fbpx

A New Direction On Creating Wealth Simplified With Chris Seveney

March 7, 2024

chrisseveney

v

0

Creating Wealth Simplified | Chris Seveney | Creating Wealth Simplified

 

Everything starts at the beginning. Often, when you shift your mind in a new direction, you begin a new beginning. In this episode, let’s embrace the thousand-mile journey and allow Janus to open the doors of a new beginning. Christopher Seveney, CEO & Co-founder of 7e Investments, talks about the new direction of Creating Wealth Simplified as we move forward this year. Since the first episode, many things changed, and Chris highlights his journey with the podcast. He also reveals some of what the podcast talks about in the future. Join Chris Seveney as he unravels the curtain of Creating Wealth Simplified’s future.

Watch the episode here

 

Listen to the podcast here

 

A New Direction On Creating Wealth Simplified With Chris Seveney

Embracing A New Direction With The Podcast

In this episode, I want to talk about how we’re going to be embracing a new direction with our show. As you know, over the past many years, we’ve recorded over 250 episodes from our early starts of the Good Deeds Note Investing Podcast where I spoke with Gail about moving it over with Jamie Bateman and then changing it over to Creating Well Simplified with Lauren Wells. Our focus has always been to enlighten and equip our audience with the knowledge necessary, to be successful and any type of investing that you do.

I’m happy to announce that we’re going to be returning back to those educational roots with a renewed emphasis on providing in-depth insights into these various investment strategies. I feel like over the last few years, I got lost and brought on some great speakers, we’ll still bring on some people to talk as well and share their stories on the show, but we’re going to go back more to almost like a coffee cafe setting of conversation education back and forth.

I cannot do that alone. Despite recording by myself, I feel like I’m much better conversationally. I’m going to be bringing on two experts. The first one is bringing on Chi Nguyen, who runs the asset management team at Seveney Investments. She has a wealth of knowledge in mortgage notes. I may know a thing or two about them as well. We’ll go back to focusing and talking more about sharing our stories on mortgage notes.

Lauren Wells will stay as well as another co-host. With Lauren, we’re going to share our broad experience in the passive investing space. It doesn’t matter whether you’re a general partner, the sponsor or an investor as a limited partner in that investment. We’re going to share insights on what we see, learned and experiencing similar to a webinar for Cashflow Expo about all the ways you can lose money in investing and focus on due diligence and understanding risk as part of what we want to talk about because many people out there will tell you how easy it is and all the ways that you can make money. The reality of it is you can make money and you can make substantial money, but you also need to play defense along with offense and understand those risks. We’ll be there to help delve deeper into those topics and offering our unique perspectives and advice.

You can make substantial money. But you should also play defense along with offense and understand those risks. Click To Tweet

I’ve already set the stage for what’s to come and talk about that education investment, particularly in mortgage notes and passive investments. I do want to go back and talk a little bit about what has changed over the years within the space and why I feel it’s important to start bringing back this information and content. I’ll say the world has changed significantly since that first episode of the Good Deeds Note Investing Podcast. 1) That podcast was awful, bad audio, bad everything but you got to start somewhere. It’s interesting when you go back and I’m the type of person who hates listening to my episodes. I rarely if ever listened to one, but I have gone back and listened to that one and it was awful.

To throw in some of those early episodes. Sorry Gail with your dogs barking, but I know that drove people nuts as well. You get to record in a nice quiet space. You look back over the last several years and for those who are in the note space or investing in the note space, we’ve had gurus who end up turning into scam artists. Believe it or not, they’re still out there teaching things that I would not recommend people be taught. Case in point, now have somebody who’s a student of this individual and basically being taught how to buy loans, which is incorrect because they’re bailing on most of the deals and they’re trying to find any little thing wrong to try and lower their price.

They’re the type of person who goes out to try and buy a home and knows they’re going to try and renegotiate the price afterward. Trust me, in the mortgage note space, that is not the MO that you want to set because you will get that scarlet letter across your chest and you will be blackballed pretty quickly. That’s one aspect. Back in the day, contracts for deeds were the hottest thing on lower-value homes, especially in troubled areas. Many years ago, I was buying hundreds of contracts for deeds. I got out of those. I may have 1 or 2 left in my portfolio. Looking back at those now, we’re seeing ramifications come into play with some other sponsors who went all in on that space and continued down that road through COVID everything now hearing that they’re having some serious financial issues. What worked many years ago, clearly isn’t working nowadays.

Also, interest rates were many years ago compared to where they are now. All of this has had a significant change to the landscape of passive investing and investing in mortgage notes. We want to come out and share real-time knowledge, education and understand how it’s important to diversify that portfoli. I’m getting a little personal here. I have a business coach and one of the things he asked me is, “What do you love to do?” One of the things I love to do is teaching and mentoring people, then he asked me, “Why do you love doing that?”

I enjoy helping people. It’s been instilled in me through my family. My father was a schoolteacher. He was my seventh-grade Social Studies teacher. He went on to become a vice principal and principal. I had him in high school, and then he went on to become superintendent. He was always there to help students and make sure that they were given an opportunity. He not only did do that in his work life, but in his personal life. My parents adopted four kids when I was older to give them an opportunity that they never would’ve had as well.

Part of me has when you grow up in an environment of providing teaching and education, that flows. When I take the passion that I have for real estate and mortgage note investing and investing in real estate in general and I can share those stories, I can have conversations with people, which fuels my fire. That gives me a lot more energy. I love that stuff. that’s why for me, I recorded some great episodes but I felt like I wasn’t filling up my cup.

When I reached out and spoke to Lauren and then I talked to Chi about this, I got excited again. That energy started coming back and starting to record episodes. I’m like, “This is awesome. I love this. I love sharing these stories.” I love being able to provide people with content that’s not at the 30,000-foot level but roll up the sleeves and dive in because everything in investing is typically not within the black or the white. It is within the gray area.

A perfect example of that is people can sit there and teach you, “How do you foreclose on a loan?” The simple answer is, you have the attorney send a demand letter and then they file the complaint and then you go to foreclosure and you bid. Technically, that’s true, but what if the borrower is threatening to file bankruptcy? What if the borrower offers to give you $3,000 down and give you some type of payment plan? Does the property have equity? Does it not have equity? Has a borrower made these promises in the past? What do you do in that situation?

There’s not a right or wrong answer, but there needs to be a thought process, and a calculation that goes on in your head of what is the most likely outcome, what does outcome A look like versus outcome B? Some people are like, “This is what I was taught of. This is what I need to do,” then realize, “You probably should have worked something out with that borrower. It would’ve maybe been better off in the long run.” I can tell you based on our portfolio where we’ve bought over 600 loans within our portfolio, typically you’re better off working something out with the borrower.

That’s the stuff that I love diving into, the what-if situations, if this, then that and quiz each other back and forth. I’m going to apologize to Chi because some of the things I’m going to try and poke holes in some of the things she says. The good thing about Chi is she’s going to poke it right back at me. She has extremely high intellect and can think on the spot. It probably makes me nervous because she’ll probably end up putting me in my place more times than not. As we do explore these future episodes, I’ve highlighted briefly why I am doing this and talked about how things have changed over the last several years.

Chris Seveney’s Journey

I want to highlight also my journey because we haven’t talked a lot recently about our journey. For those out there, you may be investors in our current fund or on our mailing list, you might get a little more information about us. My journey started back in early 2021 after COVID had hit. I was working from home and started to grow and expand my personal portfolio where at the time I had over 200 loans. I was doing it all by myself.

In doing that, I was able to balance it for a while because A) It was also during COVID. My full-time job was able to be done at home but also was slightly less demanding in real estate because everything honestly slowed down. I did realize that man, it started becoming overwhelming. Coincidentally right around that time, Lauren had reached out after seeing me at Cashflow Expo, talk about how to lose money on notes. She reached out and was interested in learning more. Reach out, “I got a question.” We hop on Zoom calls to discuss things and forth and so on.

We start chatting and talking. After about 4 or 5 months, she was A) Intense, B) Very knowledgeable and C) Very driven. I’d asked her to come on board part-time to assist me with my portfolio. For somebody who always did it alone and didn’t want to work with people, I can share many stories of that with others, it was interesting because the people I typically had worked with in the past were very similar. When you’re working with people who are similar, a lot of times you’ll cross each other’s paths or cross into each other’s lanes, which can sometimes friction, but an understanding of accountability and who does what.

I’ve learned over time using EOS and looking at what an accountability chart is, which is mind-blowing if you don’t know what that is, it’s something I recommend any business owner to look into. A) putting people right seat, the right bus, and the right accountability of what they should be accountable for. As well as having Lauren who had very different strengths than I had and then I realized her strengths were all my weaknesses. When she came on board to help me with my portfolio and then learned of her background, soon I learned and after speaking with other people, “I want to grow this thing bigger.”

Creating Wealth Simplified | Chris Seveney | Creating Wealth Simplified

Creating Wealth Simplified: Put people on the right seat and bus and write accountability of what they should be accountable for.

 

People know me, I’m a squirrel and I have big ideas. That’s when I decided to schedule the time to leave my W-2 and launch our Regulation A offering, interestingly enough, for people to know, I had this in the back of my brain for a long time because when I finished my grad studies at Georgetown, my thesis was raising $50 million for a mortgage note fund. not like I pulled this out of the blue. Typically things I do, I’ve been thinking about a long time.

Fast forward to now and in the span we put all the documents together and got qualified by the SEC in July of 2022. In the span of 18 months, we’ve been able to grow our company to $20 million plus, over 500 investors and have a team of 10 staff members. Looking back on literally a few years ago, being myself and Lauren and closing out those other funds to where we’re at, I share that story again, it’s not to brag, it’s to show people that if you’re patient and take your time, it will happen and grow. It doesn’t have to happen overnight. I think our growth over eighteen months is extraordinary and we’re going to continue to grow I didn’t start investing in real estate until many years ago.

Since that time, I’ve done pretty well for myself and I started it all in my late 30s, now in my late 40s. I share some of these stories and I’m rambling on a little bit, but I think it’s important to understand several key aspects of the journey. The joy is in the journey. It doesn’t matter when you start, it’s the fact that you never stop and you put goals in place that are realistic. It’s a marathon, not a sprint. Those are the things that I want to mention before I roll to the last topic.

It's important to understand several key aspects of the journey. Click To Tweet

Lauren On The Future Episodes

I mentioned with Chi that we’re going to talk a lot about the mortgage notes, education on that, share the stories, share case studies, share what we’re seeing in the industry, provide content for that side of the house for people, but with Lauren on these future episodes, we want to dive deeper into the investing space and why it’s a smart strategy for investors. Understanding we have the time we don’t being an LP, what to look for and what due diligence is required.

If your GP will share stories of, “What are we seeing in this space? What are people interested in? What do they want?” For example, I’m recording this in early 2024, In prior years, everyone’s gung-ho on multifamily because hey, these people are targeting 15%, 20% or 25% returns and they’re loving it, getting fat and happy. Now all of a sudden, the brakes are pulled because distributions have stopped with some funds. I saw a post earlier in one of the groups I’m in. A guy invested $50,000 in 2022 and they sold the asset. He ended up getting $800.

He didn’t get his $50,000 return plus $800. He lost $49,200. You could have made 25% in the last three years on your money, but if you take that one loss, it’s going to take a while to recover that. Understanding some of these strategies, some of these risks that people during the last few years, I’ve said in prior episodes, you could be out in a boat in the middle of nowhere, buy a piece of real estate and not communicate, wearing remember for 2 or 3 years and make money. That is not the case nowadays.

Real estate is going back it’s not a business where it prints money, it takes time, effort, and understanding of risk management and overall management because insurance, taxes and construction are more expensive. Everything is getting more expensive. Housing I don’t believe is, I think that’s going to soften. Managing that and having an experienced sponsor and how understanding what is an experienced sponsor are some of the things we’re going to talk about.

We are going to talk about self-directed IRAs. What is a self-directed IRA? There are still a lot of people out there who don’t even know these exist. You quit a job, they tell you you have two options. Keep it at your current company, and move it to another company. There is a third option. You could move it to a custodian self-direct that. One of the things I love talking about, and this is where I think I see the biggest area for improvement in education, is understanding what that capital stack is.

Creating Wealth Simplified | Chris Seveney | Creating Wealth Simplified

Creating Wealth Simplified: The biggest area for improvement in education is understanding the capital stack.

 

We’re going to talk about that and future episodes because I see a lot of investors who all look at the number on the website of what they make. You’re going to make 12% or 15%. Few things. 1) That is projected of what you’re going to make somebody interesting mentioned the other day to me because we talk a lot about some of the potential tax advantages in our fund is, “It’s not what you make, but it’s what you take home.” What it means by that is you may get 15% gross, but if you’re paying 37% taxes on that money, would you rather have 13% tax-free or 13% tax at a 20% rate at a lower rate? Those are the things people need to look at. Not only that but also that capital stack, which is where are you in order of priority?

Is there bank financing in front of you, which’s been wiping out multifamily deals? Is there bank financing? Then mezzanine financing venue. For example, we see some sponsors who have bank financing and preferred equity behind them, which are the investors, instead of doing a capital call, what are they doing? They’re sliding in mezzanine financing. now instead of doing a capital call, they’re pushing the investors into third place. Is that where you want to be? In a capital stack, the further you are from the bottom, the worse you are. Think of a building you want to be at the foundation where there’s a heavy wind or earthquake hurricane, that’s where there’s the least amount of disturbance. The higher you get, the more disturbed you are. We’ll talk about those risks. We’ll talk about other risks in general of things that we are seeing.

That’s where within me talking myself right now, that I’m passionate about talking about these issues because I want people to make those informed decisions. I want to thank you all for reading this episode. As a reminder, the journey to financial success does start with education. We’re here to try and guide you every step of the way. Don’t forget to tune in to future episodes where I will either have Chi or Lauren share their expertise. Thank you all and make sure to leave us a review and like us on your favorite platform. Take care.

 

Important Links

 

About Chris Seveney

CWS Lauren Wells | 7e Investments FundChristopher Seveney, CEO & Co-founder of 7e Investments, brings over 25 years of real estate know-how. His journey with 7e started in 2016 when he jumped into acquiring and trading mortgage notes. Chris has built a portfolio of 500+ notes, totaling over $25 million, spanning different states. Before diving into mortgage notes, he had a standout career, managing a multimillion-dollar asset portfolio and overseeing property projects worth $150 million. Throughout his 25-year journey, Chris handled $750 million in new construction projects.

At 7e, Chris is a beacon of real estate excellence, known for his commitment to honesty and professionalism. His passion and determination make him a trusted leader, earning respect from partners and colleagues. Since the beginning of his career, Chris aimed to set industry standards and foster innovation. His leadership led to multiple award-winning teams, recognized for outstanding contributions to the field. Outside work, Chris, a father and avid Boston sports fan, adds a personal touch to his journey.

You May Also Like…

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *