The Future of Real Estate Entrepreneurship

Hey, guys. You are gonna really love this guy, Jay Scott. If you haven't heard of him, you are living under an investor rock. He is a, an entrepreneur, investor, advisor, author, and partner at Bar Down Investments focused on buying and repositioning large multifamily properties. In the past fifteen years, Jay has bought and built over $200,000,000 worth worth of property around the country. He holds strategic advisor roles in several companies and is the author of five BiggerPockets books on real estate investing.

And, you know, I did a master's in economics, but this guy looks at economics in such an actionable way that I really love following him. You should absolutely follow our next guest, Jay Scott.

Hello, everyone, and welcome to the Power of Your Life podcast powered by GoBundance Women. I'm Mandy McAllister.

And I'm Kelly Resendez.

And today, we have real estate investor royalty with us. We have a real estate famous guy, Jay Scott. Jay, hi. How are you? Hardly famous, but thank you. I appreciate you ladies having me. I'm thrilled to be here. Oh, man. You are absolutely one of my my favorite voices in the world of actionable insights around econ. So thank you for for spending some time with us here. But before we really dig into all of this stuff, talk to me about your journey. Give me a couple of words on on what got you here.

Yeah. Real real quick. I am a former engineer, have an MBA, spent most of my life in the tech world or my previous life in the tech world doing engineering and business stuff.

In 2008, my wife and I both left the tech world, moved to the East Coast, fell into real estate. And for the past, I guess, eighteen years, I've been investing in real estate.

Started out in the single family world, did lots of, single family flips and rentals, and for the last six years or so have been, syndicating, meaning, buying and bringing in investors to, to to buy, reposition, and then resell large apartment complexes.

That is a bunch of different changes. Right? Like, the the tech guy to the entrepreneur to the single family to the multifamily to taking other people's money. You know? Talk to me about the kinda identity shift and the inner work that you've needed to do with all of those kind of big changes that you've had. Absolutely. Yeah. I'm I'm, unfortunately,

one of those or fortunately, maybe, one of those people that, I get shiny object syndrome. Whatever I'm doing in a year or two, sometimes sooner, I get bored and want to move on. And one of the biggest lessons I've learned is that if you harness that, you really can do great things across multiple industries, but you have to harness it.

I meet so many people that will start some venture, whether it's a business or an investing or whatever it is. And two or three months in, they either feel like they've gotten a little bit of traction, but not a lot, or they haven't gotten any traction. They give up and they move on to the next thing.

And I like in any business or, or any entrepreneurial venture. It's like an airplane taking off. I mean, you're sitting on the airplane at the beginning of the runway. The airplane starts moving. And at first you're moving really slowly, and then you start to pick up speed faster and faster and faster. And most of us feel like we're getting some momentum and then give up right before we lift off.

We don't realize. We feel like we we've successfully made it because we're now moving down the runway at a 150 miles an hour, and we don't realize that if we just give it a little bit longer, we're gonna be soaring. And so what I've always said to myself as an entrepreneur is, whenever I feel like stopping, give it a couple more months. And if I haven't gotten there then, give it a couple more months after that. It's always kind of pushing it out.

It's it's like, I I diet way too much, because I I food and I have a very bad relationship. And when I'm on a diet, what I say to myself is, look, just don't eat anything bad for a couple more hours. In a couple hours, then I can go and I can start eating crappy food. And a couple hours later, I say, well, I just made a couple hours. Just give it a couple more hours.

And so I do the same thing with my business and entrepreneurship. When I want to be jumping ship, I wanna be going after that new shiny thing. But I realized that if I just waited out a couple more months or a couple more years, I'm gonna see a snowball effect. I'm gonna see some compound growth, that I'm not gonna get if I keep giving up and transitioning every every couple months.

Yeah. So So I'm curious

on that, though. Say some more about when you know to pivot because there's throwing good money after bad. There's there you know, talk to me about how you decide that line.

Yeah. I don't decide. That's the thing. We are too close to our business to be making really, really tough decisions like giving up or pivoting without external input. So what I do is I rely on other people.

I make sure that there's always somebody that is instrumental enough in my business, integrated enough into my business that when I need to make a really tough decision, like, do I give up? Do I pivot? Or maybe it's double down? Maybe do I go spend a couple $100,000 to grow the business? Maybe do I go find an office space? Space? Maybe do I hire 10 more people?

Making tough decisions, I'm too close to it. I'm never gonna make the right decision because I'm biased because it's my baby. And so what I do is, again, I make sure that I have somebody that is that is integrated and integral enough in the business, but is still objective that they can help me make that determination.

It might be my wife. It might be my business partner. It may just be a mentor or a close friend that's been following my journey that I say sit down with me for a couple hours. Let me walk through where we are. What's going on? Ask me the hard questions. Maybe you'll help me figure out the right answer. But if not, maybe you can give me your opinion on what the right answer is.

And so I try never to make those decisions myself because, again, I I can't be objective.

Yeah. Definitely requires a lot of vulnerability to do that. I think a lot of us that are successful are like we make decisions in a silo. Yeah. I have. There have been a lot of times where I'm like, man, I wish I would have engaged that board of directors.

So talk to me a little bit about for for the people listening, we have a lot of business owners and we've got real estate investors, but they might not really understand, like, the reason why a lot of people move from single family to multifamily to syndication. They might not even know what syndication means. Share a little bit more on the on the one zero one around that. Yeah. So,

if I wanna buy a single family house, I can do that by myself. I have the knowledge. I have the experience. I have the ability to find the deal. I know the contractors. And most importantly, I probably have the money to do it myself or I can go out and get a loan, to to be able to do that. So I don't need any outside capital to do that deal.

But let's say I want to buy a 20 or 50 or $100,000,000 commercial property, maybe a large apartment complex. I may be able to find that deal myself. Who knows? I may be able to get it renovated myself. I may be able to do a bunch of it myself. But the one thing I'm probably not going to be able to do myself, I'm not going to want to do myself is bring 20 or 30 or $50,000,000 to the deal.

And so the whole purpose of syndication is that we pair together a person or generally a team of people that are very interested in doing a project. They're happy to do all the work. They're happy to put in all the effort, the knowledge, the expertise, the time, and pair them with a bunch of people that have money that don't wanna do any of that other stuff. They don't wanna spend any of the time. They don't have the knowledge, the expertise. They don't wanna be real estate investors, but they do wanna get the benefits of investing in real estate.

And so we bring together the team of operators with the people with money, and we put them together. And so a syndication is really just a partnership between the people that are executing on the deal and the people with money that are just bringing money to the deal. And all the people with money are doing is literally investing money. They have no other operational input into the deal. They don't make decisions. They have no voting rights. They put the money in. Hopefully, they get more money out, and that's a syndication.

And here's the nice thing. Syndication, we talk a lot about in the real estate world, but you can syndicate anything. Businesses are syndicated. If you if you ever see a business that has angel investors or venture capitalists, basically, that's what they're doing. There are people running the business, and they're taking money from professional investors.

I've seen artwork syndicated. I own racehorses, and we've syndicated some of our racehorses. We wanna buy an expensive racehorse, but we don't wanna put all the money in ourselves. So we go out and we find people that all they wanna do is they want to invest in racehorses, but they don't wanna have to deal with any of it. Sports teams. I know people that own parts of sports teams because they've come into a syndication to buy a major league sports team where they just put money in, and they don't know anything about running a sports team. They don't wanna be involved. They just want it as an investment. And so you can really syndicate a whole lot of things outside of real estate as well.

I love that. And, I mean, that that is exactly how I get to know you and the events that we we both speak at. So thank you for dialing that back for everybody who's interested in knowing more.

So, tell me about some unconventional strategies that you've got when it comes to being an entrepreneur and getting into real estate. And, honestly, the way you look at the overarching economic climate, I feel like that might be an unconventional strategy. But tell me a little more about what you do that you feel like is unconventional.

I don't know if it's unconventional, but one of the things I like to do is I really like to be flexible. And so I will always start with the end goal in mind. I will ask myself, where do I wanna be in five years or ten years? Where do I think the economy is heading in five years or ten years? What asset classes, what types of investments, what exit strategies do I think are gonna be most conducive to be investing in for the next five or ten years? And then I work backwards from there.

So I don't say I'm a real estate investor and I buy multifamily real estate. Right now, I happen to be a multifamily real estate investor. I probably will be for a long time. But if another opportunity came up, and here's a good example, about a year, year and a half ago, my team and I sat down and we were looking at, just the supply and demand characteristics of real estate around much of the country. And what we realized was today or a year and a half ago was not a good time to be building real estate.

But it looked like because of just the, again, the supply and demand of of of real estate coming online, that by 2026, 2027, 2028, we were going to have an undersupply of real estate again. And so we expected that if we could deliver new units, if we could build and basically be done building in the 2027, 2028 time frame, there's probably going to be a good bit of demand for new units at that point. And so basically, that was our crystal ball. Hey, let's figure out if we can put in practice a development strategy that aims to basically deliver units in the 2027, 2028 time frame.

And so we work backwards from there and we just said, Okay, we need to find a deal around this time. It has to be in these locations because this is where we think there's going to be undersupply by that time. And ultimately, last summer, we put a large parcel of land under contract, and we're going to start developing it at the end of this year or the beginning of next year, with the intention of delivering it at 2027, 2028.

This wasn't on our road map. This wasn't our strategy a couple years ago. We didn't really wanna get into to development. We didn't see it as a good opportunity, but we were open to it. And so when we started looking at the data and we realized that this was a good opportunity, we could quickly pivot. We were open to pivoting based on the data.

Yeah. Great. I wanna rewind just a little bit. You know, you said you're an engineer. You started. You probably had a w two, other things. How did you really invest the time needed to learn about real estate? And then did you have an and for a while while you were building some of this education and other things?

Because we've got a lot of people that are listening that are probably interested in investing in real estate. You know, I kinda dabbled, but now I just give Mandy all my money, given that she's a syndicator as well. But, you know, how would how how do you make that transition without really facing a lot of the fear and scarcity that so many people do?

Yeah. So I'm gonna I'm gonna give two answers to that question because the first answer isn't gonna be very inspiring. I was fortunate. My wife and I were fortunate that we did well in the tech industry. When we decided to get married, neither of us kind of wanted to solely give up our job. She was traveling three and a half weeks a month. I was traveling a couple weeks a month, and we couldn't decide. You give up your job so we could raise a family. I give up my job. So we said, let's both give up our jobs. And so it really was we decided literally within a week of getting engaged that six months later, we were going to just both quit our jobs, and we were gonna figure out how to make it work. So it's a little different for us than most people.

But here's what I've learned. And if I had to go back and I was in a position where I wanted to kind of do both, where I wanted to learn real estate while I was in my W-two. I often ask myself the question because I talk to other people in this situation all the time. What would I do? And the answer is find a great partner, find a great mentor, find somebody that can start teaching you parts of the business now where you're not taking excessive risk.

And so to give an example, when I wanted to get into multifamily in 2018, I reached out to a good friend of mine. Her name's Ashley Wilson. She was investing in multifamily, and I said to her, I would love to learn this business. I'm not ready to start taking millions of dollars from other people. I'm not ready to start buying 300 unit apartment complexes, but I feel like I could get there with some some mentorship and with some help. And so what I said to her was, I'll make you a deal. Give me one year of mentorship and support. I will give you one year of my time, my knowledge, my work, my effort, my Rolodex, my money, whatever it takes. I will just I'll give you whatever you need for your business, and you give me education in return. And she said, great. Let's do it.

And so we spent a year where, basically, I shadowed her business, and I got really involved in a couple of pieces of her business. At the end of that year, she was getting ready to do her next deal and she said, Come in and help us on the next deal. And so on the next deal, I came in. I took a small role where I helped with some underwriting. I helped with some investor relations. I helped with some due diligence. I got a small piece of the equity for that. And what we realized was we work great together. And there were things that I was really good at in the business that she hated doing. And then there were the things in the business that she was really good at that I hated doing. And so it seemed like it would make a great partnership. So in 2019, we decided to partner up, and we've been partners at Bardown Investments for the past six years.

And it was all because I said to her, let me just come and do whatever I can to help you in return for you helping me gain the knowledge. And so it was it was basically risk free for me. And if I had to start all over again and I was working a W two job, I didn't want to take any big risks. I would find somebody who was successful. I would figure out how can I help that person? How can I add value to them? And then, hopefully, in return, they they provide me knowledge and value, where I can be helping them in their business and learning the business before I go off of my own.

Oh, what an undeniable offer. Right? I I think, you know, to anybody listening out there too, one thing I wanna underline is that you were very clear on the thing you could offer. That, you know, if you go to someone and say, I wanna help you for a year, that then now you've given that person a job of now I need to think of the thing for you to do for me.

Well, but you are very clear that you are great at underwriting. You have an engineer brain. Like, these are the things that I'm great at. So come to that person with the the very clear offer of what you can have. I love it.

What do you think in terms of entrepreneurship or multifamily? You know, there's lots of advice that goes around. Right? Like, what is the single worst piece of advice that you think is is common knowledge?

One of my favorite sayings, and and I I I feel like I might have made it up. My wife tells me that she's never heard it before. I said it because I just said it one day. But one of my favorite sayings, and and we kind of live by this, is you're never going to get wealthy just doing something you love. But at the same time, you're never going to get wealthy if you don't do something you love.

And so what I like to tell people is start with those things that you can see yourself doing for the next five, ten, twenty, thirty years. That's your superset of potential investments or entrepreneurship, things that you could focus on and then narrow it down from there.

Too many people go out and say, well, I can make a lot of money by doing x. I can make a lot of money by doing y. And they try and figure out what the right thing to do is, and they never ask themselves the question of, can I see myself doing that for the next ten or fifteen or twenty years? Because there's a whole lot of things I could think I could probably make a lot of money at, but I'd be miserable. And I've been doing I've been an entrepreneur long enough to know that making a lot of money, but not doing it in a way that makes you happy is is not a good trade off.

Yeah. Absolutely. So good. So good. And I think I've never heard that quote before. That's a Jay Scott quote. Like, period. You heard it here first. Yep. There we go. Exactly.

So what would you say in terms of the way that you and your wife live your life is more unconventional? Like, goes against the grain of, obviously, just becoming an entrepreneur and an investor and whatnot does a little bit, but what else unconventional about the way that you think or what you do has created success for yourself?

Yeah. So I I think the biggest thing and a lot of people say this, but I think we really try and live this is we put family first. I will, and I have given up business opportunities when they didn't align well with the family. I've taken time off. There was there was about a year and a half back in 02/1617 where the kids were growing up. They had just gone into gotten into school. And my wife said to me, like, I feel like they're growing up fast, and we're not spending enough time with them. And I said, you're right. And I basically took a year, year and a half off. Did a little bit here and there, but it was kind of like if if I didn't work for an entire year, year and a half, that was okay because that was a trade off that had to be made.

And so for us, it's it's the big thing is always family first, but really family first. Like, if if there's if there's a trade off, family will always come first. Our kids traveled with us everywhere we went for the first twelve, thirteen years of their life. If you saw me at a conference, between 2012 and and 2022, we had our kids with us. A lot of people that we would see at conferences over and over, like, got to see our kids grow up with us. They were involved in every aspect of the business.

Now they don't have any desire to spend any time with us or or go to conferences. So They'll come back. Hopefully, they will. But yeah. So so for us, I think that's just been one of the things that, not just something we say we do, but we really, really do it. And I'm I'm kind of proud of that because, I I I'm I'm fortunate to have two amazing kids and, even if they get nothing else from me, professional wise, they will at least have gotten to have seen what we've done for the the first twelve or thirteen years of their lives.

Mhmm. I I've seen this. You know, we were talking about your your newsletter and the newsletter that everybody loves, that there's, you know, however many hundreds of thousands of subscribers you've chosen not to do because it interferes with time with the kids. So you absolutely do put your money where your mouth is there. So I I admire that in you in a big way.

When you're doing something that you you you don't know what's next, you need clarity, and you need to figure out which move do I make. You've started with the end in mind, like, you've talked about that I need to be flexible. But when you can't figure out the next right step, what's something actionable that you do to find clarity?

Yeah. It goes back to the question of how do you pivot, how do you decide to wind things down, and that you bring in other people you trust to help you. Got it. And I have, I think Kelly used the the phrase board of directors earlier in the discussion. I have the the, quote, unquote, board of directors, those people that have been part of my journey, even if we haven't formally been partners, even if we haven't formally worked together, people that have been part of the journey for the last fifteen, twenty years, that I can say, hey. I'm thinking of doing something or I'm thinking of an idea. Can I bounce it off you? Can you just play devil's advocate and tell me why it's a horrible idea or why it's a great idea?

And and so it's really, really important for anybody out there. Being an entrepreneur can be very, very lonely. I've been fortunate again. I had my wife as a partner for a long time. I've had Ashley for the last six years, which is great. I've had some other long term partners. But they're even with partners, you find that it can be very lonely. And there are a lot of people that out there that don't understand what we as entrepreneurs go through, the emotional ups and downs and the frustrations and and, the long stretches where we're just working with ourselves, trying to figure things out or dealing with issues.

And so it's really important to have those people around you, even if you don't see them every day, even if you don't see them every month, people that you know you can pick up the phone and call when you're having a problem, when you're having an issue, when you just wanna talk because you're lonely or because you need a pep talk. And so what I I recommend to anybody that's getting into this business, find people like that that you can trust, that you know will always, like, be on the lookout and give you honest feedback because that's the other thing. All of us have people who will tell us what we wanna hear. Not all of us have people who will tell us the stuff we don't wanna hear, and that's the stuff that's most important.

So find those people that are not scared to tell you what you don't wanna hear. And a lot of times, those are other entrepreneurs, because they're in the same boat. They need the same thing you do. And so network, take the time to go to events, and network with other people. GoBundance Women. I mean, if if for anybody that's listening, what an amazing resource. I mean, I've I've I've gone to a number of GoBundance events,

and it's basically your opportunity to find other people that the few people in the world that understand what you're going through on a day to day basis and Yeah. That be able to rely on those people to help you get through the tough times and you for them. Yeah. So good. Thank you for that plug. We did not pay you to say that, so thank you very much.

You know you know, when you when you've created a lot of success for yourself, you must have a lot of self awareness in order to be able to do that. Like, how did you identify or if you wanna share, like, did you ever figure out how you were sabotaging your own success, and what did you do to kinda overcome that along the way?

I haven't. I mean, some things I have, but I I still have imposter syndrome. I still feel like like, how how do people, like, trust me to to give them economic data and trust me to invest millions of dollars for them? And, and, it can be very difficult because, we grow up knowing ourselves better than anybody else knows us.

And other people tend to have this this perspective that the people we we rely on, invest with, our doctors, our attorneys, our our CPAs, these people that do things for us, we tend to think of them as being somewhat superhuman, in what they do. And we don't realize they're just normal people that have built up a skill over time. Yeah.

And so I often need to remind myself that, I'm I'm not expected to be superhuman. I'm not expected to be some Warren Buffett. I'm I'm really good at what I do, but it's because I've worked hard and I've studied. And I just have to remind myself, that I can take credit for the work that I've put in and for what I've accomplished and for what I know, even though sometimes I still very much feel like I'm a fraud.

Like, I've I've I've written five books and, when people say, oh my god. You're the guy I turned. I don't feel like a guy who if if I met somebody who wrote five books, I'd be much more in all of them than I would be of myself. And so, it it can be difficult.

But, again, it's having good people around you that that can remind you of the fact, that you've earned what you what you've done. And and and, yeah.

Sorry. I have to I don't have a better answer there. I love it. The there are good reasons that you trust your own judgment and that other people want to trust your judgment as well. And a reframe that I have on imposter syndrome is the people with the imposter syndrome, they go the extra mile to do due diligence to see around every corner that's possible. And the reason you found the success you have, in my opinion, is maybe due to that you you were looking around corners in a way that someone that was overconfident in a way they didn't deserve might not.

So, you know, there are so many gems in this conversation that I I just I've written down so many things. But, you know, taking action on your life, the the thing that I am taking away most from this this conversation is you like, there's lots of people that say, oh, yeah. I'm gonna do x, y, or z. You say I'm gonna spend more time with the kids. You make it happen. You say we're gonna leave our jobs. You make it happen. So, you know, really putting full burn the ships action behind the thing that matters to you is really what propels you into where you're at, and that is that is what I admire.

Kelly, what is your primary takeaway?

Yeah. I mean, just to to, you know, just mirror what you said, the fact that you had a life vision and you relentlessly went after it, and you've done it. Like, wow. That is just so impressive.

The other thing that I loved is this idea that you can find a mentor that could become a partner, and you can leverage one another's strengths to be able to build an empire together. And so I just thought that was fantastic.

So one of the things that we always do here is we wanna know if there's a resource or an introduction that would change the ballgame for you or something that you think that our listeners should connect with you about.

Well, I hope anybody, that that wants to connect with me does. I don't I don't like to sell anything. I'm not here to market anything.

But, I do plan to start up my newsletter again in a little bit different fashion, that one that that works with my schedule. So if anybody is interested in, my daily economics newsletter, my podcast, anything else, don't hesitate to connect with me at jscott.com. Kind of links out to everywhere if you wanna learn more about what we do in in our investments.

Take him up on this. You need to hear what this guy has to say and how he looks at the the economy overarching. So, Jay, thank you so much for joining us today.

Anybody listening who needs to to hear what Jay and we talked about today, make sure you're sharing this episode. Make sure you're liking our podcast and subscribing and giving us a five star review because it really helps us get out to the right people. Make sure that you're also going to power up your life now if you need any resources to move your influence or your business forward.

So, Jay, Kelly, thank you so much for your time today, and we will see you next week.

Thank you.