Foreign.

You're listening to the Master Passive Income Podcast Network.

Hey guys, this is Charles Seaman here for another episode of the Master Passive Income Multifamily Podcast.

And I'm here with my co host, Erica McNew.

And today we have a special guest, Scott Jacobson.

Welcome to the Master Passive Income Multifamily Podcast where we guide you to invest in commercial real estate with a special focus on raising money from others to buy bigger and better deals.

And now, here are your hosts, Charles seaman and Erica McNew.

Scott, why don't you do an introduction to yourself so the listeners can get to know you?

Sure, yeah.

First, thank you, Charles and Erica, for having me.

It's an honor, it's a privilege.

I appreciate the opportunity to chat with you guys here today.

But in the, I've been in the real estate realm, I guess the world for about 22, 23 years now.

I started pretty much right out of college.

To date me, it was just kind of a random occurrence that got me interested in real estate or even thinking about that, that, that I could have a future in real estate.

But I've, I've also at the same time been doing, I have a W2 job that I've always had.

I worked at the same company for the past about 22 years.

I'm a CPA by trade or by training.

And in my free time I like to hang out with family quite a bit.

Got a wife, we've been married just over 20 years.

Got a 15 year old son.

We love to travel, love to explore and just have fun.

Awesome.

Scott.

Well, first off, congratulations on being married 20 years.

That's quite an accomplishment.

Thank you.

It's going fast, you know.

So I have a question for you here.

And I think this is something that's probably valuable for a lot of the listeners too, especially if they're earlier on in their journey.

So you mentioned how you maintained a consistent W2 position.

How have you found that's helped you build your real estate portfolio?

In my, I never really set out to be, I was an accounting major in college and the only reason I was an accounting major is because at one point somebody told me it's probably easier to get a job and it might pay better than a different major.

But I do think that I just kind of lucked into that because it was accounting, I think, or maybe just business in general.

It gave me a good kind of mind for thinking about the numbers and thinking about how does, how does one thing affect another thing and that's definitely paid dividends.

I think in the real estate endeavor and as far as having a W2 job kind of concurrently with trying to do real estate, I.

I've just always done it.

It was, it was enough to go down that path.

But the, the guy that introduced me to the idea of real estate was actually my, my first mentor who was assigned as well, assigned as my mentor at the first job that I had right out of college, like within a year out of college.

So it was just kind of.

It was a very chance encounter that literally changed the trajectory and course of my life.

Yeah, that definitely.

Very cool.

So one of the things I think all of us need as we get into any new ve items and mentorship.

How did that help you?

Well, for him, it was definitely a.

He was assigned to my mentor and when we got together, we didn't talk about accounting, we talked about real estate, which I knew nothing about at that point.

So he was the first person that kind of put that bug in my ear or even made me realize that you could own something that you didn't live in.

At the time, I was, I was just out of college.

I was, I was renting a house with some friends and never even occurred to me, like my growing up years, it never even occurred to me that you could own something and, you know, you let somebody else live in it.

If it's a house or, you know, an office building building, let someone else work in it.

So in that sense, that mentorship was a huge kind of mindset shift for me.

It helped me think of the world or think of, you know, my opportunities way differently than I ever could ever would have on my own.

So I said I owe him a lot to literally changing the course of my professional career.

But then more recently, three, three or four, I guess about three years ago now, I joined another networking mentorship group.

And that has absolutely paid dividends as well.

I told you, I'm an accounting major.

My, my.

My brain kind of thinks in numbers.

And it took me a long time to kind of separate, you know, paying for mentorship, considering that an expense versus considering that an investment.

And they're two very different mindsets.

The dollars are the same, but it's a different mindset.

You know, am I.

Is it just.

Is it money wasted or is it money invested into.

Into me and into my future?

And once I kind of made that mindset shift is this is a absolutely an investment into what I want to do and what the future can hold, then that was a no brainer.

And it's definitely for me, it's worked out great since then.

That's great.

I'm glad to hear that.

You know, I can relate to that too.

I feel like many of us in this business and probably in many businesses, you know, we wind up paying for a lot of different mentorship.

And it's like, you know, when you look at it, it adds up to a hefty sum.

But the goal is that you wind up in a better spot than you would have been without it and at a much faster pace.

One thing that I think interests a lot of people, you know, a lot of people start out in single family and they wonder, can I do multifamily?

And I know that was the path that you took.

What, what was it about multifamily that attracted you to make the jump?

Do you still focus on single family also?

Have you totally made the jump?

So you're right.

I did start out in single family.

And it's because that's as big as my brain allowed me to think at that point.

And for me, it worked great.

It was a great stepping stone to kind of into that world that allowed me to figure out how to be a landlord and figure out kind of the team that I needed to build.

Although at that point 20 years ago, I didn't think of it as building a team, but I knew I had to find someone who could do plumbing and electrical and a roofer and, you know, all these things that kind of go into taking care and maintaining a real estate property.

And now I think back, that's absolutely.

That's kind of building my team.

But the.

I just went blank average to the best of us.

That accounting background.

I bet you have so much fun on the value adding multifamily.

On the operational side.

That is phenomenal, obviously background and experience to have for value adding multifamily in particular.

What does that look like for you?

Yeah, I.

I do enjoy.

I do enjoy that part of it because it's, it's a lot more of the figuring out kind of.

I'm not very.

In general, I'm not very creative, but I enjoy kind of thinking creatively.

And how can we, how can we take this, which may be.

Which may be a, you know, a 30 something that hasn't been updated in 30 years or at least look like it and making it much nicer and therefore not exponentially, but dramatically increasing the value of.

Especially that's in multifamily, as you mentioned, the way that commercial property is valued, it's.

It can very significantly increase the value of a property as Compared to a residential property, which still helps, but the valuation is, it's much different.

So yeah, I absolutely enjoy that and kind of thinking creatively how to, how to grow that, that value for ultimately for our investors because now get to work with investors.

It definitely changed the game once you start bringing investors in.

So, so, you know, one thing I think people get really stuck on at the beginning is what type of deals do they want to focus on?

If they're doing multi, family, all that they can fund and manage themselves, or they want to do something larger that they're bringing other people into.

What helped you make that decision and you know, what, what wanted, what created that desire for you to focus on larger properties we use?

Sure.

I think that's such a great question.

And, and for me, it goes back to another one of those kind of mindset shifts for me because the reason I didn't for so long was fear.

You know, I, I, I had, I was just, it was me, it was myself and, and my dollars and my time and my effort and, and the risk was mine.

So if the only, if, if something that I chose to do failed, the only person I had to be scared of was my wife for getting mad at me for, you know, making a bad investment.

But it, it definitely changes the, the, my mindset when dealing with investors.

And it was 2016 when I even realized that you could invest in commercial property.

Before that, I literally had no idea how someone could go out and buy a big apartment complex.

I just assumed you had to either be like a billionaire or, or a big corporation, you know, with, with money to go out and buy this.

I literally had no idea that it's, it's really just kind of normal people, like all of us kind of teaming up with other normal people, investors to do something that none of us could do on our own.

So that that whole idea of real estate syndication was introduced to me in 2016.

And I spent the next maybe five years, six years being an investor into those NLP, investor in other people's deals.

And then at some point during that time I, I started thinking, oh, this would be fun to do on my own.

But I had no idea how to do it.

And it was until 2021 when I joined the other mentoring network group that I was introduced to people who actually do it and who had experience doing it.

And that was another kind of big mindset shift for me because I knew it could be done.

I just had no idea how to do it until I started kind of putting myself in those circles to Learn from others who were doing it.

And that's definitely been a great experience for me for the last few years in that realm.

Wow.

And your role within that, are you the one that you're kind of sourcing and finding the deals, you're helping raise capital?

What does your role within the asset management and being a general partner look like?

Yeah, it's a good question.

So I started out thinking, well, with my.

My background kind of in numbers.

My brain likes to think in numbers.

I like spreadsheets.

So I'd focus on the, the underwriting side of things.

And I still enjoy the underwriting side and kind of get into the numbers and figuring out.

Because I think that is kind of the basis, the very building block of any potential investment.

If the numbers don't work out, I don't care how, how pretty the property is or how, you know, how much my friends would.

How cool my friends would think I am if I own it.

If the numbers aren't good, then, you know, it's not a good investment.

But it was probably a year or two into that process that I realized a lot of people can do underwriting, but everybody needs money.

So I kind of started retraining my focus to the capital raising side of things.

And I'm still certainly learning how to do that and trying to grow my network in that regard.

But that's kind of where I've started focusing on recently is trying to figure out how to grow my influence and grow capital raising skills, because that's.

It's important.

That's awesome.

Going to some of those events.

I've got Brad Blazer's book on raising capital I'm reading right now.

So I'm in that same kind of arena of like, training.

How.

How do you do this the proper way?

Sounds like a good book to read.

Yeah, definitely.

So, Scott, I'm curious.

You absolutely touched on something very important there, the need to raise capital.

You know, there's.

It's funny, people say you need the deal and you need the money, and there's truth to that.

But in my experience, the deal usually comes a lot easier than the money.

Oh, you've been more active than most.

So we're recording this.

It's October 2024.

The market's kind of been a little bit of a lull in the last year and a half, two years, but.

But you've been finding ways to get deals done when other people have been sitting on the sidelines.

What has helped you separate yourself from the pack and be proactive and actively doing Deals.

Several things.

I think number one is the team reference that I mentioned previously.

Definitely this business in particular, I think commercial real estate in general is very difficult to go on your own.

So I've been able to, been very fortunate to be able to partner up with several people who are kind of better at the things that I'm not as good at.

One of those is the deal finding.

I just, I haven't spent much time trying to grow those relationships with brokers, so I've kind of relied on other people to, to be that person within the team and then I can help in other ways.

Certainly once, once the deal is found and that we know it's, it's worth pursuing.

But without a doubt, the team aspect has definitely been very important and integral to anything that I've done certainly in the last several years when I've been focusing on the multifamily side.

But the other, the other part of that I think is just self motivation or drive.

You know, I, I feel like my brain is always thinking about something like this and always thinking about, even if I'm doing something else.

I almost, I feel like I'm thinking about, you know, what do I have to do next or you know, I gotta send out an email to my investor list or how do I, you know, stay motivated and involved to keep trying to grow?

You know, I'm not taking huge steps every day by any means or every week, but trying to take at least a baby step in the right direction all the time.

And I think that's, I think that's integral to, you know, whatever you want to do.

For me, it's trying to get, get better at this commercial real estate game.

So yeah, that's a really important point you mentioned.

And like, like so many books I've read through the years, they talk about, you know, the consistency and the discipline.

Right.

You know, people think, oh, it just happens overnight.

You go out and you buy an apartment building or you go out and you do whatever it is.

But there's been years of development and years of training and years of work to get to that point.

So I'm going to ask you two questions.

One, when you were first starting out, getting into real estate and then eventually transitioning to multifamily, what was it that motivated you then?

And secondly, what is it that keeps you motivated now to keep going?

So a lot of, looking back, what I can say, a lot of kind of what stepping stones have been on one hand I get, I think you could say it's been a lot of Luck for me, like, I, I've been very fortunate and I feel like some things have just kind of fallen in my lap.

The other side to that though is as I think, I don't know who said, I think there's a quote that it seems to be the harder I work, the more lucky I get type thing.

So I, I think there's, there's an interplay there between luck and, and hard work or at least kind of putting yourself out there or trying to put yourself in the right situations or the right networks to, to then get lucky and have opportunities.

So the first opportunity I had to transition from single family to multifamily was as my insurance agent just kind of randomly mentioned, hey, I, I know somebody who's selling a 14 unit apartment building in a neighboring town here in Indiana.

And I said, well, I'll take a look.

It's.

It's definitely bigger than I've ever thought to do or thought that I could do on my own and definitely bigger than I've ever dreamed about doing, but I'll take a look.

And then so I went there with my, the guy who I've been counting on for many years now as a handyman took him with me and we both walked through it and came out and said, we got to have this, we got to figure out how to buy this.

So that was the first kind of opportunity I had to think bigger.

And then as as happens a lot.

The broker on that deal also had another one in Indianapolis, which is where I live.

So he's like, hey, come look at this one.

And I looked at that one and we both walked out again, like, I got to figure out how to make this happen.

And had to get kind of creative with the financing on that one because that was definitely a larger property still 14 un.

But dollar amount was higher than I had ever thought about figuring out how to buy before, but made it happen.

And yeah, so those were, you know, call it luck, call it kind of putting myself in the right opportunities, but that, that's how I got into multifamily.

And honestly, Charles, like you asked a second part to that question, but I'm refreshed me what the second part was.

The second part was at the level you're at now, what keeps you motivated to stay, stay focused and keep doing deals versus saying okay, let me, let me rest on my laurels and stop.

Doing this because it's fun.

I really do enjoy, I enjoy real estate.

I enjoy.

Now I've really started to enjoy the process and the people that are within it.

I've had a lot of.

I feel like I've had a lot of individual success or, you know, it's.

It's allowed myself and my family to do things that I never would have if I only had a W2 job.

We'd be in a lot different position financially, and we wouldn't get to do some things we get to do.

And I feel like I've learned some things along the way in the last 22, 23 years.

So I.

I didn't think that I would.

But I've started to enjoy, or I do enjoy sharing some of those experiences and things that I've learned with other people as well.

So that's kind of the thought process I've taken, is let's.

Let's try to.

I'd like to try to educate other people, you know, what this could look like to invest in, you know, alternative investment, alternative assets as real estate.

Because most people don't even realize that they can invest in commercial real estate without buying the whole apartment building.

I.

I was a commercial or I was a real estate investor for 15 years, and I still had no idea, like I said.

And until 2016, when the idea was put in, my kind of came to me as you can even do it.

So that's what I'm trying to do now is just share with other people, let them know that this is even possible.

And of course, it resonates with some people and it doesn't resonate with other people, but I'm having fun just thinking about it and sharing with others.

Yeah.

Okay.

So it sounds like it's been largely a combination of putting yourself in the right.

The right rooms, in the right circles, and also just pushing yourself to do things you didn't think were possible at one time.

I think that's a fair summary.

Yep.

And I would say relationships, you know, the.

It was the relationship with your insurance agent is the reason that you got the 14 unit, and it was the relationships within the mastermind networking group that you're currently in that have given you the confidence to really start doing syndication relationships with your investors as you're capital raising.

So it seems like, you know, having good relationships has also been kind of a reoccurring theme of your success.

That's amazing.

I love that.

Absolutely.

And I never thought about it along those lines.

You know, as for the first 15, 18 years of, you know, doing real estate, I really didn't share it with anybody.

I just figured no one else cares.

Why do I need to talk about or tell Anybody about what I'm doing.

But when it came time to kind of move into the syndication world to where then I did had to go out and try to find investors or work with other people to help, you know, that we can both be successful then together.

It was definitely a mindset shift again of having to go out and tell people, talk about what I'm working on now and try to bring them along with me.

And I found that most people have.

Almost everybody says something to the extent of, well, this is all new to me, but I trust you so well, you know, be an investor and.

Or you've been doing it for a long time.

If you think it's good, I'll.

I'll trust you here.

And I never, you know, for the past 20 years, I never thought about, oh, I'm kind of building these trusts so that in 20 years I can ask them to invest in a property with me.

It's just, that's.

I guess that's just being a good human, I guess, trying to be a good human.

And at some point you, you build that trust, hopefully with others, and then you kind of build on that and go in together.

Very cool.

Speaking of relationships, one of the things you mentioned earlier in the conversation was about, you know, as you started using investor money, you know, before that, the only one you really thought that potentially pissed off would be your wife.

Now, I asked this question because I feel like a lot of people build this business with their spouse or their partner.

Sometimes there's.

There's roadblocks.

Right?

You know, sometimes partners aren't always supportive.

Has your wife always been supportive of you doing this from the beginning, or is it something that you found that you had to kind of sell around at the beginning?

I've been very fortunate, actually.

Had.

When we started dating, you know, way back, we, we knew each other in college, but we didn't start dating until we were both out of college.

But the way it worked actually had a couple houses, rental houses, before when we started dating.

So she's kind of always known me as a real estate investor, and I've been very unfortunate that she's never tried to talk me out of it.

She's never tried to criticize me if something didn't go as planned.

She, you know, she puts her thankfully, trust me as well, to do more good than bad.

And so far it's worked out that way.

But she, she has been involved a little bit.

She's much more technologically minded than I am, so she helped with my website when we first set that up and, but for the most part, she just stays out of it and lets me, lets me play in the real estate world and supports me, but.

But doesn't try to get too involved with it.

Excellent.

Well, from knowing you, one thing I know that you've done recently, you told me a little bit about, but I think it'd be great for the listeners to hear, you know, some of the things that you can, you can have the opportunity to do when you, when you see some success with it.

You recently made a mission trip.

You want to talk about that and the experience and what you, what you learned and what you gained from it?

Sure.

Yeah, I did.

We just came back from a mission trip through our church.

We went to the Middle east, the country of Jordan.

So most people were like, why are you going to the Middle east right now?

I heard there's bad stuff going on over there.

And it was actually a trip that was postponed.

It was supposed to be a year ago, kind of right after the conflict started up or continued around Israel a year ago.

So we postponed it.

But this year we decided, we were told that, you know, Jordan is a safe country.

They, they kind of stay neutral and hadn't had any issues.

We went there and just met with the most amazing people, had opportunities to do home visits with some refugees who were in Jordan from Syria who had come over because of the, the wars going on there that started 10, 11 years ago.

And.

But they've been displaced to refugees and talking with them and just hearing their stories, the rest of us, we have nothing to complain about, like, ever.

And we can know that on an intellectual level, but just, just getting it from them in their home and hearing about their family was literally killed by missile strikes and they left their country with just the clothes on their back.

You know, we, we can read about that, but it doesn't really feel real.

But until you're like standing next to them and they're telling you this story, and I'm thinking, why am I so lucky just to be born where I was to, to have had these opportunities, you know, to meet the right people and, you know, it just really makes you appreciate what you have on a whole nother level.

So, yeah, it was an incredible experience.

We spent.

It was just about a week, so it was a really quick trip, but it was, I know if it's to say it's life changing, but definitely mindset changing, and I hope that I can kind of keep that, that with me to where I don't take as much for granted as I might have done previously.

You know, that's a really important point that a lot of successful people I know, they talk about gratitude.

Right.

You know, I think that's something that's important.

Like, a lot of times we take things for granted, and sometimes you said it might just be as simple as being born here in the US and realizing that, you know, we have things that we think everybody does.

And then you go somewhere across the seas and it's like, wow, life is totally different.

Yeah, absolutely.

Yeah.

We, we talk about the, the.

I forget how many years ago, several years ago is the protest maybe in.

Was it in New York, Central park, like rallying against the.

The 1%, but they're doing it by talking on their iPhone while.

While wearing, you know, $100 Nike shoes or $200 Nike shoes.

So the reality is that probably all of us listening to this podcast, we're all the 1%.

When you consider the world and what, what other people are kind of the conditions that they're living in and the fact that they have to worry about is their.

Is their town going to be hit by a missile strike, really?

Thankfully, we don't have those kind of stresses here.

No, thankfully not.

We're very fortunate in that regard.

On a mission trip.

And money is good for the good it can do.

And it sounds like it will be the first of many mission trips that you get to do with your family, which is a beautiful thing that that's what you're choosing to do with your free time, your financial freedom that you're building and with the money that you're accumulating.

So, so good for you.

Thank you.

Yeah, I think it's like I said, money is.

Is great.

You can do a lot of things.

They can either be good things or bad things.

So my hope is that we choose to do good things with it, to use it to empower.

Empower others and, you know, benefit others as well as ourselves.

Excellent.

Scott, we want to thank you so much for joining us today on the.

On the show.

How can listeners get in contact with you if they want to reach you?

Sure.

My company is called Onward Equity and our website is onward or the-equity.

So onward equity.com through they have.

Also, for anyone that wants to kind of get an idea of what syndication or real estate investing is passively investing in real estate.

I wrote a book that I offer on the website as well, called the top 10 reasons to be a Passive Real Estate Investor.

Very creative with the title.

I know, but I think it does a good job of just kind of explaining for those who aren't necessarily familiar with what that world looks like to give some ideas of why you might want to think about that alternative investing.

So it's there's a pop up on the website onward hyphen equity.com.

that's if you want to get a copy of that book as well.

Love to send it to you.

I know I already got one.

Thank you.

Oh, cool.

Awesome.

Well, Scott, thanks for joining us.

And we thank everybody for tuning in for another episode of the Master Passive Income Multifamily Podcast.