Some of the goals of getting into real estate investing for many are to achieve financial freedom and early retirement. Julie Lam, the Managing Partner of Goodegg Investments, found passive investing in multifamily as a way to achieve those goals much sooner. In this episode, Julie walks us through how she stumbled upon passive investing and the benefits of multifamily syndication. She then shares with us what made her start Goodegg Investments and educate other investors, especially moms, about the many types of opportunities to achieve the freedom they desire. Julie then lets us in on her biggest mistake, what she is proud of, her inspiration to success, and more.

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How To Be A Passive Investor – Interview With Julie Lam

On this show, we interview women who are successfully investing in real estate, who generously share stories of their triumphs. I’m excited to have Julie. I invited her on for a couple of reasons. She has an incredible story but she’s focusing on something in addition to her investing. She helps people become passive investors. She’s an expert in passive investing. We’ll talk a little bit more about what exactly that means. Julie Lam has been investing in real estate since 2009. After investing locally in San Francisco and out of state in single-family homes and duplexes, she moved into multifamily investing to scale her investment portfolio.

After investing passively in a few multifamily syndications, she became passionate about passive investing. She Cofounded her company, Goodegg Investments, to educate other investors about these types of opportunities. For the last few years, she and her partner have gotten on the active side and they’ve been co syndicating. They have syndicated over 2,200 multifamily units and 1,000 self-storage units that are worth over $236 million. Because of her passive real estate investment, she’s been able to quit her job. She retired from her other work and spends most of her time with her husband and three kids. She’s a busy mama and has managed to do so much. Welcome, Julie.

Thank you so much for having me, Monick. I’m excited to be here.

I’m excited to have you so. You’ve gone far and those are numbers that probably a lot of women and readers are going, “Those are such big numbers. I couldn’t get anywhere near there.” I always like to start this conversation with what got you into real estate investing. How did you get started in the first place?

I love telling this story because I didn’t start where I’m at now. I started investing in real estate back in 2009. I accidentally became a landlord. I was looking to buy my first home with my husband. We’re doing the traditional story of getting married, buy a house and start a family. We were looking at buying properties and it so happens that it was 2009. It was the perfect time for us to get in. I still recall wanting to buy the cool loft downtown. My real estate agent pushed me to buy a 3.5 bedroom and 2.5 bath townhome. I remember standing there with her in this huge house, at the time, it was my husband and I, and I asked her, “What am I going to do with all this space? It’s on the two of us and we have no kids.” She said, “You could take this property, which you couldn’t do with the cool loft and you can rent out the other rooms and do what we call house hacking and offset your debt expenses, your mortgage expenses.” I said, “That’s an interesting idea, Laura. I like that. We might go with this,” and we did.

We ended up going with the townhome. It was my introduction to how real estate works and how leverage plays such a huge role in real estate. We bought that property in 2009. We house hacked and we rented out the other rooms. We Airbnb them for the next few years until we started having kids. We started buying more properties because we started to see, “I see how this is working.” It was still a relatively good time here in the Bay Area to buy. We bought a few more properties and as the market cycle started to mature, we started to exit out of those properties. That’s how I first got into it.

I bought my first house and ended up getting a triplex instead of the single-family I wanted. I couldn’t afford it at the time. You picked a much better time to start in 2009 I picked in 2005, which was not when houses were on sale. You go from having this townhome, you’re renting out rooms, you buy some more properties and you’re selling them at the top of the market. Tell us about what got you into multifamily?

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As we started to exit the deals that we were here locally in San Francisco, we were coming into some equity. I thought, “What’s the next step for us? Maybe we should buy a bigger and nicer house.” We live in something a little bit nicer and a little more expensive here in the Bay area. Something about that didn’t sit right with me. The idea of getting myself into millions of dollars of debt here in the Bay area, that’s what you would have to spend to buy a decent home in a nice neighborhood and work the next 30 years of my life at a job that I wasn’t entirely excited about although it was a great job. Something about that didn’t make a whole bunch of sense. I said, “There’s got to be something else out there. A better way for us to grow our wealth.”

I kept looking and researching. I looked into buying businesses and other avenues for investing stock market. Somehow I came back to real estate and realized that real estate was where I wanted to become an investor. I came across Bigger Pockets, a social networking site for real estate investors. I came across that site and fell into this rabbit hole of the real estate investing world. I started buying properties out of state and rehabbing them from 2,000 miles away. It was a lot of fun, which was not. It ended up being a lot of work. I was like, “What am I getting myself into?” Luckily, I didn’t get too far down that path.

I realized that if I wanted to achieve what I had envisioned and when I got into it, which was financial freedom and being able to retire early, that it was going to take me a long time to buy a one-single family home or a duplex one by one with all the loans, insurance, rehabs, evictions, repairs and all of that. I realized that multifamily was what I wanted to get into because after doing all my research, I realized that there are so many more opportunities when you have potentially hundreds of doors under one roof and one transaction as opposed to 1 or 2 doors. That’s how I got introduced to the idea of multifamily. I got into it slowly through the single-family process, which a lot of people do and realize that I was going to have to scale and go bigger. Multifamily was the way I wanted to do that.

You started in multifamily as a passive investor. Tell us a little bit about what that was like. We talked about passively investing. I’ve shared that I’ve possibly invested in deals too. Why don’t you describe what that means to you and how you got into these passive investment?

The story of how I got into was funny. I’m buying these single-family homes and these duplexes. I realized that I wanted to get into multifamily. I started networking with as many people as I could that were in the multifamily industry. I would ask people, “Are you interested in partnering up with me?” As I moved forward in my research with multifamily, I realized that most decent larger multifamily buildings were in the millions and sometimes double-digit millions. I quickly realized that I would need a partner. As I was networking, I would start asking people, “Are you interested in partnering up on a deal?”

I didn’t get a lot of positive responses from that. They asked, “What can you bring to the table?” I’ve told them about my real estate experience and I had some capital I was looking to bring to the table. One of the sponsors that I talked to said, “I’m not interested in having you come on board as an active investor but if you’re interested in being passive on one of the deals I do, we might be able to partner up.” I had no idea that there was anything like that. I didn’t even know what that meant. I thought, “If I was going to buy this multifamily building with somebody, I would have to have some active role where I’d have to manage the cleaners, the property management or some aspect of the property.”

When he told me that there was this opportunity to be passive, meaning you don’t do anything aside from you handing over your capital. That’s the extent of what you do and you’ll get paid on a monthly or quarterly distribution for investing your capital into the deal. I was like, “This is interesting. I need to learn more about this opportunity.” I did some more research and got back into touch with that original sponsor and said, “I’m ready to try this on for size.” I still remember that it was December of 2016. I had made that investment primarily based on the fact that a lot of the properties I was looking at here in San Francisco, I would have been lucky if I was going to have cashflow maybe 3% to 5% a month on the money that I had invested. I was like, “I could invest with this person passively and earn 8% to 10% doing nothing.” That was incredible to me. I did that first investment in December of 2016. I still remember in January or February of 2017 getting my first distribution.

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It was life-changing, to be able to not do anything and have money rolling into your bank account was incredibly life-changing for me. Up until that point, most of the things I had done that earned me any significant deposits into my bank account, I had to go out there and work for it. It was different. That was my first introduction to passive investing and it changed everything for me. I fell in love with the idea of passive investing. I’m a mother and I have three young kids. At the time I was working as well. I was commuting 2 to 3 hours a day. My time was precious. To be able to leverage the capital we had and generate additional income into our family households such that we could take a step back and not have to worry about where that next dollar was coming from was amazing for me.

That’s great. I love that about passive investing because without doing any work, it’s your money working for you. You put it out there in the hands of people that you can trust. They go off and they’re managing the asset. Your money goes off and comes back with friends. All you have to do is to invest in the deal. You have to do your due diligence on the frontend. After you write your check, all you do is wait for the money to come back to you. It’s not necessarily that because you’re not working, you’re making less. You could make more than in those properties in San Francisco where you’d be self-managing. You’re dealing with plumbers and the three T’s, tenants, toilets and termites and those kinds of things. You’d still be making less than on some passive investment. I’m a big fan of that too. What made you start the Goodegg Investments? What made you want to teach other people about passive investing?

It happened accidentally. I made that first investment in December of 2016. As the investments started to move forward and through the early part of 2017, I started talking to friends and family about this new investment that I discovered and how exciting it was. I realized that over the first part of 2017 how passionate I was about sharing and educating folks about these opportunities. I realized what an impact it was having on my life. I thought, “If I could share this with other people and have them realize that same potential in their lives through these investments, meant everything to me.” I became super passionate about it. I realized that this was the path that I wanted to go on as far as multifamily investing went. I wanted to work closely with investors, educate and help them get into a lot of the deals that I was investing in as well.

I met my business partner early on in 2018 at a real estate conference. She is also a mother of two young boys. We realized, through our conversations, that the whole reason we were doing what we were doing, which was equity raising and working with investors, was because we were passionate about the opportunities. We talked about potentially partnering up. This was in February of 2018 and in April we casually talked about a potential partnership. It took off from there. We decided together that her strengths are my weaknesses and vice versa. We realized that a partnership together with that foundation of being passionate about wanting to share our experiences of passive investment with other moms meant everything to us. That’s how Goodegg was born and that’s how we decided to partner up together.

That’s great. Switching gears a little bit on your personal story. I always ask all my guests what was their biggest mistake and what did they learn from it? I feel that we learn so much more from our mistakes than we do from our successes. What would you say was your biggest mistake and what did you learn from it?

I definitely would say that my biggest mistake was jumping into a deal in an area that I didn’t know that well. I did my research on the market as a whole. As you know, real estate is block by block, submarket by submarket. It’s hard. The mistake I made was, I had done my research on the market and the city as a whole but didn’t do my research on this particular submarket, specifically this particular neighborhood. I jumped into the deal. It was a cheap house being under $30,000 in Indianapolis. I thought, “What can go wrong with this deal? It’s $30,000.” Nothing can go wrong significantly with this deal. I was wrong. I got into that deal and it sat vacant. I rehabbed it.

I got everything done in the first three weeks after I bought it. I was ready to put it on the market. That’s another thing, I ended up buying it at the wrong time. We threw it on the market in November and it was Thanksgiving week. It sat vacant for probably about 4 or 5 months and it had to change property managers. In the time that it was vacant, it got broken into. We finally found a tenant and the tenant paid rent for about 2 or 3 months and life was good. I thought, “I’m turning this mistake around.” All of a sudden, September rolled around, it was three weeks after the first of the month. I finally realized, “I haven’t seen the rent for this property.”

 

I reached out to the property manager and realized that they hadn’t paid rent. We were going to have to evict. We went through that process through the holidays the following year. We finally sold that property in 2018. That was probably my biggest mistake. What did I learn from that? I would say that you have to, one, you’ve got to do your due diligence. Don’t rush into anything. It’ll pay off in the long run. Don’t think that you know it all. I work hard to do that due diligence upfront and it’ll pay off in the long run. Also, stick with what you’re good at and passionate about. Clearly, for me, buying single-family homes was not the way to go.

That was a good one. There are a couple of other things too that I got from that which is, it’s important about understanding the market where you’re investing. As they say, the top three rules of real estate investing are one, location, two, location and three, location. When you talk about location, it means the broader market, but it means the submarket. Even within the submarkets, one block is awesome and the next block is that warzone block you don’t want to be on. Knowing those markets with that specificity is important. One other thing you said is, it was three weeks in and you had the contact your property manager to find out where the rent was. It sounds like you might’ve needed a new property manager. They were not on top of things if you had to ask them what was happening with the rent after three weeks.

It was another reason why I’m passionate about passive investing and leveraging the experience and the time of other people and letting them manage all of that. You don’t have to even think about any of that. You’re still earning a great return on your investment. It’s incredible.

I hear you. As a passive and as an active investor, sometimes as I’m running my buildings or I’ve had to change the property managers, I’ve had to be on top of the rehab and all that stuff. It is nice when somebody else taking care of it if you don’t have to. The flip side of your biggest mistake is, what are you proud of?

I would have to say how far I’ve come in a few years. When I first got into this in 2016, I was still working my job working full time. I was commuting 2 to 3 hours a day and managing my kids’ schedules. My daughter was starting kindergarten. My other two kids were in preschool, which meant two different drop-offs. It was hectic. When I first got into this, I never thought, “Maybe I’ll retire in twenty years instead of 30 or whatever.” I never thought that early retirement or the “financial freedom” would have come so soon. I feel that once you make that commitment to do something, many other things come to you that you may not have even been expecting to happen. It’s to say that I am excited that I’ve been blessed with all of the opportunities that that has come to me over the course of the last couple of years. Things have come together. I’m proud of that for persisting and believing that there’s got to be a better way to live. I would say that’s what it is.

To what do you attribute your success?

I would say that it’s the three Ps, persistence, patience and perseverance. At the end of the day, to be successful, you have to be able to keep pushing for more. You have to keep wanting more than you have and you have to be able to fall and get back up again and repeat that process over and over. I would say, if anyone out there who wants to get into real estate investing or anything for that matter, you’ve got to be able to keep persisting, believing and be patient. It’ll happen.

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That’s such good advice. As much as you do the research and work with people who know what they’re doing and trying our best and do everything “right,” there will be times when things don’t work out. There are some places that stay vacant and a team member that’s not doing what they need to do. That happens. Part of being successful for sure is being able to persist, persevere and be patient through it all. The rewards are for sure out there, but you have to keep at it.

It’s always right around the corner. I firmly believe that what you’re looking for as about as you’re about to give up is probably right there and you can’t see it yet. If you keep going a little bit farther, keep going and pushing, you’ll get there.

What advice do you have for a woman starting in this field?

I would say leverage. I’m such a huge fan of leverage. Leverage the resources that are out there. There are so many free resources. You could go on YouTube and look at real estate investing videos or go on Bigger Pockets. Do your research first. Talk to people and network. Network, I would say was huge for me in the beginning. I talked to as many people as I possibly could that would give me the time of day. I had some real estate investing experience but not a lot. I reached out to a lot of people. There were a lot of kind people along the way who took time out of their busy schedules to chat with me. There are people like that out there who will give you that time. I would say, once you have those people on the phone, come prepared. Don’t waste their time, once you have their attention and ask all those good questions.

I would say another thing is, use partnerships as a way to get to where you want to go faster. Figure out what you’re good at and how you can offer your strengths to somebody else’s weaknesses and see if you can partner up with them. At the end of the day, if you can partner up with someone who their strengths are your weaknesses and vice versa, together you guys would be like this power team. You’ll be able to go faster, farther than you ever would if you were sitting there trying to get good at something you’re not that good at. If you’re armed with a strong education, network and an awesome partner or partners, there’s no way you can fail. You’re bound for success if you have those things. Education is key. It’s something that no one can ever take that information away from you. The more you educate and invest in yourself, the better off you’re going to be.

What do you wish you’d known at the beginning that you now know?

I would say, don’t be afraid to jump in and start even if you aren’t fully ready. I’m such a believer of mistakes are the things that success is made of if you get out there. You do it and you start doing it. If you’re going to fall, you’ve got to pick yourself up and get going again. It’s like when you learn to walk. You didn’t come out of the womb and start running. You came out of the womb and you started as a baby, started crawling, started walking, holding onto things and you fell down but you got back up again. You kept doing that process over and over until you were good at it. Don’t be afraid to get going. There were times earlier on for me that I thought about all these what-ifs, what if this happens? What if that happens? What if I quit my job and things don’t work out? What if? You have to believe and know that things are going to go wrong but they’re also going to go right. Other opportunities are going to come out of the woodworks that you might not have thought about right in the beginning.

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You can learn from the things that go wrong and springboard off of them. It’s part of the journey. That’s super good. If people wanted to find out more about you and what you’re doing, how would they get in touch with you?

They can go to our website, which is GoodeggInvestments.com. They can also email me if anyone wanted to chat about real estate. My email address is Julie@GoodeggInvestments.com.

It’s time for our famed end of show trinity, which is a brag, a gratitude and a desire. What are you bragging about? What are you celebrating? What’s one brag?

We closed three deals. Two of them are in San Antonio and another one out in Dallas and that puts three more communities into our portfolio. We’re growing. We’re at eleven properties. Primarily, most of it in the DFW area. It’s incredible. I’m super excited about that. We’re still celebrating that.

Well bragged. What are you grateful for?

I’m grateful for my family. I wouldn’t be where I’m now for so many reasons if it wasn’t for my family. They inspire, encourage, love and support me. Without them, I couldn’t do any of this for sure.

Last but not least, what’s one thing you desire?

 

The one thing that I desire is to have a significant impact on our community that inspires them to take action. Get into the investing game and get on their way to finding more time in their days to do what they love. Even if at the end of the day they never get into passive investing, at least to know that it’s an option to spread the word would make us happy. Us, being Goodegg investments.

So shall your desire be or so much better than you can imagine.

Thank you.

Thank you. That was awesome. If you want to get in touch with Julie, you can go to GoodeggInvestments.com or email her at Julie@GoodeggInvestments.com. To connect with me go to RealEstateInvestorGoddesses.com. Julie talked about the importance of educating yourself so you can take action. I hope to have you come back for our next episode. Don’t forget to subscribe so you don’t miss any amazing interviews like this one. Thank you again, Julie, and thanks to you all for being here.

Thanks, Monick. Take care.

Important Links:

• GoodeggInvestments.com
• Bigger Pockets
• Julie@GoodeggInvestments.com

About Julie Lam

Julie Lam is a successful real estate investor who began her investing career in 2009. Among her various investments, she is a limited partner investor in multiple multifamily apartment properties that total over 748 units with a combined value of more than $73,000,000. In addition to being a limited partner investor, Lam Capital Group has also co-syndicated the acquisition of over 540 units with a combined value of over $57,000,000.

As a real estate entrepreneur, Julie is passionate about helping investors understand the intricacies of passive investments. She focuses on how those investments can provide unique strategies to achieve specific financial goals that would otherwise take years to achieve. Julie strongly believes in the power of partnerships and founded Lam Capital Group to help investors find financial freedom by investing in passive multifamily apartment buildings and other niche asset classes.