He'll Reinvest With Operators Who Lost Him Money

After more than 100 syndications, a string of capital calls, two operators who turned out to be running Ponzi schemes, and the worst stretch the LP world has seen in a decade, Jim Pfeifer has a very different set of questions than he did in 2018.

Jim Pfeifer is a former teacher and financial advisor turned full-time limited partner, and the founder of Passive Pockets, the community he started as Left Field Investors before BiggerPockets acquired it. In this conversation he is unusually candid about what the last few years cost him and what they taught him. He explains why his first question for any operator is now whether they are going to steal his money, why he walks away from solo sponsors and from deals with too many layers between him and the asset, and why he would happily reinvest with operators who lost him money while refusing to touch some who made him money. Jim also breaks down what a well-handled capital call actually looks like, why the old Left Field red line of "have you ever had a capital call" no longer makes sense, and where he is quietly putting capital now. He closes on an argument worth sitting with: that the next two to three years may be a better entry point for passive investors than 2017 and 2018 ever were, precisely because the cycle taught everyone what they did not know.

Chapters

• [0:00] Why he's committing capital to real estate
• [2:09] Survive to 25, heaven in 27: the promise that keeps moving
• [8:16] The new first question: are you going to steal my money?
• [10:24] Red flags: solo operators and hidden layers
• [12:54] Should an LP ever sit out the market?
• [15:49] Why community shortens an expensive learning curve
• [21:39] The operators he lost money with and would back again
• [22:08] What a good capital call actually looks like
• [28:28] The question that used to be an automatic no
• [31:22] Where Jim is putting capital right now
• [36:48] His two biggest lessons: patience and liquidity
• [39:25] We all signed the PPM: where LP responsibility starts
• [43:02] Where is the value actually coming from?
• [47:47] The outlook for the next two to three years
• [50:32] Two books every passive investor should read

Resources

Disclosure: Some links below are affiliate links. We may earn a commission at no cost to you. As an Amazon Associate we earn from qualifying purchases.

• Passive Pockets, the community Jim founded as Left Field Investors
• Jim Pfeifer on LinkedIn
• Both Sides of the Table by Paul Shannon and Jim Pfeifer
• The Hands-Off Investor by Brian Burke
• Praxis Capital, Brian Burke's firm, whose assisted living fund Jim invested in
• InvestWise Collective, Paul Shannon's fund platform and the home of the Spectra fund
• Triple A Storage, the self storage development operator Jim tracked for two years before investing

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