• Spencer

Weiss Advice Podcast: Don’t Quit Your Day Job Just Yet with Spencer Hilligoss




Listen to my interview with Yonah Weiss (aka the cost seg king) and learn about why I quit my day job to pursue real estate investing full time.


Listen to the full episode on Spotify


Transcription:

Yonah: [00:01:08] Your network is your net worth. Come listen to some of the most successful people I know. Sure. Invaluable knowledge, stories and advice in real estate, business and beyond. This is wise advice. Whether you want to take your business or personal life to the next level, look no further. Welcome back to Wise Advice. I am your host, Yonah Weiss, and it is a pleasure. I'm so glad you took the time to join us today. I'm with someone very special, Spencer Hilligoss out in San Francisco. What's going on, Spencer?


Spencer: [00:01:46] A really an honor to be here. And I think it's a great opportunity for you and I to reconnect, but also just kind of talk about everything under the sun that sounds interesting to us right now. So really a pleasure.


Yonah: [00:01:56] Absolutely. You know, it's a new year. There's a lot going on. A lot of changes happened in the past year. And I'm sure maybe we'll talk about some of the changes that that you guys have gone through in the past year. But it's it's always good to reconnect with people. And this is a great platform for you listeners who want to have a little context. Who's this guy that we're reconnecting with? Yeah. So Spencer is the co-founder with his wife, Jennifer of Madison Investing. So it's a real estate investment company. Spencer had a background in startups and managing sales teams and development of companies Lending Home. You may have heard of pretty big company that's out there. He worked with them for quite a while and he is really taking on the real estate investing space with a bang. I mean, I think it's pretty impressive over the past couple of years what you've been able to accomplish. Maybe we'll talk about your own accolades for a minute there. But, yeah, tell us a little more about what what have you accomplished in the past, the past year during this pandemic?


Spencer: [00:02:57] Yeah, and thanks so much for the T-up. You know, so I think great background on me. I mean, in the end, I'm just a regular dude like so many of the other folks out there. But at the end, we are now co-sponsored in about, let's see, about eight, eight thousand units of commercial real estate, about six hundred million in transaction volume. We started off as residential real estate investors ourselves, you know, just to working executive professionals in Silicon Valley and based out here in the Bay Area. My co-founder and wife, Jennifer, she was more heavy on the marketing side. I was more heavy on the operations and kind of sales leadership side across five companies, three of which were unicorns. You know, they were worth over a billion bucks. You know, that was a heck of a journey. And so much of the real estate circles, you hear folks say that, that they're running away from their day job, that that just wasn't my experience. You know, I actually really enjoyed I enjoyed my my career. There were times of absolute stress, for sure, you know, including like a kind of a pivotal moment when I didn't get to see my my infant son for at night after work for like a period of two weeks when I was working 80 to 100 hours a week in an office. And I realized years ago something had to change. And we were really following the broken Silicon Valley health plan, as it were, which is kind of how I call it. And this is kind of brief, but I think it's helpful couching for where my head's up and kind of how we think about things these days.


Spencer: [00:04:25] You know, so many folks are making outstanding income day job coming in, like folks in our network, you know, working at Facebook or Netflix or Salesforce, all of that stuff, these big tech companies. But they don't really have like an exit strategy from that career. And all of their income and financial stability is tied to that income from those jobs. And for the rest of the folks that are working at small companies, they're waiting for that big Google Facebook exit where they're going to suddenly hit the the Silicon Valley lottery. And for most folks, that's just not going to happen. So we were following a similar playbook, candidly, for many years. And eventually we realized real estate offered cash flow. It's a wonderful thing called cash flow. So we started investing in residential real estate properties. Kind of realized that was more hands on than we wanted to do. You want to be fully passive? And eventually and and so we started doing LP Limited Partner Investments and syndications. And now full time I retired, quote unquote, retired from my tech career about coming up on a year and a half ago to do to run our company full time. Madisen investing. And that's just been an absolute joy. I mean, it's still a ton of work, but it's work that I gladly wake up and do every day to be a more present dad and husband and be able to help other investors avoid walking that path for the rest of their lives. But despite working full time and chasing the Silicon Valley lottery. So as long I'm going to answer no,


Yonah: [00:05:48] But that's what that's really what it's all about. I mean, so few people and I think you you kind of touched on that so many people will even get that realization that they're just on that hamster wheel and go around and think that's like you said, there's no exit strategy strategy. People aren't thinking about the light at the end of the tunnel. I mean, sure, probably these people in Silicon Valley have stock options, you know, and they have all kinds of things like that that they're thinking, well, you know, they're going to be worth X amount or maybe even worth now X amount. What can I do with that? But again, that's still you're going to get taxed very heavily on a lot of that stuff, including your your high paying income. What you know, what's the game plan, and I think people don't think about the game plan and as you said yourself, what's going to be, you know, how am I going to raise my kids? Like I want to spend more time with them? And if the job is not allowing for that will change it and do something about that, be in control of your own life.


Spencer: [00:06:49] That's right, and frankly, I think the one of the things that's a little bit prickly and unapproachable of the real estate space in particular, not not to go straight into real estate is just the fact that, like I mean, I even grew up in a real estate household. I've technically been in real estate, quote unquote, since the age of six. And I still didn't get it. I like my dad was a broker for 30 years in residential real estate. I was literally working in his business doing stuff like open houses when I was a teenager. But there's such a broad world of real estate. Right. And you and I have talked about this in the past. There's so many flavors of what that means. And so I didn't understand investing in things like real estate. I understood the broker side, like the transaction side only in residential. I didn't understand you could buy pieces of an apartment building, you know, and still get cash flow from that as an example. So it's just remarkable because I went that 13 years going cool. We are we have a great plan. And I think most people, to your point, kind of sleepwalk through it and they don't realize you have other options and you don't have to necessarily go quit your day job. And frankly, I don't think most people should. But if you want to go negative, as it were, and eventually decide that you want to go full time and do something similar to what I've done, it is certainly achievable. You do have to work extraordinarily hard to get there and you do it on nights and weekends. So passive is where most people end up getting out is like the best strategy for them. And that's what we help people do these days. We are investors.


Yonah: [00:08:16] And that's how you started. I mean, just going in, like you said, like investing. I mean, you had some residential but heavily in the syndication in this field, started off investing passively in syndications. Is that something, you know, moving having moved into the full time in doing this and running Madison Investing is is something you feel like is a little bit saturated in terms of people, all these mentorship programs and all these coaching things that a lot of people coming into the space trying to do what you're doing now.


Spencer: [00:08:45] You know, it's a topic that I'm going to be very thoughtful in terms of how I frame this. So, yes, this the is the quick and dirty answer. Yes. I think that it's a very appealing narrative, right? I mean, who doesn't find it exciting and like, frankly, kind of it's like a sexy sounding narrative, right? You're like the you know, that's why it's put in on the marketing collateral. It's out there for every single firm that's somehow involved in cash flowing. Anything is like quit, quit your day job, quit the rat race, whatever. The challenge with that is, most of that literature, most of those programs are tailored to like 99 percent of them. I'm making that set up, you know, so I estimate don't quote me on that one. But my observation has been and I think this is probably pretty close to reality, the vast majority are centered around going and becoming the asset manager of a real estate piece of property. That and that is that is a fully different career. Like it is a I mean, you're talking about managing construction projects. You're talking about fixing utilities problems. You're talking about I mean, frankly, like looking at financials that you may not inherently find interesting and want to wake up and do every day. So that's pretty darn confusing for most people.


Spencer: [00:10:03] You know, you can go on a website, listen to a couple of dozen podcasts or in my case, before I got way into this four hundred plus podcast, I don't think anyone needs to do that much. Just listen to you and you'll be good. But but but all that to say, like it's a whole different career. And it's what's fascinating is I think a lot of that saturation that you see out there comes from a place of people thinking it's a hobby. And that's when it gets a little dicey, is people realizing they sign themselves up for more than they bargained for. And the last comment here, I just want to mention this, because it seems to relate it's and seems to resonate for folks want to share this. Sure. I started using the term boomerang investor, and I've brought this up a couple of times on LinkedIn, which I wouldn't be in any way, shape or form using the way I do now. Without your guidance and help. By the way, I have to give you an awful credit for being one of the guys that got me initially into doing a daily post. And I've been doing that for almost a year and a half. So thank you and go follow you on if you don't follow me. But the boomerang investor said simply is a person who goes out, gets the bug of real estate, hits up places like biggerpockets.com which is an excellent website and a great resource Devourers podcast, studies read tons of books, but then looks at the fact that maybe they can get more zeros on their returns. And they're probably really smart, mostly successful folks. And careers are very smart. So they're used to saying, well, I can go do it. Why would I let someone else do something that I can do better? And I can I can make more money from it. So that they go off and spend two years to three years. Literally, this is based on actual people who invest with us passively now. They go off and try and do that themselves. They spend tens to hundreds of thousands of dollars. They burn thousands of hours of time. They rack up some pretty substantial frustration and then they boomerang back and call. Maybe it's me, maybe it's someone else. They may they find someone else who can help them invest passively. And they kind of realize, well, gee, I probably should have bought through. Do I actually enjoy what I'm doing in this new career, you know, a couple of years later. So that's the boomerang investor based on real people that I work with now.


Yonah: [00:12:08] And I'll be honest, I mean that it's one of the struggles that I personally struggle with because, you know, personally because I really want to be more involved in real estate, have been involved a little bit in certain aspects of it. But I really love what I do. And so if I can be involved. But I also have that, you know, I think it's it's it's a fair kind of judgment call that I would like to be more actively involved because, yes, I can make more money doing that. And to you know, I trust myself a lot more than I trust other people. And that will take a long time to do the due diligence to actually find those people that I want to put my hard earned money with. So I'm struggling with that myself. I really want to be much more involved, but I don't really like or I have an experience and I know what I'm good at and I know what I really would like to do. It's not managing assets and it's not doing financial underwriting. Right. And it's definitely not dealing with tenants. But that doesn't come up so much with, you know, when you have property management, you're dealing with larger commercial or multifamily properties. But so that being said, this is a real struggle a lot of people deal with. And I think what you're saying is so fascinating, you don't have to do that. Like there are so many options out there. And I don't think that you have to, like, do everything yourself. Don't think you have to throw out, you know, quit your job and just jump in and be full time in real estate to get the maximum benefit out of it.


Spencer: [00:13:42] There's so many different things I want to bite in on there man, as well, because I hope the audience that listens in here is what Yonah is saying and understands the context and the person that it's coming from. This is a person who literally specializes. A very critical, important part of commercial real estate transactions, meaning cost segregation, and I'm not trying to pitch you on a services because I think he is extremely competent. But I will just say, even having the knowledge and the skills and experience he does, he still doesn't necessarily know if he wants to go all in on asset management. And so think about that. I mean, if you're working in a day job and you're a marketer or you are a product software developer, I sure hope you're sitting there mapping out your day before you decide to say, I want to go and manage a two hundred unit asset, meaning I mean, it's a sort of an apartment building. And so, like, it's it's something you should reflect on. You should not go just drop fifty thousand dollars on a coaching program thinking this you're going to wake up the next day and suddenly turn into Grant Cardone.


Spencer: [00:14:42] It's it's a lifestyle choice as well. And so I think that lifestyle choice for me was an easy one because I'm based in the Bay Area, which we talked about already. And I just want to mention, like, I'm not planning on moving. I love the markets we invest in. You know, we focus in places like Texas, the Carolinas, Colorado, Idaho. Those are our markets right now. And we focus on growth markets that are recession resilient. We help passive investors go. There isn't a pitch. I'm just sharing that because I love to visit them. I don't plan on living there. I need people who are there, competent boots on the ground, experience people. I trust them after I get the heck out of them. And that's what that's how we hope. One of the one of the ways we help our investors. And so there's just so many ways to get involved. And you don't have to go jump in into a very saturated, already saturated space and carve out your name to be the next the next Sam Zell or Grant Cardone.


Yonah: [00:15:33] But with that being said, there is still a lot of room because even if you're are a marketing person, you may have something to bring to the table on a management team that you partner with. You definitely don't necessarily think about doing everything yourself, but finding the right partners like you've done is really something that is much more readily available. And it's a much easier barrier to break totally.


Spencer: [00:16:05] And I think that I appreciate you bringing it back around because anyone that knows me on a personal level, I think understands like I've got to be one of the most encouraging, positive, optimistic people you're going to interact with. And so I'm also a guy who coached people for thirteen years, which is why I don't personally offer and I don't plan on offering any type of coaching program. That was a chapter of my life that is closed. Informally, I'm always happy to help where I can, and I'm going to be very encouraging. But a great coach doesn't sit there and sell you false dreams. A great coach tells you exactly where you stand and how you can get to the next step if you're committed to walking the step. And so I what you just said is absolutely the case. There's abundant, the world is abundant. There's truly plenty to go around. But it's only going to be available for the people to treat their job like it, like a business and not a hobby. And and that's the kind of the key difference, right?


Yonah: [00:16:51] Yeah, 100 percent. That's awesome. Now there is what's to be said about investing passively as a hobby or as a side hustle and trolling, you know, an extra stream of revenue from this apartment building or that self-storage property or this commercial investment and bringing more wealth to you and building that by just investing passively, which again, as you mentioned before, a lot of people don't know about that. You know, people are torn about their 401k's and and the stock market. And I don't even want to open that up. I'm just saying.


Spencer: [00:17:26] But I mean, I was like, let's see if we can get through this without mentioning a particular stock. I think I think we can do it. I will just mention briefly that, like, I haven't looked at a single stock account value in the past two weeks, which I think I know, because we want to make evergreen content here. So I'll just say I love rational reason and frankly, like I even bought 2019, I am thankful at this moment I bought a pretty good amount of silver going on. So for what it's worth, I think thoughtful, consistent execution on a good strategy can make sense for a person is always going to be a win regardless of the context of the of the investing landscape. And so I just wanted to mention briefly to that. I think as people are trying to carve their own journeys and figure out their own plan, the thing that that was a key takeaway for me, I wish I had understood earlier in my working career. And it just breaks in my own financial literacy. I mean, I was dropping, you know, hundreds of thousands of dollars into a four one case over a decade and couldn't use any of that to impact my lifestyle. Now, if you get a company match, of course, had every time I was offered a company match and use that company. So I'm not not like a.. I'm saying you can make decisions to better stabilize your family in your household. And I'm not a financial adviser. This is not advice, despite the fact this is why I will just say that, like having only active income from your day job at a time when we're in this really, truly uncharted one hundred year event, global pandemics.


Spencer: [00:18:56] Economy scenario, that that is how I define risk. It is a number of income streams going into a household and I watched my dad, the active broker guy for 30 years, build this incredibly high flying career like we were. We did so great for many years ago, the top presidential brokers in the country in the 90s. And then we had some incredibly challenging personal headwinds. I lost my brother to cancer when he was basically a kid. It was many years ago. And then my parents got divorced, which is pretty common in most cases, and then his business crumbled and all of that stuff. Our income had one stream and it went down a lot, and when you see that happen, you realize you can't you can't. If you build your household that way, you're on very shaky, thin ice. So how can you go out and reshape your understanding as an investor just to get some more income streams, whether it's active, cool, passive, cool is just just diversify a little bit, build a side hustle. You know, there's no wrong way to go do this, guys. I would just say, like, I wish someone had kind of grabbed me by the shoulders figuratively and shook me to realize, like, you can do this really any time you want. You just have to commit to a path and do it.


Yonah: [00:20:02] And for anyone listening, this is like one, you know, so many side. You know, I've literally seen, you know, blogs on bigger pockets and there's a whole podcast in there and YouTube videos, lists and lists and lists. OK, guys, so all you have to do is after you finish this podcast, go to Google and type inside Hustle's or whatever, and I'm sure you'll find one thing at least on there that can be even a small little commitment that can produce another revenue. And really anyone can do that. Yeah. Let me ask you right now in your career as as you basically started over, I mean, like you said, you both had great careers and you've started over kind of. So what's your biggest challenge right now in terms of building this that you're faced with?


Spencer: [00:20:54] Gosh, this is going to give to two very brief answers, one is personal, one is professional. I think the hardest part of winning in life is realizing once you've won and you can you can downshift and appreciate what you've got. Now, that is a timeless question, I doubt a single human being out there has ever solved meaning like it's like sitting there in a moment of stillness, can you achieve stillness? Like, can you achieve the point where you have enough money in the bank? You've gotten to the point where you're doing OK. Your family is OK. I don't need a yacht. You know, I really don't need a mansion. I do want to be a great dad, a present husband. That's why I'm doing this in the first place. I don't want an empire. I don't want to do an account. We work in a lot of units. Doesn't matter to me that much. What matters to me is being the guy who can drop my kids off to school, being available to read books to them at night and playing a lot of music and guitar. That's what all the statues have to do with the metal band stuff. And so that that's a personal one is like. But once you get there, can you downshift and just turn off your email and truly be present? Not number two would be on a professional front. The more success you achieve, the more options you typically have, saying no is easily the hardest challenge in professional success because you're going to see more options. And just because you're presented with options daily, that doesn't mean you should be saying yes to any of them. And it's not a personal thing. It's not about likeability with other people. It has to do with, you know, what you're going for. Goal was in. Are you going to be present in that moment to say no in service of being available for the thing you should say yes to? And so that's got to be it. Sorry if that was long winded. That was great. That was awesome.


Yonah: [00:22:39] Let's jump right into the final four here. Spencer, first question we ask our guests is, what is the worst job that you've ever had?


Spencer: [00:22:46] A man part time job I took in college. I signed up to an author I was going to school was a lot boulder go. But she had a 400 page manuscript she had printed out and then the computer crashed. She needed someone to transcribe her novel. This novel was about cowboys and aliens and a little bit of spirituality mixed in. She wanted an exact type of it and no correction to spelling, which was actually a relatively tall order. And so that that was the most awful job I've ever take. And I thought I would whip it out really fast. And it was not easy at all. It was awful. That was it.


Yonah: [00:23:21] That's that sounds horrible. Yeah, that's so bad. OK, second question for you is, what is the book that you've read? Obviously not that novel, but what's one that's giving you a paradigm shift?


Spencer: [00:23:35] You know, this is right on the money for the same theme about saying No Essentialism Essentialism by Greg McKeown. I think I've listened to it now three times. And big audio book is just hard to find. Time to sit down and read it, because it all tells you it tells you actual ways to say no compassionately in service of staying laser focused on what your actual goals that you're trying to achieve. And so I think that's honestly where most people fall off, is the social grace and the social awkwardness that they don't want to absorb is why they they just say, OK, sure, I'll have that coffee with you. Despite the fact it's completely opposite of what I need to get done right now.


Yonah: [00:24:12] Right now, I'm we're all guilty of that to some extent or another. But that's definitely that's on my list already because it has been mentioned before on this podcast. And just kind of the great thing about having this is I have a huge reading list, everyone on this side, but definitely we'll get to that one for sure. So a third question for you. What's a skill or talent that you'd like to learn?


Spencer: [00:24:37] Oh, gosh, this is going to be super duper nerdy, but I do think that the so I mentioned I play a lot of music supplement like guitar. I would like to be able to record my own and produce my own music at some point. You know, it's not going to be an overnight thing, but that's a little bit.


Yonah: [00:24:55] Oh, very cool. Awesome. There you go. That's a great challenge to make. Fourth and final question. What does success mean to you?


Spencer: [00:25:05] Success means to me optionality and being able to give back to others, you know, I think truly that it's not about how much stuff you have. As corny as this might sound for folks like this is what I actually believe, I would be blissful if I can have geographical autonomy and choice to be able to live abroad with our boys who are too young for that right now. But like 10 years from now, we can live in another country for a year. And that's actually both logistically and economically achievable. And health, you know, our health is good. Knock on wood and steel. Is that that success to me? And then assuming that that we've earned that that that right. Also being able to give back consistently, regularly and meaningfully to others.


Yonah: [00:25:53] Yeah. And, you know, there are a lot of options out there. Obviously there are tons of charities and everything like that. But that's that's so important when people make that as a part of their of their business plan, you know, how are we giving back? And there's lots of impact investing in these types of things out there as well. But there's something very profound about that. Completely agree with. Spencer, where can our listeners find you or reach out to you if they choose to?


Spencer: [00:26:20] Yeah, probably to places, you know, so we just launched a brand new website beginning of the year in Medicine Investing Dotcom. And so check us out there, folks, and create a profile which reads It's not obligation thing. And then on LinkedIn, of course, I mentioned earlier, I really want to just hit this hit home on this point to it. Like I used LinkedIn as a as a tool, like most people do traditionally is like a job recruiting thing for a decade. But then in the past couple of years, I kind of opened my eyes to what it could be an incredibly powerful thing. And that would not have happened without without without you. So, yeah, yeah. It's just a fact. And I'm like like it was very eye opening and educational. So please, can I come in, connect with me and then follow my Internet rantings. Sometimes they might be a little bit contrarian for your liking, but in which case the unfollow button works as well. So but please do reach out, I promise.


Yonah: [00:27:11] And I love the contrarian of you and I appreciate the kind words and appreciate all the content you put out there. It really is something different. A lot of people aren't aren't going down the route that, you know, the path that that you put out there. So finding your own path is always the best way to go. And and thank you so much again for your time. Thanks for making the time for us and sharing this conversation with me today.


Spencer: [00:27:34] Yeah, it's just fun. Thank you so much. And I'm honored.


Yonah: [00:27:37] Awesome. Well, and to our listeners, remember, the best advice comes only when you ask. Real quick, I have one question for you. Did you like this episode? If you did, I want to ask you a huge favor. The biggest thing that helps this podcast grow and it will spread this message to the whole world is that if you review a reading and subscribe to the podcast, what that does is it basically tells the platforms that this hotkeys out on is that you like my stuff and I'm doing some right. So take a few seconds out of your day in the subscribe button. Leave a reading review. I would be extremely grateful. Also, I want to hear from you guys, so I want to give the feedback. If I have any questions for future episodes, please find me a LinkedIn social media connection. Request Yoona Weiss, I'd love to hear from you.


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