How Being a Go-Giver Creates Opportunities with Gwyeth Smith

Hey everyone, and welcome to another episode of the Everything Real Estate Investing Show with Sean Pan. Today, we have Gwyeth Smith. Gwyeth is a real estate investor in New York who focuses on acquiring properties out of his state over in Pittsburgh. He’ll tell us how he was able to acquire a commercial deal off-market with no prior experience while still holding a full-time day job. He’ll also tell us the nightmare story of closing on a deal with his lenders; something that many of us have experienced. And make sure you stay until the end to hear Gwyeth’s pro-tip on how to succeed in anything you want. Enjoy!

Sean: [00:00:52] Well, thanks so much for being on the show today. Go ahead and introduce yourself and let everyone know who you are and how you got into real estate investing.

Gwyeth: [00:00:57] Sure! My name is Gwyeth Smith. I got into real estate investing about five years ago or so. I purchased my first duplex in Pittsburgh in 2016. And from there I purchased a four-plex in 2017 and most recently closed on a 13-unit this past September. So choosing Pittsburgh as a market was really the work of my wife. That’s where she’s from and that’s where we have the connections and we just started growing from there. Currently we’re working on getting into some larger syndicated deals on the general partnership side by way of raising equity.

Sean: [00:01:38] Do you want to talk a bit more about the first few deals you did and how you decided to move into these bigger deals?

Gwyeth: [00:01:43] Yeah, so I probably started like most people do. I was on Bigger Pockets and I was looking for a way to basically earn income outside of my nine-to-five. I’m a prosthetist by trade, meaning I help people with limb loss. I make, design, and fit prosthetics and it’s a very rewarding job, but it’s a very time restrictive job. You know, I’m pretty much at the office by 6:00 in the morning and I’m back home by 5:00 in the evening. And it’s the main source of my income. So, you know, I’m always a pretty conservative guy and I’ve always been into investing. I’ve always wanted to have other streams of income just in case the worst case happened, you know with my W2 or with another source of income. So research led me to real estate investing and specifically multifamily. We were looking into it, me and my wife, and we decided that we would try to buy some place in Pittsburgh. We had family there. We had some boots on the ground there and I was introduced to a residential broker and she was awesome. It wasn’t her full-time job, which you know, everybody will tell you, to don’t work with a broker who it’s not their full-time job. But she looked at multiple places for us and a lot of times she would say, “This one isn’t worth it.”, “Don’t bother.” So when the time came when she said, “I think this one is worth it.”, I kind of believed her. So at that point we had our friends in the contractor go and walk. And if he verified it, you know, we basically start negotiating; and that’s how we got our first two buildings, our duplex and our four-plex, through that broker.

Sean: [00:03:33] Very cool. So right from the get-go you were really doing multifamily. You didn’t do single family homes?

Gwyeth: [00:03:38] Never did a single family home. You could go back about, say 14 years. I owned an apartment in New York City and I had moved out to Arizona to be with my now wife, then girlfriend, and I rented it out, but that wasn’t as intentional as what I do now, so I don’t count that.

Sean: [00:04:00] When you say apartment, you mean like one building?

Gwyeth: [00:04:03] One apartment unit. I owned a studio apartment in a coop, and I leased it out. I subletted it. But again, I don’t count that as the start of my real estate investing career. That was sure situational.

Sean: [00:04:17] How long ago did you know, when you started going on Bigger Pockets and started deciding, “I’m going to start investing out of where I am”?

Gwyeth: [00:04:23] Yeah, so that’s probably four years ago, you know I started looking into it about five. I probably got on Bigger Pockets about 4 years ago and then… it was pretty quick with the first purchase. The first purchase was, you know, nothing went smoothly for us on it. We made a lot of mistakes. But it led to the second and then it led to the bigger one that which was a third.

Sean: [00:04:50] What was the third one?

Gwyeth: [00:04:52] So the third one was the 13-unit. We closed on it in September of this last year and that was through a true commercial broker relationship and it was an off-market deal. So you know, it was kind of, hit all the boxes that you’re taught to look for when looking for bigger…, when I say bigger, you know middle-sized apartment buildings. If you’d like I can tell you that little bit about how I found an off-market deal through a broker because that was not easy.

Sean: [00:05:22] Sure, especially because you’re not even in the commercial world, right? You have a duplex and a four-plex.

Gwyeth: [00:05:27] Yes.

Sean: [00:05:28] And you’re not even in the area, right? Where do you live again?

Gwyeth: [00:05:31] Correct. Yeah. I’m in New York.

Sean: [00:05:32] How far is that from Pittsburgh?

Gwyeth: [00:05:34] About 400 miles?

Sean: [00:05:36] That’s quite a drive!

Gwyeth: [00:05:37] It’s quite a drive. Luckily. I had a partner on the Pittsburgh deal. We had done some other things together. We have done a couple private loans. We got into a flip together and I was going to sort of push the looking for an apartment building. So I had somebody as boots on the ground, but it was me who was trying to initiate a broker relationship.

Sean: [00:05:57] So talk about the timeline real quick. So you started four years ago, maybe a couple months later you got your duplex. And then did you wait another couple of months to get your four-plex?

Gwyeth: [00:06:05] Yeah. So the four-plex was really… and that was bam-bam! So that was end of 2016 when I got the duplex. Same relationship with that residential broker. The four-plex came about and the it was a very easy purchase. We got along great with the sellers and it was just seamless

Sean: [00:06:24] And when did you close on that four-plex?

Gwyeth: The four-plex we closed in January of 2017. So it was only like three months after the duplex.

Sean: [00:06:34] I have the same story pretty much but with Jacksonville and now Pittsburgh.

Gwyeth: [00:06:37] Okay. Hey! And then there was a bigger gap down to the 13-unit. It was probably a good, you know, a year and a half.

Sean: [00:06:41] So what were you doing during that time?

Gwyeth: [00:06:48] Making sure that the first two were serving as a proof of concept. So, you know, making sure that they’re running efficiently. That everything was smooth there. So I wasn’t about to kind of throw everything into it until I could prove it. There was a time where the renovations in the duplex were taking longer, costing more and you know, we weren’t feeling as confident to move forward to another. But once that was, you know, then I really wanted to grow and get bigger.

Sean: [00:07:19] Awesome. Alright, let’s go back to your 13-unit deal. It’s in Pittsburgh, right?

Gwyeth: [00:07:23] Yes.

Sean: [00:07:24] Okay, are you using the same crew, same property management team?

Gwyeth: [00:07:28] So the property management, no. We ended up self-managing the duplex and the four-plex. We had a property manager and that was not a great situation. That in itself is a story. I mean long story short, we were always wondering where the money was. We were always trying to contact her to find out what was going on. We have a tenant call us and basically said that the fire department was there. They’ve been trying to get in touch with the management company. There was a leak and the management company ignored it. Said that they couldn’t get in touch with the owners, which was a lie, because we never heard anything. Basically that leak hit a wire or something and there was an electrical fire. When we called the property manager to ask her, you know, she at that point realized that we weren’t moving forward with that relationship anymore and we just found that it was much easier managing the tenants than it was managing the manager. So ever since that time we self-managed the duplex and the four-plex. Now, we had to have a third-party management team for the 13-unit because that was agency debt and that was required as part of the loan. With that said the first management company that we used has since been transitioned to a new one and I think we’re finally in a good place with the management. But yeah management was a challenge throughout.

Sean: [00:08:46] Go ahead and talk about how you even found it in the first place.

Gwyeth: [00:08:48] Okay, so this part’s pretty interesting. So like I said, I was looking for a bigger building and I called the Brokers that were listed in Pittsburgh and nobody really answered the phone. I would leave messages. I really want to get a return phone call. I would send an email with my buying criteria. I really wouldn’t get much information back. So what I started to do was to look on their individual brokerage sites, you know, they would have on-market deals listed through their specific brokerage site. And if I saw one I like I would call and I would ask some more information about it. Asked for an OM and just to speak with somebody. It was usually an associate broker who would call me back. So I never got to speak to a lead broker until there was this one property that we really liked. It was a 15-unit and we decided to submit an LOI on it. And when we did that we were finally contacted by the lead broker. We had some good conversations about the property. We felt pretty good about it. The LOI went back and forth a couple times with the seller until it was finally accepted and you know, we signed the LOI. The seller agreed to the LOI and we started to create the purchase and sale agreement. In Pennsylvania, it goes by the agreement of sale. So we had worked all that out. We had negotiated that where both sides agreed. So me and my partner, we signed and we sent it to the broker who was going to bring it to the seller and all of a sudden we got radio silence. And a couple days later, I called the broker and I asked if he knows what was going on. How come the seller hadn’t signed yet? He basically said, you know, he didn’t know. He was having a tough time reaching the seller as well. I think it was close to a week that went by when I got a phone call from the broker and he told me that the seller had an exclusion in his contract with the brokerage and that the brokerage doesn’t usually accept exclusions when they make contracts but in this situation they did and the seller was given every opportunity to exercise his exclusion. Looks like it wasn’t going to happen. So they felt comfortable to market it and that’s where, you know, we came in. This was an on-market deal through the brokerage. And what ultimately happened was that the broker thinks that the seller used us to raise the price on his exclusion and the broker said that he wanted the deal to go to us because he’s obviously getting cut out of the deal as well with the with the seller going to his exclusion. But that in all honesty he would probably give the broker something for the troubles. You know, the thing is we’re out now. So at this point the broker was apologetic. He asked me what I was looking for. I kind of laugh to myself because I was like, ”Oh, yeah, I sent you that email while back and told some other people.” But I gave him my buying criteria and he said if somebody comes available he’ll definitely reach out, and he apologized again. Well, I guess it happens. And there’s probably about three weeks later after I got a phone call from him and he said that he felt really bad about how the last deal fell through and that has a potential deal. He wasn’t sure if it was really for sale, but that’s kind of how it worked in that area. He said if we were interested that he would try to get some information and just see if the seller or potential seller would be interested in selling. So I said sure, you know, the area was a great area. It was right next to where my wife grew up and I basically said we’d love to get some information. And that was how we kind of started the process of this one.

Sean: [00:12:43] Can you explain the whole part about exclusions? Because you kind of lost me there. So the seller… because this is the broker right? It’s his listing. So what’s the exclusion do?

Gwyeth: [00:12:51] So in his listing, I guess the contract basically says, you know, we will sell to anybody that you bring to this deal with the exception of John Doe. So, I guess according to the broker the exclusion was that he could bring anybody into deal except A certain person that the seller wanted to exercise himself.

Sean: [00:13:17] I don’t get that. So he knew who you were and he said I don’t want to sell to you.

Gwyeth: [00:13:21] Yes. So he might say for instance, I have a guy that might be interested in buying this. So I’m going to sign a brokerage agreement with you. But if my person, John Doe, wants to ultimately purchase this, I’m able to sell to him without going through the brokerage.

Sean: [00:13:42] Oh got it. Got it got

Gwyeth: [00:13:44] And like I said, he said that they rarely ever do that. But in this instance, it was one person and they basically made him try to sell to him first before marketing it but I guess, you know, some people don’t operate with the same ethics I do.

Sean: [00:14:01] Basically the seller already had a person in mind that he was going to sell it to and he basically market it in public to kind of raise the offer with this other person.

Gwyeth: [00:14:10] Yes, and the fact that we had signed the LOI, set a price, agreed upon a price, we feel that he went back to that person and said this is what the market is. So if you want it, you can beat this

Sean: [00:14:22] I see, gotcha. Thanks for explaining that. Let’s talk about this off-market property. What were the specs on it? And why do you say this is a good deal for you guys?

Gwyeth: [00:14:32] So it’s a 13-unit property. They’re all two-bedroom, one-bath unit. The value-add was that it was under rented. It was in a great location and we were able to do unit renovations to fetch a rental premium. So all units were what you’d consider classic units and the overall condition of the property seemed good so that there wasn’t a lot of deferred maintenance.

Sean: [00:14:58] Okay, and what were they renting for before?

Gwyeth: [00:15:01] The average rent at the time of purchase was $905 a unit. We looked into what going rates were and in our projections we projected them to be $1,050 a unit or first two unit renovations. Our first two lease expirations have yielded $1,150. So we’re beating that projection  by $100.

Sean: [00:15:23] Congratulations. And how much are you putting in each unit to fix it up?

Gwyeth: [00:15:26] So each unit is a little bit different. The first unit is probably going to be one of the more expensive ones. That ended up being about $5,800. The second unit is undergoing right now and that looks to be a lot cheaper at about $3,500. So we pretty much underwrote at $5,000 a unit and I think we expect to be about there.

Sean: [00:15:48] And this is like a B class neighborhood or what kind of building is it?

Gwyeth: [00:15:54] I would call it a B neighborhood. If you’re going strictly by year built then it’s a C, but it’s a solid brick building with little deferred maintenance and great curb appeal.

Sean: [00:16:07] What year was it built?

Gwyeth: [00:16:10] 1964?

Sean: [00:16:10] Okay. It doesn’t have like flat roof, or is it pitch roof?

Gwyeth: [00:16:14] Yeah, it’s a pitched roof and… I would need to go back and think but the roof is within eight years, I think.

Sean: [00:16:25] Okay, so, when you purchase something there’s always so many different ways to calculate the valuation. Because even though it’s supposed to be, like net operating income divided by cap rate, well, what’s the cap rate that you use? Also what NOI do use? The past 12 months or trailing three or yada yada yada yada? So how did you underwrite that deal?

Gwyeth: [00:16:44] So for the cap rate we purchased at low-six, it was like 6.2, which is kind of the going rate for that area and that class. If you were in a different neighborhood in Pittsburgh you can get up to those 10 caps and whatnot. But that’s not where this is. We did the cap rate off of the T12 on the purchase end but we used our assumption like what our insurance cost was going to be, what our property management was going to be. So we took the revenues of the T12 and then made certain assumptions on the expense side to calculate the cap rate.

Sean: [00:17:26] Okay. So you bought a 6.2 of your assumption numbers, right?

Gwyeth: [00:17:31] Yeah.

Sean: [00:17:32] Yeah, there’s so many other things to deal with purchasing multifamily properties. I remember when I was trying to do it, anything under an 8 cap was very hard to get like that 1.25 DSCR, especially with interest rates going like 5 or 5.5%. So how did you fund this deal?

Gwyeth: [00:17:50] So we were able to get a Fannie Mae lending on it. So we got a one-year interest only. 10-year term, 30-year amortization and our interest rate is at 5.12. So I don’t know if you remember back in September there was like a jump in interest rate. So when we were going through the whole process of finding funding and everything, our initial quote was we were going to be right at 5, probably a little bit under 5. And then there was a blip. That happened right when they were going to committee and we were walking the rate. So the rate ended up being a little bit higher than we were originally told. There were a few surprises there, but it didn’t break the deal by any stretch of the imagination.

Sean: [00:18:38] Got it. So it’s 5.12

Gwyeth: [00:18:40] 5.12. Yep.

Sean: [00:18:41] How much did you guys put down on that?

Gwyeth: [00:18:43] So we ended up… We were originally supposed to be at 80%. And I think we had it up at 82% because loan proceeds ended up being a little bit less than was originally thought

Sean: [00:18:59] 82, what?

Gwyeth: [00:19:00] That was the leverage sorry, I’m sorry. I’m backwards on that one. We ended up being 22% as opposed to…

Sean: [00:19:07] So 78. Got it.

Gwyeth: [00:19:09] Yeah.

Sean: [00:19:10] Okay, so 78% of LTV of purchase price. And that allows you guys to have your 1.25 DSCR?

Gwyeth: [00:19:17] Yeah, so we were in there at 1.25 DSCR. We might have been like just a touch above it at 1.26 if I’m not mistaken. No that was 1.25 because I think that was the reason why loan proceeds were brought down a little bit. I think we originally thought we were higher than that and when it came down to it, they underwrote a little bit differently. They underwrote with a payroll and even though we don’t have payroll, I guess they had to put it in. So it kind of changed the numbers a little bit.

Sean: [00:19:51] Do they force you guys to take whatever money you were going to repair and put it into an escrow account as well?

Gwyeth: [00:19:56] Yes. Oh we had to do that. We elected to put an extra 6500 into a repair escrow that would yield 8,000 within the loan. And then there were certain things that we needed to fix in certain time frame that were also withheld in the loan. You know, one of that was putting GFCIs in every bathroom. We have some some parking lot paving that we need to do and there was an electrical issue in one of the units. So, you know certain things were put in escrow. We had three months on some of those items and then 12 months on the parking lot paving issue.

Sean: [00:20:34] Cool. How did you fund the down payment?

Gwyeth: [00:20:37] We personally funded it, me and my partner, we went in 50/50 and we just had some money to use and we put it in ourselves.

Sean: [00:20:46] So what is your buying criteria now? Like what are you looking for in a property that says, “Okay. I’m going to go ahead and execute on this.” versus “Nah! Next one. Move on.”

Gwyeth: [00:20:54] So in my my quest to grow on what I’m doing to grow the business, I’m really really kind of switched focus a little bit where I want to have two things running in parallel. I want to build the personal portfolio of what I call it, which is, buildings like I’m currently in. But I also want to run down the syndication avenue as well. So for the personal portfolio, I’m looking to up it to about a, you know, the next one to be a 20-plus unit building at which point I would look to JV with some other people. At the same time I’m looking to get into a syndicated deal on the general partnership side by way of raising equity.

Sean: [00:21:36] Cool. How are you going to do that?

Gwyeth: [00:21:38] You know, I live in New York. So part of the reason why I don’t invest in New York is because of the returns and you know, it’s just more profitable in my mind to invest at a state. But being in New York, we are around a lot of money. So, whereas raising money maybe isn’t my my comfort zone, so to speak, but it’s the hand that I’m dealt. So I have the network here that I can try to utilize and that’s where I feel like I can bring value to an operator.

Sean: [00:22:11] Yeah, it makes sense. I mean, I’m in the exact same situation. I’m in the Bay Area, California. So prices here don’t really make sense. There are people doing it. I don’t know how. But a lot of opportunities are out of state. So go ahead and tell me what are your plans? How are you going to get to that money raising stage?

Gwyeth: [00:22:30] Well, I invested as a limited partner in a couple deals down in DFW. Those are going really well. So I’m familiar with the whole strategy and some of these value-added plans. And really it’s just connecting with people who are comfortable bringing on somebody to help raise equity and somebody that I’m comfortable with as an operator and just seeing how we can help one another.

Sean: [00:22:58] So probably the first step is you’ll reach out to the guys that you invested in and say, “Hey, how can I help you next time? Do you need help raising money for your next deal?” And they say, “Help me raise a million dollars.” Okay. They present you a deal, you say these are the good numbers. You start going to your circle of friends, or colleagues and say, “Hey, here’s the deal I have. Do you want to invest in this deal?”

Gwyeth: [00:23:17] Exactly. I’m educating them about investing as a limited partner and gauging interest. And you know, just going to networking events and talking about what we’re doing and hopefully once a relationship is there you can approach them with a deal. Another one of the reasons why I get into this and why I do that is because these deals aren’t available to everybody. So especially if you’re not an accredited investor. I have a lot of people within my network that would love to invest in some of these deals that I was able to invest in but they don’t have a pre-existing relationship with somebody on the sponsorship team or they’re not accredited. So they’re not going to see those opportunities. Now if I’m on that general partnership side, I can make them aware of those opportunities and I can invite them to invest as a sophisticated investor or accredited if that’s what they are.

Sean: [00:24:15] So what are you looking for in a deal that says this is good, like numbers wise. Are you looking for a certain…?

Gwyeth: [00:24:20] So I’m looking for a strong business plan. I’m looking for a strong operator. I’m looking for strong market and I’m looking for safety. You know, I’m looking for something that might have multiple exit strategies. I’m looking for something that’s proven, you know something similar to what I’m investing in and something that shares with the investor. A lot of what you see out there is a 70/30 split, maybe an eight percent preferred return and bonus depreciation tax benefits being shared equally with the limited partners. So that’s kind of what I’m looking for.

Sean: [00:25:04] Are you looking for a specific return like IRR number or something?

Gwyeth: [00:25:08] Yeah, I would say, IRR. You know, it’s an interesting time right now. I think that people have been doing really well and they’ve been getting some really good IRRs, you know over 20%. I feel where we’re at in the market cycle is I think we need to start tempering those expectations a little bit. So I’m comfortable with somebody coming in being conservative in the underwriting and saying, “Well this one’s a 15% IRR. This is a 14% IRR.” And if you look at the underwriting and you see a reversion cap rate significantly higher than the entry cap rate or you see an estimation of vacancy, like a vacancy jump on year one, you know, these are some of the things I look for in terms of how conservatively it’s underwritten. For that reason I would say probably that at 15% IRR but with a lot of cushion to hit it.

Sean: [00:26:03] Okay, sounds good. Yeah, thanks for sharing that. So do you want to talk about some of your horror stories that you’ve encountered or where you seen people fail the most?

Gwyeth: [00:26:12] Sure. So the 13-unit definitely did not go smoothly. I guess I can share one of the horror stories there was that the lending ended up taking longer than than initially thought. So one of my biggest goals going into this deal was to really be something that’s easy to work with the broker. I was looking for the long game here. I wanted this building to basically be a proving ground to working with the commercial brokers being real easy to work with, not coming in and re-trading and setting myself up for future deals. So with that said the second we had an LOI on it, I was already reaching out to a mortgage broker that I had used previously and letting him know the deal. He was always telling me that you me and my partner look great on paper. Everything was moving along and we’re ahead of the game. You know, we’re trying to get in everything fast. So long story short once we’re in our agreement of sale and I’m thinking things are at a certain point, they really weren’t and what ended up happening was he brought somebody else on. That person now sort of became my main contact and I’m trying to figure out what’s going on here, what their partnership is? I’m starting to think that I’m now dealing with two brokers and going to be paying to broker fees, and we’re not even to the person or the company that’s going to be underwriting and going to be lending on the deal which is the agency debt. So, you know once we get there, we had this conference call. At the time I’m on vacation in South Carolina. I’m at the pool with my kids and I’m fielding this conference call and all I’m asking is, “What are your closing cost? How much is it going to cost? What is this acquisition fee going to be on your side?” I just need to know like what, is there an origination fee? What are we looking at? But I could not get a straight answer. I just need to get a straight answer. So I called the first broker afterwards and I said, “Hey, you know that conference call didn’t really go that well. I asked the same question a bunch of times and I think everybody just kind of skated around it and we never really never really got an answer.” And he was like, “I agree, I agree. She didn’t handle it well. We’re going to have the the documents to you in a couple days to look over everything. Everything should be there.” So couple of days turns into more than a couple days and basically, long story short, by the time we see the fees there was like a 3% brokerage fee.

Sean: [00:28:50] On top of the loan?

Gwyeth: [00:28:51] On top of the loan.

Sean: [00:28:53] Just 3% for being a broker?

Gwyeth: [00:28:55] Yeah for the most part because there were two brokers now. So, you know, there was a phone call that happened after that. That wasn’t terribly pleasant and I basically said that the deal doesn’t work now because now it doesn’t cancel out. Everybody’s working this deal quite a bit and I’m pretty much here saying like, “This isn’t happening. I can’t make this work. How can we make 3% work plus a 1% origination fee plus all this stuff?”

Sean: [00:29:31] That’s your down payment already.

Gwyeth: [00:29:32] Yeah. So the second broker gets on the phone and she’s telling me that the initial broker who was somebody I’d worked with came in saying that he wanted a straight 3% for bringing me to them and everything was a he-said-she-said. I immediately started scrambling and I’m calling somebody on Bigger Pockets who worked for a company, a direct Fannie Mae/Freddie Mac lender. I called him and that voicemail basically went to say that that person doesn’t work there anymore. And if you want you can contact this person instead. So I contact that person. I tell him the story, we go over the thing real quick and told him we got to close in however many weeks and he’s like, “Well that’s not happening.” I’m like,”Well the other people tell me they can do it.” and he said we can’t, that’s not happening. I said all right, let me see what’s going on. I get a phone call from that second broker who basically says that I went around her and went directly to her lender on this. Now I had no idea who her lender is. It was just coincidence that I ended up calling the company that they were going to use and I guess people talk, but he was not the loan originator. So It was a nightmare. I called him back and I told him what happened and he’s basically like, “You can go through if you want. It doesn’t matter. Let me just tell you what your terms are going to look like. He told me what they were. There was 0% percent origination fee. So I get back on the phone with her and I’m like,”Hey, not for nothing. But you know, if you were working with the same people, then why is this guy telling me about I don’t have to pay the origination fee and you’re telling me I do and then I got your fee on top of that and there was nowhere anywhere where you told me or it was written down as to who your lender was. You know, I’m basically reaching out because I can’t do it under your terms and I never got that closing costs from you.” So long story short, she says, “I’m going to contact my originator there.” He drops the one percent origination fee. Her fee goes from 3% to 1%. I’m like,”Okay. Well now we’re penciling back out, you know, I can make this happen. But I don’t like how everything’s went down just so you know.” We kind of went from there and we closed but that whole process there was a… I still don’t know all the answers as to why things happened the way they did. Yeah, I won’t be working with him again. I’ll tell you that.

Sean: [00:32:03] So at the end the day, basically, you closed with them. You didn’t go with them directly.

Gwyeth: [00:32:08] I didn’t go directly. I was trying to go the ethical route here and maybe against my better judgment, you know, I’m not sure. But it worked on the 1%. That’s what I originally kind of underwrote.

Sean: [00:32:28] I know. I’ve had a similar experience with some lenders in the past and it’s not fun when they promise you the world and on the very end they drop the ball or something, like it’s not picking up your phone calls…

Gwyeth: [00:32:41] Yeah, because it makes it you look bad. This whole time you’re trying to do the right thing and you’re trying to be easy to work with and then next thing you know, you’re scrambling and your deal’s at risk and now your window to close is at risk and we had to get an extension and luckily we did.

Sean: [00:32:58] All right. So what would you do if you had to start all over again? Like imagine today you go bankrupt. You have nothing, no network either because you moved to somewhere else. What are you gonna do? What are your plans? What route would you take?

Gwyeth: [00:33:13] Well, I would say that the best opportunities that have happened to me have come through conferences and events and networks whether that’s on social media or that’s going to somebody’s event. I’ve just met people that have helped me and I’ve been able to get involved in ventures. So I would start there. I would start by just being genuine. I would start by knowing my goals. I would start by having a vision and just getting real clear about that. You know clarity is key and once you’re clear, it’s easier to kind of back into away and just you know become clear.

Sean: [00:34:02] So I might ask you personally. This is your goal, your vision, your clarity. What are you doing step by step?

Gwyeth: [00:34:10] So I’m basically looking to create an intentional lifestyle. I’m looking to create time with my family and my kids. My W2 as I said, it’s a rewarding job, but it’s a very time-consuming job. I don’t want to trade all of my time for money forever and then be a 65 years old looking at retirement and looking back on the things I missed. I want more experiences. I got four kids a lot of days I get home, I get a couple hours with them before they’re going to bed and I’m out the door well before they’re waking up. So, you know, it’s funny to say that this is what I’m working for, because what I’m doing now is I’m doing all this extra work which takes even more time away to get to that end game. So that’s why I’m doing it and that’s how I’m doing it.

Sean: [00:35:07] So you said that you are focusing more on to getting into syndication beyond the general partnership side. And imagine you starting over. You’re going to go networks. You’re going to talk to someone that’s syndicating right now.

Gwyeth: [00:35:20] Yeah, I’m going to talk to everybody. I want to find out what they’re doing. I want to see how I can help at all. You know, I’m a big believer in the go-giver. Big believer in that book and I feel that if you just give, that all kind of comes back to you and maybe not right away and you may not see it right away. But if that’s your mentality and that’s how you operate, I feel that good things will happen.

Sean: [00:35:46] So a lot of my listeners are on the younger side and they don’t know what kind of value they can give to other people. So say they want to do exactly what you’re saying. They’re going to meet ups. They see this guy killing it. What do you even say to them? How can I personally helped this dude who’s already doing so much?

Gwyeth: [00:36:03] So that’s a great question. And that is something that I struggle with as well. And I noticed that talking to people that I know or is very successful is intimidating. I think the best advice I can give is just be genuine,be engaging, be funny. Don’t think too hard about talking about an investment or how you can help. Just kind of see where the conversation goes. I recently connected with some people on an event and we were talking about family. We were talking about having kids and the story when me and my wife had two kids 14 months apart and we decided to try for the girl and that ended up being twin boys. So we have four boys and that whole story was engaging and we’re laughing. And this guy who’s at a higher level than me is telling me that he has one kid and his wife wants another and I’m saying, well be forewarned of this: you might get two. You know just being genuine and not forcing a conversation about, “How I can help you?” I think will kind of work itself out. And maybe it comes down to clarity. Maybe it’s figuring out where you can add value. So like I said before and you said you being from the Bay Area, me being from New York, you know, maybe raising money isn’t what we want to do, but that’s what we found we can add value. So, it’s a little bit different for everybody. I think you just got to do a little bit of self reflecting and you got to be genuine and you just have to see where your strengths are, but it’s tough. I won’t lie. It’s a tough question to answer.

Sean: [00:37:48] I mean I’m struggling with the same thing right now too. And you mentioned the book The Go-giver. I’ve heard of it from someone before but I haven’t read it myself. Do you want to give like a quick synopsis of the whole point?

Gwyeth: [00:37:58] Yeah. Don’t ask me for the author because it’s escaping my mind right now.

Sean: [00:38:04] OK they can just type in The Go-giver and find it.

Gwyeth: [00:38:06] Yeah, so it’s basically a story. It’s a short book and it’s a story about a salesman and he’s trying to land a contract and all he cares about is his landing that contract. Then he meets somebody and that person puts him in touch with a very, very successful other person. And the story just kind of evolves into how this successful person takes this young guy under his wing but tells him he just got to trust in him. Then he introduces him to other people and he sees how these people built these businesses and they built these experiences and it all happened by giving. So somebody introduced somebody to somebody and he ultimately met somebody, like the Big Kahuna if you will. He didn’t end up going with him and his company and he said, “You know what, this person would work for you.” And it all just kind of came back in the end. So it’s a great story about giving and how that’s the way that people succeed.

Sean: [00:39:15] I totally agree with that. Find a way to add value. Give before asking and it’ll all come back. Awesome, I agree. So, how can people get in contact with you?

Gwyeth: [00:39:27] I might say email is the best way. My email address is my first name. Gwyeth@rustic-capital.com. You can also go to the website which is currently under construction and contact us there as well.

Sean: [00:39:51] Perfect. Is there anything that you’d like to say to everybody else before we end the show today?

Gwyeth: [00:39:57] You know, just just kind of go back to clarity. I think getting clarity, stating a goal, seeing what your why is at the start. It’s easier said than done to figure out what your why is. From there I think things start falling into place a little bit easier.

Sean: [00:40:20] Awesome. Well, thank you so much for being on the show today. Really Appreciate it.

Gwyeth: [00:40:24] Well, thank you Sean. I enjoyed it.

Here are some of the key takeaways I got from speaking with Gwyeth. It’s totally possible to do great deals out of your area as long as you have someone on the ground that could help with the day-to-day operations. If you want to succeed in anything, be a go-giver. Just give and add value to someone who you want to become in five years. And you don’t approach them like a starving person looking for scraps, but instead come across as someone friendly someone who can relate to the other person. Talk about your commonalities and basically be friends with that person. Talk about your kids, talk about sports. Do some reflection and get that clarity of what you want to do and where you can fit in. Be genuine and you will be successful. Hope you all learned a lot. Thanks and have a great day.