Lessons from a Commercial Multifamily Investor, with Paul Moore

In this fascinating interview with Paul Moore, we discussed opportunities for investors to build generational wealth through commercial multifamily investing.  Unfortunately, there are high barriers to entry into this investment sector.  New investors to this space may lack the capital requirements, loan qualifications, and experience needed to gain a seat at the table.

Through real estate investment firm, Wellings Capital, Paul Moore is making this asset class available to investors who would otherwise lack access.  Wellings is a syndicator that allows investors to pool their funds to get the advantages of direct ownership of commercial multifamily real estate, along with its high returns, tax advantages, and low risk.

You’ll gain powerful business insights as you hear Paul share his thought-provoking and honest story.  He confidently shares his monumental accomplishments and the significant failures that accompanied them along the way.  When you listen, be prepared to learn just as much from his successes as from his stories of failure.

Paul Moore is masterful in business and marketing.  You’ll come away with a new appreciation for continuous learning and reinvention, solving problems for others, and staying congruent with your life mission.

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Where Entrepreneurship Fits into the Cash Flow System

We love Entrepreneurship.  Business owners emphasize and focus on cash flow over accumulation.

In the Cash Flow System, you first increase cash flow by keeping more of the money you make.  Then you protect your money.  Finally, you increase and make more.

Entrepreneurship is part of Investing in stage 3.  Building a cash-flowing asset portfolio of real estate and business accelerates time and money freedom.

Who Is Paul Moore?

After graduating with an engineering degree and then an MBA from Ohio State, Paul entered the management development track at Ford Motor Company in Detroit.

After five years, he departed to start a staffing company with a partner. They sold it to a publicly traded firm five years later for $2.9 million.

Along the way, Paul was a finalist for Ernst & Young’s Michigan Entrepreneur of the Year two years straight (1996 & 1997).

Paul later entered the real estate sector, where he flipped over 50 homes and 25 high-end waterfront lots, appeared as the only REALTOR® on HGTV’s House Hunters for a waterfront week special, rehabbed and managed rental properties, built many new homes, developed a subdivision, and started two successful online real estate marketing firms.

He also built several other companies and made quite a few medium and high-risk investments along the way.

Paul Moore’s Most Important Business Lessons

High Risk Does Not Equal High Returns

People often think that to get high returns, they have to take on high risk.

Instead of high risk leading to high returns, Paul Moore says that high risk leads to the potential of high returns, and more so to the potential of higher loss.  Often, people think they’re investing, when really, they’re speculating or gambling.

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. – Paul Samuelson, the First American to win the Nobel Prize in Economics

According to Paul, investing is when your principal is safe, and you have a chance to make a return.

In contrast, the definition of speculating is when your principal is not at all safe, and there’s a chance to make a return.

His wisdom comes from several experiences speculating when he thought he was investing, and consequently, losing a lot of money.

The Importance of Giving

There is a universal law that you will get back in proportion to what you give.

When Paul Moore was $2.5 Million in debt in 2007, he decided to model George Mueller’s heroic story of giving.  Paul made the most counterintuitive decision to give his way out of debt.  He challenged his family to give weekly as if they were making $500,000 a year, a decision that was painful and challenging at the time.

A few weeks later, in a providential conversation with a developer, Paul discovered a loophole in the law that prevented subdividing property.  He was able to use that law to subdivide a very valuable waterfront property.  In 13 months, he was miraculously and entirely out of debt.

Knowing When to Quit

Two of the great truths that Paul has learned through the How to Lose Money podcast are these two opposing ideas:

First, you need to know when to cut it off and quit quickly when you know things have gone wrong, before you sink more money and years of your life.

On the other hand, if you’ve made a lot of mistakes, you’ve already paid the price, you might as well get the lesson.

If you’ve made a lot of mistakes, if you’ve tripped, stumbled, lost money early on, get back up and jump back in.  You’ve already paid your tuition, so you might as well get the lesson. – J. Massey, Cash Flow Diary

These concepts are opposing ideas, held in tension with each decision we make.  So how do you reconcile them and decide which applies to your current situation?

Paul Moore shares his solution is spending time quietly praying and meditating during his early morning, asking which one is the right answer for right now, and following his gut instincts.

Other Topics Discussed

• He failed as a General Contractor, but as a REALTOR®, built a successful Real Estate Agency.
• His real estate journey that led to providing a platform for investors with a real estate investment firm.
• How he went from $2 Million in the bank to $2.5 Million in debt, and then recovered.
• Paul’s transformative discovery and personal study of direct response marketing and copywriting, and how this has been one of his keys to his success in finding investors for Wellings Capital and raising money for self-storage.
• The demographics of commercial multifamily investing that make it a market with predictability, stability, and safety.
• The mirror demographics of self-storage investing.
• His ideal exit strategy, and how it benefits investors with the return of principal, growth, and opportunity to reinvest.
• Paul’s upcoming book on Warren Buffett’s investment principles.
• Paul’s advice to get into a business you love, but to outsource and delegate as much as you can.  In this way, you can focus on your own core competency.
• His book recommendations:
  • The EMyth, by Michael Gerber
  • The One Thing, by Gary Keller and Jay Papasan
  • Start with Why, by Simon Sinek
• Paul’s passion and donation plan to fight human trafficking and rescue victims through Exodus Cry and Freedom Place.
• Paul’s mission to encourage entrepreneurs with the predictable stories of failure from successful people.

Connect with Paul Moore

If you would like to learn more about creating multi-generational wealth through commercial multifamily or storage facility investing, visit Wellings Capital.

Get Paul Moore’s book, The Perfect Investment: Create Enduring Wealth from the Historic Shift to Multifamily Housing.

Get information on buying or selling waterfront property on Virginia’s beautiful Smith Mountain Lake.

You can also find much of Paul’s work on Bigger Pockets.

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