239: Should You Invest in Oil and Gas?
Play • 37 min

I am not an oil and gas investor. That’s because I am not incentivized to do so by the tax code. The only time I was really incentivized to do so was before I became a real estate professional. Now with bonus depreciation, every time I invest in real estate, I can deduct the majority of my investment off my yearly income.

That’s the beauty of having the real estate professional designation. Unfortunately, most people don’t qualify and that’s where oil and gas becomes a very attractive option.

You see oil and gas has a unique advantage bestowed on it by tax law. With the current Trump plan, you can typically deduct every penny of your investment against your gross income—even if that’s W2 income.

So, if you are a high W2 wage earner, investing in oil and gas remains one of the few true tax mitigating investments from which you can benefit.  (Disclaimer: I’m not a CPA and not giving you tax advice!)

The last time I invested in oil and gas was when oil prices were near $100/barrel. Those investments didn’t pan out very well. It wasn’t just because of oil prices dropping, it was also because of the venture in which I invested. The general partner was making much of their money up front through fees.

In oil and gas, that model is especially problematic. The risk levels of drilling ventures are high. It’s not like real estate that tends to be a little bit more cushy in terms of margin of error. For a competent real estate operator, It’s typically not that difficult to return investor capital even if a value-add apartment deal goes side-ways.

By contrast, investing in drilling oil burns a significant portion of invested equity in equipment and drilling. If a hole comes up dry, well…there goes your money.

So, if I were an oil and gas investor today, what would I be looking for in an opportunity? Well, first of all, I would look for a business plan that did not rely solely on finding new sources of oil but also acquired working wells and used other strategies to make money.

I would also look for a venture in which the general partner had significant financial skin in the game and a track record of making money for investors to boot. In short, I would be looking for an operation like the one we will be talking about on this week’s episode of Wealth Formula Podcast.

I should also point out that the time for oil and gas investments right now is MUCH better than it was back when I invested in this asset class.

We have seen some crazy oil prices this year. When the pandemic hit, it coincided with very significant geopolitical events as well. While oil prices have recovered somewhat there is now a pent-up demand for oil on the horizon. It may never be as good of a time to invest in oil and gas ever again—especially with alternatives on the way.

To discuss all of these issues and more, this week’s Wealth Formula Podcast features an interview with Thomas Powell, Founder and Senior Managing Partner of Resolute Capital Partners.

So, if you have any interest in investing in oil and gas this year, make sure to listen to the show!

P.S. See attached for the white papers on tax law mentioned in the show!

Thomas J. Powell is a leading financier with extensive experience in investment banking and private equity, commercial banking, mortgage banking, alternative asset management, corporate finance and governance. He has a proven track record in raising private and institutional capital, investment and credit risk analysis, risk mitigation, portfolio management, distressed debt recovery, and deal structure.

Tom’s career began in 1988 in Silicon Valley at Wells Fargo Bank, and was named as the youngest Vice President in the Company’s then 140-year history. Pulling from the experience he gained with Wells Fargo, Tom addressed his entrepreneurial itch by launching ELP Capital, Inc., a mortgage banking investment company headquartered in Reno, NV. During this time, Tom also served as the Senior Managing Director for ELP Capital’s affiliated investment company—ELP Capital Advisors, a Registered Investment Advisor for the ELP Capital Family of Funds, Institutional Investors and qualified individuals.

While running ELP, Tom reconnected with a former Wells Fargo partner to publish an educational program called Six Secrets of Raising Startup Capital. The book and accompanying master class create a fund-raising tool-box for small business owners. Tom and his partner on the project distilled the essential lessons they both learned over the years of raising $2+ billion of start-up capital for their own successful businesses.

Tom is passionate about free enterprise and international trade and has served as both an international guest lecturer and an instructor at Harvard University in the Office of Executive Education. He has been active with Boys and Girls Clubs of America for over 40 years, first as a youth, then as a local board member, a National Trustee and an Executive Committee leader.

Specialties: Simplifying the mysteries of credit risk analysis, distressed debt recovery, and deal structure. Tom understands the practical application of money management in response to risk on Wall Street, Main Street, and beyond.

Most recently, Tom founded and successfully grew a diversified private investment company, Resolute Capital Partners. Specializing in deploying and managing capital across various alternative investments such as commercial real estate and oil & gas, Resolute offers investors access to beyond Wall Street assets.

When not occupied with the rapid growth of Resolute Capital, Tom can be found skiing, either at his hometown-favorite resort, NorthStar, or at any ski destination he can’t resist. An outdoor enthusiast at his core, Tom is an avid cyclist and even moonlights as a professional ski instructor for Vail Resorts.

Shownotes:

  • How will a Biden administration affect oil prices?
  • The future of investing in oil & gas and renewable energy
  • Resolute Capital’s approach to oil & gas investing
  • Real estate investing vs investing in oil & gas: how similar are they?

The post 239: Should You Invest in Oil and Gas? appeared first on Wealth Formula.

Wealth Labs with Garrett Gunderson
Wealth Labs with Garrett Gunderson
Garrett Gunderson
148. How to Buy Cryptocurrency for Beginners (UPDATED Ultimate Guide) / Ask The Money Nerds
Do you have a financial question you'd like one of our Financial Nerds to answer? Submit your questions at https://askthemoneynerds.com and watch for our response on an upcoming episode! In this episode of Ask the Money Nerds, Garrett, Amanda and a new Money Nerd, Logan talk through how to get started in the crypto space. The idea of using cryptocurrencies and Bitcoin in our daily lives is starting to become more commonly discussed across the globe. Is it time for you to consider getting into one of these currencies? And if so, how do you get started? Today, our guest is crypto-expert, Logan Sunday. He gives you the scoop on getting started with crypto and how you can dip your toe into the world of crypto if you are new to the space. *** If you enjoy the podcast, consider leaving a short review on Apple Podcasts/iTunes for us. It takes less than 60 seconds, and it really makes a difference. I also love reading the reviews! Check Out Garrett's Books: Killing Sacred Cows - https://amzn.to/2lMbX1i What Would Billionaires Do - https://wlth.co/yt-garretts-billionaire-book Connect with Garrett: Facebook: https://www.facebook.com/garrettbgunderson Twitter: https://twitter.com/GBGunderson Instagram: https://www.instagram.com/garrettbgunderson LinkedIn: https://www.linkedin.com/in/garrett-gunderson-651359b3/ Website: https://wealthfactory.com/
14 min
The Remote Real Estate Investor
The Remote Real Estate Investor
Roofstock
An Asset Manager’s Take On Real Estate (And Lessons Learned Over The Last 15 Years)
In this episode, we interview Roofstock's Director of Asset Management, Caroline Parker, about her diverse career path and the what she has learned about real estate along the way. --- Transcript Tom: Greetings, and welcome to the remote real estate investor. I'm joined in this interview with, Michael: Michael Albaum. Tom: On this episode, we have Caroline Parker, who is the director of asset management Roofstock. And with Carolina, we're gonna be talking about asset management. What is it, we're also going to spend quite a bit of time going through Caroline's history and her all the different jobs that she's had super interesting working at student housing, working at big asset management companies working at John Burns. So let's get into it. Caroline Parker, welcome to the show. Thank you so much for joining us. Caroline: Nice to be here. Thanks for having me. Tom: So we before we get into the meat of discussion, let's go ahead and talk about your background. We've had john burns on the episode on the show before we've you know, touched on some other places in your history. So why don't you take us back from the beginning? Caroline Okay, great. Well, I have a bit of a unique background. I started in banking for four and a half years in Charlotte, North Carolina. I was an analyst in the investment banking division at Wachovia when it became insolvent. Then I worked through the merger with Wells Fargo, and eventually made my foray into real estate by joining Greystar Real Estate partners at their headquarters in Charleston, South Carolina, they're already became an asset manager and REO portfolio, and eventually moved into a unique role where I got to support the C suite, helping them with projects and being their ears and eyes of the organization and getting to participate in the things like investment committee and executive. Tom: So that was the heat of everything. Right, right in 2009, as a Wachovia got purchased, am I going back in time and thinking of that correctly? Caroline: Yeah. Yeah. The big downturn, so it was a crazy time to be in banking analyst, so I got to watch everything feel relatively less impacted in some of my work senior colleagues. Tom: Awesome. Cool. So you merge into this new position supporting the C suite? Caroline: Yeah. So that's where I really got to learn the housing industry. From a very high level strategic standpoint, I really understand, you know, the different facets of real estate or multifamily world from development and acquisitions to property manage. And so it was a really amazing experience. And I fell in love with, with rental and investment in the housing industry from that point on. So from there, I moved out to California for personal reasons. And I thought, well, how am I going to combine my experience from with greystar Real Estate partners and banking, I thought, Hey, I'll go into multifamily capital. So from there, I was helping underwrite loans, multi, like from Fannie and Freddie to on balance sheet loans. And I really learned how to pick out outliers, how to ask critical questions about you know, asset performance, but what I really wanted to know and what's really driving those numbers, you know, how to, how do you really ask critical questions? And how do you really ascertain what is a good investment and what not. So from there, I knew that I needed to go back to the owner operator side. So I decided to join the Irvine company and their apartments division, and I joined their new asset management team, they hired a whole new team of people to come in and really dive into their database and kind of change the way that division with making decisions truly using data collectively across all the cross functional silos and the division. So that was a really exciting experience where I really got my arms around operation, and how do those decisions each individual decision made on site? How does it really change the financial performance of the asset? So we started from the ground up and really analyzing data quality, putting in controls, and then from there creating new tools so that our counterparts can help make district strategic decision. Michael: That is so great. Tom: To paraphrase a little is you within that multifamily team, you basically were looking at all the data coming in from operations, analyzing that data and going back to them saying like, Hey, we're spending most of our money on XYZ, we should be doing this because it's is that it's sort of a rough synthesis of that role or filling in whatever gaps or whatever place I'm missing, Caroline: I would say it absolutely includes looking at where we're spending the money most frequently, but also a strategic decision that happened on site from pricing. You were helping create an in house proprietary pricing model akin to other multifamily operators are using but but based on the airline model, where you're constantly analyzing supply and demand. The unique aspect to the Irvine company is they have a highly concentrated high quality portfolio. So to use an out of the box solution would be cannibalistic. And you would incrementally like drive prices up or down depending upon you know what your competitors are in your market which are all your property. So we were building one in house for example, or we were helping team make strategic decisions on allowing people to stay longer and their leave for asking them to move out early? Or maybe how can we make a turn more efficient so that we minimize the number of days that the property or the unit is vacant, things like that anything that can impact financial performance, which is everything we were getting under the hood on and having an opinion. Michael: Awesome. So as a multifamily guy myself, I'm curious to know, what were some of the biggest drivers of the financial performance that you were seeing? Caroline: I would say by and large, occupancy is the biggest driver of financial performance, you could raise your rent all day long. But if it takes you a home, but to to get a new tenant, then you essentially washed any returns that you would have gained from the incremental increase. So we were always scrutinizing How can we save a day here? How can we save a day there? Is it marketing a property before it's actually vacant and ready to be leased? Or is it using different channels? Is that targeting different people? You know, we're always just looking for ways to get that incremental dig occupancy, just one extra day of revenue. Michael: Yeah, makes total sense. As a total aside, the last company I worked for was a commercial property insurance we used to insure the Irvine company. Caroline: Oh, cool. And so I visited tons of their campuses up in the northern California area, and I was always blown away. It's like a resort. Like all their properties, like resort style living, Caroline: They are really beautiful. And Irvine company is very unique in the way that they care desperately about the aesthetic properties, Tom: Probably funny you in a position thinking of like, wow, how do we optimize the financials, when we're building a four seasons that you can just nod you don't have to? Okay, so you worked at the Irvine company, building those muscles and optimizing, you know, financial properties. What's next after the Irvine company? Caroline: Then after the Irvine company, I did join john Byrne's real estate consulting, I got to work very closely with john. And it was an amazing opportunity to get a macroeconomic perspective of the housing industry and all the different players and what keeps them up at night. So, you know, coming from being an asset manager, the Irvine company that's very in the weeds on day to day operations and execution, how that drives financial performance to going to like a very, very high level overview of, you know, demographic shifts and supply and demand. And, you know, where are people building? Where's their shortage…
32 min
Self Storage Income
Self Storage Income
AJ Osborne
2020 Year End Storage Industry Review and What We Expect for 2021 with John Lindsey
Welcome back everybody to the Self Storage Income podcast, I’m your host AJ Osborne. As we all know, this past 2020 year was a little crazy to say the least. Socially, politically, economically… it was the perfect storm. But it wasn’t all doom and gloom and that certainly wasn’t the case for the storage industry. I’m super excited about today’s episode because we have the one and only John Lindsey on the podcast to share his incredible insights into what storage did in 2020 and what storage is expecting to see in 2021. Who is John Lindsey? John is a great friend of mine who has some of the most extensive storage experience of anyone I know. John came from an ownership and development side of storage. John’s father built and owned and operated storage facilities, and as any great dad would, put John to work helping to build these incredible assets. Ultimately John decided that he wasn’t super excited about pouring concrete and building the storage facilities. However, he really enjoyed the storage industry, the potential there was to help others in the space, and the incredible business opportunities there were in owning and operating a storage business. That said, John launched his own brokerage company called the Lindsey Self Storage Group in 2012. From development, to the brokerage side and financing, to owning and operating, John has done it all, and he’s done it all over the world. It’d be an understatement to say that John is an amazing source for self storage industry insights. Which again, is why I’m so excited to have him on the podcast again today. We’re going to dive into 2020, what happened, how storage performed, what we saw and what we see happening in storage for 2021. We talk about the billions of dollars being poured into the industry from some of the largest investors and private equity companies in the world. We talk trends that we’re seeing, the incredible financing and buying opportunities there are right now, and more. All said and done, storage has the recipe for success now and for years to come. But if you plan on getting in, you better do it soon. Absolutely get those note books out, listen to this episode multiple times if you have to, do what ever you need to soak up everything in this episode. Thanks for listening everybody,AJ Get in touch with John at Lindsey Self Storage Group website at: https://lindseyselfstoragegroup.com/ Be sure to go to Selfstorageincome.com to get your copy of my Self Storage Playbook. This step by step playbook walks you through from start to finish - how to identify a self storage market, how to perform due diligence, how to contact a current owner, and ultimately how to land a deal and purchase a storage facility. You can also find the Self Storage Income Podcast on: * iTunes * Spotify * Stitcher The Self Storage Income Podcast is Sponsored by: Janus International - https://www.janusintl.com/ Store Local - https://www.selfstorage.coop/aws/SL/pt/sp/home_page Live Oak Bank - liveoakbank.com/incomepodcast
39 min
Master Passive Income Real Estate Investing in Rental Property
Master Passive Income Real Estate Investing in Rental Property
Dustin Heiner
Investor Coaching: Get Out Of Debt The Smart, Easy, And Fast Way
It doesn't have to take you years to get out of credit card debt. Here is the strategy I used to get out of debt fast and THEN invested in real estate for passive income. Get out of debt and use those credit cards to your benefit. The debt snowball is the best way to get out of debt fast. Get the Free Real Estate Investing Course: https://www.masterpassiveincome.com/freecoursep Join the Real Estate Wealth Builders Investor Membership https://www.masterpassiveincome.com/buildersp My Website: https://masterpassiveincome.com // WHAT TO WATCH NEXT How to Become Successfully Unemployed: https://youtu.be/wx5Ke9KVs58 Get Money For Investing in Real Estate: https://youtu.be/u4IY5UMDkrI How to Start Investing In Real Estate: https://youtu.be/fJVOeSgXZRQ How to Analyze a Real Estate Investing Deal in 5 Seconds: https://youtu.be/SqA1HcAW4EI How to Set Up Your LLC for Your Business: https://youtu.be/B9RzLkAZI9s How to Use Owner Financing to Make Loads of Money: https://youtu.be/qAOpCOWvj6Q //BEST REAL ESTATE INVESTING RESOURCE LINKS Find Off Market Properties: https://masterpassiveincome.com/propertysearch Get Business Funding https://masterpassiveincome.com/fundandgrow Great High Interest Savings Account: https://masterpassiveincome.com/cit Accurate Rental Rates: https://masterpassiveincome.com/rentometer Self Directed IRA for Real Estate Investing: https://masterpassiveincome.com/rocketdollar Learn more about Dustin and find resources to build an automatic real estate investing business: https://masterpassiveincome.com/ Join our free private Facebook group! https://masterpassiveincome.com/group NOTE: This description may contains affiliate links to products we enjoy using ourselves. Should you choose to use these links, this channel may earn affiliate commissions at no additional cost to you. We appreciate your support!
8 min
Real Estate & Financial Independence Podcast
Real Estate & Financial Independence Podcast
Chad Coach Carson
#148: The Mad Fientist on Pursuing Your Dreams After FI
Episode #148 - Brandon Ganch (aka the Mad Fientist) saved his money and left a career as a computer programmer in his early 30s to pursue a life of early retirement. In this interview with Coach, he shares some of the highs and lows of his journey (including disillusionment & depression). He also shares some tips on how he would have done things differently and how to build a life around learning and skill development, which currently means pursuing his dream of becoming a musician (he's even releasing an album! see link below). Links from the Mad Fientist: Pre-order the album - https://www.madfientist.com/album Mad Fientist's investing portfolio - https://www.madfientist.com/my-portfolio/ Ultalearning podcast - https://www.madfientist.com/scott-young-interview/ Emotional ups & downs of FI journey - https://www.madfientist.com/happiness-through-subtraction/ Withdrawal rate article - https://www.madfientist.com/safe-withdrawal-rate/ 💲RENTAL PROPERTY ANALYSIS🏘️ My online course teaches EXACTLY how I run the numbers and confidently analyze rental properties that produce cash flow and build wealth (includes my spreadsheet):https://www.coachcarson.com/RPA __________ 🎧SUBSCRIBE to the podcast for more episodes about how to achieve financial independence and do what matters using real estate investing! https://coachcarson.com/podcast ---------------- ▶️WATCH my YouTube channel - Coach Carson TV - for tutorials, tips, strategies, and interviews https://www.youtube.com/user/CoachChadCarson?sub_confirmation=1 ---------------- 📋 GET MY FREE REAL ESTATE INVESTOR TOOLKIT https://coachcarson.com/reitoolkit ---------------- FOLLOW ME ON INSTAGRAM 📸 https://www.instagram.com/coachcarson1/ ---------------- READ MY BOOK ON RETIRING EARLY 📚 https://www.coachcarson.com/retirementbook ---------------- 👋👋 SAY HI ON SOCIAL https://www.facebook.com/coachchadcarson/ https://twitter.com/CoachChadCarson
1 hr 9 min
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