Episode 72: An Intro to Due Diligence Process in Real Estate for New Investors with Hans Box

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Connect with Hans Box

https://boxwilson.com/

In this episode of Tech Equity and Money Talk, host Christopher Nelson welcomes Hans Box, founder and owner of Box Wilson Equity Group, which manages $90 million in assets. Hans discusses the critical importance of due diligence in investment decisions.

The conversation touches on the potential pitfalls of neglecting due diligence, highlighting real-life examples of bad investments stemming from inadequate research.

Hans Box is Co-Founder of Box Wilson Equity, a firm that focuses on cash flow and value-add investments. Box Wilson has invested $90MM+ in equity across various asset classes, including multifamily, self-storage, mobile home parks, distressed debt, office, and preferred equity.

He attended Texas A&M University, graduating cum laude with a B.S. degree in Accounting and magna cum laude with an M.S. degree in Accounting and is a Certified Public Accountant licensed in the state of Texas.

Hans has personally been directly involved in the acquisition, investment, and management of over $350MM in multifamily and self-storage assets, has asset managed ~3,700 multifamily units and has been the GP in ~4,300 multifamily units and ~2,000 units of self-storage.

Prior to Box Wilson Equity, he spent 5 years with a DFW-based multifamily owner-operator, where he oversaw the acquisition and asset management functions. Hans began his career at PricewaterhouseCoopers LLP where he worked in tax and strategy consulting with Fortune 500 companies.

Host: Christopher Nelson

Guest: Hans Box

Highlights:

• The Importance of Due Diligence - Hans emphasizes the need for thorough due diligence when investing in real estate. He contrasts the extensive time people spend researching consumer goods like TVs and cars with the often minimal time spent on significant investment decisions. Proper due diligence is crucial for becoming a successful passive investor and achieving financial freedom.
• Vetting the Sponsor - Hans highlights that the most critical aspect of due diligence is vetting the sponsor. He uses the analogy of the jockey and the horse to stress that a good sponsor can turn a mediocre deal into a success, while a bad sponsor can ruin a great deal. Key red flags include lack of transparency and overly sales presentations.
• Understanding the Business Plan - Hans advises that a clear value-add strategy should be evident in any business plan. Investors should be able to understand how the sponsor plans to add value to the property, whether through rent increases, property improvements, or other means. He also stresses the importance of a sensitivity analysis to understand how different variables can impact the deal's returns.
• Fees and Compensation - The discussion also covers the importance of understanding the fee structure. Hans points out that while fees are standard, they should be reasonable and aligned with the investor's interests. He warns against deals with excessive fees that can dilute returns.
• Practical Advice for Investors - Hans provides practical advice for investors, including the importance of learning to read a P&L statement and understanding key assumptions in the business plan. He also recommends being patient and not succumbing to FOMO (fear of missing out), as there will always be more deals.

Episode Timeline:

• [00:00:45] Due diligence in investing.
• [00:05:14] Vetting the operator's transparency.
• [00:08:32] Salesy business presentations.
• [00:12:24] Evaluating sponsor experience in investing.
• [00:15:32] Value-add strategy in investments.
• [00:21:20] Cash flow in commercial real estate.
• [00:22:04] Cash flow vs. value add.
• [00:25:11] Understanding assumptions in investments.
• [00:29:09] Rent increase justification process.
• [00:33:07] Sensitivity analysis in investing.
• [00:35:Due diligence in real estate.
• [00:40:51] Preferred return in investments.
• [00:44:01] Patience in real estate investing.
• [00:48:45] Due diligence in investing.
• [00:50:25] Risk adjusted return in investments.

Ready to explore the latest in tech careers and financial insights? Click here now for an eye-opening journey at https://www.techequityandmoneynews.com/!

In this episode of Tech Equity and Money Talk, your host Christopher Nelson is dropping some wisdom! He’s sharing five big lessons he picked up during his first two years of financial independence.

Spoiler alert: It's not all about kicking back and sipping cocktails! 🌴 You’ll hear why having crystal-clear goals, a solid plan, and some serious discipline is key to keeping that financial engine humming. Tune in and get ready to level up your money game! 💰🚀

Connect with Christopher

https://www.linkedin.com/in/christophercnelson/

Highlights:

• Having a Purpose: Financial independence isn't just about having free time; it's about having a clear purpose that drives you. For me, it started with wanting to spend more time with my sons and has evolved into helping technology employees understand and manage tech equity as a wealth-building strategy.
• A Roadmap is Non-Negotiable: Two essential roadmaps guided my journey—a life plan and a financial plan. The life plan helped me focus on family goals and personal growth, while the financial plan provided a clear strategy for building and managing my portfolio.
• Transition from Money Maker to Money Manager: This shift can be challenging as it involves changing your identity from someone who earns money to someone who manages it. However, it also opens up opportunities for investing in startups, philanthropy, and building a multi-generational family business.
• Self-Discipline is Essential: Without the structure of a traditional job, maintaining discipline is crucial. I follow a structured daily routine that includes early mornings, creative time, exercise, and family activities. This discipline extends to continuously challenging myself and staying uncomfortable to ensure growth.
• Run Your Portfolio as a Business: Managing your portfolio like a business involves having a clear legacy statement, a portfolio thesis, and a structured management cadence. This approach ensures that your investments are aligned with your long-term goals and can support multiple generations.

Episode Timeline:

• [00:02:49] Finding Purpose in Financial Independence.
• [00:04:24] Finding purpose in journaling.
• [00:08:55] Building a lifestyle business.
• [00:13:21] Transition to money manager.
• [00:18:15] Getting uncomfortable for growth.
• [00:22:42] Managing your portfolio like a business.
• [00:24:08] Lessons for financial independence.

Ready to explore the latest in tech careers and financial insights? Click here now for an eye-opening journey at https://www.techequityandmoneynews.com/

In this episode of Tech Equity and Money Talk, we're turning the tables! Our good friend Fred DeWorken takes over the mic and puts Christopher in the hot seat. Christopher spills the beans on his wild ride into the tech world, including that time it took him 14 years to finally grab that college diploma.

From his high-flying days as an Accenture consultant to riding the IPO wave with big names like Splunk, GitLab, and Yext, Christopher doesn’t hold back. Tune in for a behind-the-scenes look at the journey that led him here!

Frederick DeWorken previously appeared as a guest on episodes 55 and 56, and now, the roles have reversed—he's interviewing our host, Christopher Nelson.

Connect with Frederick

https://www.linkedin.com/in/data-cloud/

Host: Fred DeWorken

Guest: Christopher Nelson

Highlights:

• Unconventional Path: Christopher took 14 years to complete his college degree, initially working in the restaurant industry.
• Tech Spark: His interest in technology was ignited while working on a virtual menu project for a high-end sushi restaurant in San Diego.

In this episode, we talk about:

• Know Your Value: Christopher advises tech employees to understand and articulate their value, using tools like levels.fyi to benchmark their worth.
• Negotiate Wisely: He shares insights on negotiating not just the quantity of equity but also the vesting schedules and other terms.
• Education and Support: He stresses the importance of continuous education and surrounding oneself with a supportive community to navigate the complexities of tech equity.

Episode Timeline:

• [00:02:30] Journey into tech through food.
• [00:04:33] Persistence in advanced calculus.
• [00:08:19] Realizing Your Value in Tech.
• [00:12:30] Undervaluing skills for equity.
• [00:18:27] Due diligence for success.
• [00:22:22] Due diligence process in investing.
• [00:24:38] Maximizing Your Value as an Employee.
• [00:29:52] Negotiation strategies and growth.
• [00:31:06] Negotiating vesting schedules.
• [00:36:31] Managing stock value after IPO.
• [00:40:31] Sudden Wealth Syndrome.
• [00:42:53] Support groups and accountability.
• [00:46:33] Investing in AI companies.
• [00:51:14] Managing emotions while being choosy.
• [00:55:15] Trading time for equity.

Episode 68: A Simple Guide to Travel Hacking with Julian Fung

Ready to explore the latest in tech careers and financial insights? Click here now for an eye-opening journey at https://www.techequityandmoneynews.com/!

Julian Fung works in tech, and runs a travel business. He is on a mission to help 1000 people travel hack amazing vacations, create lifelong memories, and maximize geographical freedom.

He works with business owners & busy professionals to maximize geographical freedom through credit card points & miles.

His company, money or life, begs the question "Why not both?" We can build wealth while enjoying life along the way.

Connect with Julian

https://moneyorlife.co/

Host: Christopher Nelson

Guest: Julian Fung, Tech Employee & Owner of Money Or Life

Highlights:

• Travel Hacking Expertise: Julian shares how he leveraged travel hacking techniques to secure $250,000 in free travel.
• Luxury Stays for Free: Insights into Julian's experiences staying in luxury hotels in Sofia, Bulgaria, and Cape Town, South Africa, without spending a dime.
• Building Connections: Hear about the friendships and perks Julian gained during his global travels.
• Mastering Credit Card Points: Learn how to optimize credit card spending to accumulate points for flights, hotels, and other travel expenses.
• Achieving Financial Independence: Discover how travel hacking can support your journey to financial independence and geographic freedom.

Tune in to learn how to maximize your money and life through travel hacking with Julian Fung!

In this episode, we talk about:

• Flexibility in Dates: By being flexible with travel dates, individuals can take advantage of off-peak times when flights and accommodations are typically cheaper in terms of points or miles. Traveling during less popular times can result in better redemption options and availability, allowing travelers to stretch their points further and potentially access premium experiences at a lower cost.
• Flexibility in Destinations: Being open to exploring a variety of destinations can lead to discovering hidden gems or less crowded locations that offer unique experiences. Travelers who are willing to consider alternative destinations may find better redemption options, as popular tourist spots often have higher demand and limited availability for reward bookings. Exploring off-the-beaten-path locations can provide a more authentic and enriching travel experience while maximizing the value of accumulated points.
• Flexibility in Number of Travelers: The number of travelers can also impact the value of travel hacking. Smaller groups or solo travelers often have more flexibility in booking flights and accommodations using points or miles. Larger groups may face challenges in finding award availability for multiple travelers on the same itinerary. By being open to traveling solo or in smaller groups, individuals can increase their chances of securing reward bookings and optimizing their travel rewards.

Episode Timeline:

• [00:00:31] Travel hacking experiences.
• [00:05:47] Unlocking Travel Experiences Through Hacking.
• [00:10:16] Travel hacking for retirement.
• [00:13:22] Maximizing travel rewards for experiences.
• [00:16:29] Understanding flex points concept.
• [00:18:43] Travel hacking and points redemption.
• [00:21:23] Travel hacking strategies.
• [00:25:27] Maximizing financial independence strategies.
• [00:29:38] Transfer speeds and durations.
• [00:33:08] Alternative travel destinations.
• [00:36:04] The art of intentional travel.
• [00:39:16] Change of perspective.
• [00:41:58] Routines and personal growth.

Episode 67: Building a Shareholder Mindset Steps for Tech Professionals

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Overview:

Discover how a shareholder mindset can elevate your career and financial well-being.

Key Takeaways:

• Think Like an Owner: Understanding your equity compensation is key to viewing yourself as a shareholder and part owner of your company.
• Maximize Your Value: Manage your time and talent as assets to build wealth through equity.
• Embrace Vulnerability: Personal growth, stronger relationships, and increased creativity stem from embracing vulnerability.

Why Listen:

Learn how shifting your mindset can enhance your performance as an employee and make you a more strategic investor.

Tune In:

Join us for a deep dive into the intersection of technology, equity, and ownership!

In this episode, we talk about:

• Get to Know the Product and How to Pitch It: Understand the problem your product solves and be able to articulate it clearly.
• Be a Cheerleader for Your Team and Company: Encourage and motivate your colleagues, especially during challenging times.
• Know Your Customers: Understand who your top customers are and their impact on the company.
• Stay Focused on Metrics: Keep an eye on key business metrics and understand how you can contribute to improving them.
• Keep Your Eye on the Ball: Continuously evaluate the investment of your time and talent, and be aware of red flags that might indicate it's time to move on.

Episode Timeline:

• [00:02:08] Shareholder owner mindset.
• [00:05:42] Acting like a shareholder owner.
• [00:08:01] Great leadership in challenging times.
• [00:12:27] Thinking like an owner.
• [00:17:01] Red flags in company metrics.
• [00:21:14] Comfort vs. Career Growth.
• [00:23:10] Being too comfortable vs. intentionally resting
• [00:25:37] Thinking like an investor.

Episode 66: Guide to Building Wealth with Equity Compensation for Private Companies

Ready to explore the latest in tech careers and financial insights? Click here now for an eye-opening journey at https://www.techequityandmoneynews.com/!

Overview:

Learn how to strategically choose private tech companies to maximize your equity compensation and build wealth.

Key Takeaways:

• Embrace Change: Adapt to the constant evolution in your career and view change as an opportunity for growth.
• Strategic Selection: Host Christopher Nelson shares his five criteria for selecting successful private companies—three of his four picks went public.
• Luck vs. Strategy: Understand the difference between relying on luck and making informed, strategic investments in your career.

Why Listen:

Get insider tips on how to evaluate potential opportunities and position yourself for financial success through equity compensation.

Tune In:

Join us for expert advice on navigating the world of private tech companies and equity compensation!

In this episode, we talk about:

• Product Fit and Buyer Analysis: Understanding the product, the problem it solves, and the target buyer is crucial. Evaluating the product's market fit and the total addressable market can provide insights into the company's growth potential. For instance, focusing on companies that cater to expanding markets with predictable budgets can indicate revenue predictability.
• Customer Sentiment: Customer sentiment significantly impacts a company's success. Having enthusiastic customers who advocate for the product can indicate a strong market presence and potential for growth. Monitoring customer feedback, net promoter scores, and community engagement can offer valuable insights into customer satisfaction.
• Leadership Team: The experience and expertise of the leadership team are critical factors to consider. Leaders with a proven track record of scaling companies, navigating IPOs, and fostering a positive company culture can contribute to the company's long-term success. Balancing technical expertise with business acumen in the leadership team can ensure a comprehensive approach to company growth.
• Financial Health: Assessing the company's financial health, growth rate, profitability, and burn rate is essential. Understanding the company's financial stability, growth trajectory, and proximity to profitability can help mitigate risks associated with financial instability. Monitoring key financial metrics and evaluating the company's financial strategy can provide insights into its sustainability.
• Quality of Equity: Evaluating the type of equity offered by the company, its dilution, valuation, and liquidity potential is crucial. Understanding the equity structure, whether it involves ISOs, RSUs, or other forms of equity, can impact the value and risk associated with the shares. Assessing the company's valuation, market position, and potential for liquidity events can help individuals make informed decisions about their equity participation.

Episode Timeline:

• [00:00:42] Thinking like an investor.
• [00:04:14] Building a financial fortress.
• [00:08:50] Evaluating the product and buyer.
• [00:12:34] Customer sentiment.
• [00:14:41] Customer sentiment.
• [00:19:28] Rule of 40 for Investments.
• [00:22:40] Evaluating Equity in Startups.
• [00:26:02] IPO criteria and strategies.
• [00:28:08] Making informed career decisions.

Episode 65: Public Company Due Diligence for Tech Employees with Brian Feroldi

Ready to explore the latest in tech careers and financial insights? Click here now for an eye-opening journey at https://www.techequityandmoneynews.com/!

Guest Overview:

Brian Feroldi is a financial educator, YouTuber, and author passionate about simplifying the stock market. Since starting his investment journey in 2004, Brian has transformed his early missteps into valuable lessons that he now shares with others.

Brian’s Mission:

To demystify the stock market and help others succeed in their investments.

Connect with Brian:

• Long-Term Mindset
• Brian on X

Episode Highlights:

• From Struggles to Success: Brian’s journey from a novice investor to a stock market expert who has written over 3,000 articles for The Motley Fool.
• Key Advice for Tech Employees: Learn how to trade your time and talent for equity in public tech companies, focusing on stocks that are liquid and appreciating in value.
• Industry Insights: Brian emphasizes the importance of investing in major tech players like Facebook, Google, Microsoft, and Amazon, highlighting their growth potential and future value.

Why Listen:

Get practical tips on making informed investment decisions and maximizing your financial potential in the tech industry.

Listen Now:

Join host Christopher Nelson and Brian Feroldi on Tech Equity and Money Talk for a deep dive into smart investing strategies for tech professionals!

In this episode, we talk about:

• Stock-Based Compensation Strategy: Brian emphasized the importance of understanding stock-based compensation when considering job opportunities in tech companies. He highlighted the significance of looking at a company's financial statements, particularly focusing on the dilution rate and the company's stock-based compensation practices. By being aware of these factors, tech employees can make informed decisions about where to invest their time and talent.
• Diversification and Risk Management: Brian shared his personal divestiture strategy when it comes to equity compensation. He stressed the importance of diversifying investments and managing risk by setting a limit on the percentage of net worth tied up in any one business. By being intentional about diversification and risk management, tech employees can safeguard their financial future.
• Continuous Learning and Checklists: Brian highlighted the importance of continuous learning and the use of checklists in investing. He emphasized the value of creating a checklist that includes positive and negative aspects of a business to guide decision-making. By continuously learning and following a structured checklist, investors can enhance the quality of their investment decisions.

Episode Timeline:

• [00:02:16] Stock-based compensation insights.
• [00:07:18] Safest revenue in technology.
• [00:10:07] Guaranteed equity in big companies.
• [00:13:43] Investing in startup companies.
• [00:18:38] Recurring revenue perspective.
• [00:22:25] Financial Metrics Importance.
• [00:25:50] Stock-based compensation insights.
• [00:29:20] Risk Management in Investing.
• [00:32:21] Managing equity compensation for growth.
• [00:37:04] Stock-based compensation practices.
• [00:40:25] Investing insights and execution.
• [00:43:26] Compensation practices in businesses.
• [00:47:06] Greatest skill for an investor.