Better Returns: Invest Like a Pro

Inside Tips from a Very Prolific Real Estate Investor with Shaughn Daughtery

March 28, 2023 Shaughn Daugherty Episode 19
Better Returns: Invest Like a Pro
Inside Tips from a Very Prolific Real Estate Investor with Shaughn Daughtery
Show Notes Transcript

Join us as we hear from Shaughn Daughtery — a successful and very prolific real estate investor who went from single-family home rentals to investing in 17 apartment syndications. He focuses on doing due diligence on the markets, deals, and most importantly, the people involved. Learn about his investment strategy, how he evaluates potential investments, and his predictions for the market in 2023. Whether you're a seasoned investor or just starting, this episode is a must-listen for anyone interested in real estate investing.


  • Shaughn initially invested in single-family homes before exploring multi-family syndications.
  • His investment approach is to keep it simple by drilling down on the market, deal and team. 
  • When investing in apartments, use a hybrid strategy that involves having cash flow and reserves, while also doing value-add plays to increase income.
  • Shaughn worked in the insurance industry and has used his insurance background to evaluate potential investments.
  • Real estate investors are currently looking for opportunities in communities with diverse job opportunities and a strong market for business.
  • Shaughn encourages new investors to take action and invest, emphasizing the importance of continuing to invest in the long term.

“It takes your money out of that roller coaster ride and puts it into something that's a little more stable.”

“I want to have a good market, a good area and a solid complex that's serving the community.”

Shaughn Daugherty is a prolific real estate investor. He started investing in single-family homes and then discovered passively investing in real estate syndications. He’s now invested in 17 syndications with many different operators and markets throughout the U.S. He formed Daugherty Capital to share knowledge and opportunities for predictable, sustainable streams of passive income through strategic multifamily investments to help others achieve financial freedom. At Daugherty Capital, Shaughn oversees all capital-raising efforts, acquisitions and investor relations.


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Welcome to better returns where you will learn how to escape the volatility of the stock market by passively investing in real estate like a pro 90 of millionaires earned and maintain their wealth by investing in real estate we will share real-life examples from Savvy investors so you can do the same the show is for educational purposes only should not be considered legal tax or investment advice he once made a wooden Bread Box and high school shop class your host and my dad Matt Hansen welcome back to better returns uh I've got one of my friends here Sean Doherty he's a prolific real estate investor he's got a great story here I'm excited to hear more about it he started investing in single-family homes like many of us then he discovered passively investing in real estate syndications large apartment complexes he is invested in over 17 syndications with many different operators and many different markets throughout the United States so now he's recently formed Doherty Capital to share his knowledge and opportunities for predictable sustainable streams of passive income through strategic multi-family investing and he's really looking out to help other people gain Financial Freedom I love that about you Sean and Doherty Capital Sean oversees the capital raising efforts acquisition and investor relations so welcome to the show glad to have you oh thanks for having me Matt I'm enjoyed uh getting to know you more and excited to be on the show today yes yes you are one of the most prolific investors that I know and I think it's so valuable I did probably four or five passive investments before I started to be a general partner so you're really going to be good as you transition into the the general partner side of it so tell us how you got started in real estate what's your origin story yeah so um it was about 2016 started doing uh single family homes but uh before that uh I fell into I guess the ability best into real estate um with my mom and grandparents passing away um we uh like an inheritance and uh I spent quite a bit of time uh researching reading books listening to podcasts um and wanted to get started and kind of real estate investing I felt like that was the best Avenue for us to be able to uh invest and have our money um my wife and I did yeah two single family homes uh kind of town I grew up in and um I started to listen more about um syndications and that wasn't even really around at the time and sweet uh it was like my W-2 job allowed me to like listen to many podcasts I was on the road for maybe eight to ten hours a week so um I was listening to as much podcast as I could um so I got to the point I was like want to jump into single family rent rentals and then take a dip into the syndication so I got started in that in 2017 and I've liked that so much that we've done now 17 deals uh since then right that's really really good so what was the contrast between you know the single family how did you discover multi-family syndications and all this like mine was like on a pot I heard a podcast like seven years ago so how did you run across it what what do you remember like oh when the light bulb went off oh this is another thing I could do too well I've always been fascinated by kind of the real estates I had you know friends growing up they were apartment owners and they always kind of did their own with families and then um it was really podcasts like yourself just listening to that um about this kind of the syndication models to be able to like group you know knowledge group and money together and then be able to package into uh a deal and um it was a very foreign concept uh you know the word syndication and you know doing this all together um but it was a great analogy I listened to in a podcast is you know you're when you're a part of a deal you're like in an airplane you kind of get a business deal coin it's you have a destination at the end uh and you have people leading the charge they're the pilots you're in the back of the plane so you're a part of it you're along for the journey uh you hopefully it'll get uh good reporting along the way uh and then at the end of the destination you should hopefully you know double your money in about a five to seven year period that was what the kind of the pitch was uh but it took a lot of time for me to like really understand it and it's just I want to really do my due diligence on kind of the markets uh the deals and most importantly kind of knowing that who the people were because that's kind of who you're relying on making sure that they're doing what they say they're going to do exactly you're investing in the individual just as much as the deal itself so and that's why I think you're going to be a fabulous General partner because you have all this experience on the other end you know what it likes to be an investor and you write a huge check and okay this person is responsible for managing your money basically for the next five or six years um so what did you what was your first deal like what did your the first one you went into you've done tons what was that like and how did you feel writing that first check so yeah we did the single family homes and it took me about a year after that to be able to find out okay what's more about the syndication model uh I wanted I listened to um I guess more webinars uh geared tours I got on lists of kind of what people were doing and then it was just fortunate it was a friend of a friend's uh who I met in college who was working for a established company uh to know him they had done 10 000 units um they're based on the west coast and they had a great track record and I just kind of told them I was like I'm new to this I want to be able to like you know do this deal how does this all work

um we had meetings and it was definitely scary uh to go through you know having the total control with a single family home and then kind of giving it all up with these passive Investments um so yeah going through kind of the legal documents kind of understanding that and then it was very nerve-wracking to where you're wiring the money and okay it's gone I hope they do what they're saying to do and uh it's worked out great you know and I've soon uh duplicated it numerous times but it's uh one of those models that I've really enjoyed and yeah I've formed door to Capital recently to like kind of helped spread the word um hopefully better off everybody else's kind of living in a sense of like whether I want to help them on their vacations or college funds or whatnot but it's just kind of get you off of The Mall Street Journey the tumultuous up and downs to maybe something that's more stable and you kind of understand it and this works out well for me in this and the past and I'm hoping this can continue that way going forward that's wonderful it is good you're spreading the message and that's what it really is is most people don't know you have this opportunities to normal people like you and I can be part owners in a larger apartment complex it's just we don't have a big budget like the billion dollar budgets at the Wall Street uh firms have in the mutual funds and all those brokerage houses um so like what do you look at being an expert investor what do you look like what's your primary criteria when you're looking at a deal saying okay what are the key metrics you look at to make it a good investment for you what what are your key points yes I try to keep it simple in the sense of like knowing kind of uh the market the deal the team so I've done a lot of investments in kind of the Sun Belt area some in Colorado um and then Florida but yeah it's kind of drilling down in the market in the sense of is there uh growing population in that area is there a job diversity uh they're not relying just on one sector in the market whether it's like tourism or whatnot so if something kind of um falters then you can kind of get by with other uh jobs supporting that um and then in the sense of the deal is kind of understanding the mechanics okay uh really knowing what the type is because that's quite a big Endeavor it's kind of learning that with okay what's a bridge loan what's a you know fixed you know conventional Fannie or Freddie Mac so you kind of understand the pros and cons there are they doing a value-add play where they're going to go in and essentially Fix and Flip the units and what's the time frame on that uh and then the team is really understanding do they have a track record to have somebody on the team that's kind of been there done that they've gone through some good times they've gone through some bad times how do they navigate that and then I always check for references I've talked to at least you know three to five kind of understand okay are they doing what they say they're gonna do what do you like about them what maybe something is that you hope they would improve upon have they been improving upon that uh so it just takes time you got to put in your your due diligence as of investor but there's a lot of great opportunities out there that's excellent excellent yeah you've got a pretty good process then you've invested that many deals and and it really is a learning curve even as a passive investor because I know some of my earlier ones weren't the greatest I made money on everything but I could have made more money I think if I would have bet on a better jockey in some of the deals which you don't know early on it's like but that's why I really love the fact that you check references and I do that even nowadays um like what is their background most importantly what is their communication style are they consistently doing the monthly updates and is it just you know an Excel spreadsheet or are they actually tell me what's going on with the property that's what I really like so what are your what are your I guess so you've invested so much what are the the tips of recommendations you would say to um or the challenges you've had as a passive investor dealing with some of the some of the sponsors yeah so um I've with these deals I've done a lot of where I dip my toe in the water kind of give them the minimum amount and then I've done been a repeat investor just based off their performance are they you know doing what they say they're going to do uh do I like the reporting because like I'd like to see kind of a little bit more analysis of you know what's the what's the you know economic occupancy in terms of who's paying to um what challenges they might be coming across like there's sometimes during covet uh they have had to like withhold uh distributions um and then there's definitely times right now just it's more is worth the interest rates have gone up significantly in a year's time so with these Bridge loans that goes based off of what the market rate is and they are not their projections are a little bit off and so maybe they need to hold them with cash and they're kind of just in a holding period um those are kind of like what I've seen is kind of the worst case scenario and then I compare that to like kind of Wall Street where I've had a 401k and uh you know my account's down 11 it's a mutual fund it everyone tells me it's oh it'll work out like why is it down I can't I don't know and I don't understand it and that's just like kind of common and that's maybe something I can do a little bit more in terms of learning more about why it's down and all that but it's with these deals I okay we're having trouble getting more people in the market right now at this time at this deal and that's just like that's a little more common sense to me and it just makes it I I sleep easier knowing that my money is working over here as opposed to and the Wall Street where 11 I don't know what's gonna happen to it I think I go down firm or you know well rebound so um it kind of takes it out of that roller coaster ride and put into something that's a little more stable and you kind of write it out and seeing that things have gone well exactly exactly so the big question as an investor appreciation or cash flow everybody always has a preference and it's based on your individual you know so what is your what is your kind of you know investment thesis do you you on both do you want one or the other what what's your strategy from in terms of investing yeah I would say I like to do both like the hybrid strategy um in the sense of trying to have some cash flow it helps kind of in the sense of you need to have reserves and if something kind of goes wrong but then it's they're they're doing certain things to appreciate it I really love the value-add play where they're going to essentially go in and fix a unit charge you know 200 or 150 dollars more on rents and then you're doing that on all you're going to really increase your income uh it's going to take a while to do it might take 18 months two years to change all the units but you're increasing the income quite a bit uh with that and hopefully getting cash flow and then appreciation down the road with selling it um for more than what you have yes yes that's the big boom I know and sometimes you go into like I've invested in possibly like five deals and probably been in 15 or so total you don't know going into them you say yeah you know what I really just really about the cash flow or whatever but it depends on what goes on in the economy because one one deal you think is going to be high cash flow well really didn't but boy when they sold it I doubled my money plus um so that's funny how I know that you you can't control all that but you target for what you think but the deal may end up turning out something totally different but the bottom line as long as I make money I'm happy with it I guess that's that's my thoughts on it but that's right so what markets do you like right now what are you bullish on what states or cities anything particularly that's you know you feel like okay this is where I want to put my money in the future

um I've kind of just still investigating that quite a bit more but um I would say kind of the Nashville Georgia markets or um like uh Chattanooga um Knoxville or is something I'm definitely keeping an eye on um and then looking out more kind of West Coast to see how well like Reno uh Nevada uh we'll see kind of where if that's a good metrics um kind of with the growing population and job diversity and um and then making sure there's a good inventory uh when I'm looking for as a GP it's kind of looking for the the 100 units um roughly and to see that there's a good inventory for for turning them around gotcha that's good that's good I know we're kind of looking in the South Southwest and Arizona I think is where a market we're going there's population employment growth those are the really the two the two key things part of being a Savvy Ambassador is having a strong business and financial background so let's talk a bit about where but your background is like your formal training and all that and I think that really leads to evaluating deals and really understanding what you want to invest in so what what is your background in terms of how you know because everyone has some type of okay I preconceived notions of this but your your actual business experience really helps you a lot in this industry so share us a little about your background yeah so um I've been in the insurance industry in the past um kind of in a variety of different roles uh with uh like marketing uh underwriting um and it's kind of the broker uh standpoint recently so I would uh on the property and Casualty side so talk to businesses and then set up their their program whether they insured a building into their Tech business uh restaurants um so I would get a lot of uh understanding of how businesses are working in that regard um and any tying into real estate investing I've done some uh self-storage Investments I wanted to um I had not done any investments in that regard but I wanted to know a little bit more about their insurance programs so I gotta be able to look at that before investing in that and then I talked to the broker and I wanted to see what the interaction was with them like do they does the operator appreciate and like enjoy doing business with them because like there's clients that I've had that you know they're maybe a little bit unpleasant and so it may be commodity driven so I wanted to understand I was like are these going to be good people are they going to do the right thing is this Self Storage operator going to do the right thing if something kind of goes wrong because you can't plan for everything but it's just something where I wanted to know like are they do they treat you as a value partner and right kind of with flying colors so that was all very helpful um in that regard and so um yeah I'm kind of going to leverage be able to utilize in my insurance background kind of going forward with looking at deals and making sure we have the the right Insurance in place um for kind of these apartment complexes oh that's good you can get a little inside track and all that I know we've got a large corporation well OB Matt sudokus when we primarily work with but it's great did you already have a clear understanding of what's going going on in that industry because I don't understand everything he says all the time but I do trust the guy he's a fabulous job so that's really good you have a good understanding so what do you hopefully make their job easier when I'm interacting with them so that's yeah it's gonna make it streamline so that's regardless you get a little Advantage there inside the knowledge you understand the terminology and all the things that they do for us um so what is your crystal ball what's Sean's crystal ball look like we're early in the year what do you think's going to play out for large multi-family for the rest of the Year what's your projections

um I think there's gonna be a little bit of uh turmoil in the sense of there will be some kind of newer inexperienced operators that are going to be looking to sell um I think it's more than likely going to be somewhere in Q2 Q3 of 2023 where uh you'll start seeing kind of more uh deals in out in the Market at definitely uh a discount and they've been in the past so um that's what I'm like hoping for uh we'll see I mean the interest rates is always a a common conversation right now and um I think hopefully that the feds will kind of keep it at kind of a flat Market but it might increase slightly and then hopefully down the road maybe late 2023 2024 it starts to decline so um those are what I'm seeing but who knows I mean who really knows so that's true so yeah so um but yeah I think it's with all the kind of maybe potential turmoil there's opportunity and so I'm hoping to kind of be part of that ride excellent excellent so what is your criteria then we talked a little bit I think you said you might you like to value ads what is your criteria for properties you're looking at acquiring uh looking for kind of the you know the 100 units uh older you know 1970s 80s class BC um looking for kind of a a maybe uh the gratification of being able to be in a market where there's investment around the the community with the businesses so looking for job diversity um and essentially there's it's not something buying in the hood you're buying is in a good area there's um something that you can have on for five ten years or hold on to it however long you want so I want to have like a a good Market uh a good area and a solid complex that's serving the community well good criteria we have much similar criteria I think that's really good that's the safe you're in the middle Zone you know the class B middle Zone C plus I think that's where to be it's safe if the economy is good or bad there's always people that that want to live in those types of Apartments I think that's a great move well we're going to move on to the next segment the lightning round these are just five fun questions get to know you better Sean are you ready yes okay let's do it

number one what was your nickname as a child

uh my nickname uh for my family was Sean man uh from my brothers and my dad so what was it again like Superman but Sean man Sean man okay that's pretty good that's very complimentary number two are you a morning person or a night owl more of a night out okay good love it yeah Kindred Spirits there like that number three what would be the first thing you do if you won the lottery

I want to take my time in a sense of uh trying to understand what the ramifications on uh maybe the taxes and uh yeah I wouldn't uh rush into anything I would kind of maybe sit on the sidelines and kind of uh really figure out what we want to do next and whether it's gone on vacations or uh whatever it may be so and take time and work with the family yeah it'd be good excellent excellent very good number four if you could live anywhere in the world where would it be

I really enjoy kind of where I'm living now I'm in Northern California uh extended Bay Area and uh I would love to have the option to be able to travel still um so I enjoy kind of the full seasons uh being able to like go to the warm beaches uh and then be able to go in the snow um skiing and being out in the snow so uh we have that availability in Northern California and um but I would love the flexibility to be able to travel to be able to go to you know Mexico or Hawaii uh in that regard yeah anybody lives in California okay you guys got it you're at the beautiful weather you've got all everything going for you there other than the other challenges with the economy but yeah I do I love California so I get your answer there number five uh what's one piece the Golden Nugget that you would give to new investors to help them get better returns John the one nugget

take action and invest I think if you're a new investor I think if you're listening to this podcast and you're interested dip your toe in the water take an investment do it find out if you really like it or not and you'll be able to see the Cadence of what kind of the investor reportings you'll get hopefully the distributions along the way and you'll find out is this for me or not and then you'll continue hopefully it's a long journey and be able to do more hopefully down the road so but I think yeah just jump in take action get in a deal that's great advice that's such great advice excellent from us from a Savvy sophisticated investor himself well thanks so much for your time today Sean how can people reach out to you uh I think probably the best email uh which I have a different spelling uh so Sean is spelled uh s-h-a-u-g-h-n

uh and then at symbol uh Doherty d-a-u -g-h-e-r-t-y so it's Sean is the best way to get a hold of me excellent and it'll be in the show notes below too so if you want to contact him you're going to do fabulous you really are with all your experience as a limited partner that is people underestimate the value that happens you've you've been engaged in 17 deals you're gonna do swimmingly well you know as you start your big portfolio and start moving forward so happy to have you on the show and very best of luck to you Sean thank you well thanks for having me enjoyed our conversation and that's a wrap thank you for listening to better returns brought to you by Hanson Holdings if you enjoyed this episode please leave a five star review because it helps others discover this valuable content if you would like to earn truly hands-off passive income go to where we help you invest in large apartment complexes to grow your family's wealth see you next week with another awesome episode have a great day