Preview Mode Links will not work in preview mode

Achieve Wealth Through Value Add Real Estate Investing Podcast

Jun 9, 2020

James:  Hey, audience, and listeners this is James Kandasamy with Achieve Wealth Through Value Add Real Estate Investing podcast. Today I have an awesome guest and we're going to be flying very high with this guest. His name is Lane Beene; Lane is an F16 pilot who has been doing multifamily syndication and recently has been doing development. He owns almost 700 units in DFW area and also there's another, like out of that, another 200 plus units in the Longview, Texas which is a tertiary market. So we're going to go a bit more detailed into that as well. He has been recently working on a hot development project near Austin almost 300 units with a $15 million equity raise and a total valuation of the project of almost $52 million. Hey Lane, welcome to the show.

Lane: Thank you so much, James, for having me on the show this afternoon, I'm excited to share with your audience and share with other up and coming real estate investors on what I've learned so that they can become a better millionaire and they can get to their financial goals safer and more quickly than I was able to do.

James: Yeah. Yeah. We always want to share. I mean, real estate investors are really interesting people. This is one profession where people like to share how they come up in their business. I'm not sure why or maybe we are just within the circle of people who like to share. Maybe there are a lot of people who don't share but in general, I've seen like a lot of my friends in my circle we like to share, and we have all these podcasts, which gives all that information. So it's very, very, very interesting just investment asset class. So tell me about; you are doing, I mean F16 is for me from I can see from the ground, it flies very fast. It's super sophisticated. Do you know the rough estimate of a cost of a F16?

Lane: It's a lot; we'll see syndication for sure.

James: Does it go to billions or still in the millions?

Lane: Me and you and our whole network of investors would probably have to get a good debt, we would have to get a good financing to make it right. I think James, I think that the basic model is right around $40 million and then the the luxury apartment F16 is probably $45 million or more so that's for one and you've got to have about 24 units of that. So 24, times 30 is a pretty big tax liability. So that's kind of what it is.

James: So to fly a plane, I presume to fly a plane, I wouldn't say simple. I mean, it's already complicated; to apply an F16 must be more complicated and so like in general, how many knobs do you have to turn to make it fly? How many controls do you have?

Lane: Tough question there to answer James...

James: Or is it all automatic?

Lane: But I'd say it's like this, imagine you're doing brain surgery while you're juggling four bowling pins. That's sometimes what it's like and then other times it's like, imagine watching your kid play the violin at a recital, it's so boring and you're just trying to keep yourself awake. Then other times it's almost impossible brain surgery while juggling bowling pins. So between those two extremes, the number of buttons and the number of switches and the number of displays you have to watch varies greatly.

James: You are still flying right now. I mean, you're not a retired person, you're still flying. I mean, is it because you enjoy it flying?

Lane: James, I've got the best job ever. And flying is like riding, and some of your audience I know is going to love this and some will probably will hate it, but it's like riding a roller coaster with no rails. I grew up in Fort worth in North Texas, and there's a big amusement park here in the area where I live and it's called six flags and I know a lot of people have probably been to six flags before, but I remember as a kid, when I was in the seventh or eighth grade there was a roller coaster that we would ride and it took four or five minutes to ride and then they'd let you off. On certain times of the summer, when it was like a day week there was no line. So you could sprint from the exit back around through the line and then get back in line and it would take you about two minutes to race from the exit of the roller coaster back to the end and I think I rode it 42 times without not stopping. It's so much fun.

James: That's very interesting analogy.

Lane: So now flying an F16 is like an adult roller coaster, but there are no rails and there is no line. 

James: And it can fly because no one is up there. I mean, you probably have some, you say it's a wide sky and open sky and you can fly, it's very interesting. Throughout your career, I mean, throughout your life, you became an F16 pilot, at what point did this aha moment of the real estate come in at what point from real estate to multifamily came in?

Lane: James, that's a great question. Here is a short story or a short answer to a very long story. I was in the air force and I was in our squadron lounge drinking coffee on September 11th and somebody said, well, is an accident. And we went in to watch television and there was; that was when the first aircraft hit the world trade centers and then not too long after that, the second aircraft hit the world trade centers. I remember thinking what was going on here? No one really knew at the time and one of the senior pilots that was a pilot for American Airlines was right beside me and he said, that's it and I looked at him and I said, what do you mean that's it? And he said, the economy, the airlines, the travel industry is over.

James: I mean, even after the first plane hit?

Lane: Almost immediately and I think it was 10:30 here and about 11 o'clock he said, that's it. And I said, well, what do you mean that's it? That's not it because maybe you don't understand, but Lane Bean is going to become a commercial airline pilot and make a half million dollars in work one time a year. So you can't just stop that. That was my goal. And he's like, no, that's it and sure enough, that was, the economy changed forever. So I went into a period of what I was trying to do was totally gone. I was going to be, my career was going to transition from the air force pilot to commercial aviation, to be an American Airlines, Delta pilot, or United pilot that didn't work out because for the next 10 years, those companies stopped hiring pilots. So I went into a tailspin thinking, what am I going to do now? So what I did was I was always very interested in making repairs. I liked doing house, I liked doing carpentry work, working with wood, working with my projects on my own house and improving them. So in my neighborhood, and this is right around 2000, so 20 years ago; and so in my neighborhood, there was a vacant house that had been vacant for six or eight months and I thought, well, if I can improve my own house and make it better, why don't I try to buy this one and rent it out and make it better? And so I did. 

After learning that process, I thought, well, this isn't that hard, bought another one, bought another one, bought another one, bought another one, bought another one and eventually I had 10 single family properties buy, rent, renovate, improve it and then hold it. But then 2008 came where you could no longer continually advantageously finance these houses because I had too many. and they said, well, now you have to either one, put a very large, you can't get favorable financing on single families at this rate, or you have to go to commercial and so that's when I went and transitioned to commercial, which is for your audience. I know they know, but that is multifamily, five plus units and that's what started my career in multifamily. 

James: Very interesting because I did the same, I went up like 10 properties and I bought one more 11 and I was thinking, I have to go to commercial loan because they didn't want to do it and that's where I have to jump the multifamily. Because he just very hard to do a single families in terms of scaling up and all that. So cool. I mean, and how did you build up this 700 units in DFW and Longview? Can you quickly tell us what's your timeline in terms of moving from 10 single families, what was your first purchase in multifamily and going to 700?

Lane: Some really great lessons here to share with your audience if they are in the process of maybe operating or syndicating their own deals. I had this mentality and I was pretty good at single family, I had 10 of them and they were all doing really well and I didn't need to sell them or anything, but I had the attitude of DIY because as a single family operator, you have to DIY, do it yourself. That's what you have to do because there's just not that much revenue to hire professionals; you can, but it's more difficult. I took this attitude of DIY, I'm going to find it, find a multifamily property. I'm going to finance it myself, or very little of partners. I'm going to acquire it. I'm going to manage it myself. And let me tell you for everybody listening, listen very carefully to what I'm about to say, DIY doesn't work in multifamily. You have to partner with a good team. 

Now, the question you asked me was not DIY, the question you asked me was how did I get started on my timeline? I'm mentioning that I had a do it yourself mentality and I took that mentality into multifamily syndication or operations for two straight years. It was a complete discouragement because I had no results or progress whatsoever because I wasn't reaching out to other professionals and utilizing their skill sets. I was trying to develop my own skillset. And so for two years, I made no progress whatsoever. Then I finally learned that in the multifamily community, because the projects are bigger, you have to develop a team. Once I developed that team, I was able to accelerate and get properties and acquire assets and manage them correctly and safe and securely much more quickly and much more efficiently and productive. So that's the timeline. Two years of complete strikeout, and then starting at month 24, when I changed and stopped trying to do it myself and started trying to partner with other professionals and experts in the field, my results sky rocketed.

James: What was the first person that you think was the team member that you wanted and who the other person that you think is the most crucial team member?

Lane: Somebody just like James or somebody, that's has Achieved Investment coaching. Somebody that can hold your hand or can just be there to help you. I tell this to everybody, I say, when you hire someone smarter than you, you show that you're smarter than them. And so my advice is not to egotistically brag, is to surround yourself with very smart people and the very first person you need is a coach or a mentor or an advisor that's already successfully walked that path. They don't have to be a hundred years of experience, but they need to have some experience where they can say, hey, Lane, James, hey, don't do that. I would recommend you direct your efforts here. Let me connect you with my friend who is a broker, let me connect you with my friend who's a commercial insurance specialist. And then that's how you start building these networks. That's how you build your team. But the answer to your question clearly is find an advisor or coach or mentor or partner that has experience. That's who I would put on my team first. 

James: It's very surprising, not say surprising, it's sometimes when you are coming from a different world, like you came from the airline industry and I'm sure it's a very complicated world. I came from being an engineer and it's complicated world, but we are all within our own world. Sometimes we think this is the world. This is how everybody should be reacting. This is the best that everyone can do. But suddenly when you go out of your network and meet another person, which come from completely different circle and you start talking to them and they tell you things that you have never heard before, then you realize, okay, your circle is too small. So, I think that's very important for you to go and listen to other people who are, as you say, that was smarter, who has done it is very important because people who have more than thousand units for them buying 50 units is not a big deal. They already done it, they can tell you all the shortcuts and commercial is no joke. It's not like single family. You can make mistake and get away with it, commercial is multi-million dollar deals. If you're syndicating it's worst because now you have a lot of passive investors money in it too. You don't want to make mistakes. 

So you're absolutely right, just find people who are willing to share as we start in this podcast in the beginning, real estate is an area of investment where people are willing to share. If you go to, you open a free account and you ask one question, that's like a hundred people answering you. So can you do that in stocks? I mean, first of all, stocks is very hard to do because you don't have control itself. No one knows what's happening in the management. If Elon Musk smokes weed then the share goes down. You can't ask question, will the price go down if Elon Musk smokes weed. No one knows. . But in real estate you can be more predictable. Same thing with bonds. I mean, it's an investment asset class, but not many people knows about it. For me, it's very highly  secretive investment method. It sounds very simple, but it's a much bigger than that, bonds is huge. I mean, even same thing with Bitcoin and crypto, all that is you buy by chance. You do not know what's happening behind it. They say there's some server running behind it and all that, but real estate is like, you can make sense out of it. I say, there's a lot of people who are willing to share for free. Go to Facebook groups, go to meet ups. 

The problem I see is people really do not want to take action to do it. So that's good. It's very interesting on how did you find out and how did you move towards that stage and you have 700 units right now and you're going to tell them, but before we go into development and the details of that. So you own three or 500 units, maybe four to 500 units in DFW area, which is a major core city, it a business hub, it's a city by itself and you have like 242 units in Longview, Texas. So that's more of a tertiary market. Can you describe, why did you invest in a tertiary market compared to currently focusing on DFW and what are the differences you see between this primary market and the tertiary market, or I mean the city market and the tertiary market?

Lane: Well, for your audience, James, I know they're looking probably in different States and areas and regions and you have a national representation and so market selection, I have a four pillar funnel and I call these the four principles of real estate investing. This funnel real quickly is the very first one is strategy; so you have to have a clearly defined strategy. The second is a team; you have to have a professional team. The third of funnel and this is sequential, is market selection. Then the fourth is property identification or criteria. A lot of people revert or invert that funnel and they begin to immediately look at property and then they maybe jumped to strategy and then they jump around and I believe that's wrong way. I believe you have to start in the order and the sequence that I talked about. So before I ever looked at any property, whether it's a good or bad property, or how big or small it is, you want to make sure you evaluate the market. So what you asked me was, you said, why would you want to go to a secondary or tertiary market or non-primary market? Why is that better or worse or advantageous or disadvantageous? 

The reason is because in the area where I invest and I'm familiar with the primary markets were getting overheated, and what do I mean by that? They were being priced to perfection. In other words, they were being priced so highly, there was no margin for error, or there was no attraction in the return because the markets and the amount of money that was going into these was driving the competition to the point where it had to literally be perfect. And the pricing was priced to perfection is what I turned to termed it. There was really very little return to be had in this market with any level of risk mitigation. In other words, if the rents didn't just accelerate like a rocket ship, you weren't going to be able to make the return that you expected; or if expenses didn't flat line like you want them to, or taxes or insurance went up, which it did substantially then your perfect pricing model was in jeopardy. That is exactly what you are seeing now in the primary markets, because expenses have continued to rise, but because of COVID the revenues and the revenue increase has flat lined.

So a lot of these assets that are in primary markets that has suffered from perfect pricing, they're going to be in trouble because they will not make their rent growth projections. So the answer to your question, let me summarize in ten seconds is this, the secondary markets and the tertiary markets have not suffered as greatly from what I coin perfect pricing as the primary markets have in Texas.

James: Oh, okay. That's interesting because I didn't talk to anyone recently about tertiary market and secondary market and how is it? What you're seeing is that market seems to be performing better compared to the primary market, because primary market is basically everybody overpaid, I guess, because it's just so much competition and the brokers are more advanced and there are so many betas and best and final, and you end up paying the highest price end of the day and you're right, you're basically depending on around growth and usually the County are more aggressive as well in terms of a tax appraisals. So, okay, very interesting. Very interesting. So let's go; I can't hear you Lane.

Lane: I would add to that. So you do have to understand though, there are differences in the secondary market and there are differences in the tertiary market and that's why I said first strategy, because you may not be able to execute the same strategy in the Austin downtown area that you would execute in the outer lying areas of Austin, even though it's the same market, the sub-market may be different. So it's just important that you understand and remember I said that funnel, or the four pillars have a strategy,  have a team that can execute the strategy and then identify what market would be the best or sub-market and then at the very end of that notice, that's when I said project specific. This is a 1985, 200 units, garden style but I've already answered the top three questions and that's given me an 80% green light, yellow light or red light. If it's red, don't even worry about looking there for projects and if it's yellow, that's where you may have a little bit of consulting with your coach or consulting with your advisor, mentor. Should I pursue this, is the opportunity right? And in the East Texas market, the one that you're describing, we found a yellow light with a good project, and we were able to execute correctly.

James: So is turning around a multifamily investment deal more complicated than F16? The more complicated part of the F16 or...?

Lane: The real estate part is easy but the personal part is harder.

James: Okay. Okay. Got it. Got it. Got it. So let's go to your development. So why did you start, I mean, after you have this 700 units you started working on this 300 units development in Austin, mainly Austin. So why did you take that decision and can you walk or the rational? 

Lane: Sure. And so James, your audience is listening today for one primary reason, as we span back and ask, what value can I add to your audience? What value can you add? Why are they really listening? I believe that most of them would say we're listening because we want to use the vehicle of multifamily real estate to reach our financial goals. And so the underlying question is I want to become, I want to reach my financial goals, that's pretty much what people want to do. They want to do that and then they feel like multifamily investing or working with James and his group is going to be the best, safest way. So I believe that's what everybody is trying to do. I feel the same way. So the very first thing is, like I already mentioned strategy and as we were looking in 2018 and mispricing to execute our strategy became so thin that we realized, I don't think I can really do this strategy anymore because I can't find a good acquisition price that gives me enough margin for error and at the same time an attractive investment that I can execute a value add strategy, which was what I was trying to do. We looked at at about that same time, the tax incentive job tax bill of 2017 came out and it really advantaged redeployment or recapitalization of capital gains and that was the opportunity. It created opportunity zones. 

So if you were to reinvest capital gains into an opportunity zone project, it was extremely tax advantaged. And so we looked and we thought, boy, this is a great idea. It's kind of like a super 1031 exchange for your investors or your audience that don't know about that and I can explain that more detail if you'd like, but I said, let's look at all the opportunities zones and how can we pair opportunities on investment projects with what we do multifamily investing real estate and put those two things together because the two principles of key worth of building net worth are this one efficiently place your capital in a cash producing asset. So I'll say that again, because this is important to hear, efficiently place capital in a cash producing asset. Number two principle is execute that transaction in a tax advantaged event, if possible. So how could we do those together, development project with an opportunity zone? It's a one, two punch for success.

James: So opportunity zone is crazy. I mean, I did cover opportunity zone with Scott Hendricks maybe three to four months ago, which is fascinating on how much a tax advantage that they would get. Did you get people trying to do a 10, I mean, not 1031, trying to move the capital gain from real estate only, or was it from stocks as well?

Lane: Most of the people were already associated with real estate investing. And so it was an easy transition for them. However, that is not necessarily a requirement of opportunity zone. When you 1031 exchange, which I know your audience is familiar with, that's a like kind exchange. So real estate for real estate, business equipment for business equipment, you cannot sell your tractor at the farm and invest in real estate. You can't sell your art collection with a capital gain and invest that money into real estate. However, opportunities zones not required, it's a capital gain. So you can still Google stock at a capital gain, reinvest that capital gain into an opportunity zone and have tremendous tax advantages.

James: Yeah, it's very interesting. So let's talk about how did you select this 300 unit development place. I mean, can you walk us through what was the process? So you decided I wanted to development, I want to do opportunity zone development. So how did you choose this side or did you look at nationwide and how did you come to this particular 300 unit site development?

Lane: Yeah. So, James, again, what you're asking me is how do you select market? What adds value to a real estate market? And that's number three. I mean, that's one of the very first things you want to be able to identify. So there are three things, in my opinion, that establish consistent value in a real estate market. Number one, is demographic changes; are more people moving into that area or are more people moving out? An example, California, as you've read and you may be familiar with more than I am, a lot of people are exiting California because of taxes and other things, job loss and other areas. There are other parts of the country where they're experiencing an out migration of population. So that's a long established trend that doesn't happen overnight. It doesn't happen by this afternoon. That's a trend that is established over a long period of time. Some markets are having an inflow of people moving to the area. So we can get into all detailed analysis and data. But let me tell you this one example that anybody can understand, and this example last year had 21 million data points, 21 million. So that's a pretty big number. It's the number one way U-haul rentals. What city in the United States has the number one, is the top choice of one way rentals to this city, Houston, Texas and that area around that. So more people are moving to Houston, Texas, or that area around Texas, wherever than any other place in the country, according to U-haul truck rentals. 

So the number one thing is demographics. Where are people moving? That's going to create a demand for housing, number two, job growth. Where are the jobs being developed? A lot of jobs are being lost in areas and in cities and in governments that are not favorable for government or job growth. California's one of them, high taxes, a lot of government regulation in Texas, low taxes and very favorable job regulations. So number two, job growth. Then number three is the supply and demand of housing in any one market or sub market. So those three things are the way I chose the market. I looked at the entire map of opportunity zone areas and they are identified by census tracks and then I said of all of these areas, which one has the most favorable of those three conditions and it's the Texas triangle, it's North, Texas, South westbound San Antonio and then eastbound to Houston and then back to North. So that triangle, or what I refer to as a Texas triangle, that area contains 85% of the Texas population and it contains the majority of jobs and anything invested in that area as all those three things that I've mentioned.

James: Yeah. I mean, for the audience, if you guys want to know about what Lane is talking about, just Google, Texaplex there is a documentary which shows the Texas triangle and how much growth is happening in this triangle. I mean, if you look at when Texas had 50% of the job growth from 2009 to 2000 at that time I was 15,19, 18 by now. So job growth after the last crash happened in Texas. I think Texas is going to continue to grow, even though now we're in Covid and it's just so favorable. If you look at everywhere that Covid has affected, nothing is wrong with where it is being affected, it's just there is are some vulnerability to that market and Texas is one of the first state to open up. So we open up, we open for business.  So yeah, I mean that Texaplex area is really, really powerful. But how many sites did you see before choosing this one particular site in Austin?

Lane: We looked at a lot, James and a lot of the opportunities zones, the federal government gave the authority to governors to say, here's the criteria you identify, whatever it is you want and a lot of those governors across the whole 50 States delegated that responsibility to state mayors or regional governor officials and some of them did a really good job of identifying areas that needed to redevelop and then some of them, I think, turn their homework in the last hour and they didn't do a very good job. So a lot of the opportunities zones that have been developed they don't have any financial or investment fundamentals that would make anybody want to invest there. So they're very challenged. A lot of the other ones were more creative in what they were trying to do, realizing that as you stimulate this one part of the city, the other parts of the city may benefit from that even though they may not be the most in need at this time and so we looked at a lot and we concluded that almost 80% were areas that had zero financial incentive or investment incentives. You just have to recognize that and then just move on. So we found ones that we had those three qualifying characteristics.

James: So let's talk about the loan that you get in this development deal because I believe it's a hard loan. So tell us what the loan that you get in this double meaning, what are the advantages that you're seeing, or even a disadvantages that you've seen in this hard loan compared to your normal buying already built apartment complexes.

Lane: So a development project has a lot more risk than just buying an existing project because if you buy an existing project and a management, the property management messes up, well, maybe you can fire them six months later and you can just rehire them in within a matter of month or two, they may be able to correct what was a problem and get you back on track. But if you hire a development where it is just dirt and they mess the foundation up, or they mess up something, they blow the budget. Six months later, you may have spent a whole lot of money and you have nothing to show for it. There is no income because there's nothing to rent. So it's a lot riskier and there's a lot more risk involved. Therefore the funding and the development costs, you're incurring a greater risk.
Well, obviously the government recognizes the fact that we have to develop new housing for our growing population and we have to replace existing stock. The government through the HOD program, Housing Over Development has created some very financial terms and financing conditions to encourage guys like you, James, your audience members, and myself, to develop this new property, to meet the future needs of our country. The program that that we're under is called HUD221-D4. It's the development of new multifamily housing and it's the gold standard. It's the Cadillac of financing. We just closed our loan and it's a 40 year fully amortized loan fixed permanent and we got a 3.35% interest rate fixed for 40 years and it's permanent. So I'd never have to worry about it. So that's the advantage, the terms are almost impossible to beat. 

James: What about the prepayment penalty? 

Lane: So it's a 10 year prepayment penalty and this escalated down. So at 10 years it can be paid off, it's fully assumable and the the difficult part is it's just very difficult to get. There are a lot of qualifications for the sponsorship team, for the market, for the strategy for the project itself. There's a tremendous amount of oversight. And so it's very rigorous in that regard, but it has very, very advantageous benefits if it meets your strategy team, market and property and business model.

James: So having, I think you're still in the early stage of development right? I don't think they even break ground yet, but would you do this again? Development compared to buying a deal that is reasonably priced, that's already building?

Lane: Yes. And the reason that I would say yes to that, even though we're going to have two years of development, that is not cash flowing. The reason is because when you pair the right development opportunity with the tax advantages of an opportunity zone is what I call boom shakalaka. It's the one, two punch. So let me kind of give you some general ideas of the cost. Our project 320 units, we're building it at about the same price we can buy an existing class A project. So we're building and the price to purchase existing is roughly the same. Now in some markets that doesn't work because the cost to build is a lot more than the cost to buy. So you have to understand your financial model. Then now when I put that in, combine that with the opportunity zone tax benefits, we're expecting a three, or we're actually expecting a four X equity multiple.
That means that for every dollar you give me at the end of this project, I'm going to give you back $4. So if you were to do that with an existing project that was not opportunities zone, you would pay a 20% capital gain on those $4 or whatever your tax bracket was. But for simplicity sake, let's say you were to pay 20%, this opportunity zone, if I give you back $4, you're cash is taxed $0. So immediately, without any appreciation or any change, the benefits of that appreciation have a 20% tax benefit because it's an opportunity zone. The opportunity zone does have requirements. You have to hold it 10 years and so the hold period is a little bit longer, but couple that with the right financing, which was a HOD221-D4, which is a 10 year hold, is the perfect match for our business model and it's the perfect financing structure for development project, with opportunity zone tax advantages.

James: Also the loan, as you're talking before the show is like, you had it from beginning, from now until the end, until you own it for 40 years, there's no refinancing in between, you don't have a change loans at all? So very interesting. 

Lane: That's correct and so the same that developers get, let's say you're a fantastic developer, and you're the best there is. And you develop a project and you say, hey, this project is going to take me three years to build and so I need a construction loan and you get a three year construction loan and you nail it, at the end of 24 months, you've perfected, you've been under budget. It's the perfect model. COVID happens, now the value of your construction and your development, you nailed it. But the market took a 20 or 30% decrease. Well, guess what? Your loan doesn't care. You have to pay this loan off in nine or seven or eight months. You just finished construction. Nobody's renting because of COVID-19, it's stay at home or that. And so that's how it developers go bankrupt. It's not that they necessarily blew their project. It's just the financing lined up with a horrible market condition that they may, I mean, who could have predicted that? No one, but there's going to be developers that are fantastic developers that unfortunately got wrapped up in a very unfavorable market condition. Our loan, we have 40 years to pay it off. So right now it's 2020. This loan does not come due until 2060. So we're going to be able to ride a couple of cycles out even if it does turn back cold. 

James: Yeah, that's very interesting, because usually construction, that's the biggest risk once you're doing the beginning and you just start construction and suddenly the construction guy said, okay, everything frozen up, we are not giving you money. Or your LTV goes down. Now you bring more money. But in this case, your loan is different and couple that with the opportunities zone tax advantage. So did you have any normal investors who didn't want to take advantage of the opportunity zone tax advantage? Was there anyone who just invested in this who brought in cash rather than a capital gain or 1031 money into this?

Lane: Absolutely. So James, I think, and again, this is so important to emphasize, the keys to building your net worth are number one, invest your money efficiently in a cash producing asset. Number two, if you can, make that transaction tax advantage event, there were investors who recognize the value of Austin, Texas, recognized the value of what we were doing. And they said, this is a good deal with or without the tax advantages. Real estate in general is very tax advantage and so there were plenty. In fact, probably half of our investors did not use the right type of capital that would benefit from opportunity zones. The other half did, and both halves, both sides are equally pleased with the project. The ones that didn't use the right capital they're still going to get a great return. They're just going to have to utilize the taxes in a slightly less advantageous way.

James: Yeah, very interesting. So let's talk about yourself. I know the loan is 40 years from now, but I'm not, I don't know what's your plan with that, but where do you see you going from now? From F16 pilot, you're still flying and you're doing all this multifamily syndication, and now you're doing development, where do see you moving forward from here?

Lane: Well, James, that's another great question. So you're asking a lot about my goals and I love real estate. I love to help other people and the reason that I love to do that is because this is my purpose and that's to help you, James, help James' audience to become a better millionaire. That's what really gets me charged up and why do I say that? Because you have a passion in your life, maybe it's real estate, maybe it's a hobby. Maybe it's your community. Maybe it's your church, whatever it is, your family, travel, whatever. That's great. But sometimes we're so engaged with our nine to five vocation that we can't spend our talents and our passions where we really desire. So the vehicle of real estate allows passive investment and it allows you the financial wherewithal so that you can hopefully break away from that employment and you can get more free time. So now you can spend your talents your times and your treasures, where you really get the most satisfaction. I hope that you use those for the altruistic good of mankind. Maybe it's the boy Scouts of America. Maybe it's your community. Maybe it's your church organization. Maybe it's your travel or other things. 

But if you're working 50 to 60 to 70 hours a week, which a lot of us are out there doing, it's very difficult for you to have extra time, money or resources to really leave the impact or the influence that your life passion could. So you asked me a question and I wanted to back it up with that color, the ask, what gives me a kick? It gives me a kick when I can help James become a better millionaire or I can help James' audience become a better millionaire. The vehicle I'm going to drive us there, is multifamily investing and I'm driving the bus, get on the bus, let's become better millionaires and then when we get there, you get off the bus and you say, I'm going to do this. And I'm going to make the world better through my community involvement or through my, whatever your passion in life is. 

James: So that's awesome. One question I have for you is, was there any moment in your life where you think that I was really proud of what I did in your real estate business? That moment you can never forget it until the end. Can you describe that moment?

Lane: Well, there are certainly moments like that all the time. I'm very, I get a big charge out of real estate. I love to talk about it and I would say the, to answer your question, most clearly was one of my properties. The very first property I bought. I didn't know very much, and I didn't have a lot of the experience that I have now. And I was swinging, like I said, I had been doing real estate, single family for 10 years and then I transitioned to multifamily and I did, I was just killing myself with effort and I made no progress, zero results. And then finally somebody gave me some good advice. I went underneath the council of good counsel and I was able to acquire property, it was in my hometown here in Fort worth and it was a value add reposition of an actual vintage asset and we basically did a really nice job. I teamed with smart people, we executed a plan and that property, the very first property, this was a 25 unit property in Fort worth and it competed for property of the year for the apartment associate Tarrant County and won. This is a 25 unit property competing against all assets, less than built prior to 2000. And so that was 1500 properties in Taron County and it was number one and so I'm really proud of that fact. As much of it as this is lager or whatever you want to say [48:08inaudible].

James: No, no, no. I would never say it's a luck. I mean, when I won the property of the year for San Antonio, it was very surprising itself because I'm sure you went to this gala, the dinner gala, that apartment association have, where they have two, three tables of 10 people each from each company. Capstone, Greystone, all kinds of stone there and every time their people won the award they get a big clap and the whole room becomes very loud. I'm not sure what they do that in Fort worth, but in San Antonio, they did that. And when I won, it was surprising because I was the only one standing and going because it was a snowy day and no one else came and I'm not a big management company. But when we won, I was going alone. Did you have that same experience where you're walking alone where everybody's wondering, who is this guy?

Lane: Well, like I said, the properties that were in competition, they were run by professionals and a long established, I mean, it was pretty much like a high school team beating the Dallas Cowboys. They were not expecting a 22 year old, 1965 property to win. And it was like I was Rudy from Notre Dame and so everybody gave me the golf clap and I'm sure that under their voice, they were like, who's this guy?

James: Yeah. I know I had that. I had like a very quiet, everybody was quiet because they didn't know who's this guy, which company he is, which stone is this guy. But they clapped at the end, but it was like just some of proud moments that we have in our life. Where we able to beat all these big guys out there. This is not the IRO of the year award. This is property of the year. IRO of the year you compete within the IROs. It's not many IROs anyway, but property of the year you compete with all the big guns out there. All the class A's, all the top notch property management company, it just complete different. So awesome, Lane. So tell audience how to get hold of you.

Lane: Yeah, I'd love to. And like I said, my goal and I get a charge out of helping other people invest and get better. I want you to get there faster and safer than I did. And if there's anything I can do to help you, James, or your audience, I love to help out. I love talking about this. It helps me when I talk about it with you and understand what your goals needs and desires are to sharpen my own skill and sharpen my own skull. I try to educate people and try to train people and I have basically, I link all of my videos and education series onto my Facebook and LinkedIn page. So you can find me on LinkedIn at Lane Beene, you can find me on Facebook, two places. One is pilot legacy private equity group and that's where we post all of our training and video education or you can also find me on my website page, which is, or you can email me directly and talk to me about anything, like I said, I'd love to talk to and help you, James, or your audience or any market studies or anything I can do, certainly do that or you can email me the

James: Awesome. All right. Thank you very much for coming on, I'm sure all of us obtained lot of value out of your knowledge and the discussion itself. Thank you.

Lane: Thank you, James. And your audience. Good luck to you.