March 19, 2025 • 38 mins
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ABOUT WHITNEY ELKINS-HUTTEN
Whitney Elkins-Hutten is the Director of Investor Education at PassiveInvesting.com, founder of Ashwealth.com, and author of the award-winning #1 bestseller Money for Tomorrow: How to Build and Protect Generational Wealth. Through her proven wealth-building framework, Whitney empowers high-earning professionals and business owners to create secure, passive income streams that support a legacy of financial freedom for generations. With over $800MM in assets—including 6,500+ residential units, 15 express car washes, and 2,200+ self-storage units—Whitney guides clients to invest strategically, helping them confidently turn a single $100,000 investment into hundreds of thousands within a few years, or millions over decades.
THIS TOPIC IN A NUTSHELL:
Whitney’s background and journey to real estate
About her book - Money for Tomorrow
Current market cycles and their impact on investments
Understanding Investor Education and Relationships in Private Equity
Diversifying Investment portfolios
Investment Strategies and Risk Management
Identifying investment goals and risk tolerance
Money management and Wealth creation
Understanding the seven pillars of wealth
Connect with Whitney Elkins-Hutten
KEY QUOTE:
“I've taken my fair share of punches as a limited partner investor. If you've been investing for more than ten years, you know that not all equity deals will perform 100%. It's all about not putting too much capital in any one deal that could sink you. I've seen investors violate that immutable law of passive investing over and over again.”
ABOUT THE WESTSIDE INVESTORS NETWORK
The Westside Investors Network is your community for investing knowledge for growth. For real estate professionals by real estate professionals. This show is focused on the next step in your career... investing, for those starting with nothing to multifamily syndication.
The Westside Investors Network strives to bring knowledge and education to real estate professionals that is seeking to gain more freedom in their life. The host AJ and Chris Shepard, are committed to sharing the wealth of knowledge that they have gained throughout the years to allow others the opportunity to learn and grow in their investing. They own Uptown Properties, a successful Property Management, and Brokerage Company. If you are interested in Property Management in the Portland Metro or Bend Metro Areas, please visit www.uptownpm.com. If you are interested in investing in multifamily syndication, please visit www.uptownsyndication.com.
#RealEstateInvesting #RealEstate #CreatingWealth #PassiveInvesting #LimitedPartners #MoneyForTomorrow #InvestorEducation #InvestmentGoals #MoneyManagement #WealthCreation #PillarsOfWealth #MarketCycles #RiskManagement #GenerationalWealth #PassiveIncomeStream #FinancialFreedom #StorageUnits #Multifamily #InvestorOperator #EquityDeals #LongTermWealth #InvestmentStrategies #RealEstateInvestments #InvestmentOpportunities #SteadyCashFlow #LatestPodcastEpisode #PassiveWealth #JoinTheWINpod #DealDeepDive #WestsideInvestorsNetwork
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Episode Transcript
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Intro speaker (00:03):
Welcome to the Westside Investors Network. WIN,
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(00:24):
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or take any other action.
Trent Werner (00:40):
Welcome back to another episode of the deal deep
dive segment on the WestsideInvestors Network podcast. I'm
your host, Trent Werner. In thissegment, our future guests will
share their unique stories on aspecific deal they've invested
in. We will dive deep intofinding the deal, financing the
deal, writing an offer, and thedue diligence. Do us a solid and
(01:00):
smash that subscribe button,leave us a rating, and share
this episode.
And now let's dive deep. Welcomeback to the Westside Investors
Network podcast. I'm your host,Trent Warner. On today's
episode, we are joined byWhitney Elkins Hutton. Whitney
is the director of investoreducation at
passiveinvesting.com.
(01:20):
Whitney is gonna share somequestions that you should be
asking operators as a limitedpartner investor when you're
interviewing them andpotentially investing in one of
their deals. Whitney is alsogonna go over some different
asset types and investmentstrategies to help you diversify
and reduce your risk in yourportfolio. Whitney is also gonna
(01:41):
share about her book, Money forTomorrow, and some of the
helpful tools that she'sincluded in that book for you to
help improve your investingcareer. Now let's welcome
Whitney Elkins Hutton. Alright.
Whitney Elkins Hutton joiningthe Westside Investors Network
podcast today. Whitney, thanksso much for taking the time to
chat with us.
Whitney Elkins-Hutten (02:01):
Thank you so much for having me on, Trent.
Trent Werner (02:04):
So Whitney, correct me if I'm wrong, but you
are the director of investoreducation at
passiveinvesting.com. Correct?Yes. And what does that mean?
Whitney Elkins-Hutten (02:14):
I'm gonna say that's usually the second
question. So I I my role here atpassiveinvesting.com as the
director of investor educationmeans I get the fun job of
helping an investor invest in aprivate equity deal without
having to, like, sell them theinvestment. So essentially, I'm
kinda like a coach and a mentor.I meet the investor where
(02:36):
they're at. I help understandtheir goals, their risks, their
timeline, help educate them howour investments at
passiveinvesting dot com helpthem reach those goals, risks,
and timeline.
And then I can kind of mash themup to a particular deal, and
then the investor relations teamcan work through the details of
that deal with them.
Trent Werner (02:57):
And, I guess in a short and sweet way, how does a
typical conversation with aninvestor look for you?
Whitney Elkins-Hutten (03:07):
Yeah. Well, honestly, the conversation
that I had should look like, youknow, a conversation that you
should be having with anyoperator because they should be
coming from a fiduciary, youknow, position. Like when you
hop on a phone with an operator,as a passive investor, you're
interviewing them, they'reinterviewing you. You should be
(03:29):
understanding who they are as abusiness, what's the background
track record, their expertise,all those things that make
passive investing so wonderfulfor you in your portfolio. But
they should be asking questionsto understand who you are as an
investor.
What are their goals? What doyou need from your portfolio? Do
you need cash flow, capitalpreservation, equity growth,
(03:50):
diversification, tax benefits?
Trent Werner (03:52):
I mean, those are the kind
Whitney Elkins-Hutten (03:53):
of the big five. Those are the big
wealth pillars. I, as anoperator, want to know what that
person really needs, not so muchspend fifteen minutes with them
and say, hey, here's our menu ofinvestments you want to invest.
I want to get to know them alittle bit more, understand, and
really wholly understand thatwe're a good fit for each other.
Because especially when you gointo an equity deal, you know
(04:16):
Trent, you're making moneytogether and I mean possibly
writing out a very challengingenvironment together.
And so I think that's therelationship sometimes limited
partners don't quite understandwhen they're investing in
passive deals that they actuallymore often than not, they're on
(04:38):
the equity side of things, whichmeans they're on the
partnership. You're going makemoney or lose money together.
And unlike the stock market,which is super efficient and you
can get in and out, but it'ssuper hard to make money, you
know, getting into an equitydeal, getting into an
alternative investment, gettinginto real estate, there's a
longer glide path to makingmoney, but that's where the
(04:59):
opportunity lies. But it also isless liquid. And so, when you
ask what does a conversationlook like, should be a two way
street, not just the LP askingtheir list of questions that
they may be downloaded off of aform or, you know, offline.
Hopefully you're working with amentor or a coach on this, but
really the operatorunderstanding who you are and
(05:20):
making sure that they'rebringing you into an investment
because it is holistically agood fit for you.
Trent Werner (05:26):
I love that. Yeah. I mean, I think from a passive
investor LP side, a lot ofpeople may especially newer
limited partner investors, theywanna diversify from the stock
market or their otherinvestments. And so they find a
real estate operator that theycan invest with, and they don't
necessarily understand maybeeven what they're looking for,
(05:48):
whether it's capitalpreservation, equity growth,
cash flow, all those differentthings. And so I think that's
great that you hit all of thoseon the head with as a limited
partner, you have to be askingthe right questions of your
operator and making sure it's agood fit.
And I think identifying whatyou're looking for out of the
investment, because not all realestate investments or or
(06:08):
business investments are goingto be the same for you as a
limited partner investor.
Whitney Elkins-Hutten (06:13):
Yeah, I think one of my red flags when
I'm talking to a limited partneris maybe a more skilled
investor. It doesn't necessarilymaybe they're more skilled at
private equity investing, butthey come in and they're like,
I've been investing for like,fifteen, twenty years. Just tell
me what the returns are. I'mlike, Okay, my first question
(06:35):
is, have you invested in thespace before? Nine times out of
10, they haven't.
And I'm like, Okay, this is avery different game, because you
can't just invest in the stockmarket. The stock starts
sticking down. You have yourstop loss mechanism in place and
immediately sells. This isinvesting in a partnership. It's
(06:56):
investing in people.
It's investing in relationship.Let's get to know each other
first, right? We're gonna bemarried in an investment for
five to seven years, whether itgoes well or not well, let's get
to know each other first.
Trent Werner (07:11):
Absolutely. And so at passiveinvesting.com, you
mentioned that you havedifferent types of investment
vehicles that you guys operate.What are some of those different
investment or asset classes thatyou invest in?
Whitney Elkins-Hutten (07:25):
Yeah, so we really have tried to, you
know, create a menu of offeringsthat hit different layers of the
capital stack. That way, andthen when an investor comes into
our ecosystem, they truly candiversify their portfolio over
all the different layers of thecapital stack and also markets
and also asset classes so theycan create true diversification.
(07:47):
So one of our my favoritevehicles right now in this
market environment is the debtlayer. We have a residential
real estate debt fund. We callit the pick debt fund, real
estate debt fund, and thatinvests in fix and flip loans.
It's in first lien position. Wehave done several promissory
notes, which that's moving upthe capital stack. You're not in
(08:10):
first position, but now you'rein second position, but still
debt. We're imminently opening apromissory note fund for
multifamily, primarily. Andthen, then we move up our
capital stack and we get intoour equity deals.
And so we do multifamily equitydeals. And primarily in the
(08:31):
Southeastern Part of The UnitedStates, we focus on class a
assets. Our sweet spot is buyingfrom developers and completing
the lease up on a project andthen just holding it for five,
seven, you know, ish years. Andthen we also will do self
storage deals, similar model. Welove buying in the Southeast.
We love focusing on that, youknow, a a plus asset. Not so
(08:56):
much doing straight value add,but we look for opportunities
that have expansionopportunities to them, like
maybe additional land that wecan build additional units on.
And then we also have our cashflowing businesses. And one of
the businesses that are open toour investors is investing in
express car washes. And sothat's a unique opportunity to
(09:17):
own the cash flowing business aswell as the real estate
together.
And so you're going to hold thatinvestment by, you know,
depending on when you enter thefund five, seven, ten years. And
then, you know, the asset'sgonna kick off cash flow during
the whole time. And then when weexit, our primarily our our
first goal to exit is gonna bedoing an IPO and then possibly
(09:41):
doing a roll up sale to reap.But there's going to be a nice
back end kicker for ourinvestors because we actually
hold the land and that providesequity growth as well.
Trent Werner (09:51):
Very nice.
Whitney Elkins-Hutten (09:52):
That's a lot to dive into there guys.
There's a lot. Somebody's likescribbling and taking notes. I'm
gonna give you one place. Go topassiveinvestingwithwhitney.com.
There you can get on a one onone call with me. We can talk
about all these differentthings. You can also see our
open deals. So you don't have tolike, you know, take a ton of
notes.
Trent Werner (10:12):
Yeah. And you can always skip back ten, fifteen,
thirty seconds when you'relistening to this if you do
absolutely want to take notes.But yeah, visit
passiveinvestingwithwhitney.comand you can absolutely schedule
a call with Whitney and she candive into all the other or dive
into it deeper. Whitney, I havea question for you because we're
(10:33):
in a tough market right now.It's it's not as roses and
rainbows as it was a few yearsago, where people seem to be
making money hand over fist.
And now operators are having toactually work for it. I think
the the operators that are stilldoing well in this market are
(10:55):
the ones that, I guess, maybefocus more on their operations
and their efficiencies. If alimited partner investor is
nervy or apprehensive right nowon investing in multifamily
class A, for example, what wouldyou tell them? You know, is now
(11:15):
still a good time to invest inmultifamily that's class A,
maybe not value add, whereyou're really focused on the
longer term hold? Or would youmaybe talk to them about an
alternative investment that youjust mentioned?
Whitney Elkins-Hutten (11:28):
Yeah, so this is where I love having
conversations with peoplebecause we need to understand
where are we in the marketcycle. And you're gonna have
your local market cycle and thenyou're gonna have the larger
national market cycle.Regardless of what you think or
what political, you know,affiliation you are, we are all
the red light indicators areflashing are recession. Okay?
(11:50):
But, you know, it takes time forthat that for people to actually
say that word about six months.
So I would argue we're we'rethere. But, you know, what
happens before a recessionaryenvironment? We have hyper
supply. So, you know, in theSoutheast, in in certain, you
know, Western State markets upin the Northeast as well, we've
seen a huge amount of buildingand growth. There's tons of
(12:13):
hyper supply in the multifamilyarena, self storage arena too.
In some markets, even in expresscar washes. We've adjusted our
market strategy there. So in themarket cycle, we have to absorb
the hyper supply. Then we comeinto the trough, the
recessionary, and then we startmoving through growth. You can
invest in equity deals in thetrough of that mark, that cycle,
(12:35):
the recessionary part, but theyhave to have an extreme upside
advantage.
Okay. Meaning, things like taxabatement strategies work really
well because you're eliminatingone of your largest tax bill,
extreme value add if you're okaytaking that risk. But there is
(12:56):
an investment that the market isgiving you in this trough, and
that is debt. Because when youhead into this hyper supply into
the recessionary trough, banksget scared. They flee to the
sidelines.
So all that liquidity getssucked out of the market. And so
this is an amazing opportunityfor investors to step in and
fill that gap and get paid. Theydon't have to compete against
(13:18):
the banks anymore because thebanks are sitting on the
sideline. They tucked tail andran. They're the first to get
out and the last to get back in.
So there's this amazingopportunity here for investors
to get into lending, be it fixand flip lending. I argue fix
and flip lending works in anymarket cycle because you're
investing in any value addstrategy. You know, the the
(13:39):
actual you're backing a value avalue add deal. But you also
have your promissory notes.Right?
You know, there there are gonnabe operators that have great
assets that are going torecover, that are performing in
today's market, their cash line,but maybe they need an equity
injection to make it to theother side whenever banks can
interest rates nudge down alittle bit more and they can
(14:01):
refinance. So the those twoinvestments, the debt
investments are going be huge toadd to somebody's portfolio.
Now, somebody there might be alistener here and they might be
going, wait, Whitney, I'm not inthis to earn like a 6% to 10%
return or even a 6% to 12%return. I'm in this for the 20%,
(14:22):
thirty % IRR. Show me the money.
Where is that? Well, youprobably got beat up the last
two years if you had all of yourdeals in the equity space
because they all were exposed tothe interest rate environment.
So this is a unique opportunitytoo for investors to diversify
their portfolio across thecapital stack because it's not a
matter of if another recessionwill happen. It's just a matter
(14:44):
of when. And so I equate thisfor my listeners that are super
versed in the stock market.
We used to say 60% to 70%stocks, 30% to 40% bonds. They
were uncorrelated. When stockswere on a tear, bonds were
underperforming. But when stockswere underperforming, the bonds
would go on a tear. That hasbeen disproven.
(15:06):
Those things are actuallycorrelated, now. But when we
have the different layers of thecapital stack, right? Have real
estate, for all intents andpurposes, is still very highly
inefficient. So those layerswill remain separated for quite
some time. So this is a uniqueopportunity to add those cash
flowing layers to yourportfolio, stabilize your
(15:28):
portfolio, And you earn a returnright now because sitting on the
sideline for another year or twowaiting for an amazing equity
deal, that it could have been ayear or two that you could have
been putting your money to use,earning 6% to 12% return, right?
You know, when we talk aboutcompounding interest mean, you
know, most amazing things andsliced bread, part of that is
(15:51):
because there's a time factorinvolved.
Trent Werner (15:54):
So if an LP or an investor in general is one of
those people that you mentionedthat maybe got punched in the
mouth a little bit over the lastfew years, and they're listening
to what you just said, whatwould you say if you if, hey,
I'm down to, you know, I have ahundred thousand dollars that I
am I'm I'm comfortable investingright now because I'm I'm a
(16:16):
little skittish after the lastfew years. Would you recommend
breaking that hundred thousanddollars up? Or is there one of
these positions in the capitalstack right now to get involved
in if you can only choose one?
Whitney Elkins-Hutten (16:31):
Well, yeah, well, that that's a loaded
question. But before that, I wasgonna say you must be a Mike
Tyson fan. Right? Everybody hasa plan until you get punched in
the face. That is so very truefor the past couple of years.
I've taken my fair share ofpunches as a limited partner
investor. When you're in anequity deal, especially if
(16:52):
you've been investing for anyperiod of time, like I would say
longer than ten years, you knowthat not all equity deals are
going to 100% perform. You, youhope you have more winners than
you do ones that break even andyou hope you have more that
break even and that are winnersthan you do that are losers. So
(17:13):
it's all about not putting toomuch capital in any one deal
that it could sink you. And I'veseen investors violate that
immutable law of passiveinvesting over and over and over
again.
Right? They they have a hundredthousand dollars in cash. They
take it from their home equityline of credit because nothing
(17:34):
ever has ever gone wrong ininvesting. And they invested it
and then you know, now theirdeal has a capital call, right?
Or they took their, you know,child's wedding money and
invested it, right?
So, you know, we still want tokeep our, what we call, this is
a concept that I cover in mybook Money for Tomorrow. We want
(17:55):
to build our financial moat,right? We want to have that firm
financial foundation, Then wewanna seal all the leaks in that
foundation. Then let's add theinvestments on on top of that
foundation. Right?
Let's prepare for the rainy dayfirst. That way when we know the
rainy day is gonna come, but wedon't know if it's gonna be like
one hour or like a forty yearflood. Right. Okay. So now back
(18:18):
to your question, I have ahundred thousand dollars.
The loaded part of that questionis you gave me two options and
then you took it away and youonly gave me one option. A
little hard there. You know, forsomebody who's been sitting on
the sidelines, let's get themoney working. That's why I like
the first tier, a residentialreal estate debt fund, something
(18:39):
simple, easy. It gives youmonthly, you know, cashflow, at
least our, pick that fund will,it'll give you monthly cashflow.
If you don't need the cashflow,you can allow it to compound so
you can take advantage of that.By the way, you take a hundred
thousand dollars and let itcompound for ten years, you
could have a 17% annualizedreturn. So you can get equity
(19:02):
like returns in debt space. Youjust have to allow time to work
for you. Now, you know, andthat's if you need liquidity or
you're kind of skittish and youjust, you know, you're you want
to reprove to yourself thatpassive investing still works.
I can bring home the bacon withthis. I can port my dreams. I
(19:23):
can support my lifestyle withthis. Now for somebody who needs
a higher level of return or iswilling to take on a little bit
more risk, you think abouttaking on the second layer
there, the promissory notelayer. Because there you're
going to earn for $100,000you're not going to earn not
just 8% preferred return, you'regoing to earn 10% to 12%
preferred return.
(19:44):
But generally those promissorynote layers don't return all of
that 10 to 12% interest inmonthly or quarterly or annual
cash flow. You have to hold thenote until maturity. So you got
it. It's got to be delayedgratification. You got to be one
of those kindergartners that'snot going to like you know, that
(20:04):
you got two marshmallows sittingin front of you, and you get a
third if you don't eat the firstone, right?
You got to be willing to hangon, you know, for that time. So
for me, I mean, if you haveretirement fund money that you
don't aren't going to ask accessfor like the next five to ten
years, I think promissory notesmake a perfect complement to
(20:26):
retirement account. Now if youhave cash that you don't need,
that hundred thousand dollars isactually sitting in cash and you
don't need the cash flow fromit, you don't need the liquidity
of it, the AO promissory notescan be, you know, you should
take a look at it and make surethat it meets your goals, your
risk, and timeline.
Trent Werner (20:44):
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uptownsyndication.com today tolearn more. That's yeah, I mean,
that's kind of what I was hopingyou were gonna respond.
When I don't think what
Whitney Elkins-Hutten (21:47):
the quote is Did pass the pass the test
there?
Trent Werner (21:49):
Yeah, check. You're you're good. What's the
quote? It's a time in themarket, not timing the market.
Right?
And I think, at least mepersonally, I trade stocks too
in my, you know, in some freetime. And there's a emotional
aspect to any type of investingthat when you struggle, whether
it's for one day or for, youknow, extended period of time,
(22:13):
you start doubting yourself,second guessing yourself. And I
mean, what you just said,Whitney, is you don't have to go
try to hit a home run again. Youknow, you you can you can take
some lower risk investmentstrategies, and you don't have
to, you know, go you don't haveto leverage a HELOC to do it. Be
(22:33):
smart about it, but just getyour money working again, which
is, I think, more difficult thana lot of people realize if you
haven't been punched in themouth during your investing
career.
Whitney Elkins-Hutten (22:46):
You know, here's a way to think about it.
And for people that are visuallearners, go, any compound
interest calculator, right? Youcan take any one, you know, but
for the irs.gov/compoundinterestcalculator, I think it's still
up and working. I don't know. Ihaven't checked it in the past
couple of days, guys.
(23:07):
But I think, you know, it's anautomated tool. It should be. I
say that I jest. But long storyshort, like, put in a hundred
thousand dollars into there,plug it in at, you know, 8%. And
let's just say you just made oneinvestment and allow it to
compound for ten years.
You would be amazed. That wouldbe over $200 and you've more
than doubled your investment.But now, you can add to it. With
(23:30):
our data point, you can add toit in increments of $1,000 so
maybe you can sock away $500 amonth. Look at how the growth on
that, then change the numberfrom eight to 3.4 because if
your money's sitting in thebank, that's about what it's
making right now.
We're recording this in Februaryof twenty twenty five. Most high
(23:52):
interest savings accounts arearound 3.4 are money markets.
You'll see it's not that whatyou make is cut in half because
you took away compounding.You're probably earning a fourth
of what you could be making injust the next step up of, you
know, I don't call anythingguaranteed, but the next step
(24:15):
up, you take just that next stepin the risk layer from getting
it from the bank into a low riskdebt fund, and that's how just
taking one step, that's howpeople build real wealth. Do
that for like six months or ayear.
Re prove to yourself that thisworks, then take the next step.
(24:37):
So it doesn't have to be an allin one. I mean, I was the
director of investor relationsat a private equity firm in
2017, 'eighteen, and 'nineteen.And I I had people that had
never invested in the stockmarket before placing $400,000
on resident, you know,multifamily value add deals. I
(24:59):
mean, that's a huge leap in therisk continuum.
Yeah. So, yeah, if you need a ifyou need it just a an entryway.
Right? Let's just do it onelittle step.
Trent Werner (25:11):
Well, apparently, you had some people that were
pretty, risk tolerant back backwhen you were doing that.
Whitney Elkins-Hutten (25:17):
I just don't think they understood the
rest. I I honestly like, youknow, if you've ever read the
book, Morgan Housel's, oh mygosh. I'm, like, blinking on it.
We need to Google that and putit in the notes, but it's the
psychology of money. I thinkthat's the title of it.
And he has the second book outsince then. But the whole
(25:39):
psychology I mean, he goesthrough a whole track chapter
around, like, studies of justthe people looking at a deck
that offers a 20% IRR returnversus a deck that offers a 10%
IRR return, it could be the sameasset, same business plan,
(25:59):
technically the same asset, butjust like in the study, the the
metrics were, you know, changed.I mean, people's brains, they
were just like, oh, this is morevaluable. I'm going to go do
this. Like, it was like a drug.
Like it hit all the dopaminereceptors in the brain. So that
it's such an interesting casestudy. I think, for investors. I
(26:20):
mean, hopefully somebody isdoing some research right now.
But yeah, I mean, people getattracted to the numbers and
they are willing to just throwrisk to the wind.
And that's actually where weneed to start is understanding
what's your investor roadmap,your profile, and what is your
(26:43):
goals? What do you need fromyour portfolio? Because you
might be asking me like, hey,what do you what would you
invest in? I may have differentgoals than you do. And so
anything that comes out of mymouth, if you take that and run
with it, you're going to wake upthree years later and go, she
doesn't know anything.
And it's because I have anentirely different direction
than I'm going with my portfolioscale. Right? So there's a lot
(27:07):
to unpack there for sure.
Trent Werner (27:08):
So it sounds like what you recommend is, well,
first of all, identify what yourgoals are and where you want to
what your your roadmap lookslike. But the first step is not
what returns I want to hit. It'swhat is my risk tolerance?
What's my risk profile? And howmuch?
Or how do I need to break thisdown in my overall portfolio in
(27:29):
terms of, you know, percentageson riskier versus less risky?
Right?
Whitney Elkins-Hutten (27:34):
There's we call this business alignment.
So think of your portfolio. Thisisn't just like, I have a
million dollars. Let's go, like,figure out how to invest it.
This is like, I have a milliondollars.
What do I need this milliondollars to do? I might need it
to do a few different things forme. I might one, I I might be
like, I can't lose any of this.Or maybe I can play around a
(27:55):
little bit in stocks so I canmaybe take a hundred thousand
dollar hit. Okay.
Well, now we know $900,000 of itneeds to be in in investments
that have a hard asset backingit. Okay? Then the next question
is, what are my risk risktolerance? Like, am I I I have
people ask this question. Whatwill keep you up at night?
(28:17):
I think most of us as investorsare, the fraudsters, the people
the Ponzi schemers. You know?All that's gonna keep me up at
night. But then I have somepeople that are like, if my if I
don't get that monthly check,I'm gonna sweat. Like, I need
that monthly check coming in.
Okay. Well, great. So now we nowknow that we're probably gonna
be looking more at the debt sideof investment, so you get paid
(28:39):
first. Okay? And then we'regonna look at the timeline.
Okay? And this is where it getsreally fun because then we can
allocate certain parts of theportfolio. And I'm not a
financial advisor, guys. I'mjust giving you, like, things
that I figured out as aninvestor. But then you might
wanna allocate certain parts ofyour portfolio to long term
(29:00):
growth that are just stable cashflow.
Right? Maybe 250,000 of it. Idon't know. Whatever that that
breaks out to you. And thenanother 500,000 is into your
equity growth of your portfolio.
And then maybe the last quarteris like, those are your flyers.
Right? You maybe you have twentyyears. Okay? That portfolio will
(29:20):
look very different thansomebody who is three years away
from retirement and all theyhave is a million dollars.
And they're like, Winnie, I I'mgonna retire here in three
years. I need a hundred thousanddollars coming in monthly on
cash flow. Great. I know whereI'm gonna put them. I'm gonna
put them in the debt tiers.
It's gonna kick off monthly cashflow. Now what they do with that
(29:41):
cash flow, they could continueto reinvest some of that back
into their plan and continue togrow their equity. But that's
going to be very different.We're not going to, you know,
you know, I might discouragethem a little bit from taking on
like super risky equity dealsor, you know, there's been some
horrible stories in the newslately about like, you know,
(30:05):
investments that we thought weresuper sound like, ATM fund
investment and they turned outnot to be. They turned out to be
Ponzi schemes.
So we're gonna, you know, getwith great operators. We're
going to invest in those sounddeals.
Trent Werner (30:19):
Definitely do your due diligence when you're
investing, especially if theyare funds that you absolutely
cannot lose. Get with the rightpeople, please.
Whitney Elkins-Hutten (30:28):
Yeah. I mean, it's a yeah, it's a I've
seen people over optimize theirportfolio. I think we mentioned
this at the beginning. They'relike, oh, I've got debt equity
in my house. Let me take out aHELOC and let me invest that.
I do that too. But I put thatinto investments that I can
liquidate that produces cashflow that covers that bill. And
(30:52):
that at any point in time, canget out of like if I I sense
something is off.
Trent Werner (30:59):
Right. So Whitney, I do want to talk about money
for tomorrow. What are I guesswhat's the reason someone should
buy your book and read it?
Whitney Elkins-Hutten (31:08):
Yeah. So I actually wrote the book as a
it was a series of notes for mydaughter, you know, as I was
scaling our portfolio, you know,just down to, like, what are the
basics? Like, how does moneywork? What are the, you know,
what are those skills that youneed to execute on every single
day, every single month in orderto create your wealth? And then
(31:29):
what are those things that youneed to have in order to keep
it?
Right? I think people that getinto as, you know, investing,
whether it's in the stock marketor, you know, passive investing,
they get addicted to the growthside of things, and they forget
that we gotta go back to basicsa lot in order to create and
(31:50):
keep our wealth. And so I putthis primer all together for her
and then, we turned it into abook. And so it's really for
somebody who's just starting offtheir wealth journey, maybe you
have a teen or a kid in college,this is a great book for them to
start kind of clean and have ablueprint to scale their wealth
(32:12):
looking forward. They're notgoing to step on the big
landmines that you and I mighthave done.
But even for my more seasonedinvestor, I have a lot of people
that have read that book andthey go, oh, snap. I don't
automate the tracking of myincome and expenses. And that
was the puzzle piece for me tofind the extra dollars to be
(32:33):
able to combine that with my taxsavings to be able to go into my
next investment. It's amazinghow a lot of people skip just
kind of the basics. I coach kidssoccer.
And so what do we do? Like, withany sport, you know, you you
warm up, you run around thefield, you pass the ball, you
shoot on shoot on goal, then youget to do the cool, like,
(32:55):
strategy and, you know, learnthe bicycle kick, all those,
like, cool things.
Trent Werner (33:00):
Yeah. Which I like how you mentioned you have
seasoned investors that maybeget a reminder on some of the
things that they've eitherforgot about or have gotten away
from throughout their investingcareer because I'm guilty of it
personally. There are timeswhere I like to see the growth
and want to keep doubling down.But, you know, every now and
(33:22):
then you gotta I gotta remindmyself, hey, let's, let's stay
within ourselves. And we'relooking for a single here, we
don't need to get it all back inone swing, you know?
Whitney Elkins-Hutten (33:32):
Well, it's really interesting, because
a lot of a lot of times, like,you know, my more seasoned
investors, they they look atthat they look at like, I don't
need to track my income andexpenses. And I'm like, but do
you have a business or a realestate holdings? Yeah. I'm like,
do you track your income andexpenses there? Oh, absolutely.
To a t. I know exactly how muchI'm bringing in there. I'm like,
(33:53):
well, why wouldn't you do thatfor your personal life? I had
one coaching client. They, theywere accountants.
They are an accountant. Longstory short, they were trying
they were like, I know I have 15to $20,000 a month to invest. I
just don't know where it is.Like, I get to the end of the
month. It's poof.
(34:14):
It's gone. I'm like, well, whatdo you do for your clients? How
do you track your businessexpenses? I have everything's in
QuickBooks. I'm like, okay,cool.
Do you have that set up for yourpersonal? Do you have a chart of
accounts set up for yourpersonal life? And they were
like, no. I was like, well,let's do that first. And then
they figured out that theyactually didn't have the 15 to
20 a month initially becausethey were just spending, just
(34:39):
writing checks left and right.
But once we aligned theirspending, right? I don't ever
want to call it budgeting. Idon't want to I take people
through a process to align theirspending to what they truly want
to get out of life. Once we didthat, we found more than $15,000
We found closer to 20. And nowthey are taking that 20.
(35:02):
This is monthly savings. That's100 and or $240 a year that
they're now putting into theirinvestment plan. You put that in
the compound calculator at 8%for like ten years. That's huge.
That's millions of dollars justby finding that monthly savings.
Trent Werner (35:19):
Whitney, is there anything else about this? I
think I'm gonna I'm gonna go buyit as soon as we get off this
conversation. So because again,I I think now is a good time for
me to get a reminder for myselfand my investing career. But is
there anything else about thisbook that you wanna touch on?
Whitney Elkins-Hutten (35:36):
Yeah. So, you know, and another thing for
the more seasoned investor,again, we go through, you know,
how do we invest on investor,again, we go through how do we
invest on principle andstrategy, not based on tactic.
We don't get in theconversation. Are we doing
opportunities on investments?How do we optimize till the cows
come home for taxes?
We're going back to the basicsand understanding when you look
(35:57):
at an asset, what are the sevenpillars of wealth, those seven
levers it can pull to earn youmoney? And you would be shocked
when you go through yourportfolio that most of your
assets might only pull one ortwo, maybe even three levers. So
we're missing out on a hugeopportunity there. And then for
people that are getting close toretirement or heaven forbid, end
(36:22):
of life, I walk people through aprocess to not only get your
legal house in order, like yourestate plan in order. I'm not a
lawyer, but we go through a lotof the different things that I
learned in settling in fivedifferent estates.
But how do we actually set upthose systems to train our
executor, to train our heirs, tomake sure that we keep our
(36:43):
families out of court, keep themfrom squabbling with each other,
and that money actually make itinto their hands?
Trent Werner (36:51):
That's all great stuff, Whitney. Is there any
place that people can hear morefrom you or connect with you?
Whitney Elkins-Hutten (36:57):
Yeah. So you can find the book Money for
Tomorrow on biggerpockets.com oryou can find it on amazon.com.
And if you wanna get in touchwith me directly, you if you're
ready to pick an investment, youcan find me at
If you're like, wow, I need someserious help getting my
(37:17):
financial house in order, youcan find me at ashwealth.com, a
s h wealth Com.
Trent Werner (37:23):
Very nice. Whitney, thank you so much for
taking the time to chat with ustoday.
Whitney Elkins-Hutten (37:27):
Yeah. Thank you so much for having me
on, Trent.
Intro speaker (37:30):
Thank you for listening to this episode of the
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or take any other action.
Trent Werner (00:40):
Welcome back to another episode of the deal deep
dive segment on the WestsideInvestors Network podcast. I'm
your host, Trent Werner. In thissegment, our future guests will
share their unique stories on aspecific deal they've invested
in. We will dive deep intofinding the deal, financing the
deal, writing an offer, and thedue diligence. Do us a solid and
(01:00):
smash that subscribe button,leave us a rating, and share
this episode.
And now let's dive deep. Welcomeback to the Westside Investors
Network podcast. I'm your host,Trent Warner. On today's
episode, we are joined byWhitney Elkins Hutton. Whitney
is the director of investoreducation at
passiveinvesting.com.
(01:20):
Whitney is gonna share somequestions that you should be
asking operators as a limitedpartner investor when you're
interviewing them andpotentially investing in one of
their deals. Whitney is alsogonna go over some different
asset types and investmentstrategies to help you diversify
and reduce your risk in yourportfolio. Whitney is also gonna
(01:41):
share about her book, Money forTomorrow, and some of the
helpful tools that she'sincluded in that book for you to
help improve your investingcareer. Now let's welcome
Whitney Elkins Hutton. Alright.
Whitney Elkins Hutton joiningthe Westside Investors Network
podcast today. Whitney, thanksso much for taking the time to
chat with us.
Whitney Elkins-Hutten (02:01):
Thank you so much for having me on, Trent.
Trent Werner (02:04):
So Whitney, correct me if I'm wrong, but you
are the director of investoreducation at
passiveinvesting.com. Correct?Yes. And what does that mean?
Whitney Elkins-Hutten (02:14):
I'm gonna say that's usually the second
question. So I I my role here atpassiveinvesting.com as the
director of investor educationmeans I get the fun job of
helping an investor invest in aprivate equity deal without
having to, like, sell them theinvestment. So essentially, I'm
kinda like a coach and a mentor.I meet the investor where
(02:36):
they're at. I help understandtheir goals, their risks, their
timeline, help educate them howour investments at
passiveinvesting dot com helpthem reach those goals, risks,
and timeline.
And then I can kind of mash themup to a particular deal, and
then the investor relations teamcan work through the details of
that deal with them.
Trent Werner (02:57):
And, I guess in a short and sweet way, how does a
typical conversation with aninvestor look for you?
Whitney Elkins-Hutten (03:07):
Yeah. Well, honestly, the conversation
that I had should look like, youknow, a conversation that you
should be having with anyoperator because they should be
coming from a fiduciary, youknow, position. Like when you
hop on a phone with an operator,as a passive investor, you're
interviewing them, they'reinterviewing you. You should be
(03:29):
understanding who they are as abusiness, what's the background
track record, their expertise,all those things that make
passive investing so wonderfulfor you in your portfolio. But
they should be asking questionsto understand who you are as an
investor.
What are their goals? What doyou need from your portfolio? Do
you need cash flow, capitalpreservation, equity growth,
(03:50):
diversification, tax benefits?
Trent Werner (03:52):
I mean, those are the kind
Whitney Elkins-Hutten (03:53):
of the big five. Those are the big
wealth pillars. I, as anoperator, want to know what that
person really needs, not so muchspend fifteen minutes with them
and say, hey, here's our menu ofinvestments you want to invest.
I want to get to know them alittle bit more, understand, and
really wholly understand thatwe're a good fit for each other.
Because especially when you gointo an equity deal, you know
(04:16):
Trent, you're making moneytogether and I mean possibly
writing out a very challengingenvironment together.
And so I think that's therelationship sometimes limited
partners don't quite understandwhen they're investing in
passive deals that they actuallymore often than not, they're on
(04:38):
the equity side of things, whichmeans they're on the
partnership. You're going makemoney or lose money together.
And unlike the stock market,which is super efficient and you
can get in and out, but it'ssuper hard to make money, you
know, getting into an equitydeal, getting into an
alternative investment, gettinginto real estate, there's a
longer glide path to makingmoney, but that's where the
(04:59):
opportunity lies. But it also isless liquid. And so, when you
ask what does a conversationlook like, should be a two way
street, not just the LP askingtheir list of questions that
they may be downloaded off of aform or, you know, offline.
Hopefully you're working with amentor or a coach on this, but
really the operatorunderstanding who you are and
(05:20):
making sure that they'rebringing you into an investment
because it is holistically agood fit for you.
Trent Werner (05:26):
I love that. Yeah. I mean, I think from a passive
investor LP side, a lot ofpeople may especially newer
limited partner investors, theywanna diversify from the stock
market or their otherinvestments. And so they find a
real estate operator that theycan invest with, and they don't
necessarily understand maybeeven what they're looking for,
(05:48):
whether it's capitalpreservation, equity growth,
cash flow, all those differentthings. And so I think that's
great that you hit all of thoseon the head with as a limited
partner, you have to be askingthe right questions of your
operator and making sure it's agood fit.
And I think identifying whatyou're looking for out of the
investment, because not all realestate investments or or
(06:08):
business investments are goingto be the same for you as a
limited partner investor.
Whitney Elkins-Hutten (06:13):
Yeah, I think one of my red flags when
I'm talking to a limited partneris maybe a more skilled
investor. It doesn't necessarilymaybe they're more skilled at
private equity investing, butthey come in and they're like,
I've been investing for like,fifteen, twenty years. Just tell
me what the returns are. I'mlike, Okay, my first question
(06:35):
is, have you invested in thespace before? Nine times out of
10, they haven't.
And I'm like, Okay, this is avery different game, because you
can't just invest in the stockmarket. The stock starts
sticking down. You have yourstop loss mechanism in place and
immediately sells. This isinvesting in a partnership. It's
(06:56):
investing in people.
It's investing in relationship.Let's get to know each other
first, right? We're gonna bemarried in an investment for
five to seven years, whether itgoes well or not well, let's get
to know each other first.
Trent Werner (07:11):
Absolutely. And so at passiveinvesting.com, you
mentioned that you havedifferent types of investment
vehicles that you guys operate.What are some of those different
investment or asset classes thatyou invest in?
Whitney Elkins-Hutten (07:25):
Yeah, so we really have tried to, you
know, create a menu of offeringsthat hit different layers of the
capital stack. That way, andthen when an investor comes into
our ecosystem, they truly candiversify their portfolio over
all the different layers of thecapital stack and also markets
and also asset classes so theycan create true diversification.
(07:47):
So one of our my favoritevehicles right now in this
market environment is the debtlayer. We have a residential
real estate debt fund. We callit the pick debt fund, real
estate debt fund, and thatinvests in fix and flip loans.
It's in first lien position. Wehave done several promissory
notes, which that's moving upthe capital stack. You're not in
(08:10):
first position, but now you'rein second position, but still
debt. We're imminently opening apromissory note fund for
multifamily, primarily. Andthen, then we move up our
capital stack and we get intoour equity deals.
And so we do multifamily equitydeals. And primarily in the
(08:31):
Southeastern Part of The UnitedStates, we focus on class a
assets. Our sweet spot is buyingfrom developers and completing
the lease up on a project andthen just holding it for five,
seven, you know, ish years. Andthen we also will do self
storage deals, similar model. Welove buying in the Southeast.
We love focusing on that, youknow, a a plus asset. Not so
(08:56):
much doing straight value add,but we look for opportunities
that have expansionopportunities to them, like
maybe additional land that wecan build additional units on.
And then we also have our cashflowing businesses. And one of
the businesses that are open toour investors is investing in
express car washes. And sothat's a unique opportunity to
(09:17):
own the cash flowing business aswell as the real estate
together.
And so you're going to hold thatinvestment by, you know,
depending on when you enter thefund five, seven, ten years. And
then, you know, the asset'sgonna kick off cash flow during
the whole time. And then when weexit, our primarily our our
first goal to exit is gonna bedoing an IPO and then possibly
(09:41):
doing a roll up sale to reap.But there's going to be a nice
back end kicker for ourinvestors because we actually
hold the land and that providesequity growth as well.
Trent Werner (09:51):
Very nice.
Whitney Elkins-Hutten (09:52):
That's a lot to dive into there guys.
There's a lot. Somebody's likescribbling and taking notes. I'm
gonna give you one place. Go topassiveinvestingwithwhitney.com.
There you can get on a one onone call with me. We can talk
about all these differentthings. You can also see our
open deals. So you don't have tolike, you know, take a ton of
notes.
Trent Werner (10:12):
Yeah. And you can always skip back ten, fifteen,
thirty seconds when you'relistening to this if you do
absolutely want to take notes.But yeah, visit
passiveinvestingwithwhitney.comand you can absolutely schedule
a call with Whitney and she candive into all the other or dive
into it deeper. Whitney, I havea question for you because we're
(10:33):
in a tough market right now.It's it's not as roses and
rainbows as it was a few yearsago, where people seem to be
making money hand over fist.
And now operators are having toactually work for it. I think
the the operators that are stilldoing well in this market are
(10:55):
the ones that, I guess, maybefocus more on their operations
and their efficiencies. If alimited partner investor is
nervy or apprehensive right nowon investing in multifamily
class A, for example, what wouldyou tell them? You know, is now
(11:15):
still a good time to invest inmultifamily that's class A,
maybe not value add, whereyou're really focused on the
longer term hold? Or would youmaybe talk to them about an
alternative investment that youjust mentioned?
Whitney Elkins-Hutten (11:28):
Yeah, so this is where I love having
conversations with peoplebecause we need to understand
where are we in the marketcycle. And you're gonna have
your local market cycle and thenyou're gonna have the larger
national market cycle.Regardless of what you think or
what political, you know,affiliation you are, we are all
the red light indicators areflashing are recession. Okay?
(11:50):
But, you know, it takes time forthat that for people to actually
say that word about six months.
So I would argue we're we'rethere. But, you know, what
happens before a recessionaryenvironment? We have hyper
supply. So, you know, in theSoutheast, in in certain, you
know, Western State markets upin the Northeast as well, we've
seen a huge amount of buildingand growth. There's tons of
(12:13):
hyper supply in the multifamilyarena, self storage arena too.
In some markets, even in expresscar washes. We've adjusted our
market strategy there. So in themarket cycle, we have to absorb
the hyper supply. Then we comeinto the trough, the
recessionary, and then we startmoving through growth. You can
invest in equity deals in thetrough of that mark, that cycle,
(12:35):
the recessionary part, but theyhave to have an extreme upside
advantage.
Okay. Meaning, things like taxabatement strategies work really
well because you're eliminatingone of your largest tax bill,
extreme value add if you're okaytaking that risk. But there is
(12:56):
an investment that the market isgiving you in this trough, and
that is debt. Because when youhead into this hyper supply into
the recessionary trough, banksget scared. They flee to the
sidelines.
So all that liquidity getssucked out of the market. And so
this is an amazing opportunityfor investors to step in and
fill that gap and get paid. Theydon't have to compete against
(13:18):
the banks anymore because thebanks are sitting on the
sideline. They tucked tail andran. They're the first to get
out and the last to get back in.
So there's this amazingopportunity here for investors
to get into lending, be it fixand flip lending. I argue fix
and flip lending works in anymarket cycle because you're
investing in any value addstrategy. You know, the the
(13:39):
actual you're backing a value avalue add deal. But you also
have your promissory notes.Right?
You know, there there are gonnabe operators that have great
assets that are going torecover, that are performing in
today's market, their cash line,but maybe they need an equity
injection to make it to theother side whenever banks can
interest rates nudge down alittle bit more and they can
(14:01):
refinance. So the those twoinvestments, the debt
investments are going be huge toadd to somebody's portfolio.
Now, somebody there might be alistener here and they might be
going, wait, Whitney, I'm not inthis to earn like a 6% to 10%
return or even a 6% to 12%return. I'm in this for the 20%,
(14:22):
thirty % IRR. Show me the money.
Where is that? Well, youprobably got beat up the last
two years if you had all of yourdeals in the equity space
because they all were exposed tothe interest rate environment.
So this is a unique opportunitytoo for investors to diversify
their portfolio across thecapital stack because it's not a
matter of if another recessionwill happen. It's just a matter
(14:44):
of when. And so I equate thisfor my listeners that are super
versed in the stock market.
We used to say 60% to 70%stocks, 30% to 40% bonds. They
were uncorrelated. When stockswere on a tear, bonds were
underperforming. But when stockswere underperforming, the bonds
would go on a tear. That hasbeen disproven.
(15:06):
Those things are actuallycorrelated, now. But when we
have the different layers of thecapital stack, right? Have real
estate, for all intents andpurposes, is still very highly
inefficient. So those layerswill remain separated for quite
some time. So this is a uniqueopportunity to add those cash
flowing layers to yourportfolio, stabilize your
(15:28):
portfolio, And you earn a returnright now because sitting on the
sideline for another year or twowaiting for an amazing equity
deal, that it could have been ayear or two that you could have
been putting your money to use,earning 6% to 12% return, right?
You know, when we talk aboutcompounding interest mean, you
know, most amazing things andsliced bread, part of that is
(15:51):
because there's a time factorinvolved.
Trent Werner (15:54):
So if an LP or an investor in general is one of
those people that you mentionedthat maybe got punched in the
mouth a little bit over the lastfew years, and they're listening
to what you just said, whatwould you say if you if, hey,
I'm down to, you know, I have ahundred thousand dollars that I
am I'm I'm comfortable investingright now because I'm I'm a
(16:16):
little skittish after the lastfew years. Would you recommend
breaking that hundred thousanddollars up? Or is there one of
these positions in the capitalstack right now to get involved
in if you can only choose one?
Whitney Elkins-Hutten (16:31):
Well, yeah, well, that that's a loaded
question. But before that, I wasgonna say you must be a Mike
Tyson fan. Right? Everybody hasa plan until you get punched in
the face. That is so very truefor the past couple of years.
I've taken my fair share ofpunches as a limited partner
investor. When you're in anequity deal, especially if
(16:52):
you've been investing for anyperiod of time, like I would say
longer than ten years, you knowthat not all equity deals are
going to 100% perform. You, youhope you have more winners than
you do ones that break even andyou hope you have more that
break even and that are winnersthan you do that are losers. So
(17:13):
it's all about not putting toomuch capital in any one deal
that it could sink you. And I'veseen investors violate that
immutable law of passiveinvesting over and over and over
again.
Right? They they have a hundredthousand dollars in cash. They
take it from their home equityline of credit because nothing
(17:34):
ever has ever gone wrong ininvesting. And they invested it
and then you know, now theirdeal has a capital call, right?
Or they took their, you know,child's wedding money and
invested it, right?
So, you know, we still want tokeep our, what we call, this is
a concept that I cover in mybook Money for Tomorrow. We want
(17:55):
to build our financial moat,right? We want to have that firm
financial foundation, Then wewanna seal all the leaks in that
foundation. Then let's add theinvestments on on top of that
foundation. Right?
Let's prepare for the rainy dayfirst. That way when we know the
rainy day is gonna come, but wedon't know if it's gonna be like
one hour or like a forty yearflood. Right. Okay. So now back
(18:18):
to your question, I have ahundred thousand dollars.
The loaded part of that questionis you gave me two options and
then you took it away and youonly gave me one option. A
little hard there. You know, forsomebody who's been sitting on
the sidelines, let's get themoney working. That's why I like
the first tier, a residentialreal estate debt fund, something
(18:39):
simple, easy. It gives youmonthly, you know, cashflow, at
least our, pick that fund will,it'll give you monthly cashflow.
If you don't need the cashflow,you can allow it to compound so
you can take advantage of that.By the way, you take a hundred
thousand dollars and let itcompound for ten years, you
could have a 17% annualizedreturn. So you can get equity
(19:02):
like returns in debt space. Youjust have to allow time to work
for you. Now, you know, andthat's if you need liquidity or
you're kind of skittish and youjust, you know, you're you want
to reprove to yourself thatpassive investing still works.
I can bring home the bacon withthis. I can port my dreams. I
(19:23):
can support my lifestyle withthis. Now for somebody who needs
a higher level of return or iswilling to take on a little bit
more risk, you think abouttaking on the second layer
there, the promissory notelayer. Because there you're
going to earn for $100,000you're not going to earn not
just 8% preferred return, you'regoing to earn 10% to 12%
preferred return.
(19:44):
But generally those promissorynote layers don't return all of
that 10 to 12% interest inmonthly or quarterly or annual
cash flow. You have to hold thenote until maturity. So you got
it. It's got to be delayedgratification. You got to be one
of those kindergartners that'snot going to like you know, that
(20:04):
you got two marshmallows sittingin front of you, and you get a
third if you don't eat the firstone, right?
You got to be willing to hangon, you know, for that time. So
for me, I mean, if you haveretirement fund money that you
don't aren't going to ask accessfor like the next five to ten
years, I think promissory notesmake a perfect complement to
(20:26):
retirement account. Now if youhave cash that you don't need,
that hundred thousand dollars isactually sitting in cash and you
don't need the cash flow fromit, you don't need the liquidity
of it, the AO promissory notescan be, you know, you should
take a look at it and make surethat it meets your goals, your
risk, and timeline.
Trent Werner (20:44):
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Trent Werner (21:17):
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uptownsyndication.com today tolearn more. That's yeah, I mean,
that's kind of what I was hopingyou were gonna respond.
When I don't think what
Whitney Elkins-Hutten (21:47):
the quote is Did pass the pass the test
there?
Trent Werner (21:49):
Yeah, check. You're you're good. What's the
quote? It's a time in themarket, not timing the market.
Right?
And I think, at least mepersonally, I trade stocks too
in my, you know, in some freetime. And there's a emotional
aspect to any type of investingthat when you struggle, whether
it's for one day or for, youknow, extended period of time,
(22:13):
you start doubting yourself,second guessing yourself. And I
mean, what you just said,Whitney, is you don't have to go
try to hit a home run again. Youknow, you you can you can take
some lower risk investmentstrategies, and you don't have
to, you know, go you don't haveto leverage a HELOC to do it. Be
(22:33):
smart about it, but just getyour money working again, which
is, I think, more difficult thana lot of people realize if you
haven't been punched in themouth during your investing
career.
Whitney Elkins-Hutten (22:46):
You know, here's a way to think about it.
And for people that are visuallearners, go, any compound
interest calculator, right? Youcan take any one, you know, but
for the irs.gov/compoundinterestcalculator, I think it's still
up and working. I don't know. Ihaven't checked it in the past
couple of days, guys.
(23:07):
But I think, you know, it's anautomated tool. It should be. I
say that I jest. But long storyshort, like, put in a hundred
thousand dollars into there,plug it in at, you know, 8%. And
let's just say you just made oneinvestment and allow it to
compound for ten years.
You would be amazed. That wouldbe over $200 and you've more
than doubled your investment.But now, you can add to it. With
(23:30):
our data point, you can add toit in increments of $1,000 so
maybe you can sock away $500 amonth. Look at how the growth on
that, then change the numberfrom eight to 3.4 because if
your money's sitting in thebank, that's about what it's
making right now.
We're recording this in Februaryof twenty twenty five. Most high
(23:52):
interest savings accounts arearound 3.4 are money markets.
You'll see it's not that whatyou make is cut in half because
you took away compounding.You're probably earning a fourth
of what you could be making injust the next step up of, you
know, I don't call anythingguaranteed, but the next step
(24:15):
up, you take just that next stepin the risk layer from getting
it from the bank into a low riskdebt fund, and that's how just
taking one step, that's howpeople build real wealth. Do
that for like six months or ayear.
Re prove to yourself that thisworks, then take the next step.
(24:37):
So it doesn't have to be an allin one. I mean, I was the
director of investor relationsat a private equity firm in
2017, 'eighteen, and 'nineteen.And I I had people that had
never invested in the stockmarket before placing $400,000
on resident, you know,multifamily value add deals. I
(24:59):
mean, that's a huge leap in therisk continuum.
Yeah. So, yeah, if you need a ifyou need it just a an entryway.
Right? Let's just do it onelittle step.
Trent Werner (25:11):
Well, apparently, you had some people that were
pretty, risk tolerant back backwhen you were doing that.
Whitney Elkins-Hutten (25:17):
I just don't think they understood the
rest. I I honestly like, youknow, if you've ever read the
book, Morgan Housel's, oh mygosh. I'm, like, blinking on it.
We need to Google that and putit in the notes, but it's the
psychology of money. I thinkthat's the title of it.
And he has the second book outsince then. But the whole
(25:39):
psychology I mean, he goesthrough a whole track chapter
around, like, studies of justthe people looking at a deck
that offers a 20% IRR returnversus a deck that offers a 10%
IRR return, it could be the sameasset, same business plan,
(25:59):
technically the same asset, butjust like in the study, the the
metrics were, you know, changed.I mean, people's brains, they
were just like, oh, this is morevaluable. I'm going to go do
this. Like, it was like a drug.
Like it hit all the dopaminereceptors in the brain. So that
it's such an interesting casestudy. I think, for investors. I
(26:20):
mean, hopefully somebody isdoing some research right now.
But yeah, I mean, people getattracted to the numbers and
they are willing to just throwrisk to the wind.
And that's actually where weneed to start is understanding
what's your investor roadmap,your profile, and what is your
(26:43):
goals? What do you need fromyour portfolio? Because you
might be asking me like, hey,what do you what would you
invest in? I may have differentgoals than you do. And so
anything that comes out of mymouth, if you take that and run
with it, you're going to wake upthree years later and go, she
doesn't know anything.
And it's because I have anentirely different direction
than I'm going with my portfolioscale. Right? So there's a lot
(27:07):
to unpack there for sure.
Trent Werner (27:08):
So it sounds like what you recommend is, well,
first of all, identify what yourgoals are and where you want to
what your your roadmap lookslike. But the first step is not
what returns I want to hit. It'swhat is my risk tolerance?
What's my risk profile? And howmuch?
Or how do I need to break thisdown in my overall portfolio in
(27:29):
terms of, you know, percentageson riskier versus less risky?
Right?
Whitney Elkins-Hutten (27:34):
There's we call this business alignment.
So think of your portfolio. Thisisn't just like, I have a
million dollars. Let's go, like,figure out how to invest it.
This is like, I have a milliondollars.
What do I need this milliondollars to do? I might need it
to do a few different things forme. I might one, I I might be
like, I can't lose any of this.Or maybe I can play around a
(27:55):
little bit in stocks so I canmaybe take a hundred thousand
dollar hit. Okay.
Well, now we know $900,000 of itneeds to be in in investments
that have a hard asset backingit. Okay? Then the next question
is, what are my risk risktolerance? Like, am I I I have
people ask this question. Whatwill keep you up at night?
(28:17):
I think most of us as investorsare, the fraudsters, the people
the Ponzi schemers. You know?All that's gonna keep me up at
night. But then I have somepeople that are like, if my if I
don't get that monthly check,I'm gonna sweat. Like, I need
that monthly check coming in.
Okay. Well, great. So now we nowknow that we're probably gonna
be looking more at the debt sideof investment, so you get paid
(28:39):
first. Okay? And then we'regonna look at the timeline.
Okay? And this is where it getsreally fun because then we can
allocate certain parts of theportfolio. And I'm not a
financial advisor, guys. I'mjust giving you, like, things
that I figured out as aninvestor. But then you might
wanna allocate certain parts ofyour portfolio to long term
(29:00):
growth that are just stable cashflow.
Right? Maybe 250,000 of it. Idon't know. Whatever that that
breaks out to you. And thenanother 500,000 is into your
equity growth of your portfolio.
And then maybe the last quarteris like, those are your flyers.
Right? You maybe you have twentyyears. Okay? That portfolio will
(29:20):
look very different thansomebody who is three years away
from retirement and all theyhave is a million dollars.
And they're like, Winnie, I I'mgonna retire here in three
years. I need a hundred thousanddollars coming in monthly on
cash flow. Great. I know whereI'm gonna put them. I'm gonna
put them in the debt tiers.
It's gonna kick off monthly cashflow. Now what they do with that
(29:41):
cash flow, they could continueto reinvest some of that back
into their plan and continue togrow their equity. But that's
going to be very different.We're not going to, you know,
you know, I might discouragethem a little bit from taking on
like super risky equity dealsor, you know, there's been some
horrible stories in the newslately about like, you know,
(30:05):
investments that we thought weresuper sound like, ATM fund
investment and they turned outnot to be. They turned out to be
Ponzi schemes.
So we're gonna, you know, getwith great operators. We're
going to invest in those sounddeals.
Trent Werner (30:19):
Definitely do your due diligence when you're
investing, especially if theyare funds that you absolutely
cannot lose. Get with the rightpeople, please.
Whitney Elkins-Hutten (30:28):
Yeah. I mean, it's a yeah, it's a I've
seen people over optimize theirportfolio. I think we mentioned
this at the beginning. They'relike, oh, I've got debt equity
in my house. Let me take out aHELOC and let me invest that.
I do that too. But I put thatinto investments that I can
liquidate that produces cashflow that covers that bill. And
(30:52):
that at any point in time, canget out of like if I I sense
something is off.
Trent Werner (30:59):
Right. So Whitney, I do want to talk about money
for tomorrow. What are I guesswhat's the reason someone should
buy your book and read it?
Whitney Elkins-Hutten (31:08):
Yeah. So I actually wrote the book as a
it was a series of notes for mydaughter, you know, as I was
scaling our portfolio, you know,just down to, like, what are the
basics? Like, how does moneywork? What are the, you know,
what are those skills that youneed to execute on every single
day, every single month in orderto create your wealth? And then
(31:29):
what are those things that youneed to have in order to keep
it?
Right? I think people that getinto as, you know, investing,
whether it's in the stock marketor, you know, passive investing,
they get addicted to the growthside of things, and they forget
that we gotta go back to basicsa lot in order to create and
(31:50):
keep our wealth. And so I putthis primer all together for her
and then, we turned it into abook. And so it's really for
somebody who's just starting offtheir wealth journey, maybe you
have a teen or a kid in college,this is a great book for them to
start kind of clean and have ablueprint to scale their wealth
(32:12):
looking forward. They're notgoing to step on the big
landmines that you and I mighthave done.
But even for my more seasonedinvestor, I have a lot of people
that have read that book andthey go, oh, snap. I don't
automate the tracking of myincome and expenses. And that
was the puzzle piece for me tofind the extra dollars to be
(32:33):
able to combine that with my taxsavings to be able to go into my
next investment. It's amazinghow a lot of people skip just
kind of the basics. I coach kidssoccer.
And so what do we do? Like, withany sport, you know, you you
warm up, you run around thefield, you pass the ball, you
shoot on shoot on goal, then youget to do the cool, like,
(32:55):
strategy and, you know, learnthe bicycle kick, all those,
like, cool things.
Trent Werner (33:00):
Yeah. Which I like how you mentioned you have
seasoned investors that maybeget a reminder on some of the
things that they've eitherforgot about or have gotten away
from throughout their investingcareer because I'm guilty of it
personally. There are timeswhere I like to see the growth
and want to keep doubling down.But, you know, every now and
(33:22):
then you gotta I gotta remindmyself, hey, let's, let's stay
within ourselves. And we'relooking for a single here, we
don't need to get it all back inone swing, you know?
Whitney Elkins-Hutten (33:32):
Well, it's really interesting, because
a lot of a lot of times, like,you know, my more seasoned
investors, they they look atthat they look at like, I don't
need to track my income andexpenses. And I'm like, but do
you have a business or a realestate holdings? Yeah. I'm like,
do you track your income andexpenses there? Oh, absolutely.
To a t. I know exactly how muchI'm bringing in there. I'm like,
(33:53):
well, why wouldn't you do thatfor your personal life? I had
one coaching client. They, theywere accountants.
They are an accountant. Longstory short, they were trying
they were like, I know I have 15to $20,000 a month to invest. I
just don't know where it is.Like, I get to the end of the
month. It's poof.
(34:14):
It's gone. I'm like, well, whatdo you do for your clients? How
do you track your businessexpenses? I have everything's in
QuickBooks. I'm like, okay,cool.
Do you have that set up for yourpersonal? Do you have a chart of
accounts set up for yourpersonal life? And they were
like, no. I was like, well,let's do that first. And then
they figured out that theyactually didn't have the 15 to
20 a month initially becausethey were just spending, just
(34:39):
writing checks left and right.
But once we aligned theirspending, right? I don't ever
want to call it budgeting. Idon't want to I take people
through a process to align theirspending to what they truly want
to get out of life. Once we didthat, we found more than $15,000
We found closer to 20. And nowthey are taking that 20.
(35:02):
This is monthly savings. That's100 and or $240 a year that
they're now putting into theirinvestment plan. You put that in
the compound calculator at 8%for like ten years. That's huge.
That's millions of dollars justby finding that monthly savings.
Trent Werner (35:19):
Whitney, is there anything else about this? I
think I'm gonna I'm gonna go buyit as soon as we get off this
conversation. So because again,I I think now is a good time for
me to get a reminder for myselfand my investing career. But is
there anything else about thisbook that you wanna touch on?
Whitney Elkins-Hutten (35:36):
Yeah. So, you know, and another thing for
the more seasoned investor,again, we go through, you know,
how do we invest on investor,again, we go through how do we
invest on principle andstrategy, not based on tactic.
We don't get in theconversation. Are we doing
opportunities on investments?How do we optimize till the cows
come home for taxes?
We're going back to the basicsand understanding when you look
(35:57):
at an asset, what are the sevenpillars of wealth, those seven
levers it can pull to earn youmoney? And you would be shocked
when you go through yourportfolio that most of your
assets might only pull one ortwo, maybe even three levers. So
we're missing out on a hugeopportunity there. And then for
people that are getting close toretirement or heaven forbid, end
(36:22):
of life, I walk people through aprocess to not only get your
legal house in order, like yourestate plan in order. I'm not a
lawyer, but we go through a lotof the different things that I
learned in settling in fivedifferent estates.
But how do we actually set upthose systems to train our
executor, to train our heirs, tomake sure that we keep our
(36:43):
families out of court, keep themfrom squabbling with each other,
and that money actually make itinto their hands?
Trent Werner (36:51):
That's all great stuff, Whitney. Is there any
place that people can hear morefrom you or connect with you?
Whitney Elkins-Hutten (36:57):
Yeah. So you can find the book Money for
Tomorrow on biggerpockets.com oryou can find it on amazon.com.
And if you wanna get in touchwith me directly, you if you're
ready to pick an investment, youcan find me at
If you're like, wow, I need someserious help getting my
(37:17):
financial house in order, youcan find me at ashwealth.com, a
s h wealth Com.
Trent Werner (37:23):
Very nice. Whitney, thank you so much for
taking the time to chat with ustoday.
Whitney Elkins-Hutten (37:27):
Yeah. Thank you so much for having me
on, Trent.
Intro speaker (37:30):
Thank you for listening to this episode of the
Real Estate ProfessionalsInvesting Podcast on WIN, your
community of investing knowledgefor growth. We hope that this
episode has increased yourknowledge and added value to
your path to freedom. If youwould, please take a second to
rate us so that we can get moregreat investors to interview. If
you or someone that you knowwants to be on, please visit
(37:50):
West Side Investors Dot Com andfill out our form to be on the
show. Thank you again, and enjoyyour day.
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