JF2601: Becoming a Full-Time Passive Investor with Travis Watts

Growing up with a frugal upbringing, Travis Watts knew how to be careful with his money and live within his means. Now, he’s a full-time passive investor and helps other busy professionals do the same. Today, Travis is sharing his best advice for investors that may not have the capital for big investments yet, resources for the new investor, and how he deals with skepticism in the industry. 

 

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TRANSCRIPTION

Ash Patel: Hello, Best Ever listeners. Welcome to the Best Real Estate Investing Advice Ever Show. I’m Ash Patel and I’m with today’s guest, Travis Watts. Travis is the Director of Investor Relations for Ashcroft Capital. He is also a full-time LP investor, and today we are going to get to interview Travis.

Travis, how are you today?

Travis Watts: Ash, I’m doing great, man. I’m glad we could finally connect.

Ash Patel: Yes. So before we get started, can you give the Best Ever listeners a little bit more about your background and what you’re focused on now?

Travis Watts: Sure, I guess from—well, a couple of things. My upbringing was a lot about frugality. So when my parents split, I was five years old, so we had some tough financial times for a period of years… So they instilled a lot of budgeting and saving and kind of the old school “put your money under the mattress” kind of mindset, which I’m now thankful for that I’ve had that kind of upbringing; it taught me a lot about just keeping control over your financial situation, not overleveraging yourself, not buying things you don’t need etc. But they had no experience with investing.

So in 2009, I got into single-family homes; I had buy-and-holds, I did fix-and-flips, I ran vacation rentals… So I did a lot of stuff myself, and I was just winging it. I’ve heard you say that on a number of podcasts, “You do your best work by the seat of your pants.” That really wasn’t my scenario. I think I did my worst work off the seat of my pants. So I learned a lot about real estate and the foundational components of it, and decided ultimately I wanted to take a more passive pursuit to investing in real estate.

So in 2015, that led to investing passively in multifamily syndications, self-storage, mobile home parks, various REITs, things like that; anything that was going to give me a cash flow or passive income component, with hopefully some equity upside where I didn’t have to be the one who was managing and trying to find the properties etc, because it was just a lot for me to handle. At the time, I worked 98 hours a week at my W-2 job before I left there… So it was just tough for me to scale that kind of portfolio.

So today, I just help other busy professionals who are looking to do the LP thing like I do, just trying to be a resource, just like you are. I’m a free mentor to people and—unexpected mentor, I guess we could say.

Ash Patel: Travis, what was your W-2 job?

Travis Watts: So I worked in the oil industry in Colorado, and then also overseas in Saudi Arabia, and a little bit in Kuwait. And I helped an oil services company launch a safety program. Notoriously, in the oil industry you just work a ton of hours, and I was single with no kids, and I thought, “Why not? It’s good income” and I parked it all into real estate.

Ash Patel: And from what I read, you chased this position at Ashcroft, didn’t you? And you landed the coveted position of Director of Investor Relations?

Travis Watts: Yes and no, I guess. I’d been an investor with Joe Fairless for many years, leading up to this point. And Ashcroft Capital was just one firm of many, of 14-plus, that I had partnered with. And everything about their business model made a lot of sense to me; it met my criteria, it met my goals, they had a lot of transparency, good communication… So when Joe had his daughter, he was less inclined to go out on the road and do speaking events and go to conferences and do a bunch of podcasts as a guest… So I kind of filled that role, so to speak.

So yeah, I shot a little video on my iPhone… I remember it was on a Saturday, I thought, “What am I going to do today.” I had no plans and I thought, “I’m going to send this to Joe Fairless and just say, ‘Hey, if you’re ever looking for somebody and you could use someone to help do these speaking engagements or travel around or run the Ashcroft Capital booth or whatever, I’m your guy, because quite frankly, I’m going to these conferences anyway, as an attendee, and I love networking and meeting people, and I like to do outreach and speaking.” So that’s kind of how it came into play. It was kind of a fluke, and it wasn’t quite that easy. There was no position at first, by the way.

So Joe turned me down and said, “We don’t have anything,” and then about four or five months later, circled back and said, “You know what? We actually do have something.”

Ash Patel: That is awesome. I’m going to put you on the spot. Do you still have a copy of that video? And can we put it in the show notes?

Travis Watts: I doubt that I do. Maybe it’s on my text chain. I feel like I’ve changed phones or numbers by then, but maybe. I’ll send it to you if I do.

Ash Patel: That had to have been a powerful video. So when you interact with investors, what percentage of investors approach you, versus you approaching them?

Travis Watts: Great question. It’s heavily swayed to people outreaching to me, and the reason is, I put out a lot of blogs, a lot of articles, I write for joefairless.com, the Best Ever brand, Ashcroft, promo material, podcasts like these… So I’ve got so many outlets simultaneously running that people are connecting through Instagram, LinkedIn, Facebook, Ashcroft Capital, all over. So it’s a lot of inbound. So I’ve set up a little Calendly link that I use for everybody. So if anyone listening ever wants to connect on a 15-minute call or a 30-minute call, whatever – it’s just a simple link; find a spot on my calendar, and happy to give you my time.

Break: [06:10] to [07:43]

Ash Patel: Another question, Travis, is what percentage of these people that initially approached you are new investors, versus seasoned investors?

Travis Watts: That’s a great question, because my mission is kind of twofold, right? Anything that’s ever helped me in my life, I like to do outreach and share; and it doesn’t matter what that is. I wrote blogs on drinking celery juice. So it’s not always real estate. It’s not always multifamily.

So to answer your question, I would say, I speak a lot to the younger audience that’s saying, “Hey, I heard the story about you house hacking and renting out a spare bedroom. How do I do that? How do I get started”, all the way to the 75-year-olds saying, “I’m just learning about syndications”, and “Is that right for me?” Not that I’m a financial planner or advisor; I’m not, so I can’t give anybody advice. But it’s interesting to have the conversations like that with all demographic and age nationwide. And by the way, I’ve got a call later today, international. So sometimes you’ve got someone calling you from Morocco or something, wanting to know about US real estate markets. So I’m all over the place, man. Just happy to help if I can.

Ash Patel: Travis, I would imagine you have to do a tremendous amount of education to all of the new investors that call you. Is there a resource that you point them to, or do you just hold their hand throughout the whole process?

Travis Watts: Sure. So a lot of the content I make is intentionally made for that purpose, where I’ll shoot a video on defining what is IRR, or what is cap rate or whatever. So instead of having these 15-20 minute calls, just to discuss something complex like that, I can shoot them towards a resource page.

So I’ve got — on my LinkedIn, as I mentioned, I do a lot of articles on there, on BiggerPockets I write a blog on there, and I write a lot on joefairless.com so you can just go there and search Travis Watts; a whole multitude of things will pop up there. And it really just kind of depends, to your question, what the individual is looking for. Most of my connections, I would say, probably aren’t public resources. It’s, “Can you point me in the right direction?” “Can you introduce me to a group or a person?” So it’s kind of dependent. But that’s what the 15-minute call is all about, is helping guide people and point people in the right direction, hopefully.

Ash Patel: Here’s a crazy question. When I first met Joe – I think it was around 2015 – I was very skeptical, because back then, the returns I think were 20% is what he said we were going to be projected to receive. We ended up receiving 26% on that first deal. However, I was very skeptical, and nonetheless, I invested in the first deal, thinking, “Alright, whatever. If it works, it works. If not, lesson learned.” How do you deal with a lot of that skepticism?

Travis Watts: That’s a good question. And quite frankly, I was too. And not just with Joe, I was with syndications because see, I was doing it all on my own, and quite frankly, not doing it very well… So I knew my numbers in the single-family space, and then here I’m getting introduced to multifamily, and I’m looking at projections just like you were, and I’m going, “Wait a second… I could get potentially the same return and I don’t have to do the work?” It seemed a little too good to be true.

So how I handle that is – one, being as transparent as possible, talking a lot about risks and whatnot, and guiding people towards not just the allure of, “This is how great everything is” but also, “These are some things to consider, because this may not be right for you.” And I think that kind of tones down the skepticism for a lot of folks. If you get on the podcast and just say, “Yeah, I’m making 20% IRRs, and doubling my money all the time and getting rich”, people get very skeptical, very fast.

So just to say it hasn’t always worked that way. I’ve had deals that really didn’t perform well, and your money’s locked up, it’s an illiquid investment, and it’s a long hold period… All these different things kind of bring it down to reality of what we’re talking about, if we’re talking about multifamily syndications.

For the extreme skeptics – I’m sorry, but maybe it’s just not the right fit. There’s always going to be a level of disbelief with certain people on certain topics, and I can’t help you. If it’s not right for you or it seems too risky, you’re probably right.

Ash Patel: Travis, you hold multiple securities licenses… What’s the most common question that you get where you say, “I’m sorry, because I have a license, I can’t give you that answer.”

Travis Watts: Oh, well correction to that. So I used to have a Series 7 and 63; it’s since lapsed. So what happened was when I worked in the oil industry and I was finally able to leave that job, because it was a ton of hours and it wasn’t really my passion or interest, I went to go work for a large brokerage firm that required me to hold those licenses. So that was the first thing I did, purely out of self-education and just self-knowledge. I had only done real estate to that point as far as investing, and I just felt like, “I don’t want to be a one-trick pony. I don’t want to just have one strategy for life. I want to be a little wider versed.” So I wanted to learn stocks, bonds and mutual funds, and that’s why I took that approach.

I didn’t last very long in that position because it kind of died off, and became kind of a cheesy sales thing, where you just push mutual funds and things I didn’t really believe in… So that’s why I left and I went back to real estate full-time, because I finally had the passive income built up to do that. And that’s what I help encourage people to do, is build up enough passive income streams, where you have lifestyle flexibility. You might like what you do, which was not my story, but say you’re an IT professional, kind of like you were an engineer… Maybe you like what you do, you just don’t want to work 70 hours a week; maybe you’d rather work part-time or be a consultant 20 hours a week. So that’s the power, in my opinion, of what passive income is all about, and why I do what I do and why I preach what I preach.

Break: [13:29] to [16:10]

Ash Patel: What advice would you give some of the younger Best Ever listeners that want to follow in your footsteps?

Travis Watts: Well, first of all, I’m not tied to just one business model, one strategy. People sometimes know me as the multifamily LP investor. I do a lot of other things, and I certainly didn’t start there.

So I think my best advice, which is the advice by the way I give to my own nephews, is start small. What I did for them last year is I opened a brokerage account for (minors or whatever, because they’re not 18 yet) and I just put a couple hundred bucks in there; it was like their Christmas or birthday or whatever… And I showed them REITs, Real Estate Investment Trusts, and I showed them monthly cash flow, and I painted the picture of how they could start with as little as a couple hundred dollars, and they could scale this up over their lifetime, to the point where they could have that same lifestyle flexibility.

So I think to me, a lot of people, they look at maybe some of the deals I do, and they go, “Oh, I’m not an accredited investor,” “Oh, I don’t have $100,000 to invest.” And then they just think, “Well, this isn’t for me,” or, “This isn’t a path I want to go down.” That’s just as you’ve scaled it up, you get to those types of deals, but you could start with literally $10 buying one share of one REIT, and having monthly cash flow. So that’d be my best advice.

Ash Patel: Travis in your current business, what is your biggest pain point?

Travis Watts: Biggest pain point I think is having such a passion firsthand for what I do, and my reasons for doing it and pushing that out to the world, but then having a lot of that falls on deaf ears, unfortunately… Because this is a very nice kind of message. It’s not the mainstream media of, “Go to Fidelity and Schwab and day trade stocks, or whatever.” I think there’s a million more marketing pieces to that than there are to real estate private placements, or multifamily investing. So I think that’s a huge pain point, is it’s a little disheartening. I wish that when I’m doing a podcast like this, I could reach 10 million people and get the message out, and not just a couple of thousand or something. So that’s probably it.

Ash Patel: Travis, what is your best real estate investing advice ever?

Travis Watts: A mentor of mine, years ago, said, “Double down on what’s working.” And that came at a point in my life — between the end of high school and post-college, I had launched or tried to launch about 19 small businesses, and all of them failed for different reasons, mostly me… But the real estate did not fail, and was a success from day one in my journey. And that’s what I decided to double down on, and never looked back.

Ash Patel: Travis, are you ready for the Best Ever lightning round?

Travis Watts: Let’s do it.

Ash Patel: All right. Travis, what’s the best ever book you recently read?

Travis Watts: Greenlights, Matthew McConaughey’s biography book.

Ash Patel: And what was your big takeaway from that book?

Travis Watts: I love biographies, because it gives you a totally different perspective on life. The way I might look at a certain scenario is completely different than someone else, and I think that’s what helps expand your context and your way of thinking. And I know that happened for me in 2015 when I started doing the multifamily. I had to get around people who were limited partners and had been for 10, 20 or 30 years, to understand that this is really a reality and a different way of looking at the investment space. So probably that.

Ash Patel: Travis, what’s the best ever way you like to give back?

Travis Watts: So like you, Ash, I give my time back to people through these 15-30 minute calls. I don’t have coaching programs, I don’t have books, I don’t have anything to sell to anybody. I was just at a point of my life years ago that I had no spare time, when I worked in the oil industry; had no time for relationships, no time to visit family, no time for personal leisure, and I’ve been able to free up my time through passive Investing, so now that’s kind of my gift to others, is I can now freely give my time to other people.

Ash Patel: Travis, how can the Best Ever listeners reach out to you?

Travis Watts: Sure. Well, I’m all over Instagram, Facebook, LinkedIn, BiggerPockets, it’s Travis Watts. If you’re interested in Ashcroft Capital, Joe Fairless, kind of what I do on that realm, you can go to ashcroftcapital.com/travis/ and that’s my little resource page. So I’ve got some downloadable PDFs, my calendar link’s on there, ashcroftcapital.com/travis.

Ash Patel: Travis, I’m glad we finally connected. It was a pleasure to be able to interview you. And thanks for sharing your story, from the frugal upbringing, single-family investing, working day and night in the oil industry, and now the other extreme, enjoying some passive income and taking back control of your time. So thank you for sharing your story with us.

Ash Patel: You bet, Ash. Thank you.

Travis Watts: Best Ever listeners, thank you for joining us and have a best ever day.

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