#159: The Build-to-Rent Revolution: Unlocking Active Freedom and Crafting an Enriching Family Life

LISTEN AND SUBSCRIBE

Apple Podcasts | Google Play | Stitcher | Spotify

Hey everybody, welcome back to another episode of the Richer Geek Podcast. On today’s episode, we have Jim Sheils, a real estate expert with extensive knowledge in the Build-to-Rent niche. He’s a partner at Southern Impression Homes, a company that specializes in building rental portfolios in Florida’s high-growth markets for individual investors and institutional buyers, in addition, Jim is the co-owner/co-founder of 18 Summers, providing family education services to entrepreneurs and professionals seeking to strengthen their family relationships while succeeding in business.

In this episode, we’re discussing…

• [1:13] Jim and Jamie Sheils background and partners at Sothern Impression Homes

A company specializing in building rental portfolios for investors.

• [2:08] Overview of Southern Impression Homes

Jim provides an overview of Southern Impression Homes, focusing on building rental portfolios for individual investors and institutional buyers, particularly in Florida.

• [2:37] Build-to-Rent Strategy and Property Types

Jim explains the build-to-rent strategy, focusing on durable construction and avoiding the "three-year curse" common with older properties.

Discusses building single-family homes

• [4:38] Market Focus and Property Sizes

Highlights the importance of market focus and discusses property sizes ranging from 1,200 to 5,000 square feet, aiming for affordability below the median

• [8:16] Target Investors and Tenant Demographics

Talks about attracting middle-management, high-paying professionals, police officers, teachers, and families with two incomes.

Emphasizes affordability for both buyers and renters.

• [9:27] Process for Investors and Construction Financing

Jim explains the process for investors, highlighting that they do not need a construction loan.

Offers an in-house financing program at 4.75%, providing options for investors.

• [17:26] Long-Term Investor Perspective

Discusses the investor perspective, indicating that many investors prefer to stay for the long term due to increasing cash flow and property stability.

• [18:09] Introduction to 18 Summers Program

Shifts to discussing Jim's 18 Summers program, focusing on helping business leaders strengthen family connections through innovative frameworks.

• [18:43] Importance of Family Board Meetings

Describes the Family Board Meeting strategy to strengthen family connections through one-on-one time, intermittent tech fasting, and meaningful communication.

• [22:05] Conclusion and Where to Find Jim Shields

Wraps up the podcast, providing information on where to find more about Jim Shields and his programs

Resources from Jim

Resources from Mike and Nichole

Gateway Private Equity Group | Nic’s guide

+ Read the transcript

Mike Stohler
What if you could be doing something smarter with your money that creates income. Now, if you're wanting to get ahead financially, and enjoy greater freedom of choice, if you want a comfortable retirement, and you know you'll have more choices, if you can do more with your money. Now, if you've wondered who else is creating ways to make their money work for them, and you want actionable ideas, with honest pros and cons, and no fluff. Welcome to the Richer geek podcast. Where you here helping people find creative ways to build wealth and financial freedom. I'm Mike Stohler, and in this podcast, you'll hear from others who are already doing these things, and learn how you can too. Hey, everybody, welcome back to another episode of the richer geek Podcast. Today we have Jim and Jamie shields. This is gonna be an interesting one everyone, they do build to rent. Jim is a partner at Southern impression homes. Jamie, are you the other partner?

Jim's wife
I am not. I'm the family partner. So we'll operate are the other portion of our life. 18 summers of family education? Yes,

Mike Stohler
yeah. And we'll get into that too. That's that's very interesting. But southern pressured homes is a company that specializes in building rental portfolios for individual investors, and institutional buyers. They're currently located in Florida. And they concentrated in low density properties such as single family, duplexes quads with property management in place. What's interesting is he formerly owned Jack's wealth investments and then created southern depression, then the two companies merged in 2022. So how are the both of you doing? Good, good, great

Jim's wife
to see ya.

Jim Sheils
Happy to be in Florida. Yeah,

Mike Stohler
it's, you know, one of the three states that I would live in one is Florida. Yeah.

Jim Sheils
It's, it's, we hear about, I'm very focused on where we're building. So I look at you know, but I really focus on our markets. And, you know, we are still seeing a good season, you know, not huge growth, but steady growth again, and there's still an influx of people that were behind having housing for. So that's a really good position to be in.

Mike Stohler
So when you talk about the build rent, or the temporary rentals, are they something that people are gonna live there for a long time? What type of build do you do,

Jim Sheils
we do what any retail buyer would want to buy, we're just designated them for investors. And, you know, coming from the bulk floor foreclosure world where I used to my now building partner, and I used to bind in bulk, fix them up and rent them and keep them for ourselves or work with investors on him. We wanted to have something that was more durable, and avoiding the three recurse because the three years because on older properties I own, but I know that after three years, even if roof heating and cooling plumbing, upgraded kitchens, baths, you know, there's is the house built in the 40s and 50s, it was different. Today, we tried to build them with that aesthetically pleasing, but also that durability. So you would be able to match our houses up with upgrades of any other builder. But we also look at it from the investor mindset not to offer just single family homes, but also the duplexes or the quads. So you stay within that Residential Lending, but also get more doors under one roof, which usually produces better cash flow and better bang for your buck for each loan that you get.

Mike Stohler
Yeah, and that's, that's really fantastic. Because, you know, back in the day when I was in the residential space, man, I'd love the quads, but it's like everyone stopped building them, like after the 60s, the same Clek, or the 70s. You look at them was like, Oh my gosh, you know, it's like how many 1000s of dollars and we're gonna have to put into these things. And see that you guys are actually building the duplexes li quads is I think, very enticing. You know, I've had a bunch of single family homes and I spent most of my time just going from one end of the city to the other and just having as many as I can in one spot was just better for my sanity, is that what you're seeing is our people kind of gravitating towards that. Yeah, they're great.

Jim Sheils
I mean from lessons and Jamie and I released so we our story of real estate which started you know, 24 years ago, I used to think that cheap and abundant was the way to go really cheap housing and own as many as possible. And there was this 100 house club once you got 100 houses and you are good and I'm we go past that. However, For when there deferred maintenance and not in the areas that you would have chosen and the cheapest, there's a lot of turnover, there's a lot of headaches, you know, and I was like, gosh, this is great in a second or third job of just keeping them up. So, you know, we really probably about a decade ago started to say we want to own less of better quality. And that's really how we, we fell into it, where are now building partner? And I said, Well, what if we could build our own investment property, wherever we can avoid that three year curse, you know, and being a little better areas where they're more resellable down the road, with less headaches, less turnover. So that's what that's where the the foreclosure fix up world, we left it behind for the new construction to be in that little higher area, because frankly, I wanted more time with my family. And when my rentals are constantly in a need, well, then they're not doing their job. For me. At least that's what I have. We figured out the hard way. Yeah.

Mike Stohler
You know, I have that experience of Yeah, it seemed like, I'm even going to switch to lease to own or something like that, to make them do their own repairs and things like that. Because it's like, my god, you know, quit flushing that stuff down the toilet and quit calling. And I get the pain and it was are you concentrating on individual homes? Are you doing hold developments? We

Jim Sheils
do both infill lots and whole community. We prefer to do or partial communities. So we'll go in like we give you an example. We bought a defunct golf course. And it turned into just about 1000 Lots. We kept little under 200. And lots for us. The rest of the lots, we sold the national homebuilders. So they built nice houses around us. And we kept scattered in this community 180 homes for build to rent. Because we like to have homeownership. I know we will build for larger institutions and family offices, whole communities, where it's all rentals. But we really like the the infill lots and the partial communities because I like to have homeownership next to my rentals, if I can, you know, and so for single families and duplexes, we do that for the quad communities yet you're all investor owned, and, you know, we do have HOAs for those and to help control it. But But I like for single families and duplexes to have in desirable already established high personal ownership areas. If that makes sense.

Mike Stohler
It does. What is your typical build rent size? What is your house look like? You

Jim Sheils
know, we we start down at the you know, 12 150 square feet. And then we'll go right up to you know, about a 5000 square foot quad. So, you know, that goes from that 240,000 Right up to about 800,000 for a quad. So you know, we're still in that affordability. You know, affordability is something that I was always taught and mentored to look for. It's affordable to buy for our investors or for a retail buyer, if they sell it down the road. It's affordable for rent, but in good areas. So you know, we try to keep in that affordability range just below the median.

Mike Stohler
And what are you seeing the most, you know, when the investors come to you? Are they looking more for kind of that class a class? You know, the B? Or are they looking for more of the affordable housing, you know, just give me five of these individual houses that cost this? So they put the blue collar lunch pail Joe type of a person into him or more the white color type of rich? Or what do you say, investors?

Jim Sheils
Both I wouldn't say we have presidents of companies, but we have more replaceable, it's a middle management, high paying and replaceable income professionals, police officers, teachers, families with two incomes. Again, the average family income in the markets we're in is about 60,000. So that gives them a real affordability for our houses or our rents. So that's kind of what we focus on.

Mike Stohler
And if one of our listeners says, hey, you know, this sounds great, because they've had that pain of being a landlord and fixing everything. What is the steps of getting hold of view and building? What does the process look like?

Jim Sheils
Yeah, you can go to j&j playbook.com That's something that Jaime and I wrote up together about our journey into real estate, how we found build to rent why we do it about our company. And you can set a discovery call. You know, we have it this is not a this is not an individual sport. We have over 170 employees on our team and sales specialists that have been with me for 13 plus years. They've built dozens and dozens of successful portfolios anywhere from one property to 25 properties for individual investors, you know, AR AR AR model is not for everyone, if you're wanting to be more hands on, and it's, you know, most of our investors, they're working a really successful career. And they like it. But they want to be involved in real estate, but they don't want a second or third job in it. And that's why we only do new construction. We hung up our rehab shoes many years ago, which I know Jamie and I were both pretty happy about once we did it, it's the TV shows are great, but it's not quite as fun when you're doing so many. And we could get a better predictability. So ours is about predictability. And in high growth markets, you know, we're here in Florida for a reason. Friendly stay very landlord. Yes. I used to be in California, and I wouldn't consider that very landlord friendly. So that's that's been a that's an important thing that we guide our people on for sure. Yeah.

Mike Stohler
And we do speak about that a lot on our podcast is, you know, politics aside, you have to go you're trying to build a business. And you have to go towards business friendly states, landlord friendly states if you're doing real estate. And that's just, you know, people will get upset with me, it's like, well, you're always bashing California. And like, well, if it takes six to seven months, maybe to get someone out, I'm going to bash that concept. Because they're pro tenant and anti landlord, where you look at Arizona, Texas, Florida, you look at certain states. And they're like the one here in Arizona, it's five days, and you're out. Yeah.

Jim Sheils
And again, this is our people work hard. And I'd be wrong this year. And I used to be heavily invested in California, so I can speak that I love to visit the beautiful state. If you can not, if you're not able to collect your rent for long periods of time, that puts you in a very dangerous position. To do that we sold our last house in California, I don't know seven years ago, and didn't look back because it's it's it's it's in especially since the pandemic, things have changed a lot. It's proven, there will be times in places you can't collect rent. And I want to avoid that for us in our clients. That's why we are very, very focused on Florida. Our next market probably with our with our building channel will be Texas, but we are very focused in Florida right now.

Mike Stohler
Yeah, that makes sense. When an investor gets contacted and wants to do something, what does that partnership look like? Who does the mortgage? Are they paying cash? What does that whole? What does it look like?

Jim Sheils
That's a great question. Again, we've been we've built over 2000 units. So we've done this before, you know, we have over 850 active investors over 747 million under asset management. So you're you're stepping into a system a process, you're not first person in testing this. So you are a part of the process, but never alone in every question that you have. We've already answered dozens and dozens and dozens of times, like who is your Who do you prefer to use for lending? You know, so we'd have lenders that we work with, they're not financially affiliated, but they did the job for me or my building partner, a lot of our clients. So we have the list of that we have the insurance people which man if there's any misconception out there about? Well, I've heard insurance is impossible in Florida, I kind of laugh at that. And I always say on which properties that's something Jaime and I learned from older properties built in the 40s at lower lying ground compared to new construction, because once once the government code changed after 2004, from a big hurricane, new construction is still very cheap to get insured, because the way it's built. So all these questions, property management, again, we were in management before we were in building. So you know, 99% of the people use our management company. And we lined all that up. So all those questions, the title, everything goes through our system, you're able to see the property, it's finishing out through our builder trends. You know, as you're seeing the property you're buying, in since we're on a continual building stride, which is different for most builders, meaning a lot of builders, you'll have to wait 1216 months for a property. Well, we're continually building and have about 6000 lots that we're building out. So what we do as you can have a new construction property in less than 60 days, which is great for people who want to move their money or let's say they have a 1031 exchange. Yeah, we've worked with lots of California people out there. And that's really important. So So you walk through the process that so many other people have all the questions at the end, I like the old foreclosure fix up properties, were able to give a nice to 10 warranty. So that's two years on the little stuff 10 years on the big structural stuff, which is nice to have in place, you know for for that long term buying hope.

Mike Stohler
So someone comes in, they get the mortgage, you build it, you're walking them through the entire process.

Jim Sheils
Yeah, and that's important, important distinction there is they do not need a construction loan. For anyone out there listening going, you know Jamie and I construction loans, they're not fun, we had a lot more you step in at just the end with the permanent loan. You know, you can use whatever lender you want, we prefer some of our lenders right now we have an in house financing program, which is pretty much separating us from the competition 4.75. So you know, most people are locking in at 7%. Right now, we're pre buying money from, and you have to be at a certain size to be able to do that. So you can lock in at 4.75, that's 30 year and 10 year fixed, you know, so this is getting people in that position of cash flow right off the bat, which is huge. So we create those options, we're always trying to listen to our people, and what do they need, we also get free management for the first year, which is, you know, another thing to help you get off on the right foot. So

Mike Stohler
it is it is truly passive, you have the mortgage, while the investor, they have the mortgage, they're making the payment, you're managing it for them. Are you seeing five years, seven years? Once people get into it? Are they kind of, you know, let's cash out? Or are you saying this, like, you know what, I like this, and I want three more. We always say

Jim Sheils
a lot of we've we've seen not, you know, we started building nine years ago, and and there have been some people that they created a lot of equity through, you know, the last few years. And they sold a few of them and then kept a few or what other people did is they refinance some often they put it forward into more properties. And it's a great position to do and most of our people are looking at something long term and, and they're kind of saying, Well, yeah, I can cash in this equity, but holy cash rents have gone up something percent, you know, so my cash flow is screaming, I don't want to go anywhere, and the property is not having any big maintenance and repairs. You know, it's quiet. I'm staying, so we had some sell. But, but I think a lot of people are wanting to stay in for from what we're seeing, we always try to release monthly reports of what we're hearing what we're seeing inventory levels of 2019 and 2018 was before all the healthy normal. We're still seeing today. That was something people liked to see. So they're they're kind of in a hole are counting on the equity, but I'll keep rolling.

Mike Stohler
Yeah, it's you know, it's a fascinating concept. You know, I've seen those that, that go and get the mortgage. Are you? Is it you're just taking the property management fee? Is there other types? Is there like an ownership split on the rent? What are you seeing that people? What kind of other fees are there? All right, we are joining Jim shields again. And you know, Jim, I wanted to talk about something's very important. And I know it's very important to you. You're the founder of 18 summers, where you help business leaders strengthen their family connections, through your board meeting strategy and other innovative frameworks talk about 18 summers with me.

Jim Sheils
Yeah, 18. Summers is something my wife and I created almost 12 years ago. And it's just a simple mission to make sure as people scale their businesses, they don't lose their family along the way. So we created a couple of simple strategies and rhythms that help entrepreneurs and investors stay grounded in their family life. And one of the most popular ones is called the Family board meeting, which actually became a Wall Street Journal best selling book.

Mike Stohler
So tell me a little bit about what that entails. What is the book all about? And what is it that you and your wife do?

Jim Sheils
So our book, the family board meeting was really about a rhythm that I started doing with my two oldest sons who I adopted, I was running two businesses and one to make sure that I didn't, I didn't fail at home. And this was a way for us to reconnect Reagan reground get to know each other. And it went so well as an experiment that I started shared with other business groups I went to and it really got an underground viral following, which turned it into a book and then a best seller. And what I can tell you is family life in our business, we always have important habits or rhythms and in family life, we don't always do that. And what the family board meeting talks about is the importance of one on one time, meaning having one on one time with each of your children with your spouse, separating the parts of strengthen the old hole is extremely important. We also talked about the importance of intermittent tech fasting. We are too connected today, you have to have times of complete and total unavailability to really connect with your loved one. So we talk about something called intermittent tech fasting that my wife and I have used on our dates I use with these half days that I spend with my children, uninterrupted one on one and then we talk about some of the words that we have to start using and see One of the things that a lot of kids are missing is a sincere compliment and a genuine apology. And the power of a sincere compliment. And a genuine apology cannot be underestimated, especially when kids are going through their tweens or teens for understanding for opening up. And this is the basis of our book. And the thing that most people can feel relieved about is you don't have to be a family therapist. To succeed at home, you don't have to have a doctorate in family psychology to succeed at home, what you do need to succeed at home is a few rhythms, a few consistent rhythms you put into practice and your whole family buys into. And that'll get you not the whole way there. But 80% of the way there. And that's what 18 Summers is all about. And the 18 summers equation says 85% of the time you'll ever get with your children comes by the end of the 18th summer. So the time is now don't wait 10 years, and say, Oh, well, I'm gonna get to my business, my family, I understand, I'll get back to him. That's a horrible recipe for disaster. And that's what 18 Summers is about putting family in the forefront. Keep it in balance as you grow your business grow the depth of your family, and it can be done. You can have it both ways. Yeah,

Mike Stohler
you know, Jim, and that is so true. You know, I'm thinking about even with my life, where even when my wife and I are sitting on the couch together, we are both on our laptops, right. And it's just a crazy thing. And that is so important. You know, everybody, it's just, I actually wrote this down. I'm going to purchase this everyone, it's on amazon.com. And it is the family board meeting. It is so important because look, it's family life. You know, it's what is important, right? A lot of people think it's it's money it is but it's the family, it's having that quality time. Jim, thank you so much for having that available to all of us. Because I think that is especially in today's society. It's something's it's so important that you agree.

Jim Sheils
Yes. Thanks for having me, Michael. I'm glad you appreciate the message.

Mike Stohler Absolutely. And, Jim, where can everyone find you on the web? Yeah, if

Jim Sheils
you want to know more about our passive income playbook into real estate, you can go to JJ playbook.com. That's something my wife and I designed for helping people into the real estate world. And then if you want to learn more about our family programs, you can go to 18 summers, one, eight. summers.com. All

Mike Stohler
right, Jim, I appreciate you being on the Richer geek audience. Thanks for having me. Thanks for tuning in to the Richer Geek podcast, where we're helping others find creative ways to build wealth and financial freedom. For today's show notes, including all the links and resources from our show, and more information about our guests, visit us at www.therichergeek.com/podcast. And don't forget to jump over to Apple Podcasts, Google Play Stitcher, or wherever you get your podcasts and hit the subscribe button. Share with others who can benefit from listening and leave a rating and review to get the podcast in front of your eyes. I appreciate you and thanks for listening

ABOUT JIM SHEILS

Jim is a partner at Southern Impression Homes, a company that specializes in building rental portfolios for individual investors and institutional buyers in Florida’s high growth markets. With a strong focus on the Build-to-Rent niche, Southern Impression Homes provides new construction, low-density properties such as single-family homes, duplexes, and quads with property management in place. Jim’s experience in real estate investment extends beyond his partnership with Southern Impression Homes. He has done over 2,000 rehabs and formerly owned Jax Wealth Investments, which focused on bulk foreclosures. After a successful joint venture partnership with Southern Impression Homes, the two companies merged in 2022 to better serve their growing client base in the Build to Rent niche.

Passive InvestmentsNichole StohlerFebruary 21, 2024podcast, season 1