Working On Yourself And Your Mindset

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We spend so much time working on our business but do we even have time for ourselves Joining us again for another episode is Sterling White He is a seasoned real estate investor and proud founder of Sonder Investment Group With more than a decade of experience he and his current partner have been directly involved with both buying and selling over 100 single-family homes and scaled his personal portfolio to up to 500 units Sterling believes that when we work on ourselves we bring more value to our business and to the people around us He talks about how he is taking a step back and finding ways to improve himself He also shares important strategies and mindsets we need to navigate the current market conditions 00 01 – 07 49 Positioning Yourself in a Market Shift Welcoming Sterling back to the show The market is shifting and now is a good time to sell Real estate is overpriced but it s still better to invest than to leave the capital sitting in the bank They are hitting a pause on their previous acquisition strategies due to the economic environment and will be flipping the switch once things start to turn 07 50 – 20 59 Keeping Your Mind Sharp Sterling is improving himself by doing things beyond just business Accept these truths People are going to be people There are things that you cannot control especially what s happening in the market It s important to be self-aware in order to make sound investment decisions Practice patience and avoid FOMO Assess risk and protect your downside If given a chance what s one thing Sterling would do differently in his career 21 00 – 21 58 Closing Segment Reach out to Sterling Links Below Final Words Tweetable Quotes We ve got quite a bit of uncertainty that s going on with the rise of the interest rates and I just believe that what people are paying for properties right now is just not sustainable – Sterling White People are going to be people and they re acting in their best interest which many of the times their best interests may not be in your best interest – Sterling White I ve learned from people who are further along than me in their journeys they ve had those dry spells where they didn t acquire But when they did acquire and things did shift in the market they really scaled – Sterling White —————————————————————————– Connect with Sterling at SterlingWhiteOfficial com and subscribe to his YouTube channel Resource Mentioned How To Scale Commercial Real Estate Scaling Your Multifamily Real Estate Business With Sterling White Connect with me I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns Facebook LinkedIn Like subscribe and leave us a review on Apple Podcasts Spotify Google Podcasts or whatever platform you listen on Thank you for tuning in Email me sam brickeninvestmentgroup com Want to read the full show notes of the episode Check it out below 00 00 00 Sterling White The first point is being self-aware and that s one of the things that through philosophy I ve also been studying human psychology And it s just one of those things that to answer the question that you have is human beings I wouldn t call it irrational but it s human nature so meaning that if something s going up let s say an investment in stocks or crypto whatever it is let s say stocks that when everything s going up that s when people have the fear of missing out effect and they start investing 00 00 41 Sam Wilson Sterling White is a multifamily investor in the Midwest He has owned up to 500 units He s also been a BiggerPockets contributor since 2014 Sterling You ve been on this show before and certainly appreciate you coming on back here again with us today Welcome to the show 00 00 55 Sterling White Yes And thanks for the intro there and the energy the tone and everything I think I just may clip that part and just have it at the beginning of my podcast or just whenever I enter a room I ll just pull my phone out and play that 00 01 09 Sam Wilson That s awesome man Sterling it s great to have you back on you know there are for our listeners maybe they didn t catch your previous episode there are three questions I ask every guest who comes in the show in 90 seconds or less can you tell me where did you start Where are you now And how did you get there 00 01 23 Sterling White Yeah So started in Indianapolis Indiana rougher parts of the city single mother fraternal twin brother ended up getting into real estate This was 2009 when things were not so good in the economic environment As a construction laborer I read the book Rich Dad Poor Dad which rich and wealthy people did not get that way by being laborers so then I started buying single family I got up to 150 and then transitioned 2017 to multifamily got up to about 500 units So there we go That s 31 years and 60 seconds I believe is what I did 00 01 56 Sam Wilson Yeah you did man You definitely kept it under the 90-second threshold there Certainly appreciate that That is awesome So you scaled up to 500 units in your own personal portfolio And then things have changed We ve had a market shift like tell me what you guys are doing today and how you guys are positioning yourself 00 02 15 Sterling White Yeah So I ve been selling over the years and just have one apartment left which is 156 units which is now under contract and waiting to close There was a fire at the property and now going back and forth with insurance So it really pushed it along but actually received a million dollars more than what we had on our five-year projections And we re two years into the project So that just goes to show with where we re at in the market at this moment And I believe that there s going to start to be even more of a shift so want to have that dry powder available and ready 00 02 48 Sam Wilson That s really kind of wild So I mean and we re seeing that across how many assets I mean everybody in the multifamily business seems like oh we re hitting our projections sooner than what we thought We are getting more than what we projected And it seems like for you you think it s a good time to sell 00 03 03 Sterling White Oh yeah for sure With what people are paying and it s just one of those moments that well the perfect time I would ve said would ve been what six eight months ago but now is the other from that But it s what people are paying in the overall sentiment and people are I mean just wanting to park their money in real estate So when you get all of this influx of cash yeah it s a really good time to sell 00 03 26 Sam Wilson What do you expect So what do you expect to happen A lot of times you look at market dynamics to say okay now is a great time to sell That is because there is anticipation of something different in the future What are you anticipating 00 03 39 Sterling White So one we ve got quite a bit of uncertainty that s going on the rise of the interest rates and also I just believe what people are paying for properties right now is just not sustainable And I ll give you a prime example The 80-unit that we sold bought it for 3 35 million in 2018 and then a year and a half two years later sold it for 5 million I have no way how that person made those numbers work cause we re actually operating the property we re saying how did they make that work So I believe those deals will start to come around 00 04 12 Sam Wilson So what you re saying is that you are in and again that this is kind of not asking to predict the future but your conclusion is that people have a hypothesis That there s people that have overpaid for properties And then they re going to come back here in the near you know 6 12 18 months and say oh my gosh we ve overpaid for these And now we have to unload em at a discount and you re anticipating picking those up 00 04 37 Sterling White Yeah And I made that mistake overpaying for a property and ended up having to sell what was this 12 months a year and a half after that cause didn t raise enough cash to take care of the improvements because overpaid for the property And if would ve raised that money up front it would ve affected the investor returns So it was already an okay deal without raising the cash So in essence is that same mistake I believe people are making Not everyone I m sure some people are buying deals at a good price but just from what they bought it for I just have no clue how they re making it work 00 05 11 Sam Wilson I mean and again that s not your problem necessarily when someone else is overpaying for a property you just but you can obviously collect the proceeds from whatever it is they re willing to overpay so you see it is now a good time to sell You think yes What do you do with that capital once you have it I mean that s something that a lot of people are you know questions that a lot of investors and us as a passive investor but also active investors have is how do we protect the purchasing power of our capital I mean the published inflation rate is what 9 Let s say you get a windfall of millions of dollars You unload all your assets So you re sitting on millions and you go oh now what do I do with it How do you protect that from the you know erosion of inflation 00 05 52 Sterling White That is a great question cause I don t have the answer to that cause one real estate s overpriced And then I ve invested into other sectors and when I invested it ended up getting cut and some of those investments getting cut in half and actually went down So it s exactly what you mean it s uncertain times with what to do with their cash I still decide to invest it because having it in the bank is you re losing money due to inflation but I don t have the answers to that It s very tough right now 00 06 20 Sam Wilson Absolutely Absolutely Are you guys still in the acquisition game I mean are you still looking at assets still underwriting Are you doing anything on that front 00 06 30 Sterling White Not at this moment I just haven t cause the approach that I ve always taken is on the multifamily side is the direct to owner and outreach So build a whole entire system with that And it s a lot of work that goes into that And so for that is the amount of work versus the ROI and what I saw from an economic environment just couldn t justify the efforts that we put in for the ROI that we got 00 06 54 Sam Wilson Yeah And you guys had for those of you again that are just tuning in and have not heard Sterling s first episode when we conclude this I ll go back and find the actual episode number Normally I know that if I have a repeat guest and I didn t look that up ahead of time so I apologize but if you go back and find that episode you ll hear some really creative sourcing strategies and outreach strategies for acquisitions Sterling did some really cool things I won t repeat those here but certainly worth a re-listen or a first-time listen if you want to go back and find that episode and find some really cool methods that Sterling was using to find direct to owner deals So that s really interesting So you re saying that the amount of time and effort that it takes to ramp up especially your really unique strategy is just not there right now 00 07 35 Sterling White Correct Exactly And still once things do start to turn already have that foundation set and the knowledge it s just returning it back on 00 07 44 Sam Wilson Right It s flipping the switch and then you have you know capital in the bank and it s flipping the switch What are you doing right now to really stay sharp And then to know when the market is turned to a point to where you want to get back in 00 07 58 Sterling White So it s stabilizing the current assets being that apartment but also is I ve taken on more I wouldn t say more but different hobbies Meaning is I ve taken the time to step back and actually sharpen more of my acts meaning my mindset which is taking on more philosophy learning a different language And so those are more things and rabbit holes I ve actually gone into during this time 00 08 22 Sam Wilson Now that s really cool And you know there s always that confluence of money and time that people rarely run into in life Like you know everybody seems to work for those golden years where it s like oh Hey you know look we re retired And we got time on our hands and money in the bank And it s like that s just you know it happens at few intersections I feel like in most people s lives So it sounds like you may have found that intersection albeit potentially temporary And this is what you re pouring into So tell me on the philosophy side of things why do you think it s important to really work on the way you think 00 08 55 Sterling White And I wish more people actually talked about these types of things cause yes business is fantastic always want to improve on that side but I believe actually as a human being you improve yourself Not only you ll be better of value to people out there and just the common world but also in your business as well One of the philosophies I ve been studying or just reading up on is like stoicism there s daoism And just one of the things I ve taken on is that people are going to be people accepting that the good the bad and the ugly and just to not take anything personal that some people may do and that they re acting in their best interest which many of the times their best interests may not be in your best interest So accepting that And then also is the things that you can control and can t control which there s a lot of things out of our control such as if Sam came on this podcast and just leaned in onto me and said you know what you were I don t know make some things up you re a bad investor you re underwriting all this I can t control that but I can control my actual response to it 00 09 54 Sam Wilson Right Yeah man and that s funny You mentioned that Somebody said it that life is 10 what happens to you and 90 how you respond to it There we go Get my numbers right And getting that mindset set to where when things happen that are outside of your control you can just go you know I can t fix that The only thing I can do right now is decide how much energy I want to devote to whatever that event was and then figure out how I want to respond to it And outside of that I got to just let it go 00 10 22 Sterling White Yeah And I ll give you an example In my earlier days when I started the companies I had that is I was working on myself but there was always there s different layers to it And I ll give you a prime example If someone sent over a not so nice email to me and they had multiple points is sometimes I would just each and every point I would respond back to that email But now I ll give you an example If an employer someone sends that over to me I ll just instead of emailing and respond to em or getting triggered or frustrated or mad one I don t take it personal and I ll just hop on the phone call with them just to talk it out and completely take the angle And many times is it actually what they had in the email was not intended of how I actually perceived it 00 11 05 Sam Wilson Right Right That s absolutely great Yeah I find that as well hitting those things or not hitting em on the head but just addressing em head on It s like Hey you know what We re not going to email back and forth We re not going to chat over whatever it is Google Chat We are going to just talk And a lot of times that whatever you had perceived is not actually what was going on there That s really cool How is this affecting you as an investor And maybe if you re working on your personal philosophy how does it affect the way that you foresee yourself investing in the future 00 11 34 Sterling White Well there was that one example that I just mentioned there from the business side but also the accepting things that I can t control is I I m not able to control what s out there in the economic environment such as the Fed increasing the interest rates or let s say some Black Swan event happens in the war We ll have World War III Hopefully this doesn t get banned for me saying that but it is that those are events that I cannot control So in the event that those do happen I believe that will actually be an opportunity for investing because when there s blood in the streets that s the best time to actually invest 00 12 08 Sam Wilson Yeah 00 12 09 Sterling White Counterintuitive advice though cause when it s actually happening you re like oh gosh 00 12 13 Sam Wilson Yeah I know And you bring up an interesting point there and it s something I ve I ve long thought about but I don t have an answer to which is that investors typically invest at the completely wrong times Going back to your point there in the beginning which is that you re unloading all your assets because people are paying numbers for em that you can t have it make mathematical sense You re like this is just dumb Sure You can buy it I ll let you buy it for that No problem But one of the things that I struggle with is getting out in front of you know cause we syndicate opportunities I don t know if you syndicate your deals or if it s all in-house but you know educating our investors for the right time to invest to when everybody else is afraid being able to instill confidence in the people around us How do you see yourself doing that 00 12 58 Sterling White Yeah it s one the first point is being self-aware and that s one of the things that through the philosophy I ve also been studying human psychology and it s just one of those things that to answer the question that you have is human beings I wouldn t call it irrational but is human nature So meaning that if something s going up then let s say an investment in stocks or crypto whatever it is Let s say stocks that when everything s going up that s when people have the fear of missing out effect and they start investing And then once things start to a Black Swan event happens in the economy when it s at the top because at the bottom when people were scared that s actually when the wealthy and the smart money came in And then when things start to go up retail or the common investor comes in at the top the smart money actually starts selling off And then let s say a Black Swan event and then from there at the bottom then that s when retail starts to sell So it s just understanding that psychology and just when things are fearful and let s say in the real estate market 2008 2009 2010 that was actually the best time to buy 00 14 06 Sam Wilson It most definitely was the best time to buy 00 14 08 Sterling White But the scariest 00 14 09 Sam Wilson Oh for sure for sure 2009 I mean could you imagine going out and taking down a 30 or 40 million apartment complex In 2009 People would be like so you re doing what again Like is anybody making money in that None of their friends are making money in it There s not these you know 2x 3x equity multiples in two and a half years that everybody s seeing So it s a really interesting kind of thing that you have to figure out is how to communicate to investors and instill confidence you know when everything does seem to be or could potentially be going in the direction that most people aren t comfortable with 00 14 41 Sterling White Exactly 00 14 42 Sam Wilson Tell me this If you were to give advice to somebody else looking to get in the business right now or looking to scale their commercial portfolio and somebody came to you and said Hey Sterling I m looking to jump in man What should I do right now What would you tell em 00 14 56 Sterling White So is this a person just getting started 00 14 59 Sam Wilson Let s say they re like you and they had a single family portfolio but they want to get out of that game and get into bigger assets 00 15 05 Sterling White So I would say is I mean one patience but also is if you re on social media or whatever the case is You re saying okay I need to get a deal now cause I see all these other people getting into it and I haven t and I no longer want to be in single family and I need to get this deal now is the way to deal more credibility or whatever reason you re just in that mindset that in more of a non-patient is I would just say patience It s okay I know we re in the microwave age and it seems as if everything happens overnight but that s not the case And one thing I ve learned cause if we re speaking in today s terms on in 20 22 is that one yes I haven t acquired anything for the past several years but I ve learned from people who are further along than me in their journeys They ve had those dry spells where they didn t acquire But then when they did acquire when things did shift in the market they really scaled during those periods of time So that s one thing as I always study others but also constantly take a step back and practice patience as much as I can 00 16 06 Sam Wilson Man that s great That s great advice Yeah because I like the way you put that in the microwave age because it s so true It s so true We see it We hit the button and 30 seconds later we got a hot well I m going to call it a meal I m not going to call it food but I m not going to call it a meal Most of what comes out of a microwave I m not going to qualify I wouldn t qualify as probably food but either way it s something to eat So we re used to that instant And especially as you see on LinkedIn or you see on Facebook or BiggerPockets and you re like oh Hey cool So and so just acquired another massive you know transaction You re like golly I m just sitting on my thumbs Oh maybe 00 16 40 Sterling White Yeah And you don t know what all the work that they had that went into that That could have been an owner that they ve been following up for three four years now that they just didn t have the time to put all that in the actual post or give that backstory or they could have just overpaid for the deal You don t know none of these things So and that s the thing that what is it the self-development and mindset I went into is just keeping up with the Joneses is that is one of the worst things And that s why I work to not be on social media as much as I can off of it 00 17 12 Sam Wilson That s interesting That s very very interesting Yeah because the FOMOs and the feelings of like I m not doing enough or I m not moving fast enough or things like that none of that really generates any positivity I think in our life or actually moves the needle for us So I think that s a really really cool point Tell me this so you guys you re selling off your portfolio you re working on yourself you re working on your mindset you are developing your own philosophy You said you re learning a language as well 00 17 39 Sterling White Yeah Spanish I can speak it but speaks Spanish I don t want to get too much but it s difficult 00 17 45 Sam Wilson It s difficult when people talk to you Yeah 00 17 47 Sterling White Si 00 17 48 Sam Wilson I caught it I caught it Well you re ahead of me man I can t speak it So I can t And then that s that s really really cool I love the ability and the willingness to keep your mind sharp That s a really big I think piece of the puzzle I guess the last question maybe for you is this You know so we talked about some risks that are out there in the marketplace and you see people overpaying for things Are there other risks that other people are taking on right now that you feel like you ve found a creative way to offset and or avoid altogether 00 18 17 Sterling White I d say is believing that cap rates are going to keep steadily compressing So that s one risk when looking at and analyzing deals let s say right now it s the current properties trading at let s say a five cap instead of underwriting in let s say a three to five a year projection that it s going to be at a four maybe even the three I m just using that for example purposes that likely just keeping at a five five and a half or maybe even a six So that s what I would say is a mistake to avoid 00 18 43 Sam Wilson No I think that s really really great Yeah And who knows Who knows where the cap rates go and who knows the Fed may come out and just keep interest rates where they are They might cut em They might just keep raising em I don t know 00 18 56 Sterling White Who knows But that is the thing As an investor you just have to assess your risk and protect your downside And I see it commonly people not protecting their downside And a quick story is that there was an investor they were buying a property and they were buying the property based upon a corporation signing on to the lease which would be premium rates for their tenants And I asked them well what does the deal look like if the corporation does not sign on cause they didn t get anything on paper And they said I wouldn t buy the deal And that s what I mean it s just not protecting their downside Cause if they buy the deal in that case the corporation doesn t sign on now what are they going to do It s not protecting their downside cause they couldn t ship that to market cause it doesn t make sense 00 19 37 Sam Wilson Yeah Oh man That s yeah that s scary stuff when you hear deals that they re only good deals based upon one major investor or one major source of 00 19 46 Sterling White Everything has to go right basically 00 19 48 Sam Wilson Exactly it s like I mean it is owning a business with one major client It s like the people that oh this is my million-dollar-a-year client And then what do you do when that client goes somewhere else You re toast 00 19 58 Sterling White Exactly yeah 00 19 59 Sam Wilson Man that s wild Sterling one last question for you here is this If you would rewind the tape over your entire investing career what is one thing that you would do differently and why 00 20 09 Sterling White Man and I know you probably get this quite often is if I were to change something that could be I don t know if you watched the movie The Butterfly Effect with Ashton Kucher But basically he kept going back in time to always change one little thing but when he would change that thing it would impact the future heavily because of that one So that s the thing is that but if I were to go back just for the podcast purposes I would say being more patient with myself when it comes to accepting the things that you can t control and not control And when first initially starting out I had to have so much control that in this department this department this and really get into the nuts and bolts and oversee But if you want to quickly scale and then also free up your mind from that cause there s a lot of mental energy that goes into that So that s what I would just tell myself that you don t just learn to let go 00 20 59 Sam Wilson Man I love it Absolutely love it Sterling thank you for taking the time to come on yet again here on the podcast Look forward to you know putting this out and letting the world hear where you guys are in your investing career Certainly love it and love what you guys are doing If our listeners want to get in touch with you or learn more about you what is the best way to do that 00 21 16 Sterling White Yes you could find me at sterlingwhiteofficial com One more time that is sterlingwhiteofficial com And then on YouTube I contribute quite a bit of content on a weekly basis Just type in Sterling white Look for a bald handsome guy I ll come right on up 00 21 29 Sam Wilson Sounds great Sterling Thank you again Have a great rest of your day 00 21 32 Sterling White You too Click here to visit this podcast episode