Whether you're just starting your journey or looking to optimize your portfolio, this episode is for you! It’s packed with practical strategies that highlight the power of real estate in achieving financial independence. Press play and join us as Kevin Tornes shares his diverse investment strategies, from house hacking to earning passive income through syndications.

Key takeaways to listen for

• [06:03] How to transition from primary residences to investment properties and the challenges of becoming a landlord
• [11:47] Importance of having a supportive spouse when investing in real estate
• [19:08] Ways diverse investment strategies can serve as your financial safety nets
• [23:53] The financial implications of leveraging equity and the risks associated with real estate debt
• [27:21] An approach to building a portfolio that supports your personal and financial goals

Resources mentioned in this episode

• [03:06] BiggerPockets
• [13:57] MLS.com

About Kevin Tornes

Kevin is the Senior Manager of Sales Operations at nCino, Inc. He is a skilled business operations analyst with experience in deal desk operations, order management, ERP project management, and IIOT software monitoring for customers. Using CPQ in Salesforce, he has managed software services costing, pricing, scope definition, and proposal creation for software services teams worldwide. 

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Mentioned in this episode:

Sponsored by Nomad Capital

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Kevin Tornes: 00:00:42

The asset with Nomad should start to push off some cash and give me some sort of return when that teaser rate jumps because of the interest rate environment, it's going to be higher than I probably initially anticipated. But you should be getting some cash from that to then offset that payment.

Neil Henderson: 00:00:58

Welcome to truly passive income. I'm Neil Henderson.

Clint Harris: 00:01:00

And I'm Clint Harris.

Neil Henderson: 00:01:01

And we are here today with our good friend, live and in person, Mister Kevin Torrance. Kevin, how are you?

Kevin Tornes: 00:01:07

I'm doing well. How are you, Neil?

Neil Henderson: 00:01:08

Good, good. Thank you for taking some time out of your day on a Thursday afternoon to come and.

Kevin Tornes: 00:01:14

Yeah, I took my lunch to come do this.

Neil Henderson: 00:01:15

Okay.

Clint Harris: 00:01:16

All right.

Neil Henderson: 00:01:16

You're taking on your lunch hour. We won't get you in trouble. We won't bust you.

Clint Harris: 00:01:19

Kevin sets the record. We really appreciate his dedication. He's setting the record for shortest commute to the office to come over here and do this.

His house is literally about two blocks away, so.

Kevin Tornes: 00:01:29

That's right. That's right.

Clint Harris: 00:01:31

I appreciate you moving to be closer to Nomad capital and you're in. Protect your investment. That was intelligent.

Neil Henderson: 00:01:36

Yeah.

Kevin Tornes: 00:01:36

That's what it was all about, dedication.

Neil Henderson: 00:01:38

We appreciate that.

Clint Harris: 00:01:39

Well, Kevin, why don't you tell a little bit of just about who you are. I know you had a background in moving around a lot, and you had fairly early involvement in real estate from watching your dad.

So tell us a little about who you are, your background, and how you ended up where you are.

Kevin Tornes: 00:01:51

Sure, yeah. My name, like I said, Kevin Tornas.

Neil Henderson: 00:01:54

The Tornas.

Kevin Tornes: 00:01:55

Tornas.

Neil Henderson: 00:01:56

Okay. My apologies.

Kevin Tornes: 00:01:57

You're good.

Neil Henderson: 00:01:57

You're good. Thank you for finally correcting me.

Kevin Tornes: 00:01:59

Oh, good.

Neil Henderson: 00:02:00

It's not the worst thing. I've mistakenly called an investor.

Kevin Tornes: 00:02:03

rimary residence. November of: 2022

So that was my kind of first foray. Let's see. Going way back, though. Grew up in Colorado, was son of a Navy man. So my dad moved around a bunch when we were kids.

Every time we moved from a different location, you'd buy a house, get a second mortgage on that house before we left, use that to purchase the next house, rent out the old house, and do all that stuff. So he was very active in the real estate game and saw that growing up, which was a big kind of eye opener for me as a kid, right?

Like, okay, my dad is picking up assets, all this stuff, and, you know, he seems to love it. You know, we get to go on a bunch of trips, all that stuff. So it was a nice to see that foundational knowledge and all that stuff.

So, really enjoyed that. Got to see that as a kid, and then fast forward to my later years.

So, talking late twenties, something like that, I started listening to biggerpockets. That's really where I learned a lot about real estate investing and all that stuff.

And so Brandon Turner, Josh Dworkin, all those guys on the podcast, just listening, and I learning all that stuff.

ch is where I lived basically: 2016

I kind of looked into some quadplexes and things like that, but I was just like, I don't know if I could make this work, and I don't know if I want to. So ended up moving to Wilmington after a few moves in between there, and knew that this is where I kind of wanted to figure some stuff out.

ught our primary residence in: 2020

Had the opportunity to do that this year, which is exciting. So finally got my first, like, long term rental up and running. So that's been rented since February of this year. We moved downtown, bought a duplex.

It had a tenant in place, and tried to do the landlord thing.

I said, bought with Nomad in: 2022

Those are kind of my investments up to this point, real estate.

Clint Harris: 00:04:51

So for having a fairly short track record, first of all, one thing we see a lot of times is the it takes a little while to get over that hump of analysis, paralysis of shiny object syndrome. When you first get started, you're listening to a podcast which literally talks about different strategies every week.

And so it's easy to be like, ooh, look at this. Ooh, look at that, and kind of be all over the place. And for not having been an active investor for not long, there's a lot going on here, right?

Because, like, you've got, you know, long term residents, you have a primary that you turned into a rental. So you kept that. You've got a duplex, your house hacking and you're also looking to do short term rentals out of there.

You're also passively invested into syndication. So there's a lot going on.

A lot of times what we typically see is the flow of people start with one strategy and attempt to scale it a few times before they figure out that either they're not good at it or they suck at it or the market's not working for long term rental bird properties right now, or flips or whatever it may be. Right. And a lot of times they'll pivot to something else.

And you're working way younger than the average investor that we have investing into passive investment strategies.

A lot of times people are, they're going to make more being an active investor, buying duplexes and converting them to Airbnbs and managing that, it's a lot more work.

And I think you're about to find out that, you know, if you didn't love being a landlord with one tenant, well, you're about to have eight to ten tenants a month now. It's a lot more money because of the cash flow. And so it's a better way to house hack.

I've done it myself for years and so I think that you're going to have a lot of success there, especially because I know the location. But it's interesting to have an active strategy like a single family, a very active strategy like an Airbnb, and then also be a passive investor.

Do you feel like you are kind of testing the water with different strategies or do you have some short term, some midterm and some long term goals and you're using different properties to accomplish different things?

Kevin Tornes: 00:06:45

Yeah, great question. I think it's more the former, right? Like I'm trying to dip my toe a little bit is also having to flex as well.

So my intention when I bought the duplex downtown was fully to have a long term renter in place and all that stuff. And as we got into it, right, like we talked about just before this, the challenge is the amount of noise that we're seeing in between the units.

And so if we didnt have that, I think we would be long term renting it. The quotes ive gotten so far, a little more capital than I would like to offload.

And so at this point I figured, okay, cool, I took the leap, lets flex, lets see what we can do. Okay. If the noise is bad, maybe I dont have to have somebody in there for 365 days a year.

Maybe instead I can short term at least make something off of the asset and basically offset my costs and things like that. I'm mainly looking for financial freedom. That's what I'm trying to get out of this.

And so anywhere that I can find a way to offset expenses and things like that, that's where I'm really just trying to go for right now. And the different strategies, like you said, it's more so just trying to test the waters, get into it, and then figure my way out from there.

Neil Henderson: 00:08:02

Well, you brought up such a good point about a house hack, which is it doesn't need to be all or nothing. You know, there are people like, well, you know, I want to do a house hack if I can completely write off all of my expenses and live completely free.

That's probably what you're probably seeing on bigger pockets a few years ago and now, I mean, obviously prices are higher and things are getting a little more compressed, but you gotta look at it. If you can offset 75% of your housing costs, even just 50% of your housing costs, you're way ahead of 95% of most of the population.

Kevin Tornes: 00:08:35

That's right.

Neil Henderson: 00:08:36

And you still have a w two job. You got a good w two job.

And so now that frees up that income to do other things, to either redeploy it into other investments, whether it be active or passive.

Kevin Tornes: 00:08:49

That's right. That's right.

So, yeah, I mean, I would be lying to you if the interest rate environment right now was not causing some challenges in terms of expenses and things like that. I was hoping to be able to refinance a little bit. Now, I bought the house in November.

I think everybody thought that interest rates were going to come down a little bit and all that stuff.

And so what's nice is the w two is kind of what's nice and also kind of a weird balance you have to strike is like, the w two is a safety net for me in some regards.

And so it's nice because I can take risks and all that stuff, but I got to kind of keep it in mind that w two is like, if that goes away, right, what are you going to do? And you have to pivot and all that stuff. I feel pretty good. I mean, I took a risk. I would like to bring my expenses down further.

I'm doing that in a couple of ways. Right. Like, I took a heloc out on my old house to buy this new one.

And so mainly really focused on trying to pay off that debt and things like that right now. Like using my w two and all that stuff. Right. So I know that when I bought that duplex, right.

The idea was to definitely offset my costs, be lower all that stuff. Unfortunately, because of the tenant issues and stuff like that, like, couldn't necessarily do that as well as I would have liked.

And so we need to get that Airbnb going to help us do better in that regard. But at the same time, like, we wanted to live downtown, we wanted to do all that stuff.

So, like, in a way, yeah, it didn't work out exactly as planned, but we are flexing. We're trying to figure something out. And so that's a big thing for us.

Clint Harris: 00:10:21

So one of the most important abilities when it comes to having success with real estate is adaptability. And you have to listen to what the market is giving you and listen to what the property is giving you.

So, first of all, like, one thing I'll say, just my personal experience is that I did house hacks. We did at a long term house hack duplex, and then we did short term rentals at the beach when we moved here.

And then we did small, multifamily, converted to Airbnbs. Like, I've done those things.

And what we do now, buying old Kmart's and grocery stores and converting them to self storage, believe it or not, it's the same lessons that I learned with those first smaller properties.

So don't let it be lost on you, like what you're going through now, what you're doing now, it's the same lessons that you've got to learn one way or the other. And the difference is if you do them with bigger projects, it's just more expensive mistakes that you have to fix.

Cause there's always gonna be things that you learn along the way and processes that you go through. So, first of all, just getting off the bench and getting into the game is the big thing.

Get started, because the lessons you're gonna learn now are the same lessons. They're going to break you out of a w two job over the next few years, hopefully 510 years.

Whatever it's going to take, that's up to you as to how much you push the gas pedal. So that's a big deal. I want to commend you on that. I want to ask.

There's something that I think is probably the most reason that I've had success is my relationship with my wife and doing things together, being on the same page, being willing to take risks and bet on ourselves and having, you know, in our situation, we had two incomes because we each had our job and then creating a real estate portfolio that is basically a third person income for your household that gets up and goes to work even when you don't want to, and then taking it a step forward and leveraging that, just like you did with your equity line, we're leveraging ours into other properties, into storage and things like that.

But the foundational important part is, like, if you're taking those risks and you're working that risk muscle, as Eric likes to say, to make it stronger so that your appetite for risk is larger, how did that start out with your spouse? Have you guys always talked about this stuff? Do you talk about this stuff? Does she let you take the lead?

And how do you think that it has potential to help or hurt with what your goals are for your financial future?

Kevin Tornes: 00:12:29

Jeff, it's a great question. So the reason I'm able to do this is because I have such a supportive spouse in that regard. Right. So I'll definitely plug that right away.

But I think specifically, right, like, we found ways to help us bridge the gap. Like, my wife, she's not going to be out there like scouring the MLS or anything like that to look up properties and all that.

So she knows that this is kind of my thing and all that stuff. And so I think she is supportive of the vehicle to help us with financial freedom, and that's what she wants as well.

I think she came along for the ride and all that stuff. And so she was definitely influential in buying the duplex. Right? Like, she wanted to live downtown. I was like, okay, cool, I want to do real estate.

So, like, let's meet in the middle. We'll move downtown, we'll buy a duplex, we'll house hack it. Like, this is how we can do it, right? And so that was a big piece.

Was like us talking about that and, you know, getting together and making sure that we were compromising in some way to make sure that we could do this together. And so I think she's a big piece of that. It was great. And I think the spouse thing is a critical piece.

Neil Henderson: 00:13:37

Was your wife educated on real estate investing at all, or did you just drive her nuts at dinner tables for a couple of years?

Kevin Tornes: 00:13:45

Mainly the ladder. Mainly the ladder, right? So, yeah, I think we had two very different upbringings, right. In terms of this as an investment vehicle, right.

My dad being someone who bought a bunch of properties and all that stuff, you know, her dad taking the approach of like, I don't want to fix a toilet and two in the morning thing, and so she didn't have as much of this exposure. But I think I, you know, we're learning together and all that stuff, and she's getting up to speed as well, and I think she, uh, she enjoys it, so.

Yeah, absolutely.

Clint Harris: 00:14:14

Yeah, I think that's. It's really powerful. I think that a lot of people.

For my wife, and she's now a full time realtor, but at the time, she was in medical sales the same way that I was. And, you know, we were just dating at the time, and I convinced her to buy a foreclosure in our neighborhood that was also multifamily.

So she lived there and house hacked it. And that was a little bit of a light bulb moment of living there and not having a mortgage.

And then we started buying single families, and they were okay. It was. We're not great at managing tenants. It wasn't until we had our first.

We had a short term rental duplex at the beach, and the first summer we did 60 grand. That was kind of the moment for her. That was like, oh, this is real. And then she's out of medical sales.

We're using that to launch a new career for her into real estate, which she ended up loving, and she's very talented at it. And then that turned into buying more multifamily.

But there's an aha moment that happens, and for you as a kid, maybe it was just over a period of time, you saw your dad picking up the properties.

I try to get my sons involved in small little businesses and ventures like that, too, and still that just to try to imprint that on some level, that you should be able to go create your own value in life instead of trading your time to somebody else and pay for their days off. But typically, everybody kind of has that moment of when it's real.

And like, if you can live downtown, wife can get what she wants and allows you to add to a portfolio, do it for free, hopefully, because you're house hacking. That's the moment. And then when it's bigger projects down the road, it's a much easier lift.

The hardest part is oftentimes that first mentality shift of making a change like that, and then the next big barrier is when you have enough success that you want to quit your job. That's going to be a fun conversation to have as well.

Kevin Tornes: 00:15:53

That'll be interesting.

Clint Harris: 00:15:54

How easy that conversation goes depends on how well you do with your real estate projects right now. So no pressure.

Kevin Tornes: 00:15:59

That's right. It's a good point. Right? Like, I think you know, kind of going back to what you said earlier. Right?

Like, the big thing for me was the biggest barrier for me was just, like, getting over the hump of buying one. Like, I was like, okay, cool, if I can just buy one. And they say it's not going to be a home run.

It probably won't be, but at least you're going to get on base and you're going to figure it out, right?

Like, part of the reason I felt more comfortable about buying downtown as opposed to, you know, anywhere else or taking this approach is just like, you guys work down here as well. Like, how many rollaways do you see all around downtown? Like, how much money do we see going into restaurants downtown?

I was like, there's some intangibles here that I knew that if this doesn't go exactly the way I plan, if I hold it long enough, like, this is going to end up being, I'll get some sort of return on my money here.

So, yeah, I mean, I'll get at some point into all the fancy, like, okay, yeah, I'm going to make a 20% return on this and, like, being able to feel very confident about those numbers and all that. But, like, for now, all I'm just trying to do is, like, get into it and get on base, like I.

Clint Harris: 00:17:04

Said, well, let's unpack that a little bit, because I don't know that you did it intentionally at the time, but you built yourself an insurance policy. And also, what you said about real estate is true. Like, real estate in general is a very forgiving asset class.

If you hold any deal long enough, you eventually look like a genius if you time it right. But in an area like Wilmington that's booming with massive population growth, very forgiving asset class.

You're going to have natural and forced depreciation in here also because you're improving the property, you're maximizing the rental income, all the things, right?

But you did something else here that, you know, if we look at this property, typically what happens with a property in an area that has potential to really go up in value?

You're looking at what's my cash on cash return, especially because you took an equity line on another property that you're paying interest on and you got to pay that back. So you can pay that back with rental income from the new property and from that property, probably, and subsidize it with your w two.

Ultimately, that's money that could have gone to other things or other investments. So, like, you're looking at your cash on cash return because there's a cost to that debt and you got to pay that back.

r whatever the price tag was,: 5600

Keeping in mind, you're living in half of the property, hopefully for free. So you have to factor that in.

Kevin Tornes: 00:18:27

Sure.

Clint Harris: 00:18:27

Over time, that property is going to go up in value and a lot of the properties in our area here have gone up several hundred thousand dollars in a fairly quick period of time. Then you're going to be looking at what's my return on equity position? Right. What's my return on?

I got $200,000 worth of equity here and I'm making this amount of it was a great return on the initial investment. It was probably a great cash on cash return. But now is it a great return now that I got this much equity? How do we unlock this and put that to work?

And one thing that you did is, especially as being so much younger than our median age of our investors, if you don't mind me talking about it, you came into a passive investment strategy that's getting up and going to work every day that basically acts as an insurance policy that in the deal that you're in, the idea is that that capital is going to double tax free over a five year time period. Well, there's your equity line right there if you needed to pay that back.

Kevin Tornes: 00:19:19

That's right.

Clint Harris: 00:19:20

So I think the idea of like multiple exit strategies is always a good thing, but the combination of long term strategies, a house hack and a passive investment strategy created some diversity here that really pads your stats in terms of if one of these doesn't work out or doesn't do the best, you know, you'd be slogging away for years trying to pay that equity line back and youve got a five year balloon payment out there hanging in the background that can potentially come in to rescue the deal if you need to. Did you think about that at all at the time?

Kevin Tornes: 00:19:51

It crossed my mind. So its interesting timing on that equity line that I got. I got a one year teaser rate on that equity line, so I got it in November.

The asset with Nomad should, in theory, start to push off some cash and give me some sort of return to when that teaser rate jumps.

Because of the interest rate environment, I think its going to be higher than I probably initially anticipated, but I think you should be getting some cash from that to then offset that payment. And so I did think about that and whatnot. It is really nice.

To your point, it is a really nice insurance policy to have to basically say, okay, cool, now ive got this to help offset some of the expenses and things like that.

Neil Henderson: 00:20:39

So it's such a mindset shift for an investor. I remember the kind of that moment of terror buying my first rental property and signing for a loan of a pretty low loan.

It was probably $60,000, $80,000, whatever. And you're counting on the fact that the rental income from that property is at the very least going to pay that loan.

And that's a very different mentality from somebody who's buying, who's a boggle head, who's buying vanguard. You know, they've been index funds and things like that where they're not using any debt to buy anything. There's no, let's say consequence.

Kevin Tornes: 00:21:13

Sure.

Neil Henderson: 00:21:14

The only thing you're risking if you're investing in an index fund is the original principle, whereas when you're investing in a rental property, you're risking your original principal plus the debt. Now the benefit there is that now you're getting leverage. Now you're getting leverage, which allows you to boost those returns quite a bit.

Like you said, youre starting off. Its like youre staring at all these different strategies and you finally decide, all right, im going to do it.

Did you have that kind of gut check mentality? Was that something that gave you pause when you were at first looking to invest?

Kevin Tornes: 00:21:48

Robert? When I was first looking to invest, like, what exactly gave me pause in real estate? Oh, yeah.

I mean, when I was first looking into real estate, yeah, I mean, when youre looking at the numbers and you owe the bank hundreds of thousands of dollars, youre like, okay, what exactly happens if I dont pay that?

Clint Harris: 00:22:06

Right?

Kevin Tornes: 00:22:06

So, yeah, I mean, youre factoring all that in. Youre calculating all that, right?

When I was leveraging the heloc on the old place to buy the new place, I was doing the math in terms of, okay, cool, if I dont rent any of these units, how much money do I have to shell out to the bank on a monthly basis? And I was like, oh, man, you're doing the math in your head and you're like, okay, that's a significant expense.

And so there is a leap of faith there, right? I think is the big thing. And so I had to kind of take that and swallow that risk and whatnot and just move forward.

And I felt like I was in a good enough spot where. Where I just had to kind of do something. And so I finally pulled the trigger. But, yeah, not despite concerns.

Clint Harris: 00:22:49

So I want to take a look.

First of all, I will mention you're an engineer by trade, and so I would imagine that your plan is probably a lot more tied together than my original plan. So I think you're on the right path. I'm more of a ready shoot, aim kind of guy. Originally had to learn some hard lessons there.

You don't have to know the answer to this. In fact, I think most people probably don't. In my pursuit of financial independence, I first hit that with our short term rental portfolio.

I was still working, but I replaced my income through that. And what I figured out is that I did it wrong because we reached a level of financial independence.

But what it did not give us was time relocation independence.

Because even when I wasn't working and on call, because I worked in cardiology, I was still basically on call because I had my phone on me all the time. And we have tenants in these 14 Airbnb units and every weekend, and it's. You're tied to a location.

So for me, the real pursuit became financial time and location independence, and that's where I had a mental shift towards the more passive investment strategies. And you don't have to know the answer to this, but I want to document it now so that we can listen to it years later and kind of see how it lines up.

But what does your destination look like as to the lifestyle that you're trying to create? And then let's walk backwards from there, like, you know, 50, 55, 60, whatever it may be.

Like, you know, we all know that we want to be in good health, and we all know that we want to travel, and we all know that we want to have money. But, you know, I think it's important to really talk about, like, what does that independence of purpose look like?

Like, what are you doing with your life? What does your portfolio look like?

Even if you don't know what exactly what your pattern is or what your strategy is right now, what does that idea look like on the horizon that you're working for? Because we're all doing this for something. So what does that look like for you?

Kevin Tornes: 00:24:34

Sure, it's a great question. And it's funny because my wife and I, on Sunday, we're going to sit down and kind of map that out a little bit.

So actually, last Sunday we talked about what are our financial goals and all that stuff. Just started to list a bunch of stuff.

And at the top of the list for me is I would love to be 40 years old and be in a position where I could select to take a part time job, have that health insurance or something like that, something where I don't necessarily have to work 40 hours a week. Not to say that I wouldn't, I love my job at my current company and all that stuff.

It could be that I stick there and whatnot, but I would just at least like to have the flexibility. Right? The best would be, yeah, not having to work at all.

But you know, if I worst case thinking like, okay, maybe a part time job, something like that. Right. Because ultimately, why do I want to do that, right? My son will be ten about that time.

And so I still have a number of years where I can not have to miss the soccer games and all that stuff. I know that it's coming up to me.

Or you sit there and you realize as you're going along, like, okay, cool, climbing the corporate ladder and all that stuff, that's awesome. You're going to make a lot more money and do all that stuff. But what's the sacrifice for that? And that's probably your family, right?

And I don't know that that's necessarily what I want to give up.

So I'd love to be in a position where I can spend a lot more time with my kid and not have to worry about all of the financial requirements to do that. So. Well, see, thats the high level goal at this point. Would love to be able to travel. My wife and I are big travelers and things like that.

So anything we can do to put ourselves in a position where we could do that as early as possible, thats the big goal right now.

Neil Henderson: 00:26:24

Trey, we often talk about the difference between nest egg investing and cash flow dividend investing.

Youve got the traditional retirement strategy, which is just build up a nest egg that is 25 times the annual income that you're going to need to live on the whole Trinity study, and then you live off 4% of it until you take a dirt nap. But it's a very rigid kind of like betting on the fact that you're going to get there and that you're going to have the health when you get there.

You hit the 65 and, okay, well, I've got ten years to enjoy my life. Whereas the cash flow approach, which I love with real estate, which is you can kind of build up this portfolio of cash flowing properties.

And maybe it's not your full retirement level income, but now it gives you options.

Kevin Tornes: 00:27:12

Sure.

Neil Henderson: 00:27:13

And that's what allowed me to take the leap of faith that I took. I'm not financially independent, and I went off, I'm working at Nomad, and essentially we're not working for any kind of salary.

It's all entrepreneurial, you're not working for any money. It's all just down the road. But I couldn't do that if I didn't have a base of some sort of asset that was putting off cash flow.

That allowed me to take that leap. And I think that's the same thing. That's something people sometimes forget. I had a call with an investor today, and that was exactly his goal.

He's like, I like my job, but I'd like to get to the point where I maybe don't need the job and I don't need to make the choice about the job solely based on the income.

Kevin Tornes: 00:27:55

Right.

Neil Henderson: 00:27:55

Where I can maybe choose that, hey, I'll take less money, but this is a job. It's a company I like a lot more, or this is an area I want to live in a lot more.

Kevin Tornes: 00:28:03

That's right. That's right. So, yeah, I mean, I think that's the ultimate what I'm shooting for and all that stuff.

It's now trying to figure out the vehicle to make sure we can do that.

And like you said, like, I'm kind of planted in different areas, so I need to really come up with kind of a plan in terms of, okay, am I going to buy into ten el fundos or whatever it is right, over the next eight years, or is it going to be. That's a big piece of it, right? Am I going to buy into that? Or is it, okay, cool. I need to do a bunch more long terms. I need to figure something out.

So, yeah, that's what I'm still trying to piece together.

Clint Harris: 00:28:40

You don't have to know the answer to that now. And I think Neil is absolutely right because I've lived this out. It's like, it's going to create options for you.

And let's think about, like, worst case scenario. Like, I was selling pacemakers until the day I wasn't, and like, one day I was a pacemaker sales rep, and the next day I was not. Right? And that's it.

The good thing about being an engineer or physician, like you're a doctor, and then one day you retire, what are you. The next day you're still a doctor. Right. You're an engineer, right. And then one day you quit your job, the next day you're still an engineer. Right.

And so you can always go get a job and do something if you need to.

But having the option to do other things is probably not going to come because you have saved enough money up in your bank account that you can afford to take some big leap with your life to try to hit a different ceiling and take, you know, your time, financial location independence to a different level. It's likely going to come because you have equity in properties that you built up over time that are going to give you the ability to do that.

You don't have to know what your destination is right now.

I think it's important that we all talk about it and think about it, especially, just like you're going to and involve your wife, because that's the number one most important person in the relationship and you need continuity with that goal. You don't have to know what the goal is. As long as you know there is one, you'll figure that out. You don't have to know the timeline right now.

You'll figure that out as well. The timeline, a lot of times is going to be determined by the amount of equity that you have.

And that's one of the reasons that one of the things I did wrong originally that we focus big on later is not just focus on cash flowing assets. Focus on cash flowing assets in areas that have room for appreciation.

Because ultimately, appreciation has made more generational wealth than cash flow ever will.

And it's really nice to have that, that you can tap into it at some point if you want to bundle things together, a portfolio and make a shift, like, hey, I'm going to stop selling pacemakers and doing surgery. I'm going to go all in and investing in real estate, in self storage, even though I'm not going to get paid from it for three, four, five years.

We're going to do that because we've bundled together these other properties. At the time, we didn't know what we were doing. That was the larger picture.

But there's always a larger picture when you train your brain to think ahead, to add value to your own life with what you're doing, you're training your brain to do something that you're never going to stop. You're always going to be looking for that next thing, especially as you have more success.

So whatever it is, like you're staging for something bigger, and it's going to be opportunity. So again, like, the idea is we always know the destination and we work backwards from there.

But even if you don't know what the destination is, the decisions we're all making right now on an active basis are building up opportunity. And then when you get clarity on what that looks like for your life, that's going to give you the chance to go for it and get weird.

Let's do something different to live a different life. Because the ability to save our way to retirement is significantly different than it was for our parents generation and our grandparents generation.

If that's going away and that's changing, our job is to recognize that you can no longer play defense and get where you want to be. The world is passing us and you're going to have to play offense on some level.

Kevin Tornes: 00:31:51

That's right. That's right. And I think that's why just getting into the game is like a big thing. Just right. Jumping in and getting going so well.

Neil Henderson: 00:32:01

Listen, we're running out of time and I want to thank you so much for coming down and spending a few minutes with us, chatting. I learned some things about you I didn't know before, and we got to do this more often. This is fun.

Kevin Tornes: 00:32:10

I love it. I love it. I'll come to the meetups, do all that stuff. We'll share some stories.

Clint Harris: 00:32:14

Thank you, Kevin. We've been working together for several years now. You've been supporting our meetups for a couple years now. Neil.

Finally learned how to say your name today. It's a big day, so we really appreciate that. Thanks for your time.

Kevin Tornes: 00:32:24

Absolutely. Thanks, guys.

Neil Henderson: 00:32:25

Thank you so much for listening and watching the truly passive income podcast.

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