How To Take Your Income Through Investment Opportunities with Chris Larsen

How To Take Your Income Through Investment Opportunities with Chris Larsen

Chris Larsen is the Founder and Managing Partner of Next Level Income, through which he helps investors become financially independent through education and investment opportunities. He has been investing and managing real estate for over 20 years. He has a degree in Biomechanical Engineering and MBA in Finance at Virginia Tech. He bought his first single-family rental at age 21. 

Chris Larsen went on to basically start syndicating deals and has been involved in over $150 million in real estate acquisitions. He lives in the great state of North Carolina, with his wife and his two sons.

 

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How To Take Your Income Through Investment Opportunities with Chris Larsen

 

Brett:

Our next guest is the Founder and Managing Partner of Next-Level Income, through which he helps investors become financially independent through education and investment opportunities. He has been investing and managing real estate for over 20 years. He has a Degree in Biomechanical Engineering and MBA in Finance at Virginia Tech. He bought his first single-family rental at age 21. He then went on to basically start syndicating deals and has been involved in over $150 million in real estate acquisitions. He lives in the great state of North Carolina, with his wife and his two sons, please welcome the show with me, Christopher Larsen. Hey, Chris, how are you doing today? 

Chris:

I’m doing great. Great to see you again. 

Brett:

Absolutely. You’re coming in loud and clear now. It looks like our travels from before are all gone away. So I’m excited for you to get to know you a little bit more on the show and our listeners to get to know a little bit more as well. So for those who are just getting to know you, would you tell us a little bit more about your story, and your background, and your current focus?

Chris:

Yeah, Brett. I appreciate you having me on. I know you mentioned a little bit here in the beginning about buying my first property at age 21. And when I was in college, I was racing bicycles. And you mentioned doing a Biomechanical Engineering Degree. I knew two weeks in that I didn’t want to be an Engineer, I want to race my bike. So I was like, I’ll get a degree, I’ll go race my bike for five years or so I’ll come back and figure out what I really want to do. Well, between my freshman and sophomore year of college, my best friend, my trading partner, my roommate passed away. And it kind of threw me on my heels. I raced for another year, I poured my heart and soul into it. And I was doing really well. But after a year of doing that, and being is the most successful I’ve been, I realized I wasn’t happy, I came back to school, I quit racing my bike. And now I’m not racing my bike. I don’t want to be an engineer. And I still wanted the sense of freedom that I had when I was riding my bike when I was traveling to races and doing that. And I started, I started being a normal college kid, but also start investing in the stock market. So this is the late 90s. It’s interesting that there’s a ton of parallels in my mind between what’s going on today. And what was going on back then? So as day trading, it’s making a ton of money. I was also a college kid, I was also losing money. And one night at 3 am, I was laying there thinking and it’s just like, it’s what I want to do. I’m 40 years old laying in bed like freaking out about what my portfolios doing and worrying. And I started reading about other investment options that were out there outside of the stock market and I came upon real estate, ended up buying my first property, I liked the fact that you could leverage so I  for $3,000 a lesson that I bought my first party, you could have other people come in and pay off your debt, pay off your mortgage for you, you had cash flow, but you could also kind of control the purchase price and also the appreciation in some ways. So I managed a single-family portfolio for 15 years. But after doing that, and being in the medical device industry, at the same time, I decided it was just it was too much for too little reward ended up transitioning in 2013 to commercial real estate, mainly multifamily, and as you mentioned, ultimately started syndicating deals in 2016. And now our goal through Next-Level Income is to provide not only those opportunities through syndication but also education. So that’s why I love being on your show, Brett because you help educate investors and help people figure out ways to not only keep more of their money but ultimately let it continue to grow.

Brett:

Beautiful, amazing story, and so much to dive into here in a minute. Here’s a question for you to start. I believe we’ve all been given certain gifts, Chris, and these gifts are given to us to be a blessing and help to others. So I’m curious, maybe it’s one or two gifts you believe you were given and how does that help how you help people today?

Chris:

Yeah, I mean, my wife would say that my gift, my superpower is that I get calmer, the crazier things get. So  I spent 18 years in the medical device industry actually the end of Q1 2021, I officially walked away from that to spend 100% of my time on Next-Level Income. But I really think the gift of being able to translate complex ideas whether it’s a medical device industry or financial situations, assimilate the information, then translate those two people in ways that they can ultimately do things with them. And again, I think I utilize that the or when I was working with neurosurgeons, brain surgeons, spine surgeons, saying, “here’s this technology, here’s how you can utilize it.” But also for investors,” here’s this space that a lot of people haven’t heard about.” They’ve been just investing in the typical stock-bond portfolios out there, they can have this type of investment class in commercial real estate that only the ultra-rich had access to 10, 20 years ago.

Brett:

Excellence the same cool under fire, staying calm, calm when the craziness gets going there. So let’s dive into those parallels. You mentioned day trading, things are high, we’re in the Robin Hood environment here. Right? We’re in the what’s the recent one, the Reddit, right? Where people are banding together to buy a stock. So give us your thoughts on where we are at right now and why more than ever, commercial real estate is your go-to choice for investing?

How To Take Your Income Through Investment Opportunities with Chris LarsenChris:

Yeah, so I read a ton. If you look behind me, there’s only a handful of books back there. One of my favorites is The Secret Life of Real Estate and Banking. And I believe that the economy, real estate goes in cycles, real estate, specifically, and income these 18-year cycles. What’s interesting is the stock market parallels those cycles a lot as well. I think we’re getting into the latter part of the cycle in real estate. And I think we’re at this point where personally, I think the stock market is highly overvalued, there’s not a lot of value there. There’s a lot of froth, there’s a lot of speculation that’s going on. So I think this time if you look at where we are, if you look at the late 90s, it’s a good time to look at other asset classes and potentially diversify your portfolio. So no typical rebalancing and portfolio and by the way, I talked about, talk about all this talk about the history of my book, which you can get I know you had a website up there nextlevelincome.com, we have a book link on there, and I’ll do your audience, I’ll give it away for you. So if you’re listening, and you want to learn a little bit more about what I’m doing kind of specifics of anything I’m diving into just click on the book link, I’ll even send you a copy if you put your address on there. But I talk about how real estate in my book, I talk about how it can provide a buffer, it can provide increased returns, but also decreased volatility in your portfolio. And if you’re looking at the stock market right now, and you’ve done really well, I think it’s a great time to start looking at other alternatives that can help provide some stability going forward.

Brett:

Yeah, this thing, the simple thing is to sell high buy low. A cash flow that’s going to pay and what is the cash flow coming from people living in homes and apartments, I like mobile home parks. I like senior housing, I live multifamily value add. And so let’s talk about the North Carolina market and where you’re finding deals or even just talking about the recent deal you’ve done, what he liked about it, what it looked like to buy it to find it, and what you’re doing now to improve the property?

Chris:

So first off, the same thing I love. I love cash flow, real estate. So whether it’s mobile home parks, I think senior housing is a great opportunity going forward. Our big focus is on multifamily, as you mentioned, value adds specifically. So actually, I’ll give you a couple of different deals. We started out five or so years ago, we were looking at heavier value add more workforce housing. So we’re talking about properties that were built in the 70s and 80s. That needed a little more, a little more input a little more capital, and we’re buying them at higher cap rates today. About two years ago, we started migrating towards more stabilized assets a little bit lighter value add with a higher resident quality. And what I mean by that is not that these people are nicer, not nicer, but they have higher average incomes. So if you’re looking at workforce housing, your average incomes are say 40 to $50,000. Over the last year, those income ranges were hit disproportionately hard service economies during the COVID pandemic. I think we’re going to have increased volatility going forward with economic swings. So those higher income levels are going to have less variability. These are the white-collar workers that can work from home. So one of our most recent purchases was outside of Raleigh, so it’s in Cary, North Carolina. Again, white-collar area, just outside of the Research Triangle. Raleigh is a fast-growing area. It’s benefiting from a lot of the net in-migration from places like New York. And for the record, and again, I put this in my book three years ago, when I wrote it, we moved to the southeast for the demographics. We invest in the southeast for the demographic. So some people say, oh, Chris, you just invest there because you live there. No, we live here, because the demographics and makes it easier to invest. But we’re also looking at places like Florida, Brett. So all these areas, what they have in common is they’re benefiting from net in-migration. They’re growing faster than the average state that’s out there and the cities we invest in are growing faster than the average city. And we’re typically investing in states that are more business-friendly than other states.

Brett:

Yeah, it makes sense. Right? And I’m in California. So I’m on the front lines of wealth that are fleeing and going to other states, such as Florida, Texas, had a couple of friends about the Tennessee Boise, Idaho is really hot. Yeah. Georgia this a lot in North Carolina. It’s cool man, I spent a little bit of time there. I got to go on. peeking on Coach K. It was as he was doing a practice there. Oh, sweet. Yeah, to tour the campus there. So it’s a beautiful, amazing area. And you’re right. I mean, where are the jobs going? Where’s the net migration? Where’s the money flowing? If you follow those demographics, the South East is an amazing place to invest. That being said, give us your take on just opportunities? How hard is it to find opportunities these days? How many deals are you bidding on that are being outbid by perhaps people who are selling out like in New York or California and, and flooding their funds to an overpaying for properties? Just give us that sense of deal flow.

Chris:

Yes, certainly, if you look at over five years ago, we started in the space, the deals are getting harder to find. I mean, we took she’s three or four months between deals between our last deal, and this deal, that was closing that wasn’t even closing to finding a deal. So it’s the time is getting longer in between deals. This latest deal that we’re launching right now, which is in Orlando, Florida, is an off-market deal. So we picked it up directly from the owner. That was it wasn’t marketed. So right now, to find deals, I feel like one, you have to be selective, too, you have to have the relationships in the market, you have to stick to your criteria because I think a lot of groups that are out there that they just feel like the pressure to get a deal done. And you got it, you got to stick to your criteria. We’re also starting to look in areas like Self Storage, we’re looking at some specialized areas in the office. And you have to, I think, start to expand your horizons and look into the next 10 years. That’s why when you mentioned senior housing, I think over the next 10 years, that’s going to be a great space as well. So we continue to be very bullish on multifamily. We think that the deals are going to be a little bit slimmer, a little bit further between deals than they were before. But we’re still focused on the southeast. So Ivan wrote an article about it if you’re looking to move, you’ve kind of walked through my process on my blog about how you can find like the next hot area in the country, the next hot area in your state, next to hot air in your city, the neighborhoods that are going to boom. And we use all that same criteria when we’re trying to find deals ourselves.

Brett:

Excellent. And you can learn more about Chris Larson at nextlevelincome.com, and we’re talking about how to take your income to the next level, through investing in real estate and looking at analytics and patterns, and finding people to partner with and be active or passive, it’s a great place to be is in commercial real estate. That being said, I’ll be in Atlanta, Florida, Chris, coming up here, if the family we’re going to get this place awesome is the Disney World, I might drive by that property confidential and take a peek at that thing. And who knows that might be a good reason to do to increase investments there. So that being said, what’s the next best secret? Let’s focus a little bit now on just scaling. Right now we’re in a rapid technology-paced environment with multifamily. You know syndicators like yourself, that is I feel like it’s like a race to educate, a race to make a seamless transaction, as much as you can for investors. So what’s the best secret you found to doing just that scaling and making it more seamless for yourself and your, your clients and partners?

Chris:

Yeah, I think there’s a couple of things taking advantage of technology certainly is important, I think is it’s easier to put information out there. Things like webinars. We have our podcasts we’ve had, we’ve had our blog that’s out there educating people, it’s, it’s obviously very easy. Making the investment process again, using technology is easy, having the right members on your team, these are all basics that pretty much anyone can do. I’m going to take it in a couple of different directions. One, I think you need to look at how do you add value to a property using technology, you have even things more efficient. So we’re using some virtual tours, we’re using things that allow people to go into the property and say, hey, maybe maybe I don’t want to go to our property like I used to pre COVID. So they can go in there they can see features of the property that they might not have seen before. This, I think, again, is especially important, as you look at higher educated, higher-income people that their time may be more valuable, and then also have high-speed internet. People want more space, but if they’re working from home, can you provide high-speed internet so that’s one of our favorite strategies is to go in and be the internet service provider. Properties make it not only easier for the residents to get high-speed internet, but also in a lot of cases cheaper. So we can usually provide a better, cheaper solution that comes there. And then this is kind of the opposite. Like with all this technology, I think you have to be able to communicate and still have the ability to connect personally with people and really understand what their personal objectives are. So technology is important, like, these are all things that everybody should be doing and scaling and doing that. But I think as you scale, you have to not forget that we’re all people. And we’re probably not investing to make money, we’re probably investing to spend more time with our families to create the ability to do more of what we want to do to give money or give time to our local charities. So I think kind of remembering why we do this is the best-kept secret in my mind.

Brett:

Excellent. What’s the biggest challenge you’re currently facing?

 

How To Take Your Income Through Investment Opportunities with Chris Larsen

How To Take Your Income Through Investment Opportunities: “Find out where the people are going and buy the land before they get there.” – William Penn Adair

 

Chris:

Deal flow is a big one, Brett. You just have to look at more deals and more deals and more deals. And you have to be patient with respect to that.

Brett:

And what’s the most creative way you are you found or you’re implementing to increase deal flow?

Chris:

Again, going back to what I just said, the personal connection. So you’re we’re having to, we’re looking at more markets faster. So we’ve had, we’ve had a focus on the Southeast. I mean, we’re going back into Texas, the first deal I invested in, in the multifamily space was in Texas as a matter of fact, and I was going back like eight or so years. So but putting more feelers out in more markets. So if you’re saying, “I’m going to get a third of the deal flow and you increase your scope to three different markets, you can maintain the same level of deal flow as if you’re just focused on one or two markets for instance. Not rock, not rocket science.”

Brett:

Yeah, no rocket science is blocking and tackling baby get it on the ground building those relationships talking with the brokers are more mailers, more connections, and then increasing the markets that you’re in. Love it. What’s the most rewarding part, Chris, of what you do?

Chris:

It really is hearing the personal stories and people are like just really appreciate introducing me.  I have actually a former neighbor, and I got a call with him after I’m on the show here in the next hour. And he reached out to me, he sent me one of the crap one of these crowdfunding deals that you see on the internet. And he’s like, Hey I know you. I know you invest in real estate. I was wondering what you think about this. And I provided him some feedback. And I sent him my book. And he’s like, he said, I didn’t know this is what you did. So when you get to educate somebody, and they turn around, say, well, thank you so much for helping me. Like I didn’ know this, or I’m so glad that we connected, so glad we had this conversation. Again, I can’t get enough of that. I mean, it’s just something that I discovered kind of the hard way, I feel like I could have done it 10 or 15 years sooner. So if I can help shorten that learning curve for anybody it just makes me happier. That’s why we give our book away. That’s why we do all the resources that we have on our website because I really enjoy giving that opportunity to people because I believe that you have financial independence, if you have the ability to do what you want to do when you want to do it, you will be your best self. 

Brett:

Fantastic. It’s the ability to use the gift you’ve ever given. One of the gifts been like educating, helping people clarify numbers, clarify ideas, clarify real estate deals that make sense. Then help them hopefully have an AHA moment. Then make an impact for them for their investing. Is that a fair summary, Chris?

Chris:

Absolutely.

Brett:

Beautiful. That being said, What’s the biggest frustration when it comes to capital gains tax deferral. So our show is centered around solutions when it comes to like 1031 exchange is not working out or not being able to defer tax on the sale of cryptocurrency or stock or primary home. So what’s the biggest frustration that you found for yourself, partners, and family when it comes to capital gains tax?

Chris:

I’ve been through this a couple of times. I’ve had investors go through Actually I have one right now who’s selling a property and I don’t know if his timeline is gonna line up. So we may be having a conversation or you may be having a conversation with him in the future here, Brett. But it’s the timing. It’s the pressure that you have to do that. And it’s like, well, what do I really want to make this investment? Where do I want to wait and make the right investment? And do that not be rushed, or I was talking to this investor, in particular, is like, I really want to put my money in your next deal. I don’t know if it’s going to line up or not. And I said we’ll cross that bridge when we get to it. So it’s the timing. It’s the stress. And it’s the I think when you’re put under stress you don’t make the best decisions.

Brett:

Yeah, we call it the shotgun wedding. The 1031 is talking about when you get engaged in 45 days, and you have to get married at 180. But guess what, some people don’t want to be active anymore, right? They’d rather be passive, or some people want to be active and passive, or they want to diversify. So we do have a solution for that. It’s called the deferred sales trust. In fact, we just closed the deal. This one was in Alabama, with $2.6 million sales, and we help the gentleman defer about 600,000 of tax parking funds. And what’s cool is he’s in the early 40s, mid-40s. And he’s he wanted to start a multifamily development business. So use the funds that he would have paid in tax, and he’s building 72 units in Tennessee right now. Right? And you’re like, wow, you can do that. Yes. Not doing a 1031. Yes. And then by the way for your friend, or who’s checking out, they can invest up to 80% of the funds into your real estate syndication deal, right, which is powerful as well. So you can diversify. You can go into different marketplaces, you can go into different asset types, you can stock, bonds, mutual funds. Enough about that, you can go to capitalgainstaxsolutions.com if you wish to learn more about that. That being said, Chris, are you ready for the lightning round?

Chris:

Let’s do it.

Brett:

All right, knowing what you know now, if you go back to your 25-year-old self, the stock trading days or  I guess was before that. Whatever it is, that might have been? What’s the one Golden Nugget you would make sure you tell yourself to do?

Chris:

Yeah, I get into commercial real estate faster.

Brett:

Buy it, invest it, broker it.

Chris:

Learn how to operate it, learn how to underwrite it, and start doing deals with a partner instead of buying little single multifamily deals myself.

 

Brett:

Perfect. I love it. What’s the one book you’ve recommended the most in the past year?

How To Take Your Income Through Investment Opportunities with Chris Larsen

Chris:

That’s an easy one. We’re coming up on the one-year anniversary of the launch of my book, which I’ve probably recommended 1000 times literally. So let’s go.

Brett:

Next-Level Income book, right?

 

 

 

Chris:

That’s right.

Brett:

Give me the most impactful mobile or digital resource you recommend for your business?

Chris:

That is a good one. I would say Blinkist is a great resource. It’s an app. It will give you summaries of the books that are out there. I don’t care what you do. I don’t care if you’re in real estate. But if you’re any type of professional and you struggle to keep up with the books that you want, it’s a phenomenal resource. It’s also great if you’ve read a book and you like it, my books are not in there. But you read a book and you like it and you want to kind of refresh your memory on that. It’s fantastic.

Brett:

Beautiful, it is kind of like what we call Cliff Notes.

Chris:

Yeah, it’s almost like Cliff Notes. The different books, you can listen to them, you can read them. It’s wonderful. I recommend it to my clients all the time.

Brett:

Right on thank you for sharing, that’s a brand new one, I had never heard of that one. Favorite leadership quote that you love or you strive to live by?

Chris:

I’m trying to think what the quote would be, but I really liked the one-minute manager. And the one-minute manager, it’s basically, I guess, if I had to instill it, I would say act as if you’re the leader that you want to be. So if you’re a sales rep, as I coached and work with people for a long time, and you want to move into management, to act as a manager, if you want to be, if you’re a manager, you want to move up the chain, you act like an owner, you act like an owner of the business. I think that’s applicable. Whatever level you are.

Brett:

Beautiful, I love it. Second last question. What are you curious about right now?

How To Take Your Income Through Investment Opportunities with Chris LarsenChris:

So I am listening to Peter Diamandis, who is a futurist. He just came out with a third book in his trilogy, which I believe is called The Future Is Faster Than You Think. I’m really curious about what the future is going to hold in a lot of different areas. My personal focus right now is health, like what does the future hold for health and longevity. So I’ve been into a performance like human performance. I started racing bicycles when I was 14 years old and going all the way back till then. And what’s neat is I don’t care if you are a business person, or if you’re a professional athlete, all the things that can help you be a better athlete can help you be a better person, better business person, a better husband, a better wife, a better father, a better mother. It’s just wonderful if your health is there, and that’s why I always start my clients’ goals with their health first because I say if you don’t have good health, everything else is going to fall behind that.

Brett:

Awesome, love it. Last question for our listeners to stay encouraged and stay centered. What’s your number one secret to doing that for yourself? How do you stay encouraged to stay centered to reach your goals and stay centered on your values?

Chris:

Gratitude. So I think Tony Robbins says if you’re in a place of gratitude and fear goes away, anxiety goes away. So I get up and meditate in the morning. And one of my favorite tools is the Five Minute Journal. You can buy a paper journal, you can also buy the app, and you put what you’re grateful for that day. And if you start the day, in a place of gratitude, I think you’re going to be happier, you’re ultimately going to be more productive, you’re gonna be able to focus on what is truly important to you.

Brett:

Beautiful. Gratitude. Love it. Well, I’m grateful, Chris, that you came on the show and you shared a bit about your story and your focus and added some huge value for us. I appreciate you being on the show. And for our listeners who want to get in touch with you, would you give them one last reminder of how they can connect with you?

Chris:

Absolutely. So check out our website nextlevelincome.com. You can get our book at the book link. If you want to connect with me directly, it’s chris@nextlevelincome.com.

Brett:

Beautiful and for those who want to learn more about the deferred sales trust and ways to escape feeling trapped by capital gains tax you can go to capitalgainstaxsolutions.com or if you’re a commercial estate syndicator professional, luxury realtor, you go to experttaxsecrets.com to learn how to use that to grow your business and add more value. We appreciate you listen to the show. It doesn’t go without saying that most high net worth individuals and those who help they struggle with clarifying their capital gains tax deferral options, not having a clear plan is the enemy. But using a proven tax deferral strategies such as the Deferred Sales Trust or connect with someone like Chris Larson to level up your income and you’re investing in real estate is the best way for you to grow your wealth. I’m Brett Swarts and I appreciate you listening to the show and hope to talk to you guy again real soon.

 

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About Chris Larsen

How To Take Your Income Through Investment Opportunities with Chris LarsenChristopher Larsen is the founder and Managing Partner of Next-Level Income. After 18 years in the medical device industry, he dedicates his time to helping others become financially independent through education and investment opportunities. Chris has been investing in and managing real estate for over 20 years. While completing his degree in Biomechanical Engineering and M.B.A. in Finance at Virginia Tech, he bought his first single-family rental at age 21. Chris expanded into development, private-lending, buying distressed debt as well as commercial office, and ultimately syndicating multifamily properties. He began syndicating deals in 2016 and has been actively involved in over $350M of real estate acquisitions. In addition to real estate, Chris has invested in equities, oil & gas, and small business lending, as well as being active in Venture South, one of the nation’s Top 10 Angel Investing groups. Chris lives with his wife and two boys in Asheville, NC where he loves spending time with them in the outdoors and enjoying the food and culture that the region has to offer.

 

 

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