Wayne Courreges III reveals what to check before you wire a single dollar into a real estate syndication — and what to walk away from fast.
GROWTH PILLAR: Real Estate
WHO THIS IS FOR: SMB owners / Solopreneurs / Corporate escapees / Leaders building systems
WHAT THEY'LL GAIN: How to vet a syndication sponsor, read the legal documents that actually matter, use tax strategy to offset passive income, and build generational wealth through commercial real estate — without managing a single property.
Most people never invest in commercial real estate because they think it's reserved for institutions and ultra-wealthy families. Wayne Courreges III proves otherwise.
Wayne is the Managing Partner at CREI Partners, a Texas-based firm overseeing more than $60 million in assets across Texas, Louisiana, and Alabama. He specializes in helping busy professionals — doctors, executives, high-income earners — build generational wealth through passive real estate syndications. No property management. No landlord headaches. Just strategic capital at work.
In this episode, Wayne breaks down exactly how syndication deals work, what accredited investors need to understand before committing capital, and the red flags that should stop you cold before you sign anything.
Key topics covered:
— How syndications pool investor capital to acquire large commercial assets
— The difference between active and passive income — and why passive is where real wealth builds
— How bonus depreciation and K-1 losses can offset six figures of passive income
— Why the jockey matters more than the horse — vetting the sponsor, not just the deal
— What's actually in a private placement memorandum and why it beats the marketing deck every time
— How to structure your advisory team: tax strategist, real estate attorney, accountant
— Red flags to watch for: missing paperwork, no investor portal, poor communication during downturns
— How 1031 exchanges and stepped-up basis can pass wealth to the next generation tax-efficiently
— Why local, brick-and-mortar real estate is more stable than paper investments in volatile markets
Connect with Wayne Courreges III:
CREI Partners | Free Passive Investor Coaching | Free eBook | Email: wayne@creipartners.com | LinkedIn | LinkedIn Company | Facebook | Instagram | YouTube | Podcast
This episode is brought to you by:
Property Wizard Podcast — Fred Crouch has spent decades in real estate and makes it genuinely easy to understand, whether you're investing to grow your business or building personal wealth. Worth a listen.
Canada Growth Network — A business community where SMBs and solopreneurs get real connections and access to GoHighLevel CRM for just $47/month CAD. Not just networking. Not just software. Both — together. Start your trial today.
East Trade Winds — A free weekly networking session where real business conversations happen. Community first, sales second. Bring one challenge, bring one introduction.
Get in touch: info@kreativinsight.com
Join Canada Growth Network — $1 CAD first month, $47 CAD/month after. Real tools. Real people. canadagrowthnetwork.com/ghl
Subscribe to the K4B blog — blog.knack4business.com
Search all K4B episodes by topic — knack4business.com
Want to be a guest on K4B?Register here
Bernie (00:05)
Question to the audience. How do you actually know if a passive real estate deal is safe before you put your money in? Our guests will break down how to vet syndication deals with confidence, what red flags to avoid, and the simple busy professionals can use to protect their capital while growing long-term wealth.
Our guest today is Wayne Courreges the third from CREI Partners. He's the managing partner of this firm where he helps busy professionals build generational wealth through passive investments in commercial real estate syndications. Based in central Texas.
He leads the full investments life cycle from investor relations as the firm's lead sponsor and general partner, overseeing more than 60 million in assets across Texas, Louisiana and Alabama. Wayne focuses on acquiring communities and developing RV, boat and business storage assets and markets with strong fundamentals. All with a clear goal to protect investor capital, deliver high yield returns,
and positively impact local communities. His real estate journey began during his service as a US Marine Corps Corporal. And after completing his service in 2007,
He spent 16 years with CBRE and then went into full-time investment leadership at CREI Partners. Wayne, absolute pleasure having you here today. Thank you so much. I know you're on a big road trip yourself. And do you have your favorite quote or saying?
Wayne C (01:27)
I would say never assume that it only makes an ass out of you and me.
Bernie (01:30)
been there, done that. I've got my own t-shirt that says, hey, tag, you're it. So you started your real estate journey while you were in the Marine Corps. how did that spin up from high? Yes, sir. Two bags full, sir. And how much faster to move in money to property?
Wayne C (01:44)
It's a good question. So in high school, I actually got.
Wayne (01:47)
Bye.
Wayne C (01:47)
First exposure to real estate, was dating someone and her dad was a big real estate developer in the Austin, Texas area. And so I was really fascinated at real estate at an early age, mostly just due to that exposure that I saw with her family. So when I went into the Marine Corps, it was 2003. know, Operation Iraqi Freedom was going on and such, but I was stationed in Twain Eye Palms, California.
Wayne (02:01)
Again, just. ⁓
and ⁓
Wayne C (02:15)
was
19 at that time and decided that, you if I can try to get a loan, go buy a two bed, one bath property right outside base and rent it out. And so that's what I did. ⁓ was a time where everybody was getting loans. don't know. it was just, so, I mean, I had, was, I don't know if I put any money down. It's been so long, but yeah, it was like $90,000 two bed, bath. So, you know, that's how I started.
Wayne (02:39)
You
You know, it.
Wayne C (02:43)
But it's, but
real estate has been in my blood for really since high school.
Bernie (02:47)
Is that something that's a family thing? You have a family history in that or in the entrepreneurial space?
Wayne C (02:53)
Not so much. I definitely have felt that I've been entrepreneurial my whole life. I mean, was in, when I was in high school, I was introduced to the Rotary Club and I'm a Rotarian. Rotary Club introduced me to a bunch of other business entrepreneurs and you know, they had this whole camp enterprise and you know, go in and you build a business and you know, pitch the business and it was all in a one weekend.
Wayne (03:03)
now.
and ⁓ camp.
but. ⁓
Wayne C (03:21)
And
after that, it really fueled, was meeting CEOs and talking to different people, interviewing them at an early age. But so my entrepreneurial spirit alone has been there, you know, really since high school as well, but then real estate, again, it was just this exposure. And I just love that, you know, these are physical assets that, you know, we can, you know, make an impact to the community. You know, I don't have to worry about a tweet or whatever's going on.
Wayne (03:43)
community and
Wayne C (03:47)
geopolitically in the world because it's all pretty local to where we're buying.
Bernie (03:53)
Partnerships offer various things and they sell something and hopefully someone makes money. What did C-R-E-I offer that C-B-R-E didn't offer?
Wayne C (04:05)
That's a question. So I worked for CBRE for 16 years and they are the...
Wayne (04:10)
you
Wayne C (04:10)
of mammoth, they're, massive. they are the largest commercial real estate company and there, it's not a type of company that's franchised. mean, it's as CBRE, whether you're in Melbourne, Australia or Tokyo or Dallas, Texas, like it doesn't matter. The company operates and manages the same, which is great, because you have clients out there who own mostly institutional clients. Think of MetLife, JP Morgan, TIA craft.
Wayne (04:25)
out.
Wayne C (04:35)
lot of these institutional groups, own real estate.
Wayne (04:38)
And
Wayne C (04:38)
they don't, but they don't want to manage. They don't want to be in the data. That's not their core business. So they'll hire a CBRE, a Jones Lang LaSalle, you know, one those large companies that can manage their assets no matter where they are in the world. And they do it the same. So their financial reports that are received the same, they would maybe have a special point of contact within the company. as far as, so that was, you know, from CBRE and CBRE touches every aspect development.
Wayne (05:03)
you know, management.
Wayne C (05:03)
property.
accounting services, project manage, I mean, it just every, you know, every aspect of commercial real estate. So, you know, the, the, the clients that I was working for, you know, I was a third party, you know, property manager, any of the asset. And so really in 2019, I had finished my MBA about that time. I did a project within my MBA program. CREI partners, I created the company, the framework of the company during my MBA program.
Wayne (05:16)
and you're not owning
on
And then in
Wayne C (05:34)
2019
started this company because what I realized and what's crazy is, is that not many people think that you can own large apartment communities or large buildings. You know, I, even if I was in the business, I was thinking these are really reserved for like the institutional type people or companies. Like I said, Matt Light for JP Morgan's or very wealthy families. But what I learned about syndications and how we can all pull our money together. And it's really like a team.
Wayne (05:58)
you know,
of
Wayne C (05:59)
really a lot of teamwork to close on these assets today. Actually we're closing on a property in San Antonio and dealing and involved other partners and stuff. So it went from managing assets with CBRE to actually assets with CREI partners did both for a few years. I like to say my nine to five paid for my five to nine. I have three kids wife. And so it was important that I could support them and do this in a, in a good way. And eventually it
Wayne (06:06)
and
owning
and
Wayne C (06:27)
I left CBR not because I didn't enjoy the company. It's a great company.
But I couldn't do both, but I had grown my company to a point where it was hard to really focus on both and do a good job. So I stepped out and went all.
Wayne (06:38)
you know, it's been
on myself.
Bernie (06:41)
That sounds like a perfect Cinderella story, you know, the pumpkin, let's ride the pumpkin into the sunrise.
Wayne C (06:46)
But it's not all roses and rain, but like funeral journey, as you know, it's just to get to closing today on one of my, on this property, took a lot of stress and calls. And I mean, nothing, nothing is easy, especially in this market. So Cinderella stories happen. So like that iceberg, you see all the, all the work is happening below the water and all you see is that tip of the iceberg, but a lot of work and.
Wayne (06:47)
I'll say that it...
Any answer?
You
Figuring it out.
Wayne C (07:15)
discipline grit are required in this business.
Bernie (07:17)
So when you're bringing things together and you're talking to people, hi, we want to put your money into something and they're going to be the passive investor. What frame of mind do they have to be in? Because we've talked to different people about investing money and someone do much kind of what you're doing or they're the brokers for finding the coin and they deal with folks like yourself in CREI.
But what do you have to have in the investor's mindset? Like what do they have to turn on and get understood right quick so that, you know, that they'll be at peace with what was, you know, how things are going to unfold.
Wayne C (07:51)
Yeah, I would say first off, starting with where you are financially, this even though I
Wayne (07:57)
you know, when I say teamwork, people pulling in their money.
Wayne C (07:59)
It's really for our CRI partners, we're focused on accredited investors. So accredited investors, this whole business is governed by the security exchange commission in the United States. So the SEC sets guidelines. And for us, accredited investors is who we bring into our deals. So they meet certain income or net worth requirements. I would tell anybody, don't invest your last $50,000 into a real estate syndication. One, it's trapped into
Wayne (08:15)
you
I'm
Wayne C (08:27)
deal until it were to sell or refinance. This is not a liquid investment. ⁓ it is an investment that definitely provides potential for wealth tax benefits. For example, you know, there's different buckets, ⁓ active portfolio and passive. The true wealth sits within the half and portfolio.
Wayne (08:39)
and
I'll give you an example.
income you
of folio
in
Wayne C (08:52)
income, not so much the active income. we get a lot of doctors and, you know, vigils, executives at ⁓ large companies. And they're building because they have, they want to diversify out of wall street. I invest in wall street. We have our portfolio. However, majority of my real, my portfolio is in real estate, but that's not for everybody. Most people.
Wayne (08:54)
Activate W, no doc, and high net individual.
⁓ You know, you companies that in that
You know, they, you know.
Wayne C (09:19)
have their, most of their portfolio into a portfolio of stocks or mutual funds. They started diversifying into real estate. They did start diversifying into real estate largely because of the tax benefits that happen. So as you get passive income, you can offset that passive income through passive losses, which is what your commercial real estate through, you K-1 depreciation. And in the United States, we have bonus depreciation with the most recent tax bill that was passed. So say you invest
Wayne (09:24)
And then.
you can get thru
and
you know, I want you know you will
Wayne C (09:50)
$100,000 will
get 100 % depreciation. Now that depreciation is on the improvements of the asset, not the land. can't depreciate land. So typically you would still see a 70%. But if you get a $70,000 passive write-off on $100,000 investment, that's pretty good because that offsets other passive income. So that doesn't happen in day one because not everybody gets, has that amount of passive income. But over a period of time, say 10 years period, easily, I mean, we have
Wayne (09:58)
So.
Wayne C (10:17)
There's making over, you know, six figures of passive income, close to 200,000 or more and passive paper losses in K ones that offset those losses. How's that worth executive or doctor, you know, professional to then decide when to retire, when they want to slow back. Most of our investors guys do not want to out of their day job. They have a passion for what they do.
Wayne (10:23)
and then they get those
And then a lot high network.
they want to.
Wayne C (10:44)
but they wanna diversify and they wanna have that option to.
Wayne (10:47)
to
go off the mindset of one, making sure.
Wayne C (10:49)
So that's of It's of. Sure,
you're a credit investor, but two. Or how do you work to get there?
Wayne (10:55)
⁓
And then two, once you feel like you're in that different, you know.
Wayne C (11:00)
You're. Phase on that financial
pyramid that you're ready to like, okay, I'm ready to go invest into alternative investments. These real estate syndications can provide a great path for continued wealth building.
Wayne (11:07)
Then you know.
built.
Bernie (11:14)
So what do you want your clients to ask a sponsor, a property package developer, what do you want them to ask to make sure there's some level of protection they can sleep at night?
Wayne C (11:25)
Yeah. So there's always risk. Real estate is, is risky. have residents you have to assume. Like if I go buy like the property today, we're buying, you know, it's 98 % occupied. When we buy that asset, we've done our due diligence. We've done electrical plumbing, mechanical roofing. We've walked every single unit. We've done lease audits. We've a lot of detail checked statements, you
Wayne (11:30)
you know,
But
Wayne C (11:49)
making sure the income's actually coming. So there's, there's that, but then there is risk where, okay, you're taking this property and they have a relationship with the property manager. And now we're coming in because that property manager is moving on, not because we didn't want to keep them, but they're just moving on. So having to bring in another management staff. And so we have to keep that same type of level of service and quality of, know, just to keep the residents happy. So there's always risk, you know, COVID happened, you know, things that are out of our control.
Wayne (12:05)
and we're ha-
you
⁓
⁓ hikes insured,
Wayne C (12:19)
interest rate,
taxes, property taxes. I mean, there's all these different things.
Wayne (12:23)
⁓
Wayne C (12:23)
But it's in any investment. If there was one investment that had 100 % surety, then there would be no other investments because everybody would just go in on that one investment.
Wayne (12:32)
⁓ So.
Wayne C (12:33)
But what I would say for to really drive into your questions, this is a great one.
Wayne (12:37)
is when you're looking at evaluating
Wayne C (12:39)
real estate syndications. Think of it like no more comp buying a business. Your business has income, has expenses, net operating income. After net operating income is debt service and maybe capital expenditures. so if you think of it as just a business, you're a multi-family 1236 main street, you know, that is just a business and your residents are your customers and they're bringing
Wayne (12:55)
you know
and
you know, they're in the
Wayne C (13:06)
They're paying
the rent to the income miscellaneous other, maybe the reimbursed utilities. Then you have your expenses, utilities, payroll, repairs, maintenance, cetera. So just that framework of just not overcomplicating the real estate when you're evaluating deal is just a business and that business has income expenses. And so that's the start. The second is, that for every investment, there's a jockey on the horse and you know who that jockey is.
Wayne (13:30)
You wanna know.
Wayne C (13:32)
I'm the jockey on the horse for all of our investments for CRI partners. We are lead sponsors. We put them under contract, take all the risk upfront, close the deal, operate it. And then we manage, we manage that whole process. And it's not just Wayne. Like I have three other team members that work alongside me for our investors. But you want to know the person and you want to know that person because over the five years, you want to be able to ask questions. And I say five years, that's the typical hold period.
Wayne (13:38)
Find the deal.
then we.
to
Wayne C (13:58)
You want to ask questions. You want to see that they're sending my financial updates. Do they have an investor portal? What's the transparency? How they falls with any other properties? How did they come? So just seeing that they're good person, like, you know, is this somebody that I want to do business with? It sounds pretty like lame, like just an easy answer, but you're investing more so with the person than the property.
Wayne (14:04)
gone through any down
come back, how do they communicate?
You're in
Wayne C (14:21)
Over time, you know, as a passive investor, you do sit back, do look out for on the next deal or like, Hey, this person is being transparent. They're following through what they're saying they're doing, or if they're not, they're at least providing communication on what they're going to be doing to fix it. I think is important.
Wayne (14:24)
can you learn what's next?
Bernie (14:40)
What should we be cautious of? What are the flags to say stop so that the person's protected?
Wayne C (14:47)
So in the United States, we have, like I mentioned, it's governed by the security exchange commission. The SEC have different regulations, but a 506C offering is really where the world we live in. Investors can invest with us in the United States. But that 506C, in doing so, we have to have a private placement memorandum. And then that private placement memorandum, it goes over the risk, it goes over the investments.
Wayne (14:59)
and Canadian.
You know.
another
Wayne C (15:11)
Every,
every deal is going to have the same risk or the same business plan. Right. So through that private placement memorandum, there's a subscription agreement and a company. Typically, ⁓ changes to those agreements, but having an attorney review or you review and just making sure you're comfortable with those documents is step one. you don't. A place good members like buying a business, you know, are.
Wayne (15:17)
Then the
You know, you're not gonna be able to make any
have company agreement.
there are.
Wayne C (15:37)
There's
a limited partnership or a limited liability company that owns this asset. And within that asset, you who's the managers and who's the members, limited partners, general partners.
Wayne (15:47)
I mean, from a...
Wayne C (15:48)
Step one is just make sure you have the paperwork. Even if the presentation is like, oh, you we're going to two and a half extra investment.
Wayne (15:50)
And if
You know.
Wayne C (15:57)
The presentation is material. What really matters is what's in that private placement memorandum, what's in that subscription document and the company agreement. So that would be something is, know, spend time, talk to them. Also, if you're investing in real estate, you know, having that real estate attorney is wise, but also getting your tax person in the H &R block. if you're starting in the real estate syndications or passive investments, you have a portfolio.
Wayne (15:59)
marketing.
And this is not,
Wayne C (16:25)
or a net worth of a certain point. That's time to have, if you don't already, like bring on a tax strategist and tax professional. And those are two separate things. A strategist is not always the person who enters the numbers and submits for taxes. But bringing them on board and have a look at the deal and ask questions. So those are those things. I would say once you become a passive investor, all that hard work, I mentioned the iceberg
Wayne (16:27)
Now, you know.
You know.
giving them the opportunity to.
the ⁓
Wayne C (16:52)
analogy earlier, all that hard work is before you sign in wire funds. So networking, fit, dock you on the horse that you trust, reviewing the paperwork, the legal documents that actually matter, not the marketing material that you have. Other people look at the deal, accountant, your tax strategist or your attorney. At that point, once you sign in wire funds, there's really nothing more you can do.
Wayne (16:54)
done before.
making sure you find a good, you know,
you know, ⁓ maybe you're
and
Wayne C (17:17)
because you are a limited partner, you are a passive. And that's where all that hard work of due diligence you did prior is important. It's a lot.
Wayne (17:20)
You
And you know, we have, this is.
Wayne C (17:27)
You know, it's, it's a free program.
It's informational. I'm huge on education. So I would do this podcast, but passive investor coaching.com. It has like five hours of just content. We've created no sales pitch or anything on it. It's just. How to evaluate it, how to that sponsors, cetera.
Wayne (17:41)
you know, how you know.
Wayne C (17:45)
There's a lot to it, but remember all the hard work is done prior to signing and doing paperwork. Cause once that's done, are invested in the deal, good or bad.
Wayne (17:52)
you know, in that.
Bernie (17:55)
I a thought here. Like you've just talked about a person coming up and saying, listen, I got a bag full of cash. got enough wealth around me, so enough padding. So if things go sideways, it's not going to take me out, take my knees out. And I get that part. Having an accountant handy and having a tax accountant handy, two different animals. Having a real estate lawyer, again, different than a typical lawyer.
Do you then the investor have to be a company coming in? that a better fit or can you come in as Joe Blow, here I am. These are the guys that I've hired to make sure I'm in the right direction, vet the paperwork. Is it better to be a company or is it better to be a private person? Is there an advantage on either end?
Wayne (18:36)
There's not an advantage.
Wayne C (18:37)
either way, just who have the passive losses and the passive income go to. And the reason is because every property that is purchased, I can only speak for myself because maybe somebody out there is buying it under their name, right? But for us, every commercial real estate property we buy that we skate is actually by a limited partnership. There's a, there's a
Wayne (18:39)
you want that.
is owned actually a
Wayne C (19:02)
entity that's a limited liability company and then there's a limited partnership which actually holds deed you know title on the property.
Wayne (19:10)
you
Wayne C (19:10)
The limited partnership consists of limited partners and general partners. General partners being the managers of the entity, limited partners being members of the entity. So say if someone were to get sued or a resident or an office tenant, somebody sues the property, the shield hits at that liability company and that limited partnership. So if you're signing as
Wayne (19:22)
you know.
Limited live
an
individual with
Wayne C (19:36)
You already are part of a company signing.
Wayne (19:38)
by
that company agreement. Now I see people in. ⁓
Wayne C (19:40)
I do as
you know, with their company because they want their company to get that passive income and then get those passive losses. So that's where that tax strategist and your accountant come into play. But as far as a legal standpoint, know, this has been something that I've spoken to our attorneys in depth about because we get asked this quite a bit. In our investment, they're signing. So they are shielded from any ability. ⁓
Wayne (19:54)
And,
when they join.
the company agreement.
any liability other
than so
Wayne C (20:08)
The only liability for investors in our particular deals is the investment they put into it. So if you put in $100,000, that is the risk. That's the benefit of staying passive because if you do go side, there's more exposure for me as an active investor. And that's okay, that's the world I live in.
Wayne (20:17)
the deal.
Get more on the act.
You
Wayne C (20:26)
That's what I do for a living. Just like if you're a doctor, you know, there's a risk in that, right?
Wayne (20:31)
You know that
Wayne C (20:33)
That paperwork doesn't matter if you sign as a company or an individual because you're backed by the company owning the asset.
Wayne (20:39)
on.
Bernie (20:40)
So if you buy, let's say I get involved in a project, I drop a half million or a hundred thousand, whatever, whatever the dollar value is. And do you make your money then over the time period to leverage it? Do you make your money on exit? my next question is, if I'm gonna build it as a pyramid, not as a pyramid scheme that sounds like, know, I'm hoodwinking people, but if I'm looking to build that growth,
Do I, you know, halfway through leverage what I got on the go with you and then buy another asset on a different project and just keep leapfrogging it like that? Is that kind of the overall strategy? If you're
Wayne C (21:17)
There's different strategies here. I love talking about this stuff. So it's like, have to determine if you're a cash investor or an equity investor. And there's different types. Just think when you buy a stock, there's value stocks and there's growth stocks. There's different risk. A, when you get closer to retirement, your portfolio and your risk tolerance should shift, right? Because you don't want to be so tied into
Wayne (21:20)
it.
And as you age and.
Wayne C (21:41)
risky investments or risky stocks. if you, know, just relating it to what people, most people understand and know about is, is the stock market. On the real estate side, it's a similar thing. You have your riskier projects, which are development, taking raw land, developing, least for a speculation. more of a speculation play. ⁓ but you can make a hell of a lot of money that way and great returns depending on you are in your investment life cycle.
Wayne (21:56)
up.
that way and but you know where you
or as you're getting and allocating.
Wayne C (22:09)
closer to retirement, your patient
to those type investments are going to change. First, a cashflow investor who
Wayne (22:16)
⁓ is buying maybe an eighties, nineties, 2000.
Wayne C (22:20)
product, ⁓ property that already is a percent lease, already has strong cashflow, already has a property manager. It's a different risk profile. So within real estate, you look at risk profiles. With the asset class that you're investing in, are you comfortable with office and retail? Are you comfortable with multifamily storage? What we've done as a company and every, this is not, know, sales pitch on serial partners. It's a comfort of whoever, as you're looking at deals.
Wayne (22:23)
is 90
Then you got to get comfortable.
You
Wayne C (22:48)
For us at CRI Partners, I've built the business around 80 % multifamily. 80 % multifamily because at the end of the day, everybody needs a place to live.
Wayne (22:52)
And I don't
Wayne C (22:57)
industry long enough to know that like cycles go downhill offices shut down. People start working from home. Easier to stop paying office rent than it is your place that you live in, right? It needs shelter. It's a basic. And so we've gone all in on cash flowing deals. I've previously had an investment that was considered a deep, deep bad.
Wayne (23:04)
you know it's
You know, need of life.
that on day one.
⁓
that didn't expect to have. And I.
Wayne C (23:23)
cashflow for two years. Hated
that project because that project, there's a dopamine hit every quarter when we send distributions. So we've shifted 80 % multifamily, full focus on multifamily with quarterly distributions. They have to cashflow day one. This property we're buying today that we're closing on, we'll send our first distribution.
Wayne (23:41)
⁓ January.
Wayne C (23:43)
20 % of the rest of our portfolio is more of that speculative. We're developing a 150 unit multifamily. We're developing a Marriott hotel. We're developing an office retail. I've developed storage. We've done build to rent communities. We can talk about build to rent communities if we want. Those are gonna be more speculative. risk comfort is 20 % development speculative type deals, 80 % day one cashflow. Every investor
Wayne (23:58)
⁓ for me, my.
Wayne C (24:10)
needs to determine if you're a cashflow investor or an equity investor. Equity investor is you don't see cashflow now, but you really want that upside. that a hundred thousand today could be 250,000 year three, year five, year seven, you know, whatever the timeframe is on that business plan or that cashflow, which is going to be less risky, maybe lower returns, but higher preservation of cash.
Wayne (24:31)
and know, consistent income.
Wayne C (24:33)
and those tax benefits, that's where that bucket sits. Or you can do little blended of both, which we have plenty of investors doing with us on each of the deals.
Bernie (24:41)
you cut your teeth in apartments, that first self storage, was there a part of you that said, this just isn't sexy enough? And I'm guessing you got over it, but if you did get over it, why?
Wayne C (24:52)
Yeah, great question. So I don't like self storage, mini self storage. think it's easy to build. Most cities have plenty of zoning for storage. It's pretty low cost.
Wayne (24:56)
is
easy to get in low baritone tree, you know, from an economic
standpoint. ⁓
Wayne C (25:09)
where I...
You know, my teeth in,
there's like large storage. not the mini storage, but these are all 20,000 square feet with a 14 foot roll up door, a walk in door. have a 30 amp or a 50 amp power, on. think about RVs. I'm in an RV right now. As you know, you know, traveling the country this year.
Wayne (25:18)
20 by 50.
the amp in the unit in the very back of the unit. Right now. And, you know, unit,
I don't want it in my bar.
Wayne C (25:37)
or outside in the elements. I want it stored in a nice enclosed facility that has installation, that has power.
Wayne (25:43)
and you know,
Wayne C (25:44)
that's covered, fully enclosed.
Wayne (25:46)
And so that may not be the case for my own that's in my bar.
Wayne C (25:48)
my travel trailer that I earn,
but this one, you know, it's enough money where I want to protect it. So it's a different type of clientele and a different need. The other thing is there's a lot of businesses that don't necessarily need a front office, but they need a place to store their inventory. can reach back mechanical, electrical, plumbing, disaster recovery, generators, et cetera. So we have a lot of customers that just need that thousand square feet to store their business.
Wayne (25:55)
client.
H-Tech, mechanical, any type of
⁓
Wayne C (26:16)
And those are the best customers in my opinion, because now are now part of their business. It's a tax write-off. It's, it's become part of their within the business. So that's where I got really excited on is that type of storage. And we own two of those assets. One's in lease up mode. We've been open a year and we're 67 % least. That's incredible for one of opening in the self storage business. Normally to self-serve it, that could take three to four years.
Wayne (26:19)
unit is
you know, their needs.
⁓ near.
you
Wayne C (26:45)
My other location, we're a hundred percent leased. have a wait list. We have bumped ⁓ rents when we first bought it was about 3.75. As now going to about a six 20 a month, $625 a month. So we've, we've pushed rents while staying at high occupancy. So yeah, that's why I like, that's, they still stays in that 20 % bucket for me. 3 % is still going to be that multifamily core business. Whereas this RV boat.
Wayne (27:05)
A
But I'm not a big fan of
Wayne C (27:11)
just many self-stores. A lot of investors do extremely well at it. I'm not attacking the business. I just want to be in something that has a barrier to get into.
Wayne (27:18)
harder.
Bernie (27:20)
So when you're looking at the markets in Texas, Louisiana and Alabama, what are you looking for? What tells you that's the ticket, that's the place to go, that one not so much so. Swampland in Florida is kind of the, someone will talk about, I can sell you some land, it's just all swamp or the Brooklyn Bridge. Pick whichever country, part of the country you wanna go into, right?
But what triggers a, yeah, that's a great idea or great spot to put park money into and build either green build, brown build, whatever.
Wayne C (27:49)
Yeah, so let's talk through macro states. So red states, Republican, Democrat, not to get political, but it is what it is. The more conservative landlord friendly state is investor friendly. So Texas, ⁓ Alabama, Louisiana, Florida, Georgia, South Carolina, the South East and West, you're going to have more landlord friendly, a lot of integration.
Wayne (27:58)
being in
You know, you're going to, you know, the.
⁓
My
coming down from North ⁓ coming.
Wayne C (28:17)
east, north to
the south. You have a lot of people from the west coming into the south. So real estate ⁓ is supply and demand. So about the migration and the jobs. Texas, where we live, we've jobs that we are doing, and it's because we're a pro business. ⁓
Wayne (28:25)
man.
mean, the amount of
state,
know, and heavily,
Wayne C (28:40)
encourage and incentivize growth in business, penalize through taxes and to
Wayne (28:43)
not, you know, getting in.
You know that-
Wayne C (28:47)
the intricacies of the actual business, like letting business owners do what they.
Wayne (28:51)
do and that's grow and and how.
Wayne C (28:52)
a
for-profit mindset. So that's sort of from a macro, those states as well. To the cities, there's different cities. Like in Texas, I would never, I grew up in Austin. I love Austin. It's town. My parents live there. I will never buy Austin, Texas. Austin, Texas is extremely blue. When we talk about red and blue, like it is blue as can be. Father and my mom.
Wayne (28:54)
⁓ so
like them now when you start getting into
Wayne C (29:16)
They tried to install a generator, a whole house generator on their home. took eight months to get a whole house generator because of all the different agencies that had to through fall through.
Wayne (29:20)
months
inspect and
My you know Hey, it all happened in one day eight months
Wayne C (29:29)
home generator. And this is an example took a day. Once one day, it's
crazy. But if I look at Dallas, I'll look at Houston, look at San Antonio, look at the outskirts of Austin, Texas, Georgetown, San Marcos, Buda, Taylor. Those are incredible, fast growing markets. So that's you got Alabama, and we're really targeting Huntsville, Alabama, and we love Huntsville, Alabama, because of all the growth.
Wayne (29:45)
⁓ and I have to know like an hour.
Wayne C (29:53)
especially with military technology,
et cetera, but we have a ⁓ partner that I trust and incredibly, we've done multiple deals together, but he lives near Huntsville, Alabama. So that's really important. Louisiana, there's a lot of growth. Oil, gas, and the medical and such grow parts of Louisiana. So we bought into Lafayette. So every market, we start off with the state, into the cities,
Wayne (30:07)
gas as oil and gas and
Then we go and
then we got
Wayne C (30:19)
to go into the neighborhoods. can't change the and spend a million dollars renovating. But if the rest of the property is around, as an
Wayne (30:21)
I can go in and buy an
it.
Wayne C (30:32)
So even within the cities, now we're starting to more into the markets, different sub markets. So unless you're in this full time and say majority of the stuff that we have in multifamily is in Houston and San Antonio at this point, even though we have assets in Louisiana and the bulk of our portfolios in the Texas triangle.
Wayne (30:35)
get, you know, in depth and
You're not going to know that. And I was, you know.
Alabama.
Bernie (30:55)
One the things I noticed here in Ottawa, every once in a while you see an area that as you describe it, yeah, you know, it's not optimal, right? You wouldn't leave your car keys on the dash because you know, nowadays you don't do that, but you just, you lock everything up. There's a process called gentrification. Are you also involved in that universe too? Because you're literally taking something that's not optimal and making it optimal. And it's...
influencing the change in the neighborhood. I've seen that happen here in the city of Ottawa where you see there's a facelift happening, right? It's not instant, it's, is that part of the box you believe?
Wayne C (31:32)
So for me, there's opportunities and there's huge tax benefits. not looking for our investments and investors. I'm not looking for home runs. I'm not looking to have X, three X, ⁓ eight to two X.
Wayne (31:33)
No
you know, 10 acts, five anybody's I can get a one point ⁓
multiple.
Wayne C (31:50)
on investments or maybe a little higher.
Wayne (31:52)
I mean, we're doing great. We're getting two, three and we're going to win the game long term. You start getting into.
Wayne C (31:54)
bass hits.
I think once we
Opportunity zones. There are definitely people with a tight there those people we need those areas to You know provide, you know better housing and better To happen but for me personally, I rather stay in the world of preservation of cash having One cash flow Kind of business. I'm buying a business. I want that Dave one cash flow now We will do renovations. We'll do those things at the property, but the property we're buying
Wayne (32:02)
and we need
You know, I'm not, that needs.
and being strong day one.
And we still, you know, staying. It's not needed. And
today I don't need to put any capex. ⁓ You know, anytime soon, you know, and.
Wayne C (32:29)
into it.
soon.
The roofs are in great shape. The pool has been resurfed, like all those things. So I do that first distribution. You know, that's cashflow from the business. Force capital into the deal, potentially get, you know, residents to pay a little bit more or to get them leased up. So my preference is just to buy day one cash flowing deals at a great price.
Wayne (32:35)
painted.
When January
Not me having the f***s.
to them.
I-
and implement evaluate. ⁓
Wayne C (32:57)
bad component, but I don't like
personally the, the risk of. Cause then you still have the risk. An opportunity zone that other other things and areas are going to improve. Change the whole perception of the area that takes years. It just, for me, it's, it's not, ⁓ in my comfort zone. However,
Wayne (33:03)
going into.
If you go in and go into.
you know, building and then then you have to.
and that you know
It's needed and I think people.
Wayne C (33:25)
do
really well at it. It's just not my appetite.
Bernie (33:28)
I understand being patient with your capital, but let's say your needs substantially change. Is there an excellent strategy over a period of some time where you can get out even with penalties or you're in till it sells?
Wayne C (33:43)
Yeah, it's a great question. What goes back to company agreement and that subscription? So every deal will have every sponsor will have different.
Wayne (33:44)
and it all to that comment.
Wayne C (33:53)
you know, different stance on it. Maybe they allow that person to sell their shares to another person, another company, you know, maybe there's that at CRI partners. We do not allow that. Like it's you've invested into a deal. Are being used to maybe pay for the payment of the property or implement the business plan strategy. If there's a raise, we'll see what
Wayne (34:04)
you know,
one off like, know, something crazy then yeah, we're human. we
can do.
Wayne C (34:18)
But by the paperwork, you know, that's not an option. So every group, a little different paperwork. That's where it just really matters. Even if someone says, yeah, you can do what like the end of the day, like what is the, what is the legal, you know, four corners of a page say you do? So that's what I would say. Just look at the documents, see if it's, and if that's important to you, real estate syndications aren't the correct investment. Maybe it's more of a REIT.
Wayne (34:22)
Um, you know, but there's going to be that.
and you then maybe, you
Wayne C (34:47)
where it's you're not owner of the asset. You don't get the tax benefits, but there are real estate investment trusts that you can buy into. it's more like owning shares, like stock.
Wayne (34:48)
You know, it's like a kind of stuff.
So, you know, that would be my...
Wayne C (34:59)
Thoughts on that things happen one-offs may occur but for CRR partners, know, it's Yeah, once you've invested your partner on the deal till we refinance or sell
Bernie (35:09)
Generational wealth. I've heard people talk about this. In other words, it's one thing, I'm going to invest money now, going to realize my gains between any short term or long term, like five or 10, maybe 15 years out. But some people, they amass a fortune. people speak of old money, right? And basically it's been sitting there in different forms and there've been folks that have come along and probably in the real estate industry.
Is that something that you can help a person establish? Here's your here's your foothold. And is that like, you know, although you have a 10 year map out to you either looking to exit out yourself or, you know, go for the next 10, right? If everything goes really well, is generational wealth a component then that you would tie into this? And how would you do that?
Wayne C (35:58)
We have a lot of investors who they are putting investments in their kids' names or their family trust. They need the cash flow now, but they're building it up for their future generations.
Wayne (36:05)
I don't need
⁓ that, you know, and, you know, you know, millionaires, you know, millionaires,
Wayne C (36:12)
There's a say there, you 90 % of the real estate, now in there, you
millionaires, not the golden standard anymore. think most people can be millionaires in their lifetime if they just invested in the stock market. But if you started getting into real estate, you're appreciation, the tax standpoint, you know, that cashflow that we're talking about and just the diversification. So large.
Wayne (36:22)
I
looking at it different from the.
the ⁓ in talking with any, ⁓
Wayne C (36:40)
investor
Wayne (36:41)
you know,
Wayne C (36:42)
that is looking to diversify, just understanding where their current investments are and what the cash flow or the equity. If they're a cash flow investor, you know, we more conservative type deals like the property we're buying today. That's a day one cash flow.
Wayne (36:45)
in your
they're looking to get out of from a And it goes back to that.
You will find them.
Built in 1981.
Wayne C (37:01)
⁓ you know, solid, solid building in a great location where they're looking to like have some of their allocation towards development. we're building multifamily and one of those investors is doing four and a half million dollars into that development. Not getting cashflow on that until it's built, but that is a huge strategy and it's going to do extremely well for them. You know, once we lease up and, you know, sell the asset. So absolutely. I would love those type more of those type conversations.
Wayne (37:16)
⁓
You know, definitely, you know,
Wayne C (37:28)
Also want to make sure that. And that just like as any investment does have risk.
Wayne (37:33)
And me and will do everything I can fiduciary, you know, my fiduciary and
Wayne C (37:33)
as the job.
My
work ethic and my grit is to protect capital and to do what we say we're going to do.
Wayne (37:42)
⁓ and I, if I feel like can connect, you know, see, have some more values.
Wayne C (37:43)
that investor and I.
then yeah, well, there's definitely opportunities for growth and have that generational wealth down the road. The biggest thing on generational wealth has, you know, huge part of that is tax strategy. And so I have investors and I'm everybody who listens to this call or this podcast, do want to talk to those people, they pay zero and.
Wayne (37:59)
I'm happy to put any.
and taxes and they get an income.
Wayne C (38:09)
Six figure those
depreciation, those losses. Now there are catch up taxes. There are other ways. And then we can talk about that generational wealth through 10 31 exchanges, sell the asset, pull it into another investment. There's different vehicles for, that, or to your point, just can you do in syndications really just wait till you die.
Wayne (38:26)
And then your
family, you know, pay you, you know, they're not paying
Wayne C (38:33)
taxes on the rate at that time. don't pay
in the accrued taxes over the years. So, you know, there's different ways to look at.
Wayne (38:39)
you know,
and have great income and, you know, through
Wayne C (38:44)
generational wealth, the
real estate, but taxes and that has to be part of the conversation. Investor.
Wayne (38:51)
⁓ with any
Bernie (38:53)
What is risk impact? I hear these terms bandied about. What is risk impact? What's it mean?
Wayne C (38:59)
Risk impact. don't know. Can you tell me more about it?
Bernie (39:03)
Bernie. So the there's a risk impact. if you if if something goes sideways, right? What are the what's the fallout to you? And then there's also the risk probability. So, you know, it's and I guess the question is, how do you balance that out? Like, either yourself or you're talking to somebody? What's that fine line? Right? If every like you said earlier, if everything's 100 % guaranteed, that's when everybody's going to go to, right?
But that ain't so. how do you feel? Is it like, 20 % risk, 80 % yield.
Wayne C (39:32)
Yeah. you can, you can have a great ⁓ deal. It's a great investment cash flows, but if we suck at what we do, it's going be a horrible investment. So the person who's show.
Wayne (39:34)
of investment like we're buying today.
You gotta know, team,
Wayne C (39:46)
What, what's
Wayne (39:46)
you know.
Wayne C (39:47)
their experience and you know, what's, what's their, ⁓ what's the way to execute on the deal. So I would say from a risk standpoint, know, whatever your initial investment is, that is the risk for the passive investor. So that's what you have to be willing to lose. You invest in this type of alternative investment and you know, people invest in oil and gas and crypto.
Wayne (39:50)
you know, you definitely planning.
going back to.
You know, if you.
you know,
and maybe into, you
Wayne C (40:14)
buying your
brother-in-law's business. I mean, there's different investments and different risks. This definitely sits in that alternative investment. But I would say real estate as a whole.
And this is just my
Wayne (40:24)
opinion, but having been in the industry.
Wayne C (40:26)
this tree
almost 18 years it's a brick and mortar business the business itself it unless there's a massive flood or
Wayne (40:35)
hurricane
or and even then
Wayne C (40:36)
earthquake. It's
insured, so it's going to be rebuilt.
The physical asset risk is less than what I would say like a paper investment with stocks where, some or someone or some other company, something happened to disrupt the market. mean, those stocks were going crazy and then they came out with their own version and then the stock just drastically dropped and then acted, you know, every out there because these fund managers had Nvidia in their
Wayne (40:44)
Say.
thing.
can happen.
in the video like
impact you know fund you know you
Wayne C (41:08)
in their portfolio and they still do obviously, but you don't get that with real estate. It's actually with 20, 30 % returns year one, but if I give four to 7 % cashflow year over year and year five sell,
Wayne (41:12)
you know yeah it may not be a annual one and give you
and make a profit.
Wayne C (41:27)
5 % average annual return through the hold period, a much more stable. Don't have to worry about what's going on in social media, who the president of the United States is or what's going on overseas or.
Wayne (41:30)
And I'm sure if to
you what happens anywhere, you know, happening within that one.
Wayne C (41:43)
other than what's one
mile radius of that asset. So there's different risk profile risk impact on that as well that I think is important.
Bernie (41:51)
Wayne, a lot of our listeners are from the States. heard Canadians can also invest with you. How do we reach you if we want to learn more?
Wayne (41:59)
Yeah, and I appreciate the opportunity.
Wayne C (42:00)
So, CREIpartners.com is our website.
Wayne (42:04)
You can reach out to me directly at Wayne at
Wayne C (42:06)
C R E I partners.com. would heavily, if you're listening to this podcast, you're wanting the education. Go to passive investor coaching.com. There's no sales pitch. It's free. It just provides an incredible amount of content. But once or, you know, as in play, as you choose to learn about real estate syndications against passive investor. ⁓ You want to reach out to me directly. Wayne at CRI partners.com is the best way.
Wayne (42:09)
But
Have a
But if you're interested in
Bernie (42:33)
Wayne, I wanna say thank you so much for being our guest today. It's enlightening, it's good to understand this. I have a colleague of mine who's into the commercial real estate and the syndication here in Ontario. So I got to know what you've been talking about, totally understand it. To my co-host, Wayne Pratt, thank you. And you the Knack 4 Business listeners, because we really appreciate your time. So if you are looking to invest in the US into residential or other,
property, reach out to Wayne. He can help you start getting into it. He's got a free course. It can give you a little more enlightenment before you dive into it. And, you know, as you can hear him, he talks about having success and the jockey that matters. So let him ride your horse. For lack of better words, if you find the horse, though, I don't