September 27, 2025 • 11 mins
Shane Pogue is based in Dallas Texas where is specializes in Investigative Due Diligence. He helps investors with their due diligence process. To connect with Shane, reach out to him on LinkedIn at https://www.linkedin.com/in/shane-pogue-6b900a11a/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Welcome to the Real Estate Espressal podcast, your morning
shot of what's new in the world of real estate investing.
I'm your host, Victor Minash. This is the WEEKEND edition
where we interview notable people from the world of real
estate investing. Today is no exception.
We have a great guest all the way from Dallas, Fort Worth.
Welcome to the show, Shane Pogue.
Hey Victor, thanks for having meon.
Well, great to have you here now, Shane, you are a specialist
(00:24):
in one very narrow area. I'm excited to have this
conversation because we've not talked about this on the show
before and probably long overdue.
But maybe before we do, perhaps give me a little bit of your
back story and how you got to this point in your journey.
Got you. So I will give it do it a little
quick because I know we only gota small amount of time.
So interesting enough, I never pictured myself going into the
(00:46):
world of finance at all. My job, my thing was always
going to public service as like a police officer, but that kind
of got derailed when I got discharged from the Army with a
heart condition while I was in training to be a CID agent.
So I just kind of fell into the world of finance because I
needed somewhere to put my investigative skills that could
be useful and could take care ofmy family.
(01:07):
So I ended up working for Fidelity Investments, did due
diligence with them for a coupleyears, and then decided to
branch out on my own. And that's kind of where my
background lies. I love it.
In our pre meeting you use the word investigative due
diligence. I think we all intuitively know
what due diligence means, but investigative due diligence, you
(01:29):
want to define that? Absolutely.
So it's a little bit different than what you think of
traditional due diligence and there's tons of kinds, like you
could talk for hours about it. Investigative due diligence is
kind of a little bit of everything.
It tries to encompass all the different, like property risk,
all that kind of stuff together and gather all the information
you need to make informed decisions before you start
(01:49):
investing, before you start lending money out, before any
kind of check is wired to someone.
It's how you try to check for fraud, it's how you tried to
check for undisclosed risk and how to just make sure that
you're not getting into bad deals that haven't been
disclosed properly. When I think about due diligence
in a project, I think of a few separate axes.
(02:09):
I think about the sub market, I think about the property, I
think about the people, and I think about the mechanics of the
deal, the structure of the deal.And each of those are a little
bit independent of one another. There can even be risks, of
course, even at the municipal level when it comes to
entitlements and things like that, that perhaps an entirely
other layer, which are the ones that you would say you focus on.
(02:33):
So we do a little bit of all those just because it affects
the overall risk, whatever you're doing.
But one of the things we're incredibly focused on is of
course the company and the sponsors behind the deal in the
context of real estate investment, in the context of
lending. Of course, we're still focused
on the company in person, but what we're looking at is
basically their background. What have they done previously?
(02:56):
Do they have any undisclosed judgments, liens, that kind of
stuff that might affect the financial health of the project
or which could indicate that they might be more susceptible
to fraud? We'll also look into certain
things that they're not really, they're more niche.
So we're looking into violations, things that people
don't take away. So you're buying this property
(03:17):
and it's been tagged with violations four or five times in
the last couple years. And they're saying, hey, this is
going to be, this project's going to be very easy.
We're going to do a value add. It's going to take a couple days
to finish all the renovations, and it's got violations for
years. Well, they're basically buying a
fixer upper. If that's disclosed, that's
fine, that's great. But if you don't know how to
detect that, it's going to causeproblems.
(03:40):
That makes a lot of sense. You're looking for, at the end
of the day, consistency. You're looking for things to be
as you would expect them to be and looking for surprises.
I know when we undertake due diligence, the very first step
that we have in our process, we have something that we call a
quick kill list, which are theseare the list of things that if
(04:01):
we go through and it's not an exhaustive due diligence, but if
it fails one of these, once you've shot something, you don't
need to kill it more than once. So you want to do that quickly
before investing A tremendous amount of resource to validate
the project. So we do that first before going
into expending a lot of resource.
We call it a really fast no or athorough yes.
(04:24):
We make that distinction in our due diligence process.
In that context, where would yousay that you fit?
Actually, we do something reallysimilar for a lot of our
clients. We just call them quick checks.
So basically they tell us what would kill a deal right out, and
we can give them that little oomph in whatever they're trying
to figure out this because that's what we do all day.
(04:45):
We do investigative research, sowe're able to find things that
they might not be able to find right off the bat, and it gives
them a little bit of layer there.
So no, that's exactly how we would fit in there.
We just take over the process, more or less.
Interesting. Now one of the things that has
certainly become a lot easier inparticular in the last 1224
months, in some ways even in thelast two months is the advent of
(05:08):
AI is made it possible to correlate pieces of data in the
in the tech industry, it's called big data and correlating
data of things that were seemingly disconnected.
Now you can put two and two together that in ways that you
could not before. How much are those tools coming
into your toolbox? A lot of them actually.
So we operate sort of on a Centaur chest model and it
(05:32):
really changed the game. So if you have an expert behind
the AI working with it constantly and knows what to
spot and when the AI might have messed up, AI is a very valuable
tool. If you try to do full
replacement, of course, you get it doing all kinds of silly
things because you can't just check because no one's there to
check it. But that's exactly what we do
with it. Anytime we see a new AI program
out there, we're always looking to see how can it be used and is
(05:54):
there a pain point in our current process that can be made
faster by using this AI and is it going to do a good job if we
do, if we do use it for that? Are there particular tools you
know? These language models can be
very generic. Without having had this
discussion with you, I can almost bet you're not using
ChatGPT as your primary tool. You're using much more
(06:16):
specialized tools. Yes, we do use a few specialized
tools. We do have a custom GPT though,
that we use. It took about six months before
it actually worked for anything other than organizing lists.
And then even after that, we have to be very careful about
what we put into it because it will get confused very, very
quickly. But we do like deep research
(06:37):
tools like Jim and I. We can't actually use them to
completely replace our open source intelligence gathering
yet, but they do give you a goodbasis for what you should be
looking for. So example, you can throw
someone's name in there and if you look into what it pulled up,
you're like, oh, OK, I'm definitely going to find more
hits like this in my individual research.
(06:57):
And it kind of structures it so you're not just firing blindly
into the Internet and trying to find whatever is out there about
this person. I love it.
What would you say having work with a number of deal sponsors?
What are some of the top mistakes that you would say you
encounter most frequently? There's a quite a few that are
really big pain points in the industry right now.
(07:17):
One would be I don't need to do due diligence on them because
we've known each other for 20 plus years and it's a very
unfortunate aspect of working with lots of money.
It's, it drives fraud sometimes and it doesn't matter if you
known the guy for 5 minutes or 10 years, you should be doing
due diligence on them and they should be doing due diligence on
(07:38):
you. Honestly, especially if you guys
are involved in a lot of deals together, you want to make sure
that, and I don't always frame it in perspective of, oh, catch
them doing fraud or something like that.
Sometimes I say it from the perspective of, hey, they're
your business partner. You need to make sure both of
you are strong so that your company is built on a good
foundation. If that's not on a good
foundation and for example, yourreal estate syndication and
(07:58):
you're accepting other people's money, you don't know that that
guy has all these problems in the background that you might
even be able to help him out with if you asked him about them
and you can make the whole situation more solid, then
you're going to get into troublebecause he's going to be
successful to take extra money from management fees to do
things that he's not supposed todo.
And when you're when you have other people's money, that's
(08:20):
fraud right out. Absolutely.
Fortunately, I have not been involved in them directly, but
I've, you know, I know people have witnessed folks that have
been pulled into situations where exactly like you said.
Well, I've known this person foryears and invested with them and
you know, I got my money back and you know, 10-15 years in,
(08:40):
all of a sudden what seemed likesolid and good went bad.
And those stories are out there.They're not just urban legends,
they're real. And one of the hardest things to
explain about Ponzi schemes is that they usually pay out till
you till they don't. So I've heard investors tell me
stories about Ponzi schemes they've invested in.
That's like I got all my money back and more because they were
a very early investor. But Ponzi math only works for so
(09:02):
long until it causes problems. Yeah, and it doesn't matter what
the pedigree of the individual. I mean, heck, the chairman of
the NASDAQ was Bernie Madoff. Yeah.
Right. And investors had talked about
it or and even I think the the way they actually got him as his
own children turned him in. But it took years for people to
(09:22):
spot the red flags. So there were red flags before
people were for saying, hey, there's a problem here.
And the problem is when you go to the enforcement level of
things, you have to be very, very certain they're not going
to start throwing accusations out there, especially at someone
like Bernie Madoff, until they're absolutely certain.
And that kind of stuff. It takes time because you have
(09:45):
to get all kinds of information and sometimes you can't get
their cooperation right away. So that's why the side of what
I'm doing is kind of important, because it lets you do that
before an enforcement action is taken, before there's a huge
issue that pops up in the media.It helps you detect those little
issues that pop up over time. And then you can weigh them on a
(10:06):
risk scale and go like, OK, there's these little bits of
issues, but do I still trust this?
Do I still? Is this still something that I'm
OK with the risks of? I love it.
Well, Shane, if folks want to connect, if they want to learn
more, what's the best way? For first introductions, I love
LinkedIn. It always goes to my phone.
It's a very quick way to get in touch with me and then we can
(10:26):
schedule a meeting. We can do an e-mail, whatever
you're more comfortable with, even a phone call.
I know I'm a millennial and a lot of millennials are like,
don't call me on the phone. I do not have that hiccup.
I did background investigations with with Fidelity Investments
for a while. I was on the phone like 8 hours
a day. I am not scared of phones.
OK, I love it. Well Shane, great to connect.
(10:47):
And for the listeners at home, you definitely want to connect
with Shane Pogue on LinkedIn. The link will be in the show
notes to get in touch with him. And in the meantime, have an
awesome rest of your weekend, gomake some great things happen,
and we'll talk to you again tomorrow.
Welcome to the Real Estate Espressal podcast, your morning
shot of what's new in the world of real estate investing.
I'm your host, Victor Minash. This is the WEEKEND edition
where we interview notable people from the world of real
estate investing. Today is no exception.
We have a great guest all the way from Dallas, Fort Worth.
Welcome to the show, Shane Pogue.
Hey Victor, thanks for having meon.
Well, great to have you here now, Shane, you are a specialist
(00:24):
in one very narrow area. I'm excited to have this
conversation because we've not talked about this on the show
before and probably long overdue.
But maybe before we do, perhaps give me a little bit of your
back story and how you got to this point in your journey.
Got you. So I will give it do it a little
quick because I know we only gota small amount of time.
So interesting enough, I never pictured myself going into the
(00:46):
world of finance at all. My job, my thing was always
going to public service as like a police officer, but that kind
of got derailed when I got discharged from the Army with a
heart condition while I was in training to be a CID agent.
So I just kind of fell into the world of finance because I
needed somewhere to put my investigative skills that could
be useful and could take care ofmy family.
(01:07):
So I ended up working for Fidelity Investments, did due
diligence with them for a coupleyears, and then decided to
branch out on my own. And that's kind of where my
background lies. I love it.
In our pre meeting you use the word investigative due
diligence. I think we all intuitively know
what due diligence means, but investigative due diligence, you
(01:29):
want to define that? Absolutely.
So it's a little bit different than what you think of
traditional due diligence and there's tons of kinds, like you
could talk for hours about it. Investigative due diligence is
kind of a little bit of everything.
It tries to encompass all the different, like property risk,
all that kind of stuff together and gather all the information
you need to make informed decisions before you start
(01:49):
investing, before you start lending money out, before any
kind of check is wired to someone.
It's how you try to check for fraud, it's how you tried to
check for undisclosed risk and how to just make sure that
you're not getting into bad deals that haven't been
disclosed properly. When I think about due diligence
in a project, I think of a few separate axes.
(02:09):
I think about the sub market, I think about the property, I
think about the people, and I think about the mechanics of the
deal, the structure of the deal.And each of those are a little
bit independent of one another. There can even be risks, of
course, even at the municipal level when it comes to
entitlements and things like that, that perhaps an entirely
other layer, which are the ones that you would say you focus on.
(02:33):
So we do a little bit of all those just because it affects
the overall risk, whatever you're doing.
But one of the things we're incredibly focused on is of
course the company and the sponsors behind the deal in the
context of real estate investment, in the context of
lending. Of course, we're still focused
on the company in person, but what we're looking at is
basically their background. What have they done previously?
(02:56):
Do they have any undisclosed judgments, liens, that kind of
stuff that might affect the financial health of the project
or which could indicate that they might be more susceptible
to fraud? We'll also look into certain
things that they're not really, they're more niche.
So we're looking into violations, things that people
don't take away. So you're buying this property
(03:17):
and it's been tagged with violations four or five times in
the last couple years. And they're saying, hey, this is
going to be, this project's going to be very easy.
We're going to do a value add. It's going to take a couple days
to finish all the renovations, and it's got violations for
years. Well, they're basically buying a
fixer upper. If that's disclosed, that's
fine, that's great. But if you don't know how to
detect that, it's going to causeproblems.
(03:40):
That makes a lot of sense. You're looking for, at the end
of the day, consistency. You're looking for things to be
as you would expect them to be and looking for surprises.
I know when we undertake due diligence, the very first step
that we have in our process, we have something that we call a
quick kill list, which are theseare the list of things that if
(04:01):
we go through and it's not an exhaustive due diligence, but if
it fails one of these, once you've shot something, you don't
need to kill it more than once. So you want to do that quickly
before investing A tremendous amount of resource to validate
the project. So we do that first before going
into expending a lot of resource.
We call it a really fast no or athorough yes.
(04:24):
We make that distinction in our due diligence process.
In that context, where would yousay that you fit?
Actually, we do something reallysimilar for a lot of our
clients. We just call them quick checks.
So basically they tell us what would kill a deal right out, and
we can give them that little oomph in whatever they're trying
to figure out this because that's what we do all day.
(04:45):
We do investigative research, sowe're able to find things that
they might not be able to find right off the bat, and it gives
them a little bit of layer there.
So no, that's exactly how we would fit in there.
We just take over the process, more or less.
Interesting. Now one of the things that has
certainly become a lot easier inparticular in the last 1224
months, in some ways even in thelast two months is the advent of
(05:08):
AI is made it possible to correlate pieces of data in the
in the tech industry, it's called big data and correlating
data of things that were seemingly disconnected.
Now you can put two and two together that in ways that you
could not before. How much are those tools coming
into your toolbox? A lot of them actually.
So we operate sort of on a Centaur chest model and it
(05:32):
really changed the game. So if you have an expert behind
the AI working with it constantly and knows what to
spot and when the AI might have messed up, AI is a very valuable
tool. If you try to do full
replacement, of course, you get it doing all kinds of silly
things because you can't just check because no one's there to
check it. But that's exactly what we do
with it. Anytime we see a new AI program
out there, we're always looking to see how can it be used and is
(05:54):
there a pain point in our current process that can be made
faster by using this AI and is it going to do a good job if we
do, if we do use it for that? Are there particular tools you
know? These language models can be
very generic. Without having had this
discussion with you, I can almost bet you're not using
ChatGPT as your primary tool. You're using much more
(06:16):
specialized tools. Yes, we do use a few specialized
tools. We do have a custom GPT though,
that we use. It took about six months before
it actually worked for anything other than organizing lists.
And then even after that, we have to be very careful about
what we put into it because it will get confused very, very
quickly. But we do like deep research
(06:37):
tools like Jim and I. We can't actually use them to
completely replace our open source intelligence gathering
yet, but they do give you a goodbasis for what you should be
looking for. So example, you can throw
someone's name in there and if you look into what it pulled up,
you're like, oh, OK, I'm definitely going to find more
hits like this in my individual research.
(06:57):
And it kind of structures it so you're not just firing blindly
into the Internet and trying to find whatever is out there about
this person. I love it.
What would you say having work with a number of deal sponsors?
What are some of the top mistakes that you would say you
encounter most frequently? There's a quite a few that are
really big pain points in the industry right now.
(07:17):
One would be I don't need to do due diligence on them because
we've known each other for 20 plus years and it's a very
unfortunate aspect of working with lots of money.
It's, it drives fraud sometimes and it doesn't matter if you
known the guy for 5 minutes or 10 years, you should be doing
due diligence on them and they should be doing due diligence on
(07:38):
you. Honestly, especially if you guys
are involved in a lot of deals together, you want to make sure
that, and I don't always frame it in perspective of, oh, catch
them doing fraud or something like that.
Sometimes I say it from the perspective of, hey, they're
your business partner. You need to make sure both of
you are strong so that your company is built on a good
foundation. If that's not on a good
foundation and for example, yourreal estate syndication and
(07:58):
you're accepting other people's money, you don't know that that
guy has all these problems in the background that you might
even be able to help him out with if you asked him about them
and you can make the whole situation more solid, then
you're going to get into troublebecause he's going to be
successful to take extra money from management fees to do
things that he's not supposed todo.
And when you're when you have other people's money, that's
(08:20):
fraud right out. Absolutely.
Fortunately, I have not been involved in them directly, but
I've, you know, I know people have witnessed folks that have
been pulled into situations where exactly like you said.
Well, I've known this person foryears and invested with them and
you know, I got my money back and you know, 10-15 years in,
(08:40):
all of a sudden what seemed likesolid and good went bad.
And those stories are out there.They're not just urban legends,
they're real. And one of the hardest things to
explain about Ponzi schemes is that they usually pay out till
you till they don't. So I've heard investors tell me
stories about Ponzi schemes they've invested in.
That's like I got all my money back and more because they were
a very early investor. But Ponzi math only works for so
(09:02):
long until it causes problems. Yeah, and it doesn't matter what
the pedigree of the individual. I mean, heck, the chairman of
the NASDAQ was Bernie Madoff. Yeah.
Right. And investors had talked about
it or and even I think the the way they actually got him as his
own children turned him in. But it took years for people to
(09:22):
spot the red flags. So there were red flags before
people were for saying, hey, there's a problem here.
And the problem is when you go to the enforcement level of
things, you have to be very, very certain they're not going
to start throwing accusations out there, especially at someone
like Bernie Madoff, until they're absolutely certain.
And that kind of stuff. It takes time because you have
(09:45):
to get all kinds of information and sometimes you can't get
their cooperation right away. So that's why the side of what
I'm doing is kind of important, because it lets you do that
before an enforcement action is taken, before there's a huge
issue that pops up in the media.It helps you detect those little
issues that pop up over time. And then you can weigh them on a
(10:06):
risk scale and go like, OK, there's these little bits of
issues, but do I still trust this?
Do I still? Is this still something that I'm
OK with the risks of? I love it.
Well, Shane, if folks want to connect, if they want to learn
more, what's the best way? For first introductions, I love
LinkedIn. It always goes to my phone.
It's a very quick way to get in touch with me and then we can
(10:26):
schedule a meeting. We can do an e-mail, whatever
you're more comfortable with, even a phone call.
I know I'm a millennial and a lot of millennials are like,
don't call me on the phone. I do not have that hiccup.
I did background investigations with with Fidelity Investments
for a while. I was on the phone like 8 hours
a day. I am not scared of phones.
OK, I love it. Well Shane, great to connect.
(10:47):
And for the listeners at home, you definitely want to connect
with Shane Pogue on LinkedIn. The link will be in the show
notes to get in touch with him. And in the meantime, have an
awesome rest of your weekend, gomake some great things happen,
and we'll talk to you again tomorrow.
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