Scott Jensen: Financial Planner for Real Estate Investors

In this interview we talk with Scott Jensen, CFP, the founder of Renovate Financial Planning. What makes Scott and Renovate unique is they specialize in working with Real Estate Investors.

He wakes up every day excited to get to work because he combines the career he loves, financial planning, with his side-gig of real estate investing. It’s difficult, as a Real Estate Investor, to find an advisor who understands real estate or who won’t advise you against it because they lack understanding of this important Alternative asset class. As a Real Estate Investor himself, and an avid researcher on all things real estate and financial planning, he is uniquely able help Real Estate Investors reach their financial and real estate goals.

“My advice to an advisor is that you just have to be a little bit out of the box. Price your services not so much on the assets that you’re managing but with the over overall situation and the value that you can provide. And the value that you can provide to real estate investors is absolutely tremendous, helping somebody to put the overall picture together.”

— Scott Jensen

Scott Jensen & Family

When he is not meeting with clients, nerding out on real estate or researching tax strategies for financial planning, he can be found adventuring outside with his wife and three daughters or by the fireplace drinking coffee.

Connect with Scott at https://renovatefp.com.

Transcript

Brock Freeman: [00:00:00] Hello. Hi, and welcome to our interview with Scott Jensen. We've got myself and Chris Carsley and want to welcome Scott. Welcome to our show and we really look forward to diving in with you today and talk about all the various stuff around how you do business and how you approach real estate and giving people advice on wealth management.

Scott Jensen: [00:00:58] Welcome 

Chris Carsley: [00:00:59] Welcome Scott. 

Brock Freeman: [00:01:01] Great. 

Well, let's, let's start off with a couple of questions here, just to kind of get people to know you a little bit. Where'd you go to school? 

Scott Jensen: [00:01:12] Well, and so my path into this was a little bit unique compared to other folks who I've met with here. So I went the military route straight out of straight out of high school.

And so I did some time in the Marine Corps as a reservist straight out of high school. And so that, that did form a bit of what I would do with my career later. And so going, going after that, after that was done I went to school, just a local school here in Minnesota and, and really, I wasn't, I wasn't real picky with, with schools.

I was looking to study finance, right. I knew I wanted to get into financial  planning. I have to be an advisor. So I was looking for somewhere with a good finance program. I was hoping that it'd be somewhere that's affordable. It was fairly, fairly anti debt in my younger years. And then I wanted to be able to work and go to school and kind of bootstrap it the best I could.

And so I just went to a local school at Metropolitan State here in St. Paul, Minnesota, where I'm from. So, and that was great. The nice thing about a school like that is that most of the professors also work in the industry. And so you've got a good basis of academics, as well as you've got professors who have real-world experience.

And then also the classmates being that they were also adults for the most part, going back to school, had work experience in their field. So you could get people where the classroom discussion was very interesting and helpful. And a lot of personalities and perspectives other than just the professors.

Brock Freeman: [00:03:01] That's great. I remember one of my own professors in business school, the best one I had was really just a guy that had that real-world experience. And he. Kind of, he was a professor on the side and those are the best because you really can ask those questions. You get more than an hour academic or bookie answer to thing.

So really relate to you. And I think I can totally understand too, why you would take that attempt to do a no debt route the amount of debt that students come out with now. It's just unbelievable. I used to hear about it with doctors, but Yeah. Now just even normal students coming out with a liberal arts degree and wondering how in the world they're going to pay that back.

It's just, it's quite amazing to me. So where do you live now? And tell us a little bit more about why you love living there. 

Scott Jensen: [00:03:54] Sure. And so I, I, up in Minnesota, the Northern part of the country here, and I do, I do enjoy it for the most part. And so I'm born and raised in Minnesota. I I've left the state for vacation and I left the state while I was in the military.

And so I, I enjoy for the most part Minnesota is. It's got its extreme seasons. And so we're known for cold snowy winters and then there's hot humid summers. And really all of the seasons are just very intense. And so like our fall has just beautiful fall colors and this spring is very green and 

Chris Carsley: [00:04:38] Shorter than hockey, of course, 

Scott Jensen: [00:04:39] variety that makes it

The professional community around the twin cities is fantastic. I love that. And then up, we didn't get to the Northern part of the state. There's just beautiful rivers and lakes. 

Brock Freeman: [00:04:54] Very cool. It's still a little bit with your education about wanting to do something around finance stuff. What got you started down that road as well.

Scott Jensen: [00:05:04] Sure. And so my, my early path, I was a, I was a huge Dave Ramsey guy. Right. I remember listening to Dave Ramsey and we personally used his system for a long time. And I just thought it was the coolest thing that here's this guy making, you know, millions of dollars. Helping millions of people be on a better path financially.

Right. And just what a great what a great way to make money. And so I was thinking of that and kind of exploring careers where you could do that, right. Help people do better financially and then do well financially at the same thing. Right. And looking at different options, it seemed like being a financial advisor would be the best for me.

I've got a very analytical. Just mindset. I usually boil things down to the, to the numbers, but then understand the emotional side of things really take an approach that's just trying to help, help the client. And so, yeah, that's the main reason that I, that I started during this. And so right out, right out of college, I got a job with a financial planning firm here in Minneapolis.

A really good firm focused on retirement planning and working with retirees because it's one thing to save for retirement, right? Like if you've got a long enough time horizon, it's pretty simple. And that's an oversimplification of course, but it's much more simple than this. Once you're close to retirement and, or in retirement, you're looking to develop income from your portfolio, then that's when really things become complicated.

And so we specialized in that.

Brock Freeman: [00:06:50] Interesting. I'm sure Chris will dive into that later with that statement about the difficulties of that. What so what made you move on? To establish your own firm independently. 

Scott Jensen: [00:07:03] Right. And so, so as a financial advisor, working for a good firm in Minneapolis, things were going well, but I've always been entreprenual just, just ever since I was a kid, right.

Just always this entrepreneurial mindset, wanting to start a business or grow a business. That was always , fascinating, or interesting to me. And so that always was kind of in the back of my mind and then going through the '08' crash. And then after that with real estate prices going up and buying our first house, that was our first taste of real estate and how that could impact you and seeing the effects of sweat equity and really like.

Putting time and money into your house and seeing how that worked. And so we, we did that. And then once we bought our second house, we turned our first one into a rental property, very simple, easy way to get into a rental real estate. And, and that worked really well for us. And so we did that again.

Well, we didn't move, but we bought another house actually on an auction. Turned that one into a rental property, put a tenant in there. Very hands-on managing And, and it just was always enjoyable to us. And when well and during that process, we were getting more involved with the financial or with the real estate investing community within the twin cities.

One of the great things about the twin cities area is that the investor community is just fantastic. Very welcoming and just a helpful group. It's not a group where it seems like people are real tight or the, or the real kind of cliquey. Like people are just very well. And so getting involved with that group, I kept having people coming up with, coming up to me, asking for help with things or asking to.

You know, to work with me on various things, but really the firm that I was working with just wasn't set up to help this type of investor and most planning firms. Aren't right. And so most firms, you know, they, they just get paid for your stock market investments. And then that creates a bit of a conflict of interest there.

And not that you can't work around that, but. The firm I was at in particular, it just didn't seem like the best fit. And so with my background and the interest in real estate and experience in real estate as well as financial planning, it seemed like a natural fit to go out on my own, go out on my own and create a firm that just specializes in working with active real estate investors.

And so I did that most of my clients now own active properties, right. And so they're either managing the properties themselves, or they've hired a property manager and they're managing the property manager. But they're almost all, you know, reporting schedule E income as active real estate investors. And so having that specialty has been fantastic. 

Brock Freeman: [00:09:57] That's amazing, Scott. I. Just to, for everybody to know a little background here is Scott is someone I met on BiggerPockets. So I was particularly attracted to talk to Scott because there's so few RIAs that do anything other than just your standard public market stuff.

And so when you run across a unicorn in some sense like Scott you just, you become like, well, I want to talk to this guy. Who's this guy that actually thinks different than 99% of the other wealth management people out there. And that's not necessarily a knock on it. I, I, you know, maybe Chris, you can dive into more of the background, et cetera that, that kind of causes that.

But that's, that's one reason. It was just great to be able to reach out to Scott and find out. Hey, here's this person who is really built a great business around being a little different in the, in the marketplace and helping us clients. And with that 

Chris Carsley: [00:10:52] Yeah. I mean. You're totally right.

I mean, most of, most of your RIAs and actually most of your investors as we've had other conversations, you know, alternative investments, which real estate is, one of them is really not for everybody. It, it may not be, but the thing is, is to have someone who has that access to the client and can actually work out some of those unique particulars of their client and say, Hey, something in real estate might be useful to you. I, you know, it's got, if you've got a chance, you know, if you can give us an example of, you know, what particular clients you're running into that are looking at this alternative investment within specifically real estate that meshes well with their portfolio.

What type of client, I mean, where they, you know, income, they're looking for diversified portfolio of mix. If you can give us an example of that, because that is an important aspect that, you know, I think a lot of people. Don't utilize some alternative investment platforms simply because, well, they don't have time.

We're too busy. I've got too many clients. I don't feel like any of my clients may need, you know, anything outside of traditional investments. There's multiple reasons why it wouldn't work, but I think. There is a vast number of people that just don't have the education or the background to say, well, wait a second.

I really feel comfortable suggesting this and building this into potentially my you know, my client's portfolios, which, I mean, Scott sounds like, you know, , you kind of did a little bit of your own work and deployed your own knowledge based then to help, you know, other people expand, you know, their investment portfolio.

So if you have an example of like, and walk us through some of the clients that you work with and, and how it's really fit for them, that'd be great.

Scott Jensen: [00:12:39] Yeah. And, and so my clients are fairly diverse and, but I think, and there is a difference between passive and investing and I don't even include real estate in this passive investing real estate is passive for, from a tax perspective. But in actuality, you've either got to manage the property and the tenant and the building and all of that.

Or you've got to manage the property manager in this type of investing. Other than you can go to the, you know, investing in REITs or, or DSTs, or other instruments that are actually passive. But most of my clients are active real estate investors and I'd say active real estate investors are the ones who are either purchasing the property or, you know, finding someone to purchase the property for you and then managing themselves or managing the property manager.

And so this type of person is typically business-minded right. And they're not they're not a person that's satisfied with only a W2 income. Variable income does not mind, or this person doesn't mind having variable income. Right. And so they don't need the security of a W2 job most of the time they enjoy real estate.

Right. And I think just, and the more wealth you accumulate, I think you'd learn to gravitate towards things that you enjoy doing. And so if you don't enjoy real estate, I don't think real estate investing is probably the thing you should do. And you enjoy  the actual process of looking for properties, buying properties and that sort of thing.

Understanding construction is a good bonus. Understanding finance and the numbers is a good bonus. But I, I don't think that active real estate investing is for everybody. It's nice in that it's, it's it's not a complicated small business, right. And so it's a small business. That most people can start.

If you have some capital, you can buy a property and you can find a tenant and put that in, put the tenant in the property doing it well can be complicated, but, but in theory, it's an, it's an easy, low entry to barrier or low barrier to entry business to start. And so, it's a good spot that if you put forth some effort, you can gain above market returns because you're doing real work and it's an actual small business.

And so a few, few examples, those that I've worked with, I've got a client now where one of the things we're doing is he's, he's got his investment portfolio and he's got his real estate portfolio. Real estate makes up about 75% of his investment. He's got a significant amount of smaller, and I'd say smaller, like one to four unit buildings, either single family, duplex, triplex, and several fourplex buildings.

And so he was looking at it and he, he, he no longer has a W2 job. He's just living solely off of his real estate income for the most part. But he says, or his main goal, he wants the, the cashflow from real estate to do significantly better than inflation. And so just looking at that. He wanted to increase his passive income by 50% over the next kind of the shortest span possible.

 And so just looking at doing this now, you've got a few options, we can either supplement it, supplement this with other investments, either stocks or bonds or alternatives. We could change how he's leveraging things and or we could buy more properties. And so looking through things it seems like the best path forward.

For him is going to be to, to do leveraging a little bit differently to, to get some longer term, low interest rate mortgages and buy a few more properties. And doing that should increase his passive income and his returns overall significantly over the next few years. And so it's people that, that oftentimes want oversight.

They, they want somebody to come in with kind of an outside third-party opinion. And say,  you know, how do you, how do you think my properties are doing? What, what could I do differently or better, or at somebody who has some sort of goal in mind? How do I reach this goal? You know, a lot of times it's passive income.

Sometimes it's like legacy goal. What's the best way to pass this to children. Sometimes it's the tax planning aspect of real estate that has a lot of tax benefits, you know, with depreciation. But there's also depreciation, recapture and planning for that is a huge,  ...

Chris Carsley: [00:17:10] Does your, do many of your clients go after it sort of think about the diversification nature?

I mean, how important is that? Are you finding that with, you know, specifically to real estate and looking at you got a brand new client that maybe doesn't have any real estate and wants to get into it? I mean, is that. Yeah, I'm always curious that it's varied. What people are really after some just want the income and they don't really think about risk controls aspects and the diversification.

Is that something that you're finding more and more people want from real estate? Or is it no, it's something I'm just really interested in. I want the alternative income. 

Scott Jensen: [00:17:44] So it's, it's very, I think people very much on a spectrum here. And sometimes you get people where they understand that they're very overweight in one particular asset class.

It may be things like if you're a very heavily weighted in some city and then some local regulation makes it hard for you as a landlord, something like that makes it. You know, appear that you're, you're very much concentrated in one area and maybe that's not as good as you had hoped. And so for some clients, diversification is a major thing.

When they've come to me, you know, they they've done very well in real estate. And they want to know how to kind of spread, spread their eggs out, not have all their eggs in one basket .Other clients that I'm pushing more for diversification and they don't see the risk as much. A lot of times with my clients in particular, I think a lot of a lot of people are attracted to real estate because there's a sense of control, right?

And so if somethings happens, they can sell the property, they can get rid of the tenant, they can refinance, they've got some options. Whereas with stocks and bonds and a lot of alternatives, even. You know, the year you are at more of a the whims of the market, right. In which it's,....

Brock Freeman: [00:18:59] I want to jump in, if you don't mind, Chris. Scott said something really interesting that you and I had talked about about.

Picking on a first alternative investment. And what advice to get Scott said, look, it's something that you try. And we think that key aspect people assets, and from that there's so many different alternative assets out the list is really long to pick. Our advice to people when you're looking for alternative assets,  pick something you think you enjoy.

So it's, it's great to hear that you're seeing out there something where people picking real estate staying with it, positive, something that I didn't  are starting to join. As we all know, look the best subjects in school or the ones that you. You, you had fun with and you enjoy, and I think it's no different when you pick an alternative asset, it is, is really to pick one you enjoy and that makes learning so much easier.

What have you found around that? Have you found people about much easier as clients when they, you know, really enjoy real estate or really enjoy that alternative investment? Or is that something that you really suggest to people is, is pick something you enjoy. 

Scott Jensen: [00:20:08] Yeah, definitely. And I think you hit the nail on the head.

You just do better at the things that you enjoy doing. So, so I mean, most clients most clients that come to me, they already are real estate investors. And if they're not, I do have a discussion with them on real estate investing in the pros and cons of it because there are serious positives and serious negatives of this way of investing.

And it's certainly not for everyone, right. And so I walk people through the pros and cons and try and be, you know, unbiased. I enjoy real estate investing myself, but that's not. And I don't think that's right for most people, I don't think most people would make good real estate investors. And so I think as a financial advisor, I don't need to work with every type of individual.

Right. I need to be very, very good at working with a specific type of individual. And then for anyone out there looking for a financial advisor, you don't want a generalist. You want somebody who's very good at your particular situation, unless you've got a very general situation, right. It's just like anything, if you're doing something right.

Specialized find somebody that specializes in your specific situation and you're going to have better results. 

Chris Carsley: [00:21:28] With that said, we've talked a lot about, you know, the active aspect and people like to control. Are you doing anything or what are you sort of put together and suggest, you know, more on a passive aspect within the alternative space for investors.

Scott Jensen: [00:21:43] So I do, I do like the alternative the, the lending space, which you guys are in. And so it's tricky to me because, because you're at, you're using, you're using alternative investments to fill a spot that I don't think fits the. The characteristics of stocks and I don't think they fit the characteristics of bonds.

And so at some place that's alternative, right. Go figure. And so this is completely different animal in the portfolio. But I think that you, you can provide a bit of yield and there is a bit of risk specifically, or as, especially depending on which types of alternatives you're looking at, but within the lending space there is risk there.

And so I don't, I don't consider that, you know, as safe as a good high quality bond but the returns are better or they can be anyway, right. Depending on the, the, the time period in the performance in that. And so, so I, I like them as a compliment to a stock bond portfolio totally. 

Chris Carsley: [00:22:51] On something you said there.

And this is one of the, we can kind of meld this into the conversation around the challenges that people have been seeing currently is certainly a variety of different alternative lending carries additional risk above and beyond a high grade corporate or a treasurer or something of that nature where you're backed by you know, the taxing power of the United States within that, within the treasury aspect.

But the issue that a lot of investors are having in that space is you can't capture a yield. Is that something that has been a growing concern within your client's accounts of will? Where do we, we're going to capture yield? How are we going to do this without extending too much risk? And you know, both, I guess I may not as real estate really been one of your answers to that question.

And then the last year or so, or or what else have you been suggesting from, you know, an alternative yield standpoint without having to take massive undue risk and perhaps go out and buy nothing but high yield. You know, the JNK ETF or something of that nature if you can walk through how you've been sort of tackling that recent challenge that a lot of RIS and investors have been facing for the last year or so.

Scott Jensen: [00:24:01] Right. Well, and I would I would say that that goes back a lot farther than, than a year here. I mean, ever since interest rates got low, which they've been low for a long time now people have been talking about, well, once interest rates rise, that's going to be terrible for bonds. Right. And I've heard that conversation for the last five six, seven years. 

However bonds have done quite well during that exact same time period that people were warning that they would do poorly. And so I think we've got to be careful not to predict the market too much because typically when you do that, you, you predict it wrong. At least that's what history shows us when we try and predict the market.

You, you do it wrong. So, so how do you put yourself in a position that you'll be okay. No matter what, right. And so I think that's, that's the biggest thing that we have to solve for is figure out what, what the timeframe of the investor is. You know, w what is this money for? Are we taking retirement distributions to live off of how much do we need and for how long of a time period and to have.

You know, a specific dollar amount that we have in things that are safer and spread that out globally, amongst bonds. And so we have some bonds within the United States that are on the shorter term side of things. We have some bonds in the United States that are in the corporate and the, and the midterm side of things.

And then we have global bonds and have a solid position in bonds. But really with, with bonds, try not to have more than you need in bonds and have those, the remaining amount in more growth oriented investments like stocks or alternatives or real estate. And then real estate does it does offer are terrific cashflow that can really help supplement a portfolio.

Yeah. 

Chris Carsley: [00:25:50] Are there any other alternative platforms you use for any particular investors? I mean, I know it's sometimes when I was managing investors money, you'd have something that, you know, on one spectrum, it was very, very simple, plain vanilla. And you had others that, you know, their demands were quite complex.

Just, just curious of what other alternatives, if any within your client base you've seen sort of questions or people beginning to think about. 

Scott Jensen: [00:26:16] So one thing that, that we do most often, it's just with hard money lending. And so there's local hard money guys in town that do really good work. And, and so we'll have a portion of not necessarily your, your short-term needs, but, but have some good yield that comes in with a hard money lender.

A lot of times, it's not, it's, it's similar to what you guys are doing just with smaller properties for the most part. And so that's been a good addition to, to client portfolios and then two, if they are in more of a growth and income phase, we've even used some arbitrage in, in that we've used to collateralize the lending in order to access additional funds and do some, do some investing through that.

So basically you, you borrow money. I guess your portfolio don't go nuts because this is an extremely risky thing. You don't put it into something that's risky, but you know, if you take 10% of a portfolio and margin and put it into I, a hard money type investment, you can get some good returns without taking undue risk and without sacrificing what the portfolio would be doing otherwise.

And so in taking that approach in that span, 

Brock Freeman: [00:27:36] Great out of the box. 

Scott Jensen: [00:27:37] The other thing, the other thing

Yeah. And that's one of the nice, the thing is about working with a specific investor profile because I think for, for most individuals, for your normal average, Joe retiree, collateralized lending is probably a terrible idea. And that's why most advisors stay away from it and say, it's a terrible idea.

 Because they're right, most of the time, but for this specific subset of investors, it's not a terrible idea. And in fact it works quite well. And it's something that they understand because we're used to borrowing money and we're used to lending money. And so, so they get just the interest rate spread and the risks.

And so it, it works wonderfully to just kind of juice a portfolio a little bit without You know, without leaving extra money on the table and without taking undue risk. The, the other thing that clients are interested in a lot of times is getting into investment syndications. Right? And so these are groups of usually there's some general partners and some limited partners.

 The general partners come up with a deal, provide the, you know, fi find the loan and figure out how to manage it, do the actual deal. And then they raised money from, from limited partners, limited departments provide the funds for these. And so those can be a good investment, but they're, they're extremely high risk. And one of the things in the alternative space that that I always caution people about just, just the, the lack of regulatory oversight on specific things. Right. And so a lot of times the, these are just available to accredited investors.

And the reason for that is not because they're amazing investments it's because of their high risk investments. Right then, so it doesn't mean they're bad, but it means you should do your due diligence and be willing to ask questions or uncomfortable questions, right? Who who's auditing this is, do you have any oversight?

Which regulatory authorities are you are you dealing with, and how does, what does that look like? What are you doing to, to protect my data and my investment? Yeah. And, and so those are those are complicated to deal with. They can be good, but it's something that I always caution people from getting too heavy into. 

Chris Carsley: [00:30:09] Definitely.

Well, I, you know, I I'd say just listening to what you were saying, and I was going to recite a couple of points that you had you know, sort of sum up some of the things you've said and see if there's anything else you want to add to this list, but you had sort of said that, that, you know, investors, especially with regards to alternatives, should focus on something they enjoy.

And they like it. And they're passionate about. So they have a great deal of understanding and especially if it's going to be an active investment, you know, you know, work with a knowledgeable advisor find that advisor that's going to specifically understand, you know, what you want to do as, as an investor.

You know, really understand the risks involved in anything alternative, understand what it takes to, you know, actively manage a portfolio. Or if you're going to invest in a fund, you know, understand the risks that are inherent in that investment. And then lastly, what you were just talking about was that transparency and oversight . Work with, you know, whether it be your advisor or a fund or somebody else, a partner, you know, make sure you have the transparency and that you have, you know, that oversight to, you know, you know, protect your investment.

Is there anything else that you would want to mention as far as like, Hey, this is what we really focus on for your clients. I mean, additional point. 

Scott Jensen: [00:31:22] Yeah. I said, there's, there's two other points of clarification. 

One is it's okay to start small. Right? Most firms are, most of these investments have a minimum. There there's no need to invest more than the minimum. Right. Give it a shot, give it a couple of years and see how comfortable you are with, with this particular firm. Sometimes firms are better at raising money than they are at managing. Right. And you don't know that until you've dealt with them for for even a full cycle.

 A lot of times a syndication deal it's a five to 10 year product project. And really you should work with them for a good five to 10 years go full cycle through the project maybe before investing more than the minimum or at least getting a couple of years under your belt with these, to see how this investment sponsor performs, how they communicate how they manage in things like COVID in good times and bad. And so just spread your money out, start small. 

And then the other thing is to just realize to match up the timeframe of the investment with your timeframe, right? And so if this is an investment that you might need some of this money back within the next five years, And this is an illiquid investment that you can't get the money.

Well, it doesn't matter how good, you know, investment is. It's the wrong investment for you, right? Because this investment doesn't provide you the liquidity that you need, but maybe if you need the money in two years and there's a, a two year liquidity event or something that happens, maybe this is the right investment.

And so much much of my work. And I think much of. Anyone who's, who's helping somebody invest work is to just match the, the timeframe with the investor. Right. So that the funds are there when you need it. And if you don't need it, then, then it's all right. For them to be locked up as long as you're earning, you know, an investment.

Chris Carsley: [00:33:17] Yeah. I call that an asset liability mismatch don't you know, for any investors listening to this .Don't feel bad if mistakes happen, even at the most professional level, I've seen tons of professionals, mismatch assets, and liabilities within a complex portfolio. All of a sudden they need liquidity and it's not there.

And that's what creates some catastrophic problems. So that, yeah, that's a very important point. And I would actually say most of people's losses and stress, even in the '08' period was due to asset liability mismatch. They just. They went into things that had five-year terms and turned around and needed the money in a year.

That's not going to work. So, yeah, that's a, that's a good good point of advice. Well last question I had, which is kind of a little different was, you know, some of the people might want to understand you're doing some pretty esoteric stuff outside of the normal of you know, portfolio construction and traditional investments.

How do you structure that for yourself as part of your business? I mean , you know, you're taking a particular time in helping educate these people, helping them find investments, helping them manage those things, you know, as you, as part of your business. I mean, it's like, how does that fit? So, you know, perhaps their RAS out there can better understand, well, wait, if he pulled it off and he did it, and this is how he thinks about structuring it within his business to make it feasible for his financial advisor practice.

It's something that they could think about as well. 

Scott Jensen: [00:34:45] Yeah. And I know so, so this is pretty new usual, what, what I do, right. And so most financial advisors don't work well with real estate investors. At least they don't help with the real estate side of things, which to a lot of real estate investors. It is the main thing.

So, so they're not helping with the main thing. Yeah, that's not as good as it could be. And so my advice to, to an advisor who's doing this is that you just have to be a little bit out of the box. Price your services with the value you provide, not so much the assets that you're managing but with the over overall situation and the value that you can provide and the value that you can provide to real estate investors is absolutely tremendous helping somebody to put the overall picture together.

I mean, you can save someone hundreds of thousands of dollars in taxes over the long-term make sure that, that they have the asset and liability matching like Chris was mentioning. And so they don't get themselves in a hard situation and they have to sell things at the wrong time. Like that value is just incredible.

And so charge based on your value, not necessarily based on what they have just in stocks and bonds and do good work. I mean, the, the things that the things that you can do for, for a real estate investor just helping them, you know, have a good sounding board understanding what a client is in investing in and give them a good unbiased opinion, offers them some accountability and oversight with the stock market portfolio and the real estate portfolio determine what the effects of leverage are on their portfolio.

Try, try and help them determine what's the optimal amount of leverage. How do you manage you know, fixed versus variable rates of interest rates. I have a good professional network, CPAs attorneys, qualified intermediaries alternative investment folks and just have a good base of knowledge to, to help with.

And, and there's just, it's, it's a blast. And, and the, the reception I've gotten from real estate investors has been fantastic. There's, there's definitely a need to it. In fact, there is, there's another advisor in, in New Jersey who does a similar to what I do. And we've started a, a a real estate study group amongst financial advisors. 

And we've got, we started at about a year ago and we're all up to a little over 45 members and we just get together monthly and talk real estate and how can we help real estate clients? And so I, I do think this, this thing is going to become more popular within the financial advisor space, which I think is hugely beneficial for, for real estate investors overall.

And so it's, and I've said this before, but it's, it's. Finding somebody who works within your specialty? I think so. If, if you were a real estate investor, find a CPA that works with real estate investors, a mortgage person, a brokerages, it's just people that work in yours specific situation. 

Brock Freeman: [00:37:57] That's some great advice, Scott, for other RIAs especially those that are just getting started. And they're wondering how in the world they're gonna get those new clients, what they're going to specialize in because they're such generalists that it's, it's really difficult. So taking a specific alt like real estate is great. Maybe crypto is another one, whatever it is that you have in some enjoyment.

And it really going after deep into that area, I can see how you would much easier pick up clients in that area. Because they begin to trust you because you build that knowledge that no other RIA has, or very few of them do so great advice.

Scott Jensen: [00:38:36] Right, right. And it works wonderfully if you take a one-off situation. Right. And so you've got let's say clergy, for example, right. Pastors, there's all sorts of unique tax situations and opportunities and pitfalls of. Of pastors and for a normal, a normal financial advisor to do a really good job for a pastor.

It's kind of difficult because they're probably not your highest paying client, but they're one of your more complex clients. And so it's hard to service them well, but if you just have a practice where all you do is work with pastors. You can do a great job at a reasonable price for somebody. And it works for just about any specialty 

Brock Freeman: [00:39:20] Beyond RIA stuff.

What you know, we're all busy all the time with our professional lives, but what things would you really do more of, but. You don't really have time for? 

Scott Jensen: [00:39:31] Yeah. And so tax time is over. And so tax time is a real busy time for me. And so it's it's good to be on the other side of the ass. Really family time. I've mentioned, I got three kids, three girls and we Yeah. We spend a lot of the time together and I'm looking forward to spending a lot more time here once the, the, my schedule comes down a bit. And so looking to go, looking forward to going up Northern Minnesota, doing some hiking, walking around in the woods and different things that Airbnb, I love Airbnb getting a cabin on the lake and just hanging out with family or friends.

Brock Freeman: [00:40:08] And then lastly, what new belief. Behaviors or habits that you've adopted within the last five years have most positively impacted your life.

Scott Jensen: [00:40:22] So five years, what makes it kind of tricky? But I think the biggest thing is to just be continually learning. Right. And I didn't start this five years ago, so I'm sort of cheating on the question. But always, always, always learning. Right. And so if, if you find somebody and they're, you know, trying to teach you something trying not to be critical of what they're saying, and maybe if you disagree with.

99% of what somebody is saying. Well, is there 1% that you could learn from that individual? How can, how can, what, what they're saying be applied to your situation or the situation to somebody, you know? And so just always learning and then to understanding that, the world, isn't a world of, of scarcity and that there there's plenty of people to help.

Right. And there's plenty of people who want help with, with their planning and their investments. And so the, the work that you guys do and the work that I do, yeah. 

Brock Freeman: [00:41:23] That's great advice. Scott always be learning. I find it a lot of fun just having these interviews or even interviews with new investors and you learn how they made their money.

Their, their specific profession. It's always fascinating. And then I'm sure for you, as you learn, even from real estate investors in the, in that gets act input to you, and that gets back output to other real estate investors that you're working with clients. So, man, that's, that's really a key for professional success in your businesses is that I'm always ready to learn something from somebody that's.

That's great advice, Scott. Well, Scott, it's been a lot of fun talking to you about this business. And I hope that our guests are going to come away with some really important whether you're an investor, whether you're another RIA. I think there's some incredible nuggets here around diving in considering your first investment or as a new RIA, how to really be successful in this business.

And Scott really as a, as a picture perfect example of, of how to do well as an RIA and do good for people, which is, which is great. So, thank you so much for interviewing with us Scott and great luck in the future. And thanks to everybody out there listening to us. 

Scott Jensen: Yeah, I definitely enjoyed the podcast and the interview.

Thanks for having me.