Meet Ron: From Bay Area Startups to Passive Investing in Real Estate
After a childhood spent in California’s Napa Valley, Ron settled in the Bay Area’s Walnut Creek and entered the tech industry. Like so many professionals who join early-stage startups, Ron did well financially with the equity he had been given at some of his companies. As that equity turned into real dollars in his bank account, he went searching for a way to put that money to work.
Ron discovered real estate, but he had to learn some hard lessons before discovering a way to invest in real estate that delivered strong returns without having to actively participate in the day-to-day management.
Watch Ron’s full story below where he explains the different real estate investment approaches he explored. Interested in learning how to enhance your investment journey while acquiring the greatest asset — time? Sign up for our free course, Your Blueprint to Passive Real Estate Investing.
The Challenges of Active and Semi-Passive Investments
The last 12 years of Ron’s career were spent at Workday, an enterprise management startup that went public in 2012. While Ron did well financially during his tenure, he had reached a point in his career where he was contemplating what life after the daily work grind would look like.
As he started to think about retirement, he began to explore real estate investment options. He started by investing in single-family homes in markets outside of his home state of California. Through this process, he learned two key lessons:
The need to actively manage these investments had a negative effect on his greatest asset — his time
He wanted to grow his investment portfolio faster to capitalize on his returns
Ron’s number one goal for retirement was to gain freedom from the shackles of day-to-day work life by growing and taking back his time. Freedom for Ron meant more time to travel and pursue other passions, such as giving back to his community through volunteer work and charitable donations. Ron quickly learned that building an investment portfolio of single-family homes was not going to help him achieve his goals.
“There were some pain points. Some of those pain points being dealing with property managers, some are good and some are not so good,” Ron said. “Tenants that move out and ransack the place and you have to start over, which sets you back financially. And then maintenance and issues like that.”
In fact, over the past 15 years Ron had purchased ten single-family homes nationwide- one of them outside of Dallas, Texas. In February 2021, Texas suffered from a catastrophic winter storm that left much of the state without power. In homes across the state, frozen pipes burst, as people struggled to stay warm. The below photo shows the major damage Ron’s investment sustained, forcing expensive repair bills and long-term vacancy.
Investing in single-family homes is an active or semi-passive activity, even when you’re working with a management company. The sense of freedom that so many retirees desire is hard to find with this investment strategy.
Ron had big goals, hopes and dreams for his real estate investments, but buying and renting single-family homes one by one wasn’t making enough progress to match his timeline.
“It wasn’t getting me where I wanted to go quickly enough and with less headache,” Ron said. “And I decided it was time to take a fully passive approach to that and not be so invested in single-family rentals.”
Passive Investing Through Real Estate Syndication
In pursuit of truly passive real estate investments, Ron started doing a lot of research. One day, he came across an interview with Madison Investing Co-Founder and CEO Spencer Hilligoss on a popular podcast focused on thought leadership in the real estate industry.
“He was doing an interview for another syndicator, just talking about his own career path and what led him to Madison Investing, and I really liked his vibe,” Ron said. “We had similar stories with a background in tech, and that’s when I decided to take it to another level and talk to him in person and get to know the company better.”
Ron made his first investment with Madison Investing in December 2019. He continued to participate in deals with Madison Investing in the months following. By the summer of 2020, the cash flow he was receiving from his passive investments had completely replaced his Workday paychecks. He’s now invested in more than 10 deals alongside Madison Investing, with many of those deals surpassing initial expectations.
“Three of the syndications that I’ve invested in have already exited; typically it’s a five- to seven-year business plan, and three of them have exited after just two years, which is remarkable,” Ron said. “Time is money, so what’s great about that is you can exit, reinvest that into the next deal with a 1031 exchange and keep going, and that allows you to reach those goals even quicker.”
As Ron continues to explore the freedom of his retirement years, he plans to continue using real estate syndication through Madison Investing as a primary tool for maintaining financial stability.
“Obviously it’s working, and I hope to continue the partnership for many years,” Ron said.
Hear Ron’s story in his own words using the video player below. And sign up for our free course, Your Blueprint for Passive Real Estate Investing, to learn how to achieve financial wealth and grow your greatest asset, your time.
Testimonial disclaimer: Unique experiences and past performances do not guarantee future results. Testimonials herein are unsolicited and may be non-representative of all investors.