Real Estate Nerds 52: Growing from One Fix-and-Flip to Apartment Investing with Andrew Cushman - Best Deals

Real Estate Nerds 52:

Best Deals

"Growing from One Fix-and-Flip to Apartment Investing"

Andrew Cushman
Real Estate Investing Expert
Real Estate Nerds
Episode 52: "Best Deals"

Listen to the Podcast Here:

“The first flip went great and I basically made as much as I did all year at my job and said, ‘You know what? This is the best opportunity that we’ve ever seen and we’re going to go for it,’ so I walked in and quit my job,” – Andrew Cushman

Real Estate Nerds host Scott Royal Smith and real estate investor Andrew Cushman discuss Andrew’s entry into real estate investing. Andrew started with fix’n’flips and soon quit his job to be a full-time investor, eventually transitioning into apartment investing. Learn about fix and flips, apartment investing, property management, networking, investing wisdom, the best ways to connect with mentors and more!

Scott Smith: Hello, and welcome to the Real Estate Nerds podcast. On this best deal episode, we will explore the human side of real estate investing with a seasoned pro about the legendary best deal of their life. The deal isn’t just the investment, it is also the person executing it. Stay with us and learn what it takes to be the best investor. Hi, and welcome to the Real Estate Nerds podcast. I’m your host, Scott Royal Smith. I am the CEO of Royal Legal Solutions, your one-stop shop for everything needed for real estate investors.

Scott Smith: Tax, business, legal advice, asset protection. You name it, we got it for the real estate investor. I’m here with a good friend of mine, Andrew Cushman. He is a phenomenal individual, very well-versed in real estate, makes a killing at getting into deals at the right time and improving upon them to get maximum returns. Andrew, thank you so much for coming on the show. I think today we’re talking about best deals, is that right?

Andrew Cushman: Yeah. That sounds good.

Scott Smith: Excellent. Well, before we get into the best deal, Andrew, can you give us a little bit of backgrounds for listeners of what they need to know about you, for what it’s like? Who were you before you got into this deal? Set the stage for us.

Andrew Cushman: Yeah. I took the traditional path into real estate and went and got a chemical engineering degree, but even in high school, I knew I wanted to be an entrepreneur. I just didn’t know how or what so the engineering degree was kind of a fallback until I figured it out, and so I worked as an engineer for about seven and a half years for a big food company and then my wife and I discovered how to flip houses by talking to people who are in pre-foreclosure and we found that in 2007, did our first deal in 2007 here in Southern California where we still live.

Andrew Cushman: The first flip went great and I basically made as much as I did all year at my job and said, “You know what? This is the best opportunity that we’ve ever seen and we’re going to go for it,” so I walked in and quit my job, went into flipping full-time; two years later, my wife did the same thing and we’ve been business partners ever since. We flipped full-time for, I guess, four or five years.

Andrew Cushman: I had some really good years in 2009, 2010 and then we looked around and said, “This has been great, but it’s not going to last forever. What’s the next big thing? All these people are getting foreclosed on, they’ve got to live somewhere. They can’t buy a house for probably seven or 10 years. Most of them don’t want to buy a house.” We just came out of a huge recession, which means we’re going to be in an expansion.

Andrew Cushman: Look at all those factors, what’s probably going to do really well? We said, “All right, so apartments.” What we did then is we had a mentor for single-family flipping and we asked him, said, “Hey, do you know anybody who can teach us apartments?” and he actually said, “Yeah, I do.” He connected us with the guy who, at the time, had done about 800 units. We hired him as a mentor to teach us the business and then our first deal was 92 units out in Macon, Georgia, which is the other side of the country, and we bought that.

Andrew Cushman: I guess that was early 2011, we’ve been doing apartments full-time ever since and have done about 1,800 units since we started and so far so good.

Scott Smith: Wow, that’s awesome, Andrew. What a great way to get started as somebody else coaching you along the process. That’s something we always think about as, whenever you’re starting something new, having somebody that’s older and wiser than you to help guide you along the way is always a good way to know that you’re on the right path to being successful. How did you recruit that relationship? Because everybody’s looking for a mentor, and sometimes ours are not so easy to get, so how were you able to get a good one?

Andrew Cushman: We were fortunate that things worked out that easy. It’s not always that easy. The mentor we had for flipping houses was somebody that we had met and hired through … I wouldn’t say a guru but a local flipper that had put together a class, that was teaching people, and then the person who was doing apartment was just connected with them and he, at the time, considering coaching people and taking people on and maybe teaching a class.

Andrew Cushman: We just connected at just the right time and it worked out, and then actually we became friends after that and I guess … What is this? Seven, eight years later, we’re still doing deals together and talk on a weekly basis and all of that. Basically, word of mouth and connecting with people.

Scott Smith: Very cool. Well, it comes down to the networking, right? How networking is the most important thing because it helps you find people into it.

Andrew Cushman: Definitely, and that’s true in any business but especially in multifamily. It’s very much a “we” business; you can do a few things as a solo guy but it’s pretty tough.

Scott Smith: Yeah. Well, getting into this best deal, when you first started looking into it and first getting into it, what were the major roadblocks, if there were any guy that made you think, “Well, maybe this isn’t the right deal”?

Andrew Cushman: There are quite a few. This particular deal was something we purchased in 2014 in East Atlanta. Back in that time, that was a part of Atlanta that still had not begun to recover from the Great Recession, or had bottomed out but there was still quite a fair amount of distress there. The property itself had been foreclosed on and the guy who was selling it at the time had owned it for about two years. He bought it out of foreclosure. He fixed some of the major stuff like roofs and foundation, whatnot, and then he filled it up with not the best tenants.

Andrew Cushman: Then he was selling it, so it wasn’t an overly distressed property, but it wasn’t exactly clean either, and then the market there, again, like I said, still had a fair amount of stress. One thing we had a tremendous amount of time was getting a lender for it. Nobody wanted to lend in that area and at that time, and it wasn’t a really bad area. The median income was $40,000, so we’re not talking ghetto but still just a rougher half of town.

Andrew Cushman: We actually went through 65 lenders to find a bank that would eventually give us a loan on that property.

Scott Smith: Wow, that’s incredible. How do you work your way through that many lenders?

Andrew Cushman: Again, not by yourself. I had a couple of really good mortgage brokers that just would not quit and kept digging and digging until they found somebody and, just like how I found my mentors, it was similar. The bank that ended up giving us the loan was because one of the mortgage brokers that we still work with to this day had a friend who had a friend who knew the president of the board of one branch bank in a little town in Georgia, and this was their specialty and they were willing to do it.

Andrew Cushman: Again, now we still do loans with that bank today in Georgia and it’s a very quick, easy, almost handshake type of deal.

Scott Smith: That’s wild. Yeah. How much of your time would you say that you invest inside of the relationship side of what you do? Because it seems like most people, I think, are really driven to like, “Oh, I want to do my social medias, send my e-mails, do my text messages,” all the task-oriented things about real estate, but it sounds like you really focused into the deep relationship building to get primary, secondary, tertiary contacts.

Andrew Cushman: Yeah, and I fall into the same trap. Especially as a former engineer I’m very much the task-oriented person and I’m actually working on trying to keep myself more focused on building the relationships. The e-mail and the texts and the social media, all of that is good and well but it’s secondary to forming real relationships and by real meaning you know the person, maybe you see them in person occasionally, it might be at a conference or a Mastermind or touring a property or something like that.

Andrew Cushman: That’s all fine. Somebody that you actually talk to on the phone occasionally, someone that you have a one-on-one e-mail conversation with not necessarily just from a blast that you sent to 4,500 people. Those are the real relationships that are critical to succeeding in the business and building a team and making the kind of contacts that are going to actually help you succeed.

Scott Smith: No, absolutely. Well, I think that those are really important things but the one thing I think people get caught up in doing that work is that a lot of times it’s not a lot of fun.

Andrew Cushman: One thing I learned in the flipping business, doing pre-foreclosures, is I used to cold-call people in … They get a notice of default and I’d call them up and ask them if there’s any way I could help and, knowing that every once in a while someone’s best solution would be to sell me the house. Well, that’s not exactly the easiest conversation. “Hi, I’m a stranger, I’m calling you to talk about your financial problems.”

Andrew Cushman: Most people aren’t real receptive to that, so that’s a great way if you want to build up that muscle of making phone calls and not worrying about rejection, just go make a few cold-calls like that and it’ll get you through that no problem. Everything else after that’s a piece of cake.

Scott Smith: Yeah, right. Don’t be afraid to cold call people if you want to talk to them.

Andrew Cushman: The thing is most people that you’re going to be dealing with outside of the foreclosure world are going to be either happy to talk to you or at least easy to work with.

Scott Smith: Yeah, how do you do that typically? Let’s say that you want to meet somebody and they’re hard to reach? You have somebody that’s like, “Man, if I could meet XYZ person, that’d be a huge opportunity for me, but man, they seem really hard to reach,” how would you pursue going after somebody like that?

Andrew Cushman: A couple things. The first thing I would do is I would reach out to my existing network and see if anybody in my network already has a connection to that person because a warm introduction is by far and above the best way. For example, if I wanted to get in touch with you, Scott, maybe I said, “I’ve heard you on several podcasts,” and let’s say I heard you on a podcast where I know that podcaster, I would reach out to that podcaster and say, “Hey, you know what? That was a great episode and I’d like to talk with Scott and I would love to get connected with him. Could you connect us, maybe just via e-mail?” or something like that.

Andrew Cushman: I’ve done other things where I shot a quick video just on my phone. It was somebody that I wanted to get in touch with who was fairly high profile and I had no connection to, but I knew somebody who did know them. I shot a quick video on my phone in my backyard as an intro and then went to that person who was a mutual connection and said, “Hey, could you forward this to the person I’m trying to get in touch with?” and sure enough I got a response within a day or two.

Andrew Cushman: That’s the primary thing. The other thing is these days everything is available on the Internet. It’s out there permanently. Without being a stalker, try to learn what you can about that person, what their interests might be, and then see if you can find a way to send them something either that’s of interest to them or just might add value to what they’re doing or what their business is, and those would be the top two things that I would do.

Andrew Cushman: Probably the third is just sheer persistence. Sometimes an e-mail gets buried, especially if it’s someone who’s busy or high profile, they’re going to get a lot of requests and maybe the first five times yours just gets lost and on the sixth or seventh or 18th time, that e-mail might connect but that would be after the first two methods that I mentioned.

Scott Smith: That’s awesome, Andrew. I think that one of the pieces I think everybody misses or at least I see time and time again I see, you agree with us and when they’re trying to form new relationships with people, whether it’s a mentor or a networking relationship, is that what they’ll do is just essentially ask the person like, “Hey, will you help me?” and that’s probably a low thing to start with, because most people are like, “I’ve got my own problems, man. I’m not trying to inherit yours for free.”

Scott Smith: Actually trying to be friends with people in the modern era, you can find a lot of things and find out where you have genuine common ground to be able to say like, “Hey, I don’t know if you saw this really cool TED Talk about a thing, but I saw that you were interested in that and I really liked it. By the way …” Something like that, is that typically what you’re thinking of?

Andrew Cushman: Yeah, that’s a great example. If you’re trying to reach out to somebody, definitely don’t send that e-mail like, “Hey, I’m interested in real estate. Where do I start?” Because that information is already out there over and over again. If you want to reach out to someone and maybe start a relationship where you might be able to get some mentorship or some help, ask a specific question. Say, “Hey, I’m doing this. I’m looking at a five-unit property and I heard on a podcast that you own a ton of properties in this size and in the same market, what’s your experience been with this or can you recommend a property management company?”

Andrew Cushman: Something something specific that shows that you’re already taking action and that you’re motivated. I hate to phrase it this way, but almost to say that you’re worth the person stopping and taking their time because there’s 10 million people out there who have great intentions, but very few take action. Anybody that you’re reaching out to is going to be more inclined to help someone who’s already taking action.

Andrew Cushman: That’s definitely something to consider when reaching out to people.

Scott Smith: Yeah, 100%. A really specific question that’s interesting for most people. [inaudible 00:13:58] is really boring. If you hired pretty smart, successful people, they do it … I think, primarily, a lot of us are probably pretty well-motivated by money and these other things, but probably more at a deeper level, it could be the puzzle of it all, like, “What do we figure out?” and so interesting question for someone, like, “Oh, that is a really interesting question to think about, that actually merits a response.” Stupid questions, you don’t want to respond to those.

Andrew Cushman: Well, yeah, and also keep in mind too, not everybody’s a good fit. Some people just will naturally fall into a good relationship, business-wise or other, but sometimes you’re just not a good connection and that’s fine. That’s okay, just move on and find somebody else who is inclined to help you or connect with you, or whatever that might be now.

Scott Smith: Very cool. You developed one of these relationships with somebody to help you with your first deal and it sounds like you use some of these tools to … This probably wasn’t your first time trying to recruit somebody to help you with the deal, is that right? Is this the first deal you ever did where somebody else helped you?

Andrew Cushman: You’re talking about the first apartment deal?

Scott Smith: Yeah. For your first apartment deal, your best deal here. You had somebody else to help guide you through that and I was like, “Well, there’s probably other people that you looked into beforehand that didn’t pan out and this is one that didn’t pan out and you had a great relationship.”

Andrew Cushman: Well, we were fortunate, so again, for the flipping, we hired somebody through a small … Again, I hesitate to say guru but for lack of a better term. Someone who was teaching pre-foreclosures to whoever would sign up, and there were four coaches. We interviewed four of them and we picked the one that we felt was a good fit. For the multi-family, we were fortunate that when we reached out to him, just to say, “Hey, do you know anybody?” number one, that he did, and number two, that that person was receptive to being a coach.

Andrew Cushman: Going forward since then, I could count five, six, seven different people that I would consider, in one level or another, mentors now, but those are people that I’ve built relationships with over time. Maybe met at a conference or met at a Mastermind and we just connected and now we’re all peers and some of them have done multiples of times, have as many units as I have, but because we’ve met and connected, I can reach out and just the other day I had a question about a project I’m trying to do.

Andrew Cushman: I just quickly called three of these guys and said, “Hey, have you experienced this, how do you solve this?” Five-minute conversation with each one of them and that really helped me figure out what I’m trying to figure out, and so that’s another point. It’s really easy to get focused on this finding a mentorship or coach as this big, official thing and if you approach someone and say, “Will you be my mentor?” that’s kind of like on a first date saying, “Hey, how many kids do we want to have and when should we get married?”

Andrew Cushman: It’s a little too much in the beginning and mentorship can be something that simple, it’s just somebody who’s already succeeded with what you want to succeed in that you can connect with and just reach out to occasionally. Again, the five or six people that I would list right now, there’s a handful of others that I’ve either lost connection with or we just didn’t connect well. Would they have been good mentors? Yeah, probably but it wasn’t a natural fit, and again, that’s okay.

Andrew Cushman: You just keep meeting people. Keep seeing who you connect with. Keep seeing who’s a good fit.

Scott Smith: Very cool. Let’s turn back to the best deal. You ended up getting this best deal together. You got through the financing, went through about 3,000 lenders before were able to find the right one that’s able to work with you. What’s the next step in that story? You end up getting the financing, you close on that deal and it’s smooth sailing from there, or what was it like buying that property?

Andrew Cushman: Yes, we got the bank loan and they financed part of the purchase for … I don’t know. I think it was probably 75% of the purchase and the rehab. The rest of the equity was syndicated, as sponsors we did put in some, but the majority of it was, of course, syndicated. We did a renovation of about $8,000 dollars a unit, so a little bit on the exterior and the vast majority on the interiors. When we went went through and renovated those units, I think we bumped rents about $125 a unit. It was 120-something units.

Andrew Cushman: It took probably about 18 months to work through that entire thing and one of the things that we learned is the older your property gets right, you’ve got 2000s, ’90s, ’80s, ’70s, ’60s, the older the property is, most cases, the more hidden problems you’re going to have. It also depends on how it was built. The older you get, the more likely you are to have plumbing issues, wiring issues, foundation issues, subfloor issues, asbestos, all those kind of things.

Andrew Cushman: The renovation, there were some hidden costs, I mentioned sub-floors. The property that we bought wasn’t on a slab foundation. It was crawlspaces, meaning you could physically crawl under the building and the floor was just joists and plywood and it was built on top of that. What happens is, especially in the south where its moist, that rots out over time. That was something that, five years ago, we weren’t aware to watch out for, and so that cost an extra probably $30,000 or something like that to correct all of that.

Andrew Cushman: It was a little bit tougher renovating and then also, in 2014, we hadn’t fully developed our screening process as far as demographics and neighborhoods and crime. Now, we have a very thorough process for that but we didn’t have that back then and so the demographic itself was a little bit rougher than we expected, both in terms of crime. It took a couple years to get everything completely calmed down at the property as far as we feel like it’s very safe, nothing ever happens.

Andrew Cushman: Then also the demographic there was very rough on the unit, so we would renovate a unit, put somebody in it, they would move out 12 months later and it looked like it needs to be renovated again. That was another piece that we learned is that when you’re in certain areas and demographics and factoring in the edge of the property, you adjust your expense level accordingly, because again, on those turns you’re going to have more repairs because people treat them rougher and the building’s older, it decays faster, and some of those systems decay and that can get really expensive.

Andrew Cushman: Those are some of the things we learned in there.

Scott Smith: Was there anything that you can do, besides raising prices and to adjust for expenses to cover that? Was there any additional background checks or anything like that that you did that were able to raise the quality of the tenants in the apartments?

Andrew Cushman: Absolutely. When we inherited it, they had, what we call, stuffed the property meaning just anyone who can sign the lease you put them in there so that you can say it’s 95% occupied when you go to sell it. There’s lots of people that had to be, let’s just say, transitioned off the property, but once we took over management, we required things like no violent crime history at all, and no felonies. In the beginning it might be three times income.

Andrew Cushman: Meaning whatever the rent is, their income has to be at least three times that. We check references. They can’t have any past evictions, so having stringent screening criteria for the people that you’re leasing to, over time, certainly will help and will give you much better property, but actually what I was referring to as screening is before we buy a property, screening for the neighborhood and the area and what kind of income and crime levels and all that kind of thing.

Andrew Cushman: You screen before you even buy it and then, yes, once you buy it, you have very strict screening criteria for applicants so that you can raise up the level of quality of people … Not quality of people, but you’ll have a much more stable, community-friendly tenant base.

Scott Smith: Awesome. You bought the property, you’re doing the rehabs, you’re figuring out how the tenants need to be adjusted over time, what additional testing you can do. Essentially, it’s testing to be able to do … You’re going to test the applicants more and make it more stringent for them to come in, in some form or fashion. I would imagine that that has quite the level of appreciation to a property if you’re able to take it.

Scott Smith: So far, you’ve made physical improvements and personnel improvements.

Andrew Cushman: Yeah. We bought that for $2.4 million. We put just over a million into it, and then we actually just a couple months ago sold that for a little over $7 million.

Scott Smith: Wow, very nice. Can I ask you a question about this too? I think a lot of people get caught in looking at a new property with how excited are you about the opportunity, what are the number of things that you have to look into for any given opportunity, and then if you had to look all the way down into saying that what, essentially, are the compliance pieces for who they rented the properties to, to see if they stuffed it or not?

Scott Smith: You can see how the scope of the due diligence could become so burdensome you’d almost never get into anything.

Andrew Cushman: Yeah.

Scott Smith: Where do you fall in that category? Are you more falling in line with saying like, “Oh no, once I’ve learned about this and learning about how people can stuff apartments, it’s now always part of my list of things that I go through and check?” or is that just a risk that you run because it’s really too expensive to check and you’re like, “Oh, I’ll just correct the course if it turns out to be that way”?

Andrew Cushman: Well, I guess it’s expensive to check and find in terms of time and effort. Again, keep in mind you don’t have to do all of it. Your property management company can help, any other members of your team can help, but no, there’s very little … I can’t think of anything off the top of my head where we’ve learned something, we’re like, “Okay, we’ve got that, we don’t have to worry about it or it’s just not worth looking into.”

Andrew Cushman: What we’ve done is over the years, we’ve built a large spreadsheet that just has … I don’t even know how many items on it, probably over 100, of different things that once we are under contract in a property, some of them from beforehand, that we will dig into and investigate and that’s going to be the quality of the existing tenant base. One thing we will do is we will do a full lease audit, so that means we sit down …

Andrew Cushman: Well, I don’t personally do it; someone from our management company will sit down and read through every single lease and we will rebuild our own rent roll from the actual leases and then compare that to the existing one and we’ll look, how many people actually have background checks? How many people have documented income? How many people are consistently running late? Are there any weird things in the lease or anything that’s not not filled out?

Andrew Cushman: That right there will tell us what kind of tenant base we’re dealing with. Was the property stuffed, have they been doing proper screening over the years? We absolutely dig into all that kind of stuff as we’re doing due diligence. Yes, it would be overwhelming if you’re trying to do this on 100 units by yourself, but again, it gets back to this … It’s a “we” business. You bring in people to help you with it.

Andrew Cushman: It would be far more expensive in the big picture to skip anything like that than to just pay it up front. Even if you take the time, effort, and actual money to do it up front and then you find out, “Wow, this is a bad deal,” and you have to step away from it and not do that deal and you’re going to lose whatever money that you spent doing that, that’s far better than doing a bad deal. Something to always remember is no deal is better than a bad deal, especially if you’re syndicating and bringing in other peoples’ money.

Scott Smith: That’s a beautiful way to wrap up today’s episode. I usually like to do a lesson learned at the very end, Andrew, and one of the things that I learned from today’s episode was just the ability to also be able to correct course and there’s a number of pieces in here that you ran into a lot of adversity with. Getting the financing, with finding out that now you had tenants that you had to transition out, and having the patience to be able to transition them over the course of a couple of years, and to get the renovations.

Scott Smith: Those are some really strong … Potentially, people could say those are really huge hurdles to have to overcome, but what’s neat about that is that overcoming those hurdles essentially gave you this huge payout at the end of the day. I take that to heart, man, the spirit of you stick with it and you solve it even if it takes you years, and as long as the market stays strong you can come out the other side and make a good, healthy chunk of profit off the end of that.

Scott Smith: If you were going to leave the listeners with a lesson learned from your talk today, what do you think is the most important takeaway?

Andrew Cushman: Well, we’ll go ahead and put a pin in the “no deal is better than a bad deal,” but then also just to tee off something you just said, even if the market doesn’t stay strong you can still do really well with multi-family properties and the key is to buy the right property in the right area and make sure that you have good cash flow. That’s one of the beauties of real estate. If you can have a property that always cash flows well, in a sense, it doesn’t matter what the value of it is.

Andrew Cushman: Because if you’re cash flowing, you can hold and wait and make distributions and be profitable until the next big up-cycle. Especially where we are today, keep that in mind, always look at what’s the downside first then look at what’s the upside and I would never, ever, especially today, buy a property where I thought the cash flow could change enough to put me into a position where I would have to sell because, yeah, it might not be a good time to sell in the next few years.

Andrew Cushman: Don’t know, but it could be so that would be another takeaway is don’t be afraid of the market and sit on your hands and not do anything, just evaluate it properly.

Scott Smith: Yeah, and I think that’s fair to say. What I was getting at is saying one of the beautiful things about real estate is give it enough time and you have good cash flow and enough time, you can always make money.

Andrew Cushman: Somebody else is paying down that mortgage for you.

Scott Smith: Right, yeah, so you’re always going to come out ahead as long as those two things … You’ve got time and you’ve got good cash flow. You can make a lot of mistakes, a lot of things can go wrong and you’re still flying above that. Thank you so much, Andrew, for coming on the show today. For everybody that wants to reach out to you, what’s the best way for them to do that?

Andrew Cushman: I’m on LinkedIn, Bigger Pockets. You can just Google Vantage Point Acquisitions. Our website is just VPACQ.com. There’s a there’s a “Contact Us” button on there and any of those will work well.

Scott Smith: What type of people are you looking to get in contact with?

Andrew Cushman: I’m always looking to expand our network. I love talking with other people who are in the business. Obviously, we consider new investors as we move along, but yeah, anyone who’s in the business whether advanced or getting started or looking to participate or invest. A variety of people.

Scott Smith: Awesome. Well, thanks Andrew, for coming on the show. Of course, I’m your host, Scott Royal Smith, Esquire and CEO here at Royal Legal Solutions, your one stop shop for everything real estate investor related. Thank you for coming on the show, Andrew, and everybody we’ll be in touch soon. That’s all for this best deal episode and I’m your host, Scott Royal Smith, with the Real Estate Nerds podcast.

Scott Smith: When investments go good, they can go great. Your legendary best deal could be your next one, so keep at it. Thank you for joining us and if you enjoyed the show, leave a review to help clue in those sleeping masses for what they need to know and what we all need reminders of. Do your good deed for the day and I’ll see you again soon.

 

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About Andrew Cushman

Andrew Cushman has a BS in Chemical Engineering from Texas A&M University. After graduation, Andrew worked for a large food company for 7 years in a variety of supervisory positions.  During that time, Andrew (joined by his wife in 2004) experimented with a variety of businesses in the hopes of making the jump from W2 employee to entrepreneur.

In 2007 Andrew discovered house flipping and left his corporate position to start a business in real estate investment. Starting off with single family properties in the depths of the recession, Andrew completed 24 single family flips (purchase, rehab, sell), all of which were very profitable.

In 2011 Andrew transitioned to the acquisition and repositioning of multifamily properties, acquiring a mostly vacant 92 unit property on the other side of the country as a first deal.  That first property was eventually sold for several times its original purchase price, and Andrew now acquires B Class, Value-add properties throughout the Southeast. In total, Andrew and his team have acquired and re-positioned 1,796 multifamily units to date. Outside of the business world, Andrew has been a certified alpine ski instructor and when not working in real estate enjoys surfing, backcountry skiing, and time with his family. Andrew is married with two children and resides in Southern California.

Visit his site here: //vpacq.com/

Linkedin: //www.linkedin.com/in/andrew-cushman-959471a/

Connect With Andrew Cushman

Connect with Andrew via his website, //vpacq.com, where you can send him a direct message.

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When making business decisions that affect your long-term goals, like what types of investments to make with your retirement dollars and which vehicles to use, it really is best to be aware of all of your options. We frequently talk about the Solo 401(k) and Self-Directed IRA as tools for funding your retirement. But what about life insurance? And what about the stock market? What if we told you there is a tool that allows to to reap some benefits of both? It’s called Indexed Universal Life Insurance–and some investors have found it a useful addition to their retirement plans.

What Is Indexed Universal Life Insurance?

Indexed Universal Life Insurance (IUL) plans are a variety of permanent life insurance plan that features a cash-building element. One primary benefit of these plans is that the policy holder gets some of the gains of being associated with the stock market without all of the risk Wall Street is famous for. This is in no small part because of how these policies are designed. IULs earn in part because they are directly linked to a market index, such as the Dow or the S&P 500.  Any gains remain within the policy, albeit a cap rate will limit how much you can make. However, you are protected during a particularly bad year for your index with an IUL. The worst case scenario with these plans is that you make nothing, but you never actually lose money no matter how poorly your index performs. The protection of your principal is actually derived in part from the same cap rate that limits your gains.

How much money do policyholders stand to make? Historically, returns run between 5-9%. The S&P Index has actually returned at 9-11%, but the upside limit on UILs stems from the account’s cap rate. For this reason, many advisors argue that the UIL can make a wise addition to a retirement or estate plan once more traditional and self-directed accounts are maxed out.

Tax Benefits of Indexed Universal Life Insurance (IUL) Plans

There are three key tax benefits of IULs. First, you may pay into the policy with pre-tax or after-tax funds. Withdrawals from the policy may be made tax-free if you are under 59 1/2. Such withdrawals are regarded as loans, with your death benefit serving as collateral. Any funds paid out to the beneficiary are also tax-free, including normal benefits upon your passing. This is true regardless of their value.

Ask the Experts at Royal Legal Solutions About Your Retirement Planning Options

Regardless of where you are in the retirement planning process, Royal Legal Solutions an assist you. We have extensive experience educating investors about self-directed investment options. Many of our investor-clients love our Solo 401k information, product, and compliance services. Our Self-Directed IRA services can also be helpful for retirement planning, as the SDIRA is yet another vehicle that allows you to diversify and take total control of your investments. To determine which of the available retirement planning strategies are best for you, consult with one of our experts at Royal Legal Solutions. You may also contact us with any questions you may have about your options.

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