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Nick Huber Profile picture
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3 Feb, 6 tweets, 1 min read
Your wealth manager is ripping you off if you’re:

Under the age of 50

“Diversified” across value, small cap, large cap, growth etc

Have no real estate or alt investment exposure

Own a single bond / treasury

W a net worth of $2MM +

...

Fire them!
If their goal is “not losing” your money vs. growing your money they are doing a terrible job.

If you’re high net worth and investing on a 10+ yr horizon the classic diversification strategy is absolutely terrible for you.

You need a barbell strategy.
You need access to real estate deals and other alt investments.

You need tax planning as part of that investment package (it’s not about how much you make, it’s about how much you keep).

You need a specialized solution!
Don’t try to do it yourself. Get a better wealth manager.

Interview a lot of them.

Ask the right questions about time horizon, risk, and tax efficiency.
I have fired a crappy one and I have an excellent one.

He has access to alternative investments. Sees deals daily in real estate, private equity, private offerings, and more.

He helped me set up a trust so my stuff is in order when I die.

It’s not simple stuff!
I am in no way promoting managing your own capital.

Just that the person in the cubical at your local trust company is likely not right for you if you fit the demographic in the original tweet!

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More from @sweatystartup

Nick Huber Profile picture
4 Feb
Corporate america is a trap for anyone who wants to stop working prior to 60 yrs old.

They pay you just enough so the opportunity cost of doing something on your own isn’t worth it.

And more and more every year so the new $ is just enough to keep you.
They love it when you buy nicer houses, cars, things.

They hate it when you buy investment properties or assets.

Their goal is to keep you making money for them as long as possible.
By the time you’re 35 with two kids making $200k a year but spending $175k a year there is no way out.

They have you exactly where they want you.

And you’re 100% stuck.
Read 34 tweets
Nick Huber Profile picture
4 Feb
Banks love loaning a lot of money to people who buy real estate and every investor I know loves DEBT.

It amplifies everything. Kicking appreciation, depreciation and cashflow (or lack thereof) into overdrive.

A thread on how I think about it and how it works 👇👇👇
Let’s say you’re buying a $1MM asset at a 7 cap. Meaning it generates $70k in net operating income (before debt service)

You put $300k down and borrow the rest ($700k) from a local bank.
At a 4% interest rate on a 20 yr amortization schedule you’re paying about $25k in interest and $25k in principle a year.

That’s 20k in cashflow on your $300k cash investment. A 6.6% CoC return.

You need better debt terms to buy 7 cap deals nowadays. But let’s continue.
Read 26 tweets
Nick Huber Profile picture
4 Feb
Buying is selling.

Nowhere is that more true than real estate.

You're selling the broker on your competence.

The banker on your strategy.

The investors on your vision.

Employees on your future.

If you don't like uncomfortable situations, find a different career.
Let me take this one step further.

If you don't like uncomfortable situations, your prospects of ever making real money in your life are slim to none.
Rephrase this:

If you aren't "willing" to put yourself in uncomfortable situations.

Nobody "loves" it early on.

But you damn sure better be willing to do it if you want to accomplish anything.
Read 5 tweets
Nick Huber Profile picture
3 Feb
Diversification is overrated.
Since I’m getting a lot of shit for this and nuance doesn’t exist around here I’ll elaborate.

You don’t get wealthy by diversifying.

You get wealthy by making a few good bets that go big.

A small biz. A W2 for years with options.

You get GOOD at something useful and focus.
60 years older with a retirement account you worked your whole life to build?

Diversify. Absolutely. 100%.

Preserve your wealth.

45 with 20 working years ahead of you?

Focus.
Read 8 tweets
Nick Huber Profile picture
2 Feb
How to responsibly invest in real estate deals as a passive investor:

Get an understanding of the assumptions a sponsor is making inside their financial models.

What is controllable and what isn't?

A few questions you should ask 👇👇👇
What rent increase assumptions are you making and how do you know you can do it?

What data do you have to back it up?

What happens if you can't raise rents?
What refinancing assumptions are you making? What interest rate and interest only period?

This drastically effects cashflow. Be weary of folks projecting extremely low rates 3 years from now.

What happens if interest rates go up to 5%? Can we still make money paying principal?
Read 6 tweets
Nick Huber Profile picture
1 Feb
We currently own 10 facilities and $12MM worth of self storage.

We have 12 more worth $22MM under contract to close in the next 3 months and we're sending 5+ offers a week.

This is going to be a big year.
What we're buying:

Mom-and-pop self storage facilities in tertiary / rural markets.

Wrapping them in technology, cutting costs, increasing revenues, refinancing, holding forever.
We’re drinking out of a firehose. There are 25,000+ of these things in the USA owned by private owners.

I’ve consulting 50+ ppl in the past 6 months who are looking seriously at their first deal.

DM me if you need help!
Read 5 tweets

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