Better Returns: Invest Like a Pro

Brilliant Real Estate Investor Insights with Jin Wang

May 11, 2023 Jin Wang Episode 22
Better Returns: Invest Like a Pro
Brilliant Real Estate Investor Insights with Jin Wang
Show Notes Transcript

Are you struggling to understand the power of real estate investing? Tune in to this week's podcast episode to hear Jin Wang share her personal journey to uncovering the true potential of real estate investing. Learn how she changed her business structure, invested in real estate, and reduced tax liabilities to build a better future for her family and investors. Don't miss the discussion on the current preferences of investors in the real estate industry and the outlook for long-term holds. Tune in now!


  • Jin shares the power of passively investing in apartments that  come from asset appreciation, tax benefits as well as cash flow.
  • Investors in the real estate industry have varying preferences for their money, with some looking for longer-term strategies and others seeking early exits.
  • Opportunities for early exits may arise in the next three to six months, but there is currently not a lot of deal flow due to high interest rates and sellers expecting top dollar for their properties.

"If you want to change your tax, you've got to change your facts."

" And so that's when we stumbled across passively investing in multifamily, and that was the second great discovery because now we're putting our money into these investments, and I don't have to deal with any of these problems.”

Jin is a former auditor and CPA who has been investing in real estate since 2014. She left her W-2 job in 2020 to become a full-time real estate investor and co-founded the Sage Investing Group. As a managing partner and head of investor relations at Sage, Jin is driven by her unwavering commitment to helping other first-generation immigrants grow and protect their wealth for future generations. With over 2,600 units across 7 markets today, Jin and her team exemplify the transformative power of strategic and purposeful investments.


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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 used to wear olive green parachute pants in the 80s your host and my dad Matt Hansen welcome back to better returns invest like a pro I've got another one of my friends on the show today Jin Wang Jin is a former auditor and CPA don't hold that against her she is a fun person really um she's investing in real estate since uh 2014. she left her W-2 job in 2020 to become a full-time real estate investor and she's the co-founder of sage investing group with two of her friends which are friends of mine as well they're really great team as a managing partner and head of investor relations at Sage jyn is driven by your unwavering commitment to help other first-generation individuals grow and protect their wealth for future generations with over 2 600 units across seven markets today Jin and her team exemplify the transformative power of strategic powerful Investments welcome to the show Jen hi Matt thank you so much for having me cheers well I always like to start with your origin story how did you discover the value of Real Estate sure um Yes actually it took me a long time to understand the power of real estate investing um it started about 10 years ago I guess when I started getting curious on why I kept hearing people say that real estate is the most part you know one of the most powerful investment vehicles out there and I wanted a piece of that for myself I was like well how can I learn about it and how can I apply that to our own lives um so back then I used to you know I did a little bit of research and I guess initially I kind of understood that real estate investing the only returns that you would get is really I only saw the cash flow from it right um and to me it didn't really make a lot of sense because in our area I live in Maryland and where I am from the home values are quite high so it doesn't really quite cash flow anything I buy my cash flow fifty dollars a hundred dollars a month at most so it didn't really quite make sense to me but I was still kind of like wondering well why is it still the most powerful vehicle if the cash flow is not really quite great um so I did a lot of Education um through podcasts and reading books and eventually started going to conferences um and I eventually realized that you know there are a lot more to it than just cash flow right right um the real estate you get the returns from the appreciation of the asset um you also get tax benefits like the paper losses from the depreciation um of the asset so when you take all of those into consideration um the return can be quite significant so then once I realized that um you know I came across this one book which was really great um I would recommend you read it if you haven't already but it's a Tom real rights book um tax free wealth and I read this back in 2017 um and at that point in my life um you know my husband Jack and I we had we had a growing family we just had our second baby um you know paying a lot of expenses for child care and all the other typical expenses that you know typical middle class family would pay for um and so we're working really hard to pay for you know to make a good living for our family um but you know at the end of the day we felt like you know we didn't really have a lot of time to spend with our kids um and plus we ended up having to I think at that time our tax liabilities were close to six figures and so you know at the end of the year we're like okay we don't have a lot of time to spend with our kids and plus we don't have a lot of money left over to to save with so how are we going to build a future for ourselves going like this um so from the tax-free book you know one great thing I picked out there was um when it comes you know one of his most famous quotes is uh you know if you want to change your text you got to change your facts and so then I kind of looked at our situation and I was like well what is it about ourselves that we have control over what can I change um and then two things came to mind uh one of which was you know the I guess how we set up our business um Jack he's a residential realtor in the Maryland Virginia area and uh so he's a realtor we had a single member LLC set up for him and so I knew that if we changed that to an S corp it would save us about 15 in self-employment so that was one first thing that I did and then the second thing I did was like all right well we gotta start investing in real estate then you know uh there's a lot more return to real estate than I initially thought and as a realtor you get a lot of you know benefits uh tax benefits from investing in real estate so those are the two facts that you know I took I um prioritized to change about our lives at that point in time excellent so that was the first discovery and then you know so from there from there we um you know got really resourceful and you know we looked at what areas we had lazy money sitting on such as lineup Equity or you know whatever and so it became really resourceful found some lazy money that we had um pull out some of that uh to use to uh to buy two duplexes at that time and so you know um through those two duplexes it gave us really uh great experience and exposure to landlording we have a lot more than you know our prior properties did you know we couldn't really afford to buy a lot so the problems we bought were a bit older so they were a lot you know more maintenance that we had to um I had to take care of and it was really hard to find a quality property managers in the area that we invested in um the ones that we did find they put they Place poor quality tenants in our property and that resulted in what like um lots of delinquencies and also damages to our property that you know rent deposit was not able to cover so you know we learned a lot through that whole experience but in hindsight I do feel like it's a big blessing in disguise because it led us to our second discovery of the power of reality investing um so through that experience we're like all right well maybe landlording is not really what we want especially since we have two young kids and we both have full-time jobs you know what what else is out there and so that's when we stumbled across passively investing in multi-family um and that was the Second Great Discovery because now we're like putting our money into these Investments and I don't have to deal with any of these problems that I mentioned above with you know tenants and having to manage your property manager even though you're paying them um and plus you know you get all these benefits that we got in our duplexes and our single families passed off to us so that was the second major discovery excellent excellent excellent so yeah I've met Tom real right back to that book tax-free wealth I met him oh probably four or five years ago in a seminar so I've got his book in a red same thing it was like oh my gosh how you structure things is so important from a tax standpoint oh yeah you mentioned Jack is classified as a real estate professional status according to IRS which gives you all these rights and privileges and I am as well um because after I retired from my corporate gig I could become you know this requirement 750 hours per year that you need to be focused on real estate specifically and all that that's really powerful in terms of tax because you can offset passive losses with W-2 income that's really a powerful thing that you guys have done there and then the third thing is you you've came to the realization do I want to be an active investor in dealing with tenants toilets and termites or do I want to be a passive investor or run deals in your case but I know you do both and um you know I'm a partner in large apartment complexes totally different world yeah I mean I would beg to say yeah the passive is much more rewarding and financially and personally than the active one because you've lived through the active stuff and it's not enjoyable is it yeah right it's not enjoyable but at first you know even though I kind of knew that passive investing existed I didn't really understand what it was all about to be honest with you and so um I wanted to have control over my assets I wanted those problems but little did I know that those were you know major problems that would suck up so much time but I want to control you know over you know uh I guess just have easier access to the property like something that's in state closer to where I live um and just have more control but I learned with more control you know obviously you know more time more involvement more problems and that's I discovered that was not something that I wanted yes that's that's really it's really good let's talk a little bit about what the sage team does so I know Lana and I know Maggie I know your business partners really well as well as I know you and Jack quite well I've known for probably two or three years now um and I think you really do have a great team there so let's talk about how you structured the sage team and how you help people with your your uh your company yeah sure so uh megalana and I you read earlier that I have a CPA background audit background and it's really funny because all three of us all three Partners on this team come from that CPA audit background um so that was a commonality that really kind of brought us together and then as well as well as our value our work ethics um you know it's very hard-working individuals um that just want to do things the correct way instead of taking shortcuts and that was something I truly value in you know having partners um and so yeah the three of us we found each other through a mastermind group um you know that you're part of as well and so yeah from there we um it was really funny because I started off um being an active investor a multi-family by uh rating capital right for other people's deals I was um yeah so I was a part of that and then Lana and Maggie they came in with the desire to Source deals to hunt for deals into underwrites um Lana she loves excels she is so great at it and so great at building you know building all these amazing uh worksheets and I don't know what she does but she does amazing job with Excel and so you know when Maggie met me she was like you know what you would be a good fit for us because you know Lana's underwriting Maggie does this deal sourcing she builds a relationship with the brokers in our market and then I um I'm part of the investor relations Capital raising part of the team so we kind of magically just perfectly fit together you do then also your your personalities too you're so complementary because I know all three of you quite well it's like you really are a powerful team just because the synergies the sum of the holes is greater um it's really it really works well for this age team so yeah you guys are blessed to work with so what What markets you guys looking in right now anything's tumultuous right now in the world in the US in the real estate what What markets are you guys really kind of focused on right now uh so we have a two um investment properties that are in uh actually six altogether we count the portfolio but anyway so six properties in Alabama um the southeast part of Alabama which we really enjoy um that market um has been amazing for us in our investments um so uh Alabama is still one of our core focuses even though it's not a sexy State like Texas and Florida but right yeah it has like sound Market fundamentals that we like and we're not competing you know with a lot of the other bigger syndicators out there and with institutional money so they were able to kind of buy these assets at a better at a great at a really good uh cost basis which is super important when you're investing because you make your money on the buy um and so Alabama is something that we like to continue focusing on um but we're also focusing on others part of the southeast part of the U.S so Georgia we're you know we're open to Georgia we're looking in Tennessee as well um and parts of the Carolinas What specifically profit properties do you look for what attributes are you guys looking at right now oh yeah oh yeah um

the newer multi multi-finals assets so um 1990s or newer it's a vintage that we're looking for right now and we're still looking for those bigger complexes for the economy of scale so anything that's 100 units and above um and of course we're looking in markets or neighborhoods that are well good markets obviously with you know strong growth fundamentals right job and Industry diversity and population growth all that stuff um but also you know going down into the neighborhood level we're looking for properties that are sitting in like B B Class A Class neighborhoods so yeah excellent excellent so what's your process for like um vetting deals like what I guess what are your yeah what what criteria are you guys looking for other than you know 100 units in those areas are you doing heavy value add late value ad where do you see like is it cash flow now or later kind of what what type of uh what kind of criteria you're looking at um that's a really good question so um we are staying away from the heavy value ad asset especially like you said right in this um very um I guess that in this environment that we're in right now with higher interest rates and inflations and you know just a lot of things um going on recessions so we are really not looking at heavy value ads at the moment um and we probably would never go into heavy value yet we kind of had some experiences to heavy value ads and we don't really necessarily like it um for us as Auditors and you know with audit background we're a little bit more risk-averse so we're going to look for the assets you know that have potential the value add potential because that's where you really make your money from the value ad right um so looking for those type of assets that are maybe like light value-add um right the light value ad with the potential for us to bump the the growth the rent growth in them in the market so yeah nothing too crazy something that's like manageable and something that's in a cash flow from day one obviously um yes and then kind of for us to kind of work on the asset and continue building upon that um the cash flow by renovating the prop the units by innovating the price property improving on the community and the Tenant experience at our properties and boosting up the noi and the valuation of the Assets in that way well excellent that's really good I think that's kind of the same Market that we're kind of looking at as well in terms of you know the the mid mid-level not super super heavy value add but you want to have some common component of that because I think that's where you bring a lot of value basically to your investors I always say it's we're flipping an apartment but it's a six year hold and it takes you that long to renovate hundreds of units and things like that right and I think what yeah a good point that you may bring up is uh the holding period too um you know yeah it is kind of like flipping apartments right in this indication space um and I think what we're interested in doing is looking for deals that have the potential for longer term hold um because you know after being doing this for several years um you know there are times when deal flows may be a little bit slow and then investors are scrambling to find place to put their Capital right after they exited exit out of a deal and for us you know as I believe as a real estate guys they say you know buy real estate and never sell yes and so you know that's kind of um you know I think what we are aiming to do just uh buying real estate in the refinancing and return as much of the capital to the investors as possible as soon as we can by infusing that value-add um that value-ad business plan right and the refinancing pulling out the capital will be turning it to investors um giving them the returns you know keeping a little bit if um a little bit or nothing none of their investment in the deal if possible right and then continuing to cash flow hold the property and continue to cash flow from there yes that's a good point because we've been able to turn you know they call full cycle you know purchase it renovate it and sell it we've been in two and three year hold periods which is just phenomenal the stuff we call pre-covered but post covet it's a different world and that's the same thing what are your views what do you think the whole times are going to look like going forward based on the new economy and New Deals what are your thoughts that's a great question I feel like the whole time it's probably more realistic to the business plan because we typically underwrite um you know these projects to last five six seven years and like you said you know the past year or two people you know we've been able to sell after like I don't know uh after um yeah only like less than less than two years time frame for a lot of these deals and you know beat the investor returns that was projected right because of the market but now you're right we're not in that kind of Market anymore um and so I feel like it's going to be more realistic uh five six seven eight years time frame yeah and it's interesting that um investors some investors based on their individuals well like okay they're not really happy that we turn something in 24 months because they don't want to now I gotta go find another deal and a lot of them do reinvest with us in the next deal but it but it's interesting that people would like to I just want to put my money there let it sit for six years or longer that's an inter perspective and I think that people are probably seeing that more now than they did in the past where where things are going on in the world that I'd rather just have my money locked up in real estate in sitting in a bank or sitting in Wall Street you see you see the same thing from your investors what's the view of your investors that you're talking to nowadays I know everybody's tightening their purse strings what's this what's the word on the street Jen in terms of what's going on out there with the people you talk to investing um yeah you're right A lot of people are kind of well yeah they kind of want to hold on to their cash at the moment but when they do invest they are looking for longer term strategies I guess they're not really looking to um I mean it depends we have like all sorts of investors and some people don't really want to tie up the money for that long but I feel like maybe they feel this way because there's different uh levels of experience right among all of our investors um perhaps I think some of the newer investors do want to cash out a little bit sooner because they see that return it's a sign oh my gosh this investment's working they see the cash flow is a sign that the project is successful right um and you know everybody has kind of like their different needs for the money um you know some investors invest well one of the investor we have invested with us because he is infesting for his kids college um College expense right he's like Okay so this investment acted in five years that's when his kids will go to school so he wants to pull out that money and use it for to pay for the college education so yeah all different spectrum of investors with different preferences for either or um yeah for holding it or for pulling out uh pulling out as soon as they can I suppose that seems to make their returns um so although our Outlook is for more long-term holds right it's all gonna I guess depends on the deals that we're in and the environment that we're operating in um so uh so that so you know we might still have opportunities where we would exit you know if possible right in the next few years that we can exit early but you know if we see the opportunity that we can Cash out refinance and continue holding that property uh for a longer period of time um then we would like to take our investors along that Journey with us exactly and then they're they're trusting their money with us because they know we're going to make the good the good decision on that too oh yeah so I know they sometimes get frustrated well we we exceeded our expectations and turned it quicker it's not a bad thing but you're right it's everyone everyone's at a different spot and they're they're their investment world and that's why it's great they know if they're educated they know in advance okay we think this is going to go this period this many years or whatever and if you exceed it you exceed it but yeah worse things have happened you got your money back quicker yeah you build your money faster than we planned right yeah I feel like they wouldn't really have that you know that big of a problem we were able to return all the original you know capital and then do an infinite uh return thereafter right like you get all your additional money back and then all these cash flows day after are cash free um and I mean sorry not fast free the the their infinite returns right yeah right so they're not really they don't have any money left in the in the game but they're continuing to get those cash flow from it so I think in those situations which is the ideal situation I don't think investors will have too big of a problem as long as they find something else to put it in right now at this moment in time there's not a ton of deal flow if you will because interest rates are up sellers are still thinking they can get top dollar for the properties well that's really kind of not you need to adjust with the economic conditions are and the net operating income and all those things but I think there's a big adjustment going on in the next three to six months in terms of what the market looks like but and in the same spot you are very good very good gearing up to take advantage of those opportunities when they arise so it will happen it will happen well are you ready now it's time for the lightning round Jen

okay very exciting question number one what was your nickname as a child

um so I'm Chinese and um I to be honest I don't feel like I had a nickname when I was a child they yeah um in Chinese we have um it's very typical to have first middle name and um and so everybody's just call me by my middle name um I really didn't have a nickname I can think of what's your middle name oh uh in Chinese

[Music] excellent excellent number two morning person or night owl well um I read this book Miracle mornings and it changed me converted me from being a night owl to a morning person and it did so for the better because I felt like I got a lot more done I was able to do a lot more I guess like self-development um and to spend more time in the morning filling up my own Cup right before the kids wake up um so you know I I'm more of a morning person these days than I was before but naturally I am more of a night owl oh you are I've read Elrod's book it's on my shelf here I married two of his books it didn't take with me I really tried oh I brought my life to try to be a morning person so congrats you were actually to able to overcome that that's that is a challenge yeah it's a it's hard because you keep shifting back and forth a little bit you know sometimes you lose track and then I'm right now I'm trying to get back into the morning routine again so it's hard yeah yeah when you have kids too you have young kids so yes you're you've got to be up and ready to go in the morning so yeah that kind of forces you to do that well that's good number three what would be the first thing you do if you won the lottery well um the first thing I would do I always think about the future and so knowing what I know now I would definitely buy cash flowing in appreciating assets more multi-family um because you know you gotta you know create that passive income streams if you don't live the lifestyle that you want right um and you gotta keep protect that money and keep it growing so that you can pass it off to you to Future Generations so assuming that you know I have a lot of money from the lottery I would probably take half to invest in multi-family in other cash flowing commercial real estate um and protect the money in that way um yeah excellent outstanding number four if you could live anywhere in the world where would it be

um so I love Hawaii um I Am Naturally a I love the sunshine I love warm weather um that's why I moved from Maryland to uh California to La for college because I wanted to kind of get away from the cold for a bit in there for four years um so naturally a warm weather person I you know I'm super happy when the sun is shining and you know when I see palm trees those are my favorite things sunshine and palm trees in the ocean it's just so calming so I think Hawaii has like all those attributes that I really am attracted to and I'm the most happiest in the environment so probably Hawaii oh wow you sound just like my wife that's her absolutely the sunshine the water you know the beach all that stuff and I agree I think that's wonderful and then the finals five question fifth question is what's the one piece of advice you would give to new investors to help them get better returns yeah I think it's um it's pretty simple um it's really just to diversify to diversify across different asset classes different Market different operators you know don't put all your eggs in one basket um and you know that's kind of why stage does what we do too we Source our own deals but we also um partner on other people's deals because we want to give our investor-based opportunity to you know invest in different class assets ABC you know um different vintages in different markets because we ourselves cannot be in you know Texas and Florida and you know um you know everywhere all at once so we have to focus on the markets that we um we want to focus on and that we know the most about um and then kind of rely on other operators that we trust to bring these other markets exposures to our investors I think that's really really wise and I do the same thing I partner with people in Florida and Florida deals in Texas Texas deals and you know Arizona Arizona deals so you give people an opportunity to keep the market they want and we're working with people like you and I are friends like you and somebody you know like and trust it's going to do a good job of operating those assets so I like that that you're not limiting you know that just because I'm buying in Kansas City you can only invest in Kansas City I love that about you guys the sage team is great thanks well thanks for being on the show how can people get a hold of you Jen uh sure yeah you can find us all of us in our contact information on our website uh and we are on all the social media networks LinkedIn Facebook um Instagram so stage investing group excellent I follow you on all those too so I know you do I recommend everybody else does that as well thanks so much for being on the show Jen you offered some really great golden nuggets of information here based on your experience and your your background as a CPA and a Savvy investor so thanks again for sharing appreciate it thank you so much Matt for having

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