July 31, 2025 • 46 mins
What happens when life's most devastating moments become the catalyst for financial transformation? Chris Larsen's journey from competitive cyclist to multifamily real estate mogul began with unimaginable loss. After his best friend died suddenly at 18, Chris experienced a profound shift in perspective that would forever change his approach to life and money.
"If I die tomorrow, will I be satisfied with my life?" This question pushed him to abandon his cycling career and pursue what truly mattered – living fully and creating financial freedom. At just 21, while studying engineering at Virginia Tech, Chris purchased his first rental property, laying the groundwork for what would become a half-billion-dollar real estate portfolio.
Throughout our conversation, Chris reveals the hidden advantages of multifamily investing that most overlook. Beyond simple cash flow, he explains how forced appreciation through operational improvements creates wealth regardless of market conditions. His strategic pivot from single-family to multifamily investments came after discovering his single-family portfolio was yielding a disappointing 4% return on equity – an embarrassing realization for someone with an MBA in finance.
Perhaps most fascinating is Chris's unconventional incorporation of cash value life insurance as a cornerstone investment strategy. Unlike traditional financing methods, these specially structured policies provide tax-advantaged liquidity that can be deployed into real estate deals. "My guaranteed minimum this year is 4%, but I'm getting 6% with dividends – completely tax-free," he explains, demonstrating how this approach creates both protection and opportunity.
For those concerned about today's volatile market conditions, Chris offers practical insights on navigating higher interest rates and increasing supply pressures. His team has found creative solutions like partnering with housing authorities to incorporate affordable units, boosting cap rates by 200 basis points in some markets. He's also eyeing emerging secondary markets that follow migration patterns – places like Columbus, Indianapolis, and Myrtle Beach that combine quality of life with affordability.
Ready to transform your financial future? Visit nextlevelincome.com to download Chris's multifamily playbook or explore his approach to building a personal banking system through life insurance. The path to financial freedom may not be what you expect – but as Chris proves, sometimes our greatest setbacks become our most powerful catalysts for change.
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Episode Transcript
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Chris Larsen (00:07):
I said you know what this is silly, riding my
bike around in circles.
You know what if I die, youknow, am I going to be happy?
Am I going to be satisfied withmy life?
I said there's way more to live, you know.
And I was like I'm not going to.
You know, I'm not going to letany opportunities go by.
I'm going to ask the girl outif I want to go out with her, if
my friends invite me tosomething.
I'm not going to let anyopportunities go by.
I'm going to ask the girl outif I want to go out with her, if
my friends invite me tosomething, I'm going to do it
Like I'm going to really livelife to the fullest.
(00:30):
And you know, through a lot ofintrospection, I've realized
that, hey, if you want to livelife on your own terms, you have
to have money.
That's just a reality.
You know, money helps youachieve things.
You know I, like Dan Sullivanof Strategic Coach says, if you
can write a check for it, if youhave the money, you can write a
(00:50):
check for it, it's not aproblem.
So it's a great thing if you'relistening to remember.
John Hauber (00:55):
Welcome to the Senior Housing Investors Podcast
.
If you are an owner operator,investor, developer or buyer of
senior housing, you've come tothe right place.
The best way to stay connectedwith us is to sign up for our
weekly newsletter athavenseniorinvestmentscom.
This podcast doesn't existwithout you, our community.
(01:17):
Thank you for listening andreach out to us anytime.
And reach out to us anytime.
Kelsie Heermans (01:27):
Welcome back everyone.
Today, our host, John Hauber,is joined by Chris Larson,
founder of Next Level Income, acompany on a mission to help
people achieve financialindependence through education
and smart investing inincome-producing real estate.
Chris brings years of personalinvesting experience and has
made it his purpose to guideothers on how to make, keep and
(01:49):
grow their money.
From helping those juststarting out to supporting high
earning professionals with taxstrategy, insurance and
long-term planning, chris andhis team provide both the tools
and the roadmap to build truepassive income.
He's also the author of thebook Next Level Income, host of
a popular financial podcast anda passionate educator who
(02:10):
believes that once you gainfinancial freedom, you gain
freedom in life.
Chris, we're excited to haveyou with us, john.
John Hauber (02:18):
Thanks, Kelsey.
Hello everyone, welcome back tothe Senior Housing Investors
Podcast, where we dive deep intothe investment strategies
powering today's most successfulreal estate and wealth building
investors.
I'm your host, jon Hauber,today.
I'm honored to welcome ChrisLarsen, founder and managing
partner of Next Level Income.
(02:40):
Over the past two decades,chris has mastered the holy
grail of real estate multifamilyspecification and pioneered
using whole life insurance as aprivate bank for investors In
2025,.
His team has deployed well overa half a billion dollars into
apartment communities across theSoutheast and beyond.
(03:01):
Chris, welcome to the show.
Chris Larsen (03:04):
John, it's great to be here, great to see you.
John Hauber (03:06):
Yeah, no problem, let's just jump right into it.
And Kelsey went over yourbackground and such, but so we
won't go into that.
I really want to get into thecore of who you are and what
your philosophy is in terms ofinvesting.
So you bought your first rentalproperty at 21 while studying
engineering.
Walk us back to that momentwhen.
(03:28):
What drove you to buy insteadof rent, and how did that first
deal reshape your worldview?
Chris Larsen (03:36):
Yeah, john.
Well, thank you, Thank you forthe opportunity and I know you
got a son that was about thesame age when I bought that
first property and up to thatpoint, kind of right right
before that point, all I wantedto do is be a professional
cyclist and I started racingwhen I was 14 and 15, I won the
state championships, went,started going to national
championships, um was on thejunior Olympic team.
(03:58):
Ultimately it was an allAmerican cyclist in college and
you know, top five in thecountry and my, my team, like
two years after that, went pro.
But I quit that year and thereason is my and you know.
Long, very long story short,but my best friend.
His name was also Chris.
I met him just like a couplemonths into when I started
(04:21):
racing.
We became best friends.
He was a year younger.
We started training togetherevery day.
So he lived 10 miles away fromme and we'd we'd ride down the
BNA trail between Baltimore andAnnapolis and we'd meet up every
day after school and we trainedfor two to four hours a day
after school and we just becamereally tight like brothers and
then we started travelingtogether to races.
(04:41):
We went up and down the Eastcoast.
I went to Virginia tech it'shard, hard to hard to read here
on the wall but went to Virginiatech, got an undergrad degree
in biomechanical engineering andChris was was set to come and
be my roommate the followingyear, since he was a year behind
.
But on June 21st 1997, he had amassive brain hemorrhage and
(05:03):
and passed away at 18.
He had just turned 18.
I just turned 19.
And it was devastating.
I was probably depressed when Ilook back, but I leaned into
cycling and I hit.
It was very successful.
That following year.
But I'll never forget, I wasdoing his memorial race that
fall, that September, for thesecond year and I'd won the
(05:26):
first year that they had hismemorial race and I actually won
the second year too and I was,I mean, I was in such great
shape.
I had, uh, that somebody hadthrown tax into the road and I I
had lapped the field on the twoand a half mile course um with
a small group and I actually gota flat from the tax and my
whole team dropped back to helpme back into the field and I
(05:47):
dropped them, went through thefield, went back off the front
and won the race.
I mean I was just in fantasticshape and you'd think like I was
at my peak and I would havebeen thrilled.
And I just remember that I hadno emotion when I won the race
and it wasn't, you know, itwasn't that I was sad, it wasn't
that I was happy, it was likeit was like I was empty
(06:07):
emotionally.
And I think anybody that reallythinks about it like the
opposite of love isn't hate,it's it's indifference and
that's that's what I felt.
I went back to school.
Um, I did one more race and my,my mother was there and I
dropped out of the race andshe's, like you, never dropped
out of the race.
I said, yeah, I'm done.
I don't think she realized itat the time, but I was.
(06:29):
I was actually done with racing.
I went back to school that falland it was my junior year and I
sold all my bikes.
I was president of the cyclingteam.
I still kind of helped them out, but I quit.
I quit the sport effectivelyand I said you know what this is
silly, riding my bike around incircles.
You know what?
If, what, if I die?
You know, am I going to behappy?
(06:49):
Am I going to be satisfied withmy life?
I said there's way more to live, you know, and I was like I'm
not going to.
You know, I'm not going to letany opportunities go by.
I'm going to ask the girl outif I want to go out with her.
If my friends invite me tosomething, I'm going to do it
Like I'm going to really livelife to the fullest.
And you know, through a lot ofintrospection, I realized that
hey, if you want to live life onyour own terms, you have to
(07:11):
have money.
That's just a reality.
You know, money helps youachieve things.
You know, I, like Dan Sullivanof Strategic Coach, says, if you
can write a check for it, ifyou have the money, you can
write a check for it.
It's not a problem.
So it's a great.
It's a great thing, you know,if you're listening to remember.
But in that process I startedday trading.
I was making like $5,000 amonth day trading, you know, as
(07:33):
a junior in college, at 20 yearsold.
But it was like I mean I justremember like not sleeping and
being stressed out and I waslike this is not investing.
You know, I ended up gettingmaster's degree in portfolio
management, like institutionalfinance, and as I learned more,
I'm like no, no, day trading isnot investing.
Even the stock market to alarge degree isn't really
(07:54):
investing in a lot of ways.
So I read 250 books oneverything money, business,
investing, real estate relatedand I said you know what I
really like real estate At 21,.
I can buy a property with $3,investing, real estate related.
And I said you know what Ireally like real estate I can.
You know, at 21, I can buy aproperty with $3,000, got an FHA
loan, I think it was at thetime and it can cashflow it.
You have all these benefits.
(08:15):
And I said this is going to bemy path.
So that's.
That was ultimately why I boughtthat first property.
And then I bought the propertynext door so I had two, three
bedroom townhouses, so I hadlike my own little six, you know
, unit multifamily dealeffectively.
And I continued to buy about aproperty a year and I said you
know what, if I can just paythese properties off, I have 10
grand a month coming in.
You know, and I'll be.
(08:36):
I'll be done by the time I'mlike 35 or 40.
But the challenge was I ran outof capital pretty quick so I
ended up entering a career inmedical device sales.
So that was how I createdcapital to buy my properties.
But, as Robert Kiyosaki said, Ihad in my head you know that I
was going to be an investor.
I saw everything through thatinvestor's lens.
(08:57):
That's how it all started, johnat 21.
John Hauber (09:00):
And that's that's so cool for us.
And, and you know you talkabout books and as you can see
behind me how many books I have,I used to have like three cases
of you know bookshelves behindme and I just finally had to get
rid of them.
But I've read that or more, andI'm really enjoying also the
you know the Founders Podcastwhere someone reads
(09:24):
autobiographies before me andthen talks about them.
So that's Founders Podcast.
Oh, yes, yeah, you will checkthat out.
It's really very, very popular,yeah.
Anyway, you talk about you knowbooks, so share one early
mistake yeah, at Apache, morethan any other book and mentor
ever could.
How did you recover and pivot?
Chris Larsen (09:46):
Yeah.
So I bought several propertiesand you know I stopped buying
properties in 2005.
So I was like, okay, you know,2005,.
I ended up starting to sellproperties at the end of 07,
december 20, 2007.
And I literally watched thecomps fall like off a cliff, you
(10:07):
know, from 300,000 to 290 to280 to 270.
And what happened was the bankscalled, started to call, like
home equity lines of credit andall those things.
So one of the early lessons Ilearned, john, was that you know
, credit can come and credit cango and you have to be very
conscious of that.
(10:27):
And so I started following thecredit markets, you know, which
really kind of led me toinvestigate the real estate
cycle and learn.
You know, you mentioned, youknow, life insurance,
specifically cash value lifeinsurance.
It's like, okay, liquidity isvery important.
So I got into some, you knowsome, some small trouble, but
some early trouble where Ididn't have enough liquidity
because I was banking on thoselines of credit, on my
(10:50):
properties as as a portion of myliquidity, and when those went
away, I lost, you know, themajority of the quote unquote
liquidity that I had.
So what I learned was equity isgood but cash is better, so you
have to balance out the equityin your properties and the cash
that you have on hand.
I see a lot of people say I'mgoing to pay down my mortgage.
(11:11):
It's like, well, what if youneed that money back?
Oh, I'll get a line of credit.
Well, what if the bank takesaway your line of credit?
Oh, that wouldn't happen.
Oh, yes, it could.
Yeah, so I've learned and I'lladd one more layer to that.
My parents, so my father, passedaway when I was five, when I
was quite young, but mystepfather was a contractor.
My stepfather and my motherended up working for Jimmy Dean
(11:33):
Jimmy Dean Sausage, which, ifyou're older, if you're all
right, you're older, you knowJimmy Dean, or even you know who
he is, but he had aconstruction company and when
the savings and loan crisishappened in the early 90s, they
both lost their jobs.
So I saw all these differentthings happening in the real
estate market.
So in 2008 hit and I started tolook back through history.
(12:06):
I always liked economics andbanking and history and
different things.
You can see that these cycles,they repeat themselves and these
credit expansions and creditcontractions happen and they
largely affectdisproportionately affect the
real estate markets.
John Hauber (12:21):
Well and that's what's so great about your
podcast is that you keepeveryone informed on what's
going on in the marketplace asit relates to real estate
investing, and so love yourpodcast.
That's why I'm having you ontoday.
I want to make sure that othersknow about it and such so Next
Level Income correct.
Chris Larsen (12:41):
Yeah, Next Level Income show.
You can check us out atnextlevelincomecom.
And yeah, we're closing in onseven.
Like we're getting in.
We're closing in on the end ofour seventh year, so almost
eight years in.
John Hauber (12:53):
Yeah, offline.
He said that and I said we'refour and a half years in and
you're doing awesome, so let'syou know, okay, so from that
first bold step that you made inyour 20s and then subsequently
selling in 2008.
Chris Larsen (13:09):
I ended up not selling because, as the
properties went down in value, Iended up holding the properties
.
So you held the property.
Yeah, fortunately we hadlong-term debt and they were
cash flow positive, so it was anokay position.
But it would have been great ifI sold them six months or a
year earlier.
John Hauber (13:26):
Oh, believe me, I lived through 2008 to 2012.
So I could tell why.
I don't think it's about thattime, but we won't get into
those.
But you went all in tomultifamily and let's transition
and explore why you did that.
Okay, so you call multifamilythe holy grail of real estate
(13:47):
and, beyond cash flow and scale,what unique structural
advantages set it light, yearsapart from single family or
commercial real estate?
And I just want to make a pointhere, because this is the
Senior Housing Investors PodcastSenior housing is a subset of
multifamily, so let's just startwith that.
Chris Larsen (14:06):
Yeah, it is, and I think we can kind of transition
into why I'm a big fan ofsenior housing, kind of going
forward and some of thedemographic changes that have
shifted.
But, if I may, john, if you'relistening today and I'm holding
this up, you're probablylistening on the show, but if
you want a free copy of my book,you can also get that
nextlevelincomecom and I kind ofwalk through.
(14:27):
You know all these things thatI'm going to describe with
multifamily.
But, as you know, I had acouple momentous points in my
life.
I mentioned the first when youhave, in my adult life, when my
best friend passed away, mymother passed away at the end of
2011.
And we had, just a week later,we had my second son and I had
(14:48):
been been working and been verysuccessful in the medical device
space, you know.
But it was one of those pointswhere my wife and I kind of took
inventory of everything in ourlives and said, ok, like you
know, what are we doing?
It was a consequential electionyear in 2012.
And so what are we doing?
You know, what does ourportfolio look like?
And I went and looked at myportfolio and my single family
(15:10):
rentals were doing well, butthey were kicking off like 7%
cash and I was making, you know,a few hundred thousand dollars
a year at the time, you know,plus my wife's income.
You know I was paying a lot oftax because I'd lost all the tax
benefits from single family andI was ending up with a 4%
return on my equity.
So I looked at my equity, notmy original investment.
(15:33):
I think if you're a real estateinvestor, I think that's a
really good way to evaluate yourportfolio is return on equity,
not return on your originalinvestment as it grows, and I
was like I was embarrassed withsomebody with a MBA in finance
getting 4% return.
I was like this is Now.
The returns were great from myoriginal investment but looking
(15:56):
forward, I was like this isn'tokay.
And my wife had started her ownarchitecture practice and we
were at a business meeting outon the West Coast, you know kind
of for her and I was talking tosomebody at that meeting and I
was, you know, lamenting, youknow, the performance of my
portfolio and he goes well, haveyou looked into investing in
(16:16):
multifamily?
I said yeah, you know, and Isaid I've looked into it.
It's you know, I see thebenefits but and he goes, you
should talk to my friend.
They syndicate multifamilydeals.
So I I reached out and I've Igot into the medical device
space because of demographics.
(16:37):
Um, I followed a author by thename of, uh, harry Dent, and
then kind of some other stuff.
So I started followingdemographic trends and the
millionaire next door wasanother, was another author.
I forget his name off the topof my head, but he's talking
about hey, if you want to, ifyou want to make a lot of money,
just follow the baby boomers,you know, get into finance or
(16:57):
the medical field.
And you know real estate, youknow for in these ways, in these
ways.
And I was like wow, I was likeI'm talking to this guy and he's
talking about you know, thecoming, you know, demographic
wave of millennials that aregoing to be renting.
And I said like you soundexactly like all this stuff that
I've read.
And he didn't, he didn't knowabout these authors, but that he
(17:18):
was saying the same thing.
And I was like no-transcript,john, because you know, forced
(17:50):
depreciation comes fromincreasing the operating income
in a property, which boils downto operations and you know, as
you get into, you know moreoperationally heavy type
investments like car washes thatwe're in, or senior housing, as
you and your audience isfamiliar with.
If your operations aren't good,then your income can go the
(18:10):
other way too.
So you can force appreciation,but you can also go the wrong
way with that.
So all those factors led me toultimately sell off my single
family portfolio and we investedin multifamily.
And then I introduced my firstpartner to the space and we
syndicated our first deal in2016.
August, I think, second 2016,.
(18:32):
We closed on our first deal.
Going on, you know it's beennine years at this point.
John Hauber (18:36):
Awesome.
So today, as you know, manyinvestors chase niche strategies
my friends in self-storage,others that we know are mobile
home parks even crypto is beingtalked about quite a bit and
senior housing.
I don't consider senior housingto be niche because it has both
(18:57):
the demographics and a reallysupply demand issue going on
right now.
So it's best investments incommercial real estate at this
point, and so has multifamilysyndication stood the test of
time, even through 2024 and2025?
.
Chris Larsen (19:17):
So the answer is yes.
The short answer is yes.
Now has it been a, you know, asmooth road, smooth sailing the
whole time?
No, there's been a lot ofchallenges.
And that goes back to so one.
You know, when I got into thespace in 2012, 2013, originally,
you know we're going on 13, 14years on at that point, you know
(19:38):
, the demographic trends stillstand like we're still 6 million
housing units roundabout shortin this country, you know.
So we've got to fill that gapsomehow.
And you know the majority ofthe household formation.
You know they're going out andrenting.
They're either renting homes,they're renting townhouses,
they're renting apartments withthose.
So, yes, the demographics hasstood the test of time.
(19:58):
What we've seen the past coupleyears, as a lot of people know,
is that when rents were going updouble digits, you know, in
2001, 2002, and rates were rockbottom, you had a lot of supply.
You know starts I'm sorry, youhad a lot of starts.
And today you're seeing thatsupply peaking.
So we've had a record supplyover the past year, hit the
(20:20):
market.
So that's actually put a lot ofdownward pressure on rents.
So you think about it like if Iown a property and you have a
property across the road oracross town.
You have a new builder.
They need to sell that property, to get it off their books,
because that's what they do theybuild and sell, they develop
and sell.
They don't develop and operatetypically.
(20:40):
So what are you going to do?
You're going to do everythingin your power to get your
occupancy up to the point whereyou can sell that property, and
typically you need it to be 50to 70% to sell it.
So what do you do in that case?
You do the same thing I didwhen I bought an office downtown
and I needed to fill it upbefore I closed.
I gave away two, three monthsfree on the front end so that I
(21:03):
could get the rents where theyneeded to be, so that the bank
would then say oh, you know,your income is here.
What did I care if I was givingrent away when I initially
bought the property, because Ibought it from foreclosure right
.
All I wanted was the show insix months and a year that was
going to have that positivetrend.
So that has a lot of immediatedownward pressure on that.
(21:24):
The other thing that we face,john, is interest rates have
come up.
So as interest rates have comeup.
Cap rates have come down.
I just read that cap ratesreversed last month, so about 75
basis points annualized.
So that's a nice reversal intrend.
But we've had a lot of headwinds.
So what's happened is you havea lot of supply hitting the
market, you have rents that havebeen flat, in some markets even
(21:46):
downward, and cap rates havedecreased as well.
So if you have a multifamilyportfolio and you're selling
some of those properties, it'sbeen an inopportune time to sell
this year and last year.
But we're seeing those trendskind, you know, kind of reverse.
But I think you know investorsgot spoiled by seeing, you know,
just outrageous returns, youknow for a decade, and now
(22:07):
they're coming back to kind of,you know, coming back from the
stratosphere, you know, backdown to normal, and I think
that's going to, you know we'regoing to have kind of a normal
market going forward, you know,for multifamily.
But I think multifamily isstill going to be a solid space
to be invested in over the nextdecade.
John Hauber (22:22):
Yes, supply and demand again right and
affordability right.
Individuals yes, very difficultto get into homes today, and so
multifamily is whereindividuals are going.
So this brings up a great pointand a great question is that
day in 2025 and going into 2026,because I don't see the 10-year
(22:46):
doing anything much over thenext year.
Fairly flat yeah, how do youstress, test your acquisitions
and protect investor capitalthrough this cycle?
Chris Larsen (22:58):
Yes, through this cycle, yes.
So if you're an operator yourowner that is forced to
refinance a property right now,you're in a challenging place
the bottom line so that's achallenging spot to be in.
Over the past five years therewere a lot of bridge loans that
were out there that are comingdue.
So we're hundreds of billionsof dollars that are bridge loans
that are coming out.
(23:18):
That provides an opportunitytoday to buy these properties at
a discount.
We have one currently inHouston that's under contract
20% below what the seller boughtit for.
So that's a great opportunity.
We typically have long-term debton our current acquisitions
that we bought in the pastcouple of years.
So we're saying, okay, is therea long-term debt?
(23:41):
What is the forecast for those?
You mentioned affordabilityWe've been creative with some
programs, specifically in theHouston market.
We made six acquisitions andpartnered with the Houston
Housing Authority to provideaffordable housing as a portion
of those units.
So that's increased our caprates about 200 basis points in
those properties, you know.
(24:08):
So we say okay, we want to makesure that we have reasonable
rental expectation or reasonablerent expectations in terms of
increases.
You want fixed rate debt.
You also want to make sure youhave ample reserves.
You know for these investors aswell, and I think you know it's
easier now.
You know to say, hey, we expectto sell at the same or a higher
cap rate, whereas you know ifyou bought a property five years
ago, you know you could easilysay, hey, we'll probably sell
(24:28):
this at 100 basis points lowercap rate and do that.
So I think a lot of operators,ourselves included, have learned
over the past.
You know few years.
You know that you need to bemuch more conservative.
You know some blind spots.
You know if you look atinflation, you know expenses up
to I mean senior housing isfacing the same thing in terms
of expenses going up.
You know across the board.
(24:49):
You know supplies, renovations,staff.
You know these new units thatare coming onto the market.
You know one of the things thatpeople don't think about is
well, what happens if, ifsomebody comes to hire your
staff because now they need tostaff their new building up as
well and they say, hey, john,we'll hire you at a 25% you know
bonus.
You know over what what Chrisis paying you.
(25:11):
So we're vertically integratedin in most of our markets with
our, with our currentacquisitions, and that also
helps us control that control.
You know.
You know our staffing as wellas our costs, and you know we're
able to source at a lower rateas well.
John Hauber (25:25):
You know, with those Awesome, chris, thank you
Appreciate that, and so let'sshift gears.
This would be very interestingbecause no one on our podcast
has ever spoken about this, andI personally, 22 years old,
incorporated this investmentvehicle into my portfolio, and
that is full life insurance, atopic few real estate pros
(25:51):
understand.
In simple terms, how doesbuilding cash value inside a
policy compared to a 1031exchange or even a bank line of
credit?
Chris Larsen (26:02):
Yes, yeah, and I like the way you kind of changed
what you said there.
You said investment and thenyou said vehicle.
The way I think about lifeinsurance is more like a vehicle
, like a strategy, because thechallenge I've seen in the
industry is that people compareit to an investment.
(26:24):
And I'll give you a quick story.
So I mentioned my father passedaway at five.
My friend passed away veryyoung you see people pass away
and my best friend asked me oneday he said, chris, what do you
do, what's the cornerstone ofyour strategy?
I said life insurance, asked meone day.
He said, chris, what do you doLike, what's the cornerstone of
your strategy?
I said life insurance.
And if we go back a hundredplus years, this was what the
(26:45):
majority of Americans used fortheir savings in retirement.
And then you had pensions comeinto play, and then you had
mutual funds and term insurance,et cetera, and the country has
largely gotten away from this.
You know.
So we don't.
We don't look at it the sameway we did.
I look at it as a personalpension fund, because what you
and I can't say about ourinvestments, john, is that
(27:06):
insurance provides guarantees.
It provides guaranteed rate ofreturn, it provides a guaranteed
payment upon death.
Well, my best friend, threeyears after he set up his life
insurance policies, his wifepassed away at the age of 40.
She was in the military.
She came back from the MiddleEast and had an aggressive form
of cancer, likely from the toxicexposure that she had over
(27:29):
there, and he got a $3 millionpayout that allowed him to step
away from the job that he wasworking in, relocate his family
back closer to his family andspend more time with his
daughters.
And I was talking to aninsurance I'm sorry, a financial
advisor.
And he was like, oh, I'm, youknow I hate whole life insurance
.
You know it's got.
(27:50):
You know rates, returns aren'tgreat.
And I said, well, my friend gota policy on on his wife and she
passed away three years later.
I said he got $3 million.
I said do you want to know whatthe rate of return was on that?
And he's like, well, and I saidhere's the thing.
I said if you're going to sayit's a bad investment, you also
have to acknowledge when it's agood investment.
But I wouldn't say, hey, lookat the great investment my
(28:14):
friend made in buying lifeinsurance.
It's a vehicle, it's aprotection, it has all these
benefits.
So the way we look at it, john,is like a vehicle, you know.
We use it and incorporate itinto our investment strategy,
but we look at it and wemaximize the cash.
And I actually got licensed,you know, during COVID, because
(28:34):
I realized that a lot of peopledidn't have a good knowledge of
this.
So my partners, you know,specialize in structuring these
policies to maximize the cashvalue but minimize the costs.
And the challenge is, if youtalk to, you know, your average
advisor, they're going to giveyou, you know, basically an out
of the box insurance policy,because if they structure it the
(28:55):
way we do, they cut theircommission by like two thirds.
So they're not reallyincentivized to do it and it's
more complicated to do.
It, takes a lot moreunderstanding to do that.
But I think the first thing isyou know you say okay, if you
value the predictability and theguarantees.
You know if you're a businessowner, if you're saving for
(29:15):
college, you know if you're in,you know an entrepreneur and you
know you have a lot ofvariability in terms of other
things, it's really nice to knowthat that money is growing, you
know, predictably every year.
So, like this year, myguaranteed minimum is 4%, but
I'm going to get 6% with ourdividends this year in our
policy and that's tax-free, youknow.
So I know 6% tax-free isn't anamazing rate of return but it's
(29:39):
a really nice, safe place to putmy cash.
And that means I evaluateeverything by looking at that
first and doing that.
And it saved us during Helene,which hit us here in Asheville.
It saved us during COVID tohave access to that.
I know a lot of investors thatthey use their life insurance
policies to finance theirpurchases and what they do, kind
(29:59):
of setting up their own familybank.
But the big thing, you know,for those of us that have
children is, you know we look atour financial picture not just
through our eyes.
Which an advisor would say, oh,you don't need insurance
anymore when you're 65, you knowyour portfolio is worth this
much.
Well, I say well, wait a minute.
I want to leave a legacy to myfamily, you know so.
I know my insurance is set upto create generational wealth,
(30:23):
not just for my children butalso their children through the
structures that we set up.
And you know Nelson Nash, whokind of pioneered, you know
everything around infinitebanking and really the way that
we structure our policies.
You know he had a very holisticview of things as well.
So I, I think, um, you knowagain if, if it's, uh, it's
(30:44):
something that you know, theultra wealthy use it.
There's more.
There's more than just the rateof return, john is as you
talked about inside the policy.
There's all the other benefitsthat come with it.
John Hauber (30:54):
Okay, so let's let's just take a real world
example and walk us through fora scenario scenario.
I'm going to fund a policy with, let's say, $50,000 a year by
year three.
How would you deploy a policyloan back into the deal and what
are the pros and pitfalls?
Chris Larsen (31:15):
Yeah, I'll try to simplify it and this is kind of
complex and three years is adecent timeline, but you can
look at it through differentthings.
So when you structure a policythe way we do, typically all the
expenses are going to be frontloaded in the first couple of
years.
So in that third year if youput $50,000 into the policy this
(31:36):
might be surprising forsomebody here but you can
actually take 50,000 out in theform of a policy loan as you
borrow.
At today's rates it's about 5%.
Now that same individual isgoing to have much more than
$50,000.
They put $150,000 in that.
So year three you're going totypically get dollar for dollar.
You've probably had a portionof that in expenses in the first
(32:00):
couple of years.
So it's going to vary.
You might have $130,000, maybea little less, maybe a little
bit more than that in total cashvalue in that policy.
But the nice thing is I'll giveyou a real world example.
I had one of my partners cometo me and says hey, chris,
actually somebody you know isselling a car wash in town and
he'll sell it to us if we canclose this month at the same
(32:23):
price.
He paid for it, which was likea 15% discount, so we're getting
a $200,000 discount on this.
So I took $250,000 as a policyloan paid 5%.
I'm making 20% on that money.
So instead of borrowing thatmoney from the bank or using
cash, I was able to take a loanout.
Now one might say well, chris,why would you take that money
(32:45):
out and have to pay the interestrate?
Well, the nice thing is, if youstructure the policies well,
I'm paying 5%.
But remember I mentioned I'mgetting 6% on the money I have
in that policy.
The insurance company actuallyrecognizes the money that I have
in there, whether it's in thereor whether I've taken it as a
loan.
And even though I'm paying 5%,I'm still getting 6% inside the
(33:07):
policy.
So let's just assume it's awash in terms of that.
I can now pay that money backbecause I'm making 20% on my
money over a period of time andI can repeat this strategy over
and over again.
And my wife and I used to dothis when we built spec homes.
So we would take a 50 or$100,000 loan, buy a lot, build
a house, sell it in 12 years,double our money, pay the loan
(33:30):
off, go and do it all over again, all the while not having to
rely on banks as well as beingable to allow our money to
continue to compound inside thepolicy being able to allow our
money to continue to compoundinside the policy and we still
had the benefit of the actualdeath benefit, you know, from
the money that we had in there.
So it's some people call itlike the and strategy.
You know, you get to, you know,have the insurance and you get
(33:52):
to use the cash at the same time.
John Hauber (33:54):
So are these policies guaranteeing 5% or 6%,
or is it based on what themarket is doing?
Chris Larsen (34:01):
Great question.
So there's a guaranteed minimumrate.
So typically you're looking ata guaranteed minimum rate.
It depends on when youstructure the policy.
Like, ours are about 4%.
That can vary from, you know, 2, 3, 4, 5%, depending on when
you structure that policy.
And then you have to make sureit's with the right company.
You know, we work with a stableof companies, but the ones I
(34:22):
have my policies with are mutualinsurance companies and what
that means is if the companyturns a profit and these
companies have to turn a profitso that they can stay viable, if
you think about it.
So I say if they turn a profit,but when they turn a profit,
they return that profit back inthe form of a dividend, you know
.
So this year the company thatI'm with, penn Mutual, informed
(34:45):
us that hey, this year yourguaranteed minimum plus your
dividend is going to be 6%.
So this year I know that we'regoing to get a 6%.
You know, not not guaranteed,but I know this year it's going
to be that much.
John Hauber (35:01):
Awesome.
Thanks, chris, appreciate thatinput.
Now we talked aboutdemographics.
Okay, we know what thedemographics is doing.
When we, when we look atwhether or not we're going to
(35:26):
acquire a property, or we'reconsulting with owners and
operators and investors andbuyers and sellers, you know
that population migrationcontinues.
To rewrite the maps, forexample, like go to one of these
you know, u-haul, or or one ofthe other sites, and say, okay,
what's going on in terms ofmigration?
So what's popping up in ourgrouping of the highest
(35:51):
migration states are Florida andTexas and the Carolinas, and
even Boise, idaho.
Which emerging second tiermarkets are flying under the
radar right now, and why?
Chris Larsen (36:04):
Yeah, oh, that's a great question because we focus
on those larger markets as well.
Houston's one of our favorites,dallas is another one.
I moved to the Carolinasbecause I knew that the
demographics were going to pushin that way, if we get, you know
, a lot of the secondary marketsare in those states, but
they're smaller markets, right.
(36:24):
So you're seeing, you know,like the Asheville, north
Carolinas.
You know of the world, you'realso seeing some that people
aren't thinking about is theMidwest, you know.
So you're seeing, like Columbus, ohio, indianapolis.
I would consider Boise asecondary market as well, and
you can kind of see this.
These are like echoes of themass migration trends.
(36:47):
And when I say echoes, you knowif you're, if you're moving out
of California, you know it'sclose to move to Boise, you know
, for instance.
So you see people moving, youknow, to that area, like Texas,
you know, maybe, maybe notAustin, but you have.
You have markets that are inbetween, like Austin and San
Antonio.
I'm trying to remember theexact market that I'm thinking
(37:09):
of Waco.
Yeah, there's Waco, and there'sanother one in that corridor
that I'm blanking on at themoment, but this is.
You can say, oh well, where isclose to these bigger markets
where people would prefer tolive.
You're seeing, like MyrtleBeaches, savannah, georgia.
You know these are markets andI think it's easy to overlay.
(37:31):
You know the demographic, youknow the mass migration trends,
john, and then you layer onquality of life on top of that
and that's where you canidentify some of these markets.
And I have a whole algorithmthat I went through and a
methodology that I have on myblog that you got.
You can go tonextlevelincomecom and just
search for, like demigrationtrends or how to find you know,
(37:53):
the next big markets.
But you know, if you look atthe quality of life scores and
you look at the best places tolive and then you check the
proximity, you can figure out alot of these things yourself.
If you're, if you're, a smallerinvestor, you're like, hey, I
just want to move to an areawhere I could buy a house and do
well.
This is a great way to do thatand take advantage of some of
(38:13):
these things.
Like Cary, north Carolina, forinstance, is another one Outside
of Raleigh, but terrific market.
Greensboro, north Carolina,winston-salem, north Carolina.
These are some other secondarymarkets that have done really,
really well.
And what do those markets, andlike Columbus, ohio have in
common they have a betterquality of life than you know,
(38:34):
some of these bigger cities, butthey also have a lower cost of
living, so they're more familyfriendly and if you're a
millennial trying to start ahousehold, you may be almost
forced into those markets, youknow, versus getting into.
You know, the main market andeven on a micro scale like you
can take Asheville, northCarolina and Brevard, which is
just south of us has popped upand been just an amazing, you
(38:55):
know, growth story from asmaller town that's there as
well.
So if you're, if you're lookingat from a smaller perspective,
if you're looking at you know,hey, how do I figure out if this
is a good market?
You can layer on, you know,some of these quality of life
scores as well as the cost ofliving, and go just outside of
some of these big migrationareas.
John Hauber (39:15):
That's a great point and there's.
You know, I use a spreadsheetand the spreadsheet was you know
, we track the baby books rightand we track the baby books
right and we track absolutelyhealth and wellness.
So I put in a spreadsheet thebest regional hospitals in the
united states that have, yes,all of the services, all of the
(39:38):
you know like brain surgeons andspine surgeons and everything,
and said, okay, you know, theydon't want to move away from
their community to a city wheremaybe their kids live, they want
to stay in their farming ortheir beautiful county community
.
And, boy, that county has onegreat markets for the senior
housing space.
We also, in the senior housingspace, we look at where the 55
(40:10):
and 64-year-olds are moving,because those are the ones that
are making the decisions fortheir parents.
But they also have kids thathave potential grandkids and the
parents are coming in andwanting to be near their kids,
their grandkids parents arecoming in and wanting to be near
their, their kids or grandkids.
Chris Larsen (40:31):
I'll give you a quick antidote.
So my, my stepfather hasdementia and he was.
He was not living here, but wemoved him here in Asheville,
north Carolina, and he's in.
He's in a senior livingfacility just North of Asheville
for that same reason, you know.
So I think that's another,that's another great way If you
follow the decision makers,those that are paying the bills,
I think that's a really greatpoint that you made there.
John Hauber (40:52):
Thank you.
So we've got probably anotherfive minutes or so, but we want
to get into some really corequestions, because we have a lot
of new investors out there thatare, you know, w-2 employees or
they're you know millennials,and they're making good money.
They want to invest.
So if someone's listening andhas 50,000 of investable capital
(41:15):
and zero prior syndicationexperience, what three steps
would you have them take thisweek to get started?
Chris Larsen (41:23):
Yes.
So I think the first thing is,if you've got that money at
$50,000, quote unquote burning ahole in your pocket, the first
thing you want to do is justpause and listen to shows like
yours, John.
Go to the Next Level Incomeshow.
Go to nextlevelincomecom.
Start to educate yourself.
And if you were, when I wastrading in the stock market, one
(41:44):
of the things you would do isyou'd set up like a dummy
portfolio and you would tradewithout real money.
So I would start to educateyourself and then find operators
that you want to contact andstart looking at deals.
So before I invested in myfirst multifamily deal, I spent
a year talking to operators andlooking at deals that came
(42:06):
across.
So then, when I had that moneyto invest at 100K, I split
between two $50,000 investments.
At the time I was comfortablemaking those investments.
One of the things that we haveset up is a debt fund, so it's
liquid.
So if you said, hey, I want toearn something while I'm
evaluating, but I want to beable to get my money back, like
I want to earn something, youknow, while I'm evaluating, but
I want to be able to get mymoney back when I want to place
(42:28):
it long-term.
We have a debt fund right now.
It pays up to 10% and you canget your money back within 90
days.
So typically 30 to 90 days iswhen we're getting that money
back.
So that's another option ifinvestors say, hey, like I want
to get something you know for mymoney, but I ultimately want to
(42:48):
put this in a longer term,higher earning investment.
John Hauber (42:49):
All right, we're going to do something
differently that we haven't doneon the Senior Housing Podcast.
We're going to kind of copywhat you've done and others have
done by listening to you andwe're going to go into a
lightning round.
Okay, let's do it.
Are you ready?
All right?
So best single book you'vegifted investors other than your
own book.
Chris Larsen (43:08):
All right, this is a big one, but it's called the
Secret Life of Real Estate andBanking by Philip Anderson, and
it goes through.
It's really thick.
His partner, akhil Patel,a-k-h-i-l Patel, wrote a shorter
version.
I can't remember the name offthe top of my head, but I would
read that in lieu of this.
(43:28):
But this is a great book thattalks about the real estate
cycles, the secret life of realestate and banking.
John Hauber (43:34):
Excellent One KPI.
Every syndicator must trackreligiously.
Chris Larsen (43:41):
You've got to know your expenses, your expense
ratio, and you've got to knowyour inflation on expenses,
absolutely.
John Hauber (43:47):
If you could roll back time, one piece of advice
you would give your 30 year oldself.
Chris Larsen (43:53):
Put it all in Bitcoin.
John Hauber (43:55):
Yeah, I agree.
Chris Larsen (43:58):
I love real estate , but 15 years ago I would have
put it all in Bitcoin.
John Hauber (44:02):
Oh, yeah, yeah, so can we one day go back in time?
And anyway, we'll let that onego.
Right, we'll let that one go,yeah, yeah, all right, so you
hit your original 2025 AUM goal,I believe.
Okay, tell me.
If that's not correct, what'sthe next mountain to climb?
New asset classes, such assenior housing, driven due
(44:23):
diligence, or maybeinternational syndications, such
as senior housing driven duediligence or maybe international
syndications.
Chris Larsen (44:31):
So actually, john, you know, one of the reasons
that we were brought together isI started looking into the
senior housing space in 2019because of the demographics,
yeah.
So we came really close tomaking our first investment then
, and then COVID hit.
So, yeah, we're heavily focusedon senior housing, as you
mentioned.
It's kind of an offshoot ofmultifamily and I think if
you're, if you followdemographics and you're in
multifamily, it's just, it's anatural, you know.
John Hauber (44:50):
Next, step in those terms.
Awesome, so we're going tofinish with this one.
This is a fun one.
Outside of real estate andinsurance, what passion project
fires you up right now?
Family sports, or perhapssomething totally offbeat?
Chris Larsen (45:04):
Yeah, so uh, both my boys they're 15 and 13 play
lacrosse.
I just bought a sprinter vanrecently and I just got back
from a four day trip with myolder son going to a lacrosse
tournament.
So I'm I'm learning everythingI can about lacrosse.
I was a cyclist but I'mlearning everything I can about
lacrosse recruiting, how to helphim train you know, nutrition,
all these things.
It's a fun journey.
(45:25):
It's very different.
He's very talented, so it's funto learn along with him and
help me support his passion.
John Hauber (45:33):
Awesome, chris.
This has been phenomenal manand thank you for your candor
and your tactical wisdom.
Listeners, if you want to divedeeper, grab Chris's book Next
Level Income or visitnextlevelincomecom to download
his multifamily playbook and,eventually, senior housing
playbook.
(45:53):
I'll teach you everything youneed to know, chris and his
policy design guide, chris.
Any other way individuals canreach out to you.
Chris Larsen (46:01):
No, that's great, One of the corners of our
website that you know wouldpertain to listeners of this
specific episode.
You go to nextlevelincomecomforward slash banking.
You can also get a copy of ourbook that talks about our
specific life insurance strategy, and you can learn more about
that.
So if you say, hey, this thatsounded interesting, Chris,
that's something that I'd liketo incorporate into into my
(46:24):
strategy, you can learn morethere as well.
Nextlevelincomecom forwardslash banking.
John Hauber (46:28):
Excellent.
Thank you, chris, and thank youfor our audience, for tuning in
once again and until next time.
I said you know what this is silly, riding my
bike around in circles.
You know what if I die, youknow, am I going to be happy?
Am I going to be satisfied withmy life?
I said there's way more to live, you know.
And I was like I'm not going to.
You know, I'm not going to letany opportunities go by.
I'm going to ask the girl outif I want to go out with her, if
my friends invite me tosomething.
I'm not going to let anyopportunities go by.
I'm going to ask the girl outif I want to go out with her, if
my friends invite me tosomething, I'm going to do it
Like I'm going to really livelife to the fullest.
(00:30):
And you know, through a lot ofintrospection, I've realized
that, hey, if you want to livelife on your own terms, you have
to have money.
That's just a reality.
You know, money helps youachieve things.
You know I, like Dan Sullivanof Strategic Coach says, if you
can write a check for it, if youhave the money, you can write a
(00:50):
check for it, it's not aproblem.
So it's a great thing if you'relistening to remember.
John Hauber (00:55):
Welcome to the Senior Housing Investors Podcast
.
If you are an owner operator,investor, developer or buyer of
senior housing, you've come tothe right place.
The best way to stay connectedwith us is to sign up for our
weekly newsletter athavenseniorinvestmentscom.
This podcast doesn't existwithout you, our community.
(01:17):
Thank you for listening andreach out to us anytime.
And reach out to us anytime.
Kelsie Heermans (01:27):
Welcome back everyone.
Today, our host, John Hauber,is joined by Chris Larson,
founder of Next Level Income, acompany on a mission to help
people achieve financialindependence through education
and smart investing inincome-producing real estate.
Chris brings years of personalinvesting experience and has
made it his purpose to guideothers on how to make, keep and
(01:49):
grow their money.
From helping those juststarting out to supporting high
earning professionals with taxstrategy, insurance and
long-term planning, chris andhis team provide both the tools
and the roadmap to build truepassive income.
He's also the author of thebook Next Level Income, host of
a popular financial podcast anda passionate educator who
(02:10):
believes that once you gainfinancial freedom, you gain
freedom in life.
Chris, we're excited to haveyou with us, john.
John Hauber (02:18):
Thanks, Kelsey.
Hello everyone, welcome back tothe Senior Housing Investors
Podcast, where we dive deep intothe investment strategies
powering today's most successfulreal estate and wealth building
investors.
I'm your host, jon Hauber,today.
I'm honored to welcome ChrisLarsen, founder and managing
partner of Next Level Income.
(02:40):
Over the past two decades,chris has mastered the holy
grail of real estate multifamilyspecification and pioneered
using whole life insurance as aprivate bank for investors In
2025,.
His team has deployed well overa half a billion dollars into
apartment communities across theSoutheast and beyond.
(03:01):
Chris, welcome to the show.
Chris Larsen (03:04):
John, it's great to be here, great to see you.
John Hauber (03:06):
Yeah, no problem, let's just jump right into it.
And Kelsey went over yourbackground and such, but so we
won't go into that.
I really want to get into thecore of who you are and what
your philosophy is in terms ofinvesting.
So you bought your first rentalproperty at 21 while studying
engineering.
Walk us back to that momentwhen.
(03:28):
What drove you to buy insteadof rent, and how did that first
deal reshape your worldview?
Chris Larsen (03:36):
Yeah, john.
Well, thank you, Thank you forthe opportunity and I know you
got a son that was about thesame age when I bought that
first property and up to thatpoint, kind of right right
before that point, all I wantedto do is be a professional
cyclist and I started racingwhen I was 14 and 15, I won the
state championships, went,started going to national
championships, um was on thejunior Olympic team.
(03:58):
Ultimately it was an allAmerican cyclist in college and
you know, top five in thecountry and my, my team, like
two years after that, went pro.
But I quit that year and thereason is my and you know.
Long, very long story short,but my best friend.
His name was also Chris.
I met him just like a couplemonths into when I started
(04:21):
racing.
We became best friends.
He was a year younger.
We started training togetherevery day.
So he lived 10 miles away fromme and we'd we'd ride down the
BNA trail between Baltimore andAnnapolis and we'd meet up every
day after school and we trainedfor two to four hours a day
after school and we just becamereally tight like brothers and
then we started travelingtogether to races.
(04:41):
We went up and down the Eastcoast.
I went to Virginia tech it'shard, hard to hard to read here
on the wall but went to Virginiatech, got an undergrad degree
in biomechanical engineering andChris was was set to come and
be my roommate the followingyear, since he was a year behind
.
But on June 21st 1997, he had amassive brain hemorrhage and
(05:03):
and passed away at 18.
He had just turned 18.
I just turned 19.
And it was devastating.
I was probably depressed when Ilook back, but I leaned into
cycling and I hit.
It was very successful.
That following year.
But I'll never forget, I wasdoing his memorial race that
fall, that September, for thesecond year and I'd won the
(05:26):
first year that they had hismemorial race and I actually won
the second year too and I was,I mean, I was in such great
shape.
I had, uh, that somebody hadthrown tax into the road and I I
had lapped the field on the twoand a half mile course um with
a small group and I actually gota flat from the tax and my
whole team dropped back to helpme back into the field and I
(05:47):
dropped them, went through thefield, went back off the front
and won the race.
I mean I was just in fantasticshape and you'd think like I was
at my peak and I would havebeen thrilled.
And I just remember that I hadno emotion when I won the race
and it wasn't, you know, itwasn't that I was sad, it wasn't
that I was happy, it was likeit was like I was empty
(06:07):
emotionally.
And I think anybody that reallythinks about it like the
opposite of love isn't hate,it's it's indifference and
that's that's what I felt.
I went back to school.
Um, I did one more race and my,my mother was there and I
dropped out of the race andshe's, like you, never dropped
out of the race.
I said, yeah, I'm done.
I don't think she realized itat the time, but I was.
(06:29):
I was actually done with racing.
I went back to school that falland it was my junior year and I
sold all my bikes.
I was president of the cyclingteam.
I still kind of helped them out, but I quit.
I quit the sport effectivelyand I said you know what this is
silly, riding my bike around incircles.
You know what?
If, what, if I die?
You know, am I going to behappy?
(06:49):
Am I going to be satisfied withmy life?
I said there's way more to live, you know, and I was like I'm
not going to.
You know, I'm not going to letany opportunities go by.
I'm going to ask the girl outif I want to go out with her.
If my friends invite me tosomething, I'm going to do it
Like I'm going to really livelife to the fullest.
And you know, through a lot ofintrospection, I realized that
hey, if you want to live life onyour own terms, you have to
(07:11):
have money.
That's just a reality.
You know, money helps youachieve things.
You know, I, like Dan Sullivanof Strategic Coach, says, if you
can write a check for it, ifyou have the money, you can
write a check for it.
It's not a problem.
So it's a great.
It's a great thing, you know,if you're listening to remember.
But in that process I startedday trading.
I was making like $5,000 amonth day trading, you know, as
(07:33):
a junior in college, at 20 yearsold.
But it was like I mean I justremember like not sleeping and
being stressed out and I waslike this is not investing.
You know, I ended up gettingmaster's degree in portfolio
management, like institutionalfinance, and as I learned more,
I'm like no, no, day trading isnot investing.
Even the stock market to alarge degree isn't really
(07:54):
investing in a lot of ways.
So I read 250 books oneverything money, business,
investing, real estate relatedand I said you know what I
really like real estate At 21,.
I can buy a property with $3,investing, real estate related.
And I said you know what Ireally like real estate I can.
You know, at 21, I can buy aproperty with $3,000, got an FHA
loan, I think it was at thetime and it can cashflow it.
You have all these benefits.
(08:15):
And I said this is going to bemy path.
So that's.
That was ultimately why I boughtthat first property.
And then I bought the propertynext door so I had two, three
bedroom townhouses, so I hadlike my own little six, you know
, unit multifamily dealeffectively.
And I continued to buy about aproperty a year and I said you
know what, if I can just paythese properties off, I have 10
grand a month coming in.
You know, and I'll be.
(08:36):
I'll be done by the time I'mlike 35 or 40.
But the challenge was I ran outof capital pretty quick so I
ended up entering a career inmedical device sales.
So that was how I createdcapital to buy my properties.
But, as Robert Kiyosaki said, Ihad in my head you know that I
was going to be an investor.
I saw everything through thatinvestor's lens.
(08:57):
That's how it all started, johnat 21.
John Hauber (09:00):
And that's that's so cool for us.
And, and you know you talkabout books and as you can see
behind me how many books I have,I used to have like three cases
of you know bookshelves behindme and I just finally had to get
rid of them.
But I've read that or more, andI'm really enjoying also the
you know the Founders Podcastwhere someone reads
(09:24):
autobiographies before me andthen talks about them.
So that's Founders Podcast.
Oh, yes, yeah, you will checkthat out.
It's really very, very popular,yeah.
Anyway, you talk about you knowbooks, so share one early
mistake yeah, at Apache, morethan any other book and mentor
ever could.
How did you recover and pivot?
Chris Larsen (09:46):
Yeah.
So I bought several propertiesand you know I stopped buying
properties in 2005.
So I was like, okay, you know,2005,.
I ended up starting to sellproperties at the end of 07,
december 20, 2007.
And I literally watched thecomps fall like off a cliff, you
(10:07):
know, from 300,000 to 290 to280 to 270.
And what happened was the bankscalled, started to call, like
home equity lines of credit andall those things.
So one of the early lessons Ilearned, john, was that you know
, credit can come and credit cango and you have to be very
conscious of that.
(10:27):
And so I started following thecredit markets, you know, which
really kind of led me toinvestigate the real estate
cycle and learn.
You know, you mentioned, youknow, life insurance,
specifically cash value lifeinsurance.
It's like, okay, liquidity isvery important.
So I got into some, you knowsome, some small trouble, but
some early trouble where Ididn't have enough liquidity
because I was banking on thoselines of credit, on my
(10:50):
properties as as a portion of myliquidity, and when those went
away, I lost, you know, themajority of the quote unquote
liquidity that I had.
So what I learned was equity isgood but cash is better, so you
have to balance out the equityin your properties and the cash
that you have on hand.
I see a lot of people say I'mgoing to pay down my mortgage.
(11:11):
It's like, well, what if youneed that money back?
Oh, I'll get a line of credit.
Well, what if the bank takesaway your line of credit?
Oh, that wouldn't happen.
Oh, yes, it could.
Yeah, so I've learned and I'lladd one more layer to that.
My parents, so my father, passedaway when I was five, when I
was quite young, but mystepfather was a contractor.
My stepfather and my motherended up working for Jimmy Dean
(11:33):
Jimmy Dean Sausage, which, ifyou're older, if you're all
right, you're older, you knowJimmy Dean, or even you know who
he is, but he had aconstruction company and when
the savings and loan crisishappened in the early 90s, they
both lost their jobs.
So I saw all these differentthings happening in the real
estate market.
So in 2008 hit and I started tolook back through history.
(12:06):
I always liked economics andbanking and history and
different things.
You can see that these cycles,they repeat themselves and these
credit expansions and creditcontractions happen and they
largely affectdisproportionately affect the
real estate markets.
John Hauber (12:21):
Well and that's what's so great about your
podcast is that you keepeveryone informed on what's
going on in the marketplace asit relates to real estate
investing, and so love yourpodcast.
That's why I'm having you ontoday.
I want to make sure that othersknow about it and such so Next
Level Income correct.
Chris Larsen (12:41):
Yeah, Next Level Income show.
You can check us out atnextlevelincomecom.
And yeah, we're closing in onseven.
Like we're getting in.
We're closing in on the end ofour seventh year, so almost
eight years in.
John Hauber (12:53):
Yeah, offline.
He said that and I said we'refour and a half years in and
you're doing awesome, so let'syou know, okay, so from that
first bold step that you made inyour 20s and then subsequently
selling in 2008.
Chris Larsen (13:09):
I ended up not selling because, as the
properties went down in value, Iended up holding the properties
.
So you held the property.
Yeah, fortunately we hadlong-term debt and they were
cash flow positive, so it was anokay position.
But it would have been great ifI sold them six months or a
year earlier.
John Hauber (13:26):
Oh, believe me, I lived through 2008 to 2012.
So I could tell why.
I don't think it's about thattime, but we won't get into
those.
But you went all in tomultifamily and let's transition
and explore why you did that.
Okay, so you call multifamilythe holy grail of real estate
(13:47):
and, beyond cash flow and scale,what unique structural
advantages set it light, yearsapart from single family or
commercial real estate?
And I just want to make a pointhere, because this is the
Senior Housing Investors PodcastSenior housing is a subset of
multifamily, so let's just startwith that.
Chris Larsen (14:06):
Yeah, it is, and I think we can kind of transition
into why I'm a big fan ofsenior housing, kind of going
forward and some of thedemographic changes that have
shifted.
But, if I may, john, if you'relistening today and I'm holding
this up, you're probablylistening on the show, but if
you want a free copy of my book,you can also get that
nextlevelincomecom and I kind ofwalk through.
(14:27):
You know all these things thatI'm going to describe with
multifamily.
But, as you know, I had acouple momentous points in my
life.
I mentioned the first when youhave, in my adult life, when my
best friend passed away, mymother passed away at the end of
2011.
And we had, just a week later,we had my second son and I had
(14:48):
been been working and been verysuccessful in the medical device
space, you know.
But it was one of those pointswhere my wife and I kind of took
inventory of everything in ourlives and said, ok, like you
know, what are we doing?
It was a consequential electionyear in 2012.
And so what are we doing?
You know, what does ourportfolio look like?
And I went and looked at myportfolio and my single family
(15:10):
rentals were doing well, butthey were kicking off like 7%
cash and I was making, you know,a few hundred thousand dollars
a year at the time, you know,plus my wife's income.
You know I was paying a lot oftax because I'd lost all the tax
benefits from single family andI was ending up with a 4%
return on my equity.
So I looked at my equity, notmy original investment.
(15:33):
I think if you're a real estateinvestor, I think that's a
really good way to evaluate yourportfolio is return on equity,
not return on your originalinvestment as it grows, and I
was like I was embarrassed withsomebody with a MBA in finance
getting 4% return.
I was like this is Now.
The returns were great from myoriginal investment but looking
(15:56):
forward, I was like this isn'tokay.
And my wife had started her ownarchitecture practice and we
were at a business meeting outon the West Coast, you know kind
of for her and I was talking tosomebody at that meeting and I
was, you know, lamenting, youknow, the performance of my
portfolio and he goes well, haveyou looked into investing in
(16:16):
multifamily?
I said yeah, you know, and Isaid I've looked into it.
It's you know, I see thebenefits but and he goes, you
should talk to my friend.
They syndicate multifamilydeals.
So I I reached out and I've Igot into the medical device
space because of demographics.
(16:37):
Um, I followed a author by thename of, uh, harry Dent, and
then kind of some other stuff.
So I started followingdemographic trends and the
millionaire next door wasanother, was another author.
I forget his name off the topof my head, but he's talking
about hey, if you want to, ifyou want to make a lot of money,
just follow the baby boomers,you know, get into finance or
(16:57):
the medical field.
And you know real estate, youknow for in these ways, in these
ways.
And I was like wow, I was likeI'm talking to this guy and he's
talking about you know, thecoming, you know, demographic
wave of millennials that aregoing to be renting.
And I said like you soundexactly like all this stuff that
I've read.
And he didn't, he didn't knowabout these authors, but that he
(17:18):
was saying the same thing.
And I was like no-transcript,john, because you know, forced
(17:50):
depreciation comes fromincreasing the operating income
in a property, which boils downto operations and you know, as
you get into, you know moreoperationally heavy type
investments like car washes thatwe're in, or senior housing, as
you and your audience isfamiliar with.
If your operations aren't good,then your income can go the
(18:10):
other way too.
So you can force appreciation,but you can also go the wrong
way with that.
So all those factors led me toultimately sell off my single
family portfolio and we investedin multifamily.
And then I introduced my firstpartner to the space and we
syndicated our first deal in2016.
August, I think, second 2016,.
(18:32):
We closed on our first deal.
Going on, you know it's beennine years at this point.
John Hauber (18:36):
Awesome.
So today, as you know, manyinvestors chase niche strategies
my friends in self-storage,others that we know are mobile
home parks even crypto is beingtalked about quite a bit and
senior housing.
I don't consider senior housingto be niche because it has both
(18:57):
the demographics and a reallysupply demand issue going on
right now.
So it's best investments incommercial real estate at this
point, and so has multifamilysyndication stood the test of
time, even through 2024 and2025?
.
Chris Larsen (19:17):
So the answer is yes.
The short answer is yes.
Now has it been a, you know, asmooth road, smooth sailing the
whole time?
No, there's been a lot ofchallenges.
And that goes back to so one.
You know, when I got into thespace in 2012, 2013, originally,
you know we're going on 13, 14years on at that point, you know
(19:38):
, the demographic trends stillstand like we're still 6 million
housing units roundabout shortin this country, you know.
So we've got to fill that gapsomehow.
And you know the majority ofthe household formation.
You know they're going out andrenting.
They're either renting homes,they're renting townhouses,
they're renting apartments withthose.
So, yes, the demographics hasstood the test of time.
(19:58):
What we've seen the past coupleyears, as a lot of people know,
is that when rents were going updouble digits, you know, in
2001, 2002, and rates were rockbottom, you had a lot of supply.
You know starts I'm sorry, youhad a lot of starts.
And today you're seeing thatsupply peaking.
So we've had a record supplyover the past year, hit the
(20:20):
market.
So that's actually put a lot ofdownward pressure on rents.
So you think about it like if Iown a property and you have a
property across the road oracross town.
You have a new builder.
They need to sell that property, to get it off their books,
because that's what they do theybuild and sell, they develop
and sell.
They don't develop and operatetypically.
(20:40):
So what are you going to do?
You're going to do everythingin your power to get your
occupancy up to the point whereyou can sell that property, and
typically you need it to be 50to 70% to sell it.
So what do you do in that case?
You do the same thing I didwhen I bought an office downtown
and I needed to fill it upbefore I closed.
I gave away two, three monthsfree on the front end so that I
(21:03):
could get the rents where theyneeded to be, so that the bank
would then say oh, you know,your income is here.
What did I care if I was givingrent away when I initially
bought the property, because Ibought it from foreclosure right
.
All I wanted was the show insix months and a year that was
going to have that positivetrend.
So that has a lot of immediatedownward pressure on that.
(21:24):
The other thing that we face,john, is interest rates have
come up.
So as interest rates have comeup.
Cap rates have come down.
I just read that cap ratesreversed last month, so about 75
basis points annualized.
So that's a nice reversal intrend.
But we've had a lot of headwinds.
So what's happened is you havea lot of supply hitting the
market, you have rents that havebeen flat, in some markets even
(21:46):
downward, and cap rates havedecreased as well.
So if you have a multifamilyportfolio and you're selling
some of those properties, it'sbeen an inopportune time to sell
this year and last year.
But we're seeing those trendskind, you know, kind of reverse.
But I think you know investorsgot spoiled by seeing, you know,
just outrageous returns, youknow for a decade, and now
(22:07):
they're coming back to kind of,you know, coming back from the
stratosphere, you know, backdown to normal, and I think
that's going to, you know we'regoing to have kind of a normal
market going forward, you know,for multifamily.
But I think multifamily isstill going to be a solid space
to be invested in over the nextdecade.
John Hauber (22:22):
Yes, supply and demand again right and
affordability right.
Individuals yes, very difficultto get into homes today, and so
multifamily is whereindividuals are going.
So this brings up a great pointand a great question is that
day in 2025 and going into 2026,because I don't see the 10-year
(22:46):
doing anything much over thenext year.
Fairly flat yeah, how do youstress, test your acquisitions
and protect investor capitalthrough this cycle?
Chris Larsen (22:58):
Yes, through this cycle, yes.
So if you're an operator yourowner that is forced to
refinance a property right now,you're in a challenging place
the bottom line so that's achallenging spot to be in.
Over the past five years therewere a lot of bridge loans that
were out there that are comingdue.
So we're hundreds of billionsof dollars that are bridge loans
that are coming out.
(23:18):
That provides an opportunitytoday to buy these properties at
a discount.
We have one currently inHouston that's under contract
20% below what the seller boughtit for.
So that's a great opportunity.
We typically have long-term debton our current acquisitions
that we bought in the pastcouple of years.
So we're saying, okay, is therea long-term debt?
(23:41):
What is the forecast for those?
You mentioned affordabilityWe've been creative with some
programs, specifically in theHouston market.
We made six acquisitions andpartnered with the Houston
Housing Authority to provideaffordable housing as a portion
of those units.
So that's increased our caprates about 200 basis points in
those properties, you know.
(24:08):
So we say okay, we want to makesure that we have reasonable
rental expectation or reasonablerent expectations in terms of
increases.
You want fixed rate debt.
You also want to make sure youhave ample reserves.
You know for these investors aswell, and I think you know it's
easier now.
You know to say, hey, we expectto sell at the same or a higher
cap rate, whereas you know ifyou bought a property five years
ago, you know you could easilysay, hey, we'll probably sell
(24:28):
this at 100 basis points lowercap rate and do that.
So I think a lot of operators,ourselves included, have learned
over the past.
You know few years.
You know that you need to bemuch more conservative.
You know some blind spots.
You know if you look atinflation, you know expenses up
to I mean senior housing isfacing the same thing in terms
of expenses going up.
You know across the board.
(24:49):
You know supplies, renovations,staff.
You know these new units thatare coming onto the market.
You know one of the things thatpeople don't think about is
well, what happens if, ifsomebody comes to hire your
staff because now they need tostaff their new building up as
well and they say, hey, john,we'll hire you at a 25% you know
bonus.
You know over what what Chrisis paying you.
(25:11):
So we're vertically integratedin in most of our markets with
our, with our currentacquisitions, and that also
helps us control that control.
You know.
You know our staffing as wellas our costs, and you know we're
able to source at a lower rateas well.
John Hauber (25:25):
You know, with those Awesome, chris, thank you
Appreciate that, and so let'sshift gears.
This would be very interestingbecause no one on our podcast
has ever spoken about this, andI personally, 22 years old,
incorporated this investmentvehicle into my portfolio, and
that is full life insurance, atopic few real estate pros
(25:51):
understand.
In simple terms, how doesbuilding cash value inside a
policy compared to a 1031exchange or even a bank line of
credit?
Chris Larsen (26:02):
Yes, yeah, and I like the way you kind of changed
what you said there.
You said investment and thenyou said vehicle.
The way I think about lifeinsurance is more like a vehicle
, like a strategy, because thechallenge I've seen in the
industry is that people compareit to an investment.
(26:24):
And I'll give you a quick story.
So I mentioned my father passedaway at five.
My friend passed away veryyoung you see people pass away
and my best friend asked me oneday he said, chris, what do you
do, what's the cornerstone ofyour strategy?
I said life insurance, asked meone day.
He said, chris, what do you doLike, what's the cornerstone of
your strategy?
I said life insurance.
And if we go back a hundredplus years, this was what the
(26:45):
majority of Americans used fortheir savings in retirement.
And then you had pensions comeinto play, and then you had
mutual funds and term insurance,et cetera, and the country has
largely gotten away from this.
You know.
So we don't.
We don't look at it the sameway we did.
I look at it as a personalpension fund, because what you
and I can't say about ourinvestments, john, is that
(27:06):
insurance provides guarantees.
It provides guaranteed rate ofreturn, it provides a guaranteed
payment upon death.
Well, my best friend, threeyears after he set up his life
insurance policies, his wifepassed away at the age of 40.
She was in the military.
She came back from the MiddleEast and had an aggressive form
of cancer, likely from the toxicexposure that she had over
(27:29):
there, and he got a $3 millionpayout that allowed him to step
away from the job that he wasworking in, relocate his family
back closer to his family andspend more time with his
daughters.
And I was talking to aninsurance I'm sorry, a financial
advisor.
And he was like, oh, I'm, youknow I hate whole life insurance
.
You know it's got.
(27:50):
You know rates, returns aren'tgreat.
And I said, well, my friend gota policy on on his wife and she
passed away three years later.
I said he got $3 million.
I said do you want to know whatthe rate of return was on that?
And he's like, well, and I saidhere's the thing.
I said if you're going to sayit's a bad investment, you also
have to acknowledge when it's agood investment.
But I wouldn't say, hey, lookat the great investment my
(28:14):
friend made in buying lifeinsurance.
It's a vehicle, it's aprotection, it has all these
benefits.
So the way we look at it, john,is like a vehicle, you know.
We use it and incorporate itinto our investment strategy,
but we look at it and wemaximize the cash.
And I actually got licensed,you know, during COVID, because
(28:34):
I realized that a lot of peopledidn't have a good knowledge of
this.
So my partners, you know,specialize in structuring these
policies to maximize the cashvalue but minimize the costs.
And the challenge is, if youtalk to, you know, your average
advisor, they're going to giveyou, you know, basically an out
of the box insurance policy,because if they structure it the
(28:55):
way we do, they cut theircommission by like two thirds.
So they're not reallyincentivized to do it and it's
more complicated to do.
It, takes a lot moreunderstanding to do that.
But I think the first thing isyou know you say okay, if you
value the predictability and theguarantees.
You know if you're a businessowner, if you're saving for
(29:15):
college, you know if you're in,you know an entrepreneur and you
know you have a lot ofvariability in terms of other
things, it's really nice to knowthat that money is growing, you
know, predictably every year.
So, like this year, myguaranteed minimum is 4%, but
I'm going to get 6% with ourdividends this year in our
policy and that's tax-free, youknow.
So I know 6% tax-free isn't anamazing rate of return but it's
(29:39):
a really nice, safe place to putmy cash.
And that means I evaluateeverything by looking at that
first and doing that.
And it saved us during Helene,which hit us here in Asheville.
It saved us during COVID tohave access to that.
I know a lot of investors thatthey use their life insurance
policies to finance theirpurchases and what they do, kind
(29:59):
of setting up their own familybank.
But the big thing, you know,for those of us that have
children is, you know we look atour financial picture not just
through our eyes.
Which an advisor would say, oh,you don't need insurance
anymore when you're 65, you knowyour portfolio is worth this
much.
Well, I say well, wait a minute.
I want to leave a legacy to myfamily, you know so.
I know my insurance is set upto create generational wealth,
(30:23):
not just for my children butalso their children through the
structures that we set up.
And you know Nelson Nash, whokind of pioneered, you know
everything around infinitebanking and really the way that
we structure our policies.
You know he had a very holisticview of things as well.
So I, I think, um, you knowagain if, if it's, uh, it's
(30:44):
something that you know, theultra wealthy use it.
There's more.
There's more than just the rateof return, john is as you
talked about inside the policy.
There's all the other benefitsthat come with it.
John Hauber (30:54):
Okay, so let's let's just take a real world
example and walk us through fora scenario scenario.
I'm going to fund a policy with, let's say, $50,000 a year by
year three.
How would you deploy a policyloan back into the deal and what
are the pros and pitfalls?
Chris Larsen (31:15):
Yeah, I'll try to simplify it and this is kind of
complex and three years is adecent timeline, but you can
look at it through differentthings.
So when you structure a policythe way we do, typically all the
expenses are going to be frontloaded in the first couple of
years.
So in that third year if youput $50,000 into the policy this
(31:36):
might be surprising forsomebody here but you can
actually take 50,000 out in theform of a policy loan as you
borrow.
At today's rates it's about 5%.
Now that same individual isgoing to have much more than
$50,000.
They put $150,000 in that.
So year three you're going totypically get dollar for dollar.
You've probably had a portionof that in expenses in the first
(32:00):
couple of years.
So it's going to vary.
You might have $130,000, maybea little less, maybe a little
bit more than that in total cashvalue in that policy.
But the nice thing is I'll giveyou a real world example.
I had one of my partners cometo me and says hey, chris,
actually somebody you know isselling a car wash in town and
he'll sell it to us if we canclose this month at the same
(32:23):
price.
He paid for it, which was likea 15% discount, so we're getting
a $200,000 discount on this.
So I took $250,000 as a policyloan paid 5%.
I'm making 20% on that money.
So instead of borrowing thatmoney from the bank or using
cash, I was able to take a loanout.
Now one might say well, chris,why would you take that money
(32:45):
out and have to pay the interestrate?
Well, the nice thing is, if youstructure the policies well,
I'm paying 5%.
But remember I mentioned I'mgetting 6% on the money I have
in that policy.
The insurance company actuallyrecognizes the money that I have
in there, whether it's in thereor whether I've taken it as a
loan.
And even though I'm paying 5%,I'm still getting 6% inside the
(33:07):
policy.
So let's just assume it's awash in terms of that.
I can now pay that money backbecause I'm making 20% on my
money over a period of time andI can repeat this strategy over
and over again.
And my wife and I used to dothis when we built spec homes.
So we would take a 50 or$100,000 loan, buy a lot, build
a house, sell it in 12 years,double our money, pay the loan
(33:30):
off, go and do it all over again, all the while not having to
rely on banks as well as beingable to allow our money to
continue to compound inside thepolicy being able to allow our
money to continue to compoundinside the policy and we still
had the benefit of the actualdeath benefit, you know, from
the money that we had in there.
So it's some people call itlike the and strategy.
You know, you get to, you know,have the insurance and you get
(33:52):
to use the cash at the same time.
John Hauber (33:54):
So are these policies guaranteeing 5% or 6%,
or is it based on what themarket is doing?
Chris Larsen (34:01):
Great question.
So there's a guaranteed minimumrate.
So typically you're looking ata guaranteed minimum rate.
It depends on when youstructure the policy.
Like, ours are about 4%.
That can vary from, you know, 2, 3, 4, 5%, depending on when
you structure that policy.
And then you have to make sureit's with the right company.
You know, we work with a stableof companies, but the ones I
(34:22):
have my policies with are mutualinsurance companies and what
that means is if the companyturns a profit and these
companies have to turn a profitso that they can stay viable, if
you think about it.
So I say if they turn a profit,but when they turn a profit,
they return that profit back inthe form of a dividend, you know
.
So this year the company thatI'm with, penn Mutual, informed
(34:45):
us that hey, this year yourguaranteed minimum plus your
dividend is going to be 6%.
So this year I know that we'regoing to get a 6%.
You know, not not guaranteed,but I know this year it's going
to be that much.
John Hauber (35:01):
Awesome.
Thanks, chris, appreciate thatinput.
Now we talked aboutdemographics.
Okay, we know what thedemographics is doing.
When we, when we look atwhether or not we're going to
(35:26):
acquire a property, or we'reconsulting with owners and
operators and investors andbuyers and sellers, you know
that population migrationcontinues.
To rewrite the maps, forexample, like go to one of these
you know, u-haul, or or one ofthe other sites, and say, okay,
what's going on in terms ofmigration?
So what's popping up in ourgrouping of the highest
(35:51):
migration states are Florida andTexas and the Carolinas, and
even Boise, idaho.
Which emerging second tiermarkets are flying under the
radar right now, and why?
Chris Larsen (36:04):
Yeah, oh, that's a great question because we focus
on those larger markets as well.
Houston's one of our favorites,dallas is another one.
I moved to the Carolinasbecause I knew that the
demographics were going to pushin that way, if we get, you know
, a lot of the secondary marketsare in those states, but
they're smaller markets, right.
(36:24):
So you're seeing, you know,like the Asheville, north
Carolinas.
You know of the world, you'realso seeing some that people
aren't thinking about is theMidwest, you know.
So you're seeing, like Columbus, ohio, indianapolis.
I would consider Boise asecondary market as well, and
you can kind of see this.
These are like echoes of themass migration trends.
(36:47):
And when I say echoes, you knowif you're, if you're moving out
of California, you know it'sclose to move to Boise, you know
, for instance.
So you see people moving, youknow, to that area, like Texas,
you know, maybe, maybe notAustin, but you have.
You have markets that are inbetween, like Austin and San
Antonio.
I'm trying to remember theexact market that I'm thinking
(37:09):
of Waco.
Yeah, there's Waco, and there'sanother one in that corridor
that I'm blanking on at themoment, but this is.
You can say, oh well, where isclose to these bigger markets
where people would prefer tolive.
You're seeing, like MyrtleBeaches, savannah, georgia.
You know these are markets andI think it's easy to overlay.
(37:31):
You know the demographic, youknow the mass migration trends,
john, and then you layer onquality of life on top of that
and that's where you canidentify some of these markets.
And I have a whole algorithmthat I went through and a
methodology that I have on myblog that you got.
You can go tonextlevelincomecom and just
search for, like demigrationtrends or how to find you know,
(37:53):
the next big markets.
But you know, if you look atthe quality of life scores and
you look at the best places tolive and then you check the
proximity, you can figure out alot of these things yourself.
If you're, if you're, a smallerinvestor, you're like, hey, I
just want to move to an areawhere I could buy a house and do
well.
This is a great way to do thatand take advantage of some of
(38:13):
these things.
Like Cary, north Carolina, forinstance, is another one Outside
of Raleigh, but terrific market.
Greensboro, north Carolina,winston-salem, north Carolina.
These are some other secondarymarkets that have done really,
really well.
And what do those markets, andlike Columbus, ohio have in
common they have a betterquality of life than you know,
(38:34):
some of these bigger cities, butthey also have a lower cost of
living, so they're more familyfriendly and if you're a
millennial trying to start ahousehold, you may be almost
forced into those markets, youknow, versus getting into.
You know, the main market andeven on a micro scale like you
can take Asheville, northCarolina and Brevard, which is
just south of us has popped upand been just an amazing, you
(38:55):
know, growth story from asmaller town that's there as
well.
So if you're, if you're lookingat from a smaller perspective,
if you're looking at you know,hey, how do I figure out if this
is a good market?
You can layer on, you know,some of these quality of life
scores as well as the cost ofliving, and go just outside of
some of these big migrationareas.
John Hauber (39:15):
That's a great point and there's.
You know, I use a spreadsheetand the spreadsheet was you know
, we track the baby books rightand we track the baby books
right and we track absolutelyhealth and wellness.
So I put in a spreadsheet thebest regional hospitals in the
united states that have, yes,all of the services, all of the
(39:38):
you know like brain surgeons andspine surgeons and everything,
and said, okay, you know, theydon't want to move away from
their community to a city wheremaybe their kids live, they want
to stay in their farming ortheir beautiful county community
.
And, boy, that county has onegreat markets for the senior
housing space.
We also, in the senior housingspace, we look at where the 55
(40:10):
and 64-year-olds are moving,because those are the ones that
are making the decisions fortheir parents.
But they also have kids thathave potential grandkids and the
parents are coming in andwanting to be near their kids,
their grandkids parents arecoming in and wanting to be near
their, their kids or grandkids.
Chris Larsen (40:31):
I'll give you a quick antidote.
So my, my stepfather hasdementia and he was.
He was not living here, but wemoved him here in Asheville,
north Carolina, and he's in.
He's in a senior livingfacility just North of Asheville
for that same reason, you know.
So I think that's another,that's another great way If you
follow the decision makers,those that are paying the bills,
I think that's a really greatpoint that you made there.
John Hauber (40:52):
Thank you.
So we've got probably anotherfive minutes or so, but we want
to get into some really corequestions, because we have a lot
of new investors out there thatare, you know, w-2 employees or
they're you know millennials,and they're making good money.
They want to invest.
So if someone's listening andhas 50,000 of investable capital
(41:15):
and zero prior syndicationexperience, what three steps
would you have them take thisweek to get started?
Chris Larsen (41:23):
Yes.
So I think the first thing is,if you've got that money at
$50,000, quote unquote burning ahole in your pocket, the first
thing you want to do is justpause and listen to shows like
yours, John.
Go to the Next Level Incomeshow.
Go to nextlevelincomecom.
Start to educate yourself.
And if you were, when I wastrading in the stock market, one
(41:44):
of the things you would do isyou'd set up like a dummy
portfolio and you would tradewithout real money.
So I would start to educateyourself and then find operators
that you want to contact andstart looking at deals.
So before I invested in myfirst multifamily deal, I spent
a year talking to operators andlooking at deals that came
(42:06):
across.
So then, when I had that moneyto invest at 100K, I split
between two $50,000 investments.
At the time I was comfortablemaking those investments.
One of the things that we haveset up is a debt fund, so it's
liquid.
So if you said, hey, I want toearn something while I'm
evaluating, but I want to beable to get my money back, like
I want to earn something, youknow, while I'm evaluating, but
I want to be able to get mymoney back when I want to place
(42:28):
it long-term.
We have a debt fund right now.
It pays up to 10% and you canget your money back within 90
days.
So typically 30 to 90 days iswhen we're getting that money
back.
So that's another option ifinvestors say, hey, like I want
to get something you know for mymoney, but I ultimately want to
(42:48):
put this in a longer term,higher earning investment.
John Hauber (42:49):
All right, we're going to do something
differently that we haven't doneon the Senior Housing Podcast.
We're going to kind of copywhat you've done and others have
done by listening to you andwe're going to go into a
lightning round.
Okay, let's do it.
Are you ready?
All right?
So best single book you'vegifted investors other than your
own book.
Chris Larsen (43:08):
All right, this is a big one, but it's called the
Secret Life of Real Estate andBanking by Philip Anderson, and
it goes through.
It's really thick.
His partner, akhil Patel,a-k-h-i-l Patel, wrote a shorter
version.
I can't remember the name offthe top of my head, but I would
read that in lieu of this.
(43:28):
But this is a great book thattalks about the real estate
cycles, the secret life of realestate and banking.
John Hauber (43:34):
Excellent One KPI.
Every syndicator must trackreligiously.
Chris Larsen (43:41):
You've got to know your expenses, your expense
ratio, and you've got to knowyour inflation on expenses,
absolutely.
John Hauber (43:47):
If you could roll back time, one piece of advice
you would give your 30 year oldself.
Chris Larsen (43:53):
Put it all in Bitcoin.
John Hauber (43:55):
Yeah, I agree.
Chris Larsen (43:58):
I love real estate , but 15 years ago I would have
put it all in Bitcoin.
John Hauber (44:02):
Oh, yeah, yeah, so can we one day go back in time?
And anyway, we'll let that onego.
Right, we'll let that one go,yeah, yeah, all right, so you
hit your original 2025 AUM goal,I believe.
Okay, tell me.
If that's not correct, what'sthe next mountain to climb?
New asset classes, such assenior housing, driven due
(44:23):
diligence, or maybeinternational syndications, such
as senior housing driven duediligence or maybe international
syndications.
Chris Larsen (44:31):
So actually, john, you know, one of the reasons
that we were brought together isI started looking into the
senior housing space in 2019because of the demographics,
yeah.
So we came really close tomaking our first investment then
, and then COVID hit.
So, yeah, we're heavily focusedon senior housing, as you
mentioned.
It's kind of an offshoot ofmultifamily and I think if
you're, if you followdemographics and you're in
multifamily, it's just, it's anatural, you know.
John Hauber (44:50):
Next, step in those terms.
Awesome, so we're going tofinish with this one.
This is a fun one.
Outside of real estate andinsurance, what passion project
fires you up right now?
Family sports, or perhapssomething totally offbeat?
Chris Larsen (45:04):
Yeah, so uh, both my boys they're 15 and 13 play
lacrosse.
I just bought a sprinter vanrecently and I just got back
from a four day trip with myolder son going to a lacrosse
tournament.
So I'm I'm learning everythingI can about lacrosse.
I was a cyclist but I'mlearning everything I can about
lacrosse recruiting, how to helphim train you know, nutrition,
all these things.
It's a fun journey.
(45:25):
It's very different.
He's very talented, so it's funto learn along with him and
help me support his passion.
John Hauber (45:33):
Awesome, chris.
This has been phenomenal manand thank you for your candor
and your tactical wisdom.
Listeners, if you want to divedeeper, grab Chris's book Next
Level Income or visitnextlevelincomecom to download
his multifamily playbook and,eventually, senior housing
playbook.
(45:53):
I'll teach you everything youneed to know, chris and his
policy design guide, chris.
Any other way individuals canreach out to you.
Chris Larsen (46:01):
No, that's great, One of the corners of our
website that you know wouldpertain to listeners of this
specific episode.
You go to nextlevelincomecomforward slash banking.
You can also get a copy of ourbook that talks about our
specific life insurance strategy, and you can learn more about
that.
So if you say, hey, this thatsounded interesting, Chris,
that's something that I'd liketo incorporate into into my
(46:24):
strategy, you can learn morethere as well.
Nextlevelincomecom forwardslash banking.
John Hauber (46:28):
Excellent.
Thank you, chris, and thank youfor our audience, for tuning in
once again and until next time.
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