🎙 Passive Cash Flow Podcast EP.187 | Revealing Andrew McNair’s $300 Million Property Strategy
Andrew McNair is the President & Founder of SWAN Capital. He manages over $300 million in assets, exited an 8-figure personal real estate portfolio, and has 10+ years of experience in real estate investing including multi-family, RV parks, storage, short term, and industrial properties. Andrew enjoys sharing his knowledge with others.
He is a public speaker, an adjunct professor, host of a weekly radio show called “What Your Money Would Say” and podcast host of Rich Young & Powerful. Some of his guests have been Dr. Ben Carson, Larry the Cable Guy, Dabo Sweeney, and many others. Andrew has appeared as a financial commentator on WSJ, Forbes and Fox Business and has contributed to Market Watch. Andrew is the author of three books: “Don’t Be Penny Wise & Dollar Foolish”, “Tithe: A Living Testimony,” and “The Giving Crisis”
Learn more at: https://swan-capital.com/
🧠 Topics Covered:
00:00 Podcast Introduction
01:54 Building and Exiting an Eight-Figure Real Estate Portfolio
02:58 “Rich Dad Poor Dad” and Early Financial Lessons
03:58 The $147K Stock Market Loss and Coal Investment
05:00 Launching Swan Capital and Shifting to Real Estate
07:37 The Stress of Small-Scale Real Estate (Toilets & Tenants)
11:57 The Decision to Exit and Focus on Scaling Up
16:17 Starting the Wealth Management Firm at Age 20
18:28 Exiting the Portfolio and Avoiding Capital Gains
23:00 Andrew’s Philanthropic Mission: The Joy of Giving
27:37 The Giving Crisis and Lessons from History
29:49 Contact Info & Final Advice on Giving
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⚠️ Disclaimer:
This is not a solicitation for funds, tax advice, or legal advice. This is not intended to be, and must not be construed to be in any form or manner a solicitation of investment funds or a securities offering. Peoples Capital Group LLC is NOT a United States Securities Dealer or Broker nor U. S. Investment Adviser is a Consultant/service provider and makes no warranties or representations as to the listener or viewer. All due diligence is the responsibility of the investor.
Transcript:
00:00:00:01 – 00:00:19:07
Andrew McNair
I grabbed this company that’s really on hard times and I think it’s going to rebound. It does the complete opposite. Under the Obama administration, coal just just dived. And so I ended up losing all of that $147,000. But, you know, and it was probably the best thing that ever happened to me because by the time I was 25, had 25 houses by 30, had 50 houses.
00:00:19:07 – 00:00:27:21
Andrew McNair
And that was my journey of piling up all of these duplexes and quad plexus.
00:00:27:23 – 00:00:44:24
Aaron Fragnito
All right, ladies and gentlemen, welcome back to the Passive Cash Flow Podcast. I’m your host, Aaron Frank Nieto, and we have an excellent guest here today with $300 million in real estate. Hit the lottery here, Andrew McNair. How do we do today, Andrew?
00:00:45:01 – 00:00:47:17
Andrew McNair
We’re doing excellent. I’m really excited about today’s show.
00:00:47:17 – 00:01:10:15
Aaron Fragnito
It’s literally absolute. So I want to have you on the show here because obviously you’ve been successful in your ventures to acquire such a large portfolio of real estate. You invest with some of the best syndicators in the space and, have a pretty straightforward model. But I wanted to dig into it and kind of learn about why you buy the properties you buy and how you were able to accelerate to such a large level in this space.
00:01:10:17 – 00:01:15:05
Aaron Fragnito
And, you know, a little bit more about the books you’ve written and things like that. How’s that sound?
00:01:15:07 – 00:01:16:21
Andrew McNair
Sounds like a plan.
00:01:16:23 – 00:01:34:11
Aaron Fragnito
Excellent, excellent. And by the way, to our listeners, if you’re enjoying our content, be sure to hit that like and subscribe button. And, share this with a friend. If you think they would gain value out of it. We come out with a new episode on the Passive Cash Flow podcast every two weeks. Here we have interesting guests like Andrew McNair here.
00:01:34:11 – 00:01:54:16
Aaron Fragnito
So, Andrew, let’s jump into it here. So your company is Swan Capital. You manage, over 300 million in assets right now, and you exit an eight figure personal real estate portfolio. So let’s let’s hit the brakes here. Let’s talk about your past a little bit and that exit, because that is really what it’s all about. At the end of the day.
00:01:54:16 – 00:02:14:03
Aaron Fragnito
You know you can build wealth on paper. You can have revenue. You can have staff. Right. All these different KPIs and whatnot. But hey, at the end of the day, it’s about exiting and putting money in your pocket and creating legacy wealth for yourself and your family. So let’s just go back to the big beginning here. How did you build up that initial portfolio and exit successfully?
00:02:14:05 – 00:02:30:09
Andrew McNair
Yeah, certainly. You know, there’s plenty of metrics that people will track. But, you know, net worth is the the score we should be tracking. Right. So, you know, a lot of people will track like credit score. And I always tell clients like that is getting an A in the wrong class. You know the A that you want is the net worth class.
00:02:30:09 – 00:02:58:05
Andrew McNair
So my story starts off like many that are probably listening. I read that one, purple book that flipped my world upside down. I mean, it’s so true that the two things that change your life are the books that you’re reading, the people that you meet. And when my parents handed me Rich dad, Poor dad that they had picked up from an Amway conference, my world was opened up to a whole different life, that there was actually this world out there where one day you could save enough money that you would never have to work again.
00:02:58:05 – 00:03:19:20
Andrew McNair
I’m like, that sounded way too good to be true when you’re literally flipping hamburgers at McDonald’s. And so I just started peppering my parents with all these financial questions, and they were like, don’t listen to us. Do as we say, read this book, but don’t take our advice. And they introduced me to like this Mr. Miyagi figure in my life, this local financial advisor.
00:03:19:20 – 00:03:35:16
Andrew McNair
And he’s like, I’ll teach you everything you need to know about money, but you’re going to show up every day, at high school and come work with me. I’ll pay you $0 an hour to take out the trash, fill out the financial plans and the models, and you just show up every day, and I’ll teach you about money.
00:03:35:22 – 00:03:58:17
Andrew McNair
And he delivered on that promise. And so that’s where you’d find me from 14 to 18. And I, started into real estate. This is really a sad story. At 18, I had saved up, believe it or not, $142,000. I’d say that 60,000 waiting tables at Denny’s doubled it in the stock market right. And so I think I’m on a roll.
00:03:58:17 – 00:04:22:11
Andrew McNair
I got the Midas touch. And then I see this duplex across from my church, and I’m like, I’m going to buy that in cash at 18. And the SAT, I had underwritten the deal. It was like, this is a great cash flowing opportunity. And sadly, I was like, I’m going to take one more, smoke out of the cigaret butt company that invests in coal, and it’s a coal company.
00:04:22:11 – 00:04:44:06
Andrew McNair
I’m going to make this one last investment. So straight out of like the Benjamin Graham textbook Intelligent Investor. I grabbed this company that’s really on hard times and I think it’s going to rebound. It does the complete opposite under the Obama administration coal just just dived. And so I ended up losing all of that $147,000 and not buying that duplex.
00:04:44:06 – 00:05:00:01
Andrew McNair
And it’s still kind of like sits there every day. I, you know, I go to church on Sundays. I’m like, that thing haunts me, that one duplex that I wish I would have purchased. But, you know, Aaron, it was probably the best thing that ever happened to me because, you know, it taught me a lot of other lessons that we can unpack later.
00:05:00:01 – 00:05:24:17
Andrew McNair
But that was my first, like, really invitation to real estate. And then when I started, my wealth management firm, started seeing my own clients at 18 and then started Swan Capital at 20, I thought, you know what, if I’m investing alongside clients in the stock market and I’m talking about diversification, I’m not really living it because my income and my assets are tied to the stock market.
00:05:24:23 – 00:05:41:09
Andrew McNair
And if the market goes down, I’m going to lose my income and my assets. And I don’t want to do that twice. And that’s when I started buying houses. And so by the time I was 25, I had 25 houses, by 30 had 50 houses. And that was my journey of of piling up all of these duplexes and quad plexus.
00:05:41:11 – 00:05:48:09
Aaron Fragnito
Wow. Interesting. Okay, so you finally started buying some real estate, in your 20s there. It sounds like a lot of real estate.
00:05:48:11 – 00:05:50:14
Andrew McNair
Yeah. That’s me. And,
00:05:50:16 – 00:06:01:15
Aaron Fragnito
And, and and how did you grow so quickly, though? Because real estate is a very cash intensive space. So were you raising capital from outside investors? I can’t imagine you were that good at waiting tables, you know.
00:06:01:17 – 00:06:20:09
Andrew McNair
Well, I had moved on from the waiting table days. It starts one capital, and I had a lot of success with my business early on, and so I lived very frugal. I mean, I literally was, you know, living in, within my business. And I lived in the office and I was just piling as much money into real estate.
00:06:20:09 – 00:06:51:20
Andrew McNair
So luckily it was really good timing. I can’t say that it was just because I’m absolutely brilliant. Sometimes the timing is just perfect. This was after 2010, 2011. There were some really good opportunities. There was a lot of foreclosures still in the market, and what I did is every it seemed like every couple months I’d buy a house in cash and, and these were duplexes that I was purchasing for $70,000, but they were c d level properties that needed a complete redo.
00:06:51:24 – 00:07:22:03
Andrew McNair
And so, you know, I literally got my hands dirty renovating these properties. And they were instantly cash flowing, which was an amazing opportunity. And so I was just continually rolling those cash flows. And then I started stripping and refinancing it to buy more properties. So I had, about ten when I got up to 50 houses, I had about ten FHA loans, and then the rest I had paid for in cash with the profits from the business as well as profits from the rental properties.
00:07:22:05 – 00:07:28:21
Aaron Fragnito
Interesting. Yeah. Kind of the buy renovate refinance repeat strategy. Right. The BR strategies they say correct.
00:07:28:23 – 00:07:37:00
Andrew McNair
Yeah. But little did I know that was more like the burn strategy because my hair started falling out from the stress of toilets tenants in time.
00:07:37:02 – 00:07:52:09
Aaron Fragnito
Yeah. Well absolutely. Right. Which kind of pushed you into this next chapter here by essentially creating a fund and investing as a as an LP on a lot of these opportunities. It sounds like you got a little tired of, managing tenants toilets and trash. Is that what happened?
00:07:52:11 – 00:08:09:08
Andrew McNair
Yeah. I mean, I could write a book of all the things that have happened. Me. So this is true story. I’ve had someone burn my house down intentionally. I’ve had someone burn it down accidentally. I had someone murdered inside my house, left for dead for two weeks. Someone murdered in the front of my property. These are not HUD houses, by the way.
00:08:09:10 – 00:08:32:17
Andrew McNair
I just don’t know how lucky I am that actually ended up on the front page news and then I’ve had just wild tales of renovating these properties. I’m like, you know, if I keep on doing this and I get to the 200 house goal that I wanted, I mean, I think it might kill me to go through all of the stress, and that’s when I had to start rethinking that ladder I was climbing before I got to the top.
00:08:32:19 – 00:08:48:02
Aaron Fragnito
It sounds like you and a lot of class D, class C assets, where a lot of those shenanigans kind of go down. Yeah I remember I, I was outside, I started buying class D real estate which you no longer buy. Always looks great on paper. But then in reality it’s like oh my gosh what did I get myself into?
00:08:48:04 – 00:09:14:09
Aaron Fragnito
And I remember I at least out all the units to, temporary rental. It was like tro tenants. And the deal is, they have six months to either get a job or go to school, and then, the rental assistance will continue. But if they don’t do that in six months, it doesn’t continue. And I, I lease this thing up so quick, like when word got out as accepting tro, I had at least up in like a week, I was like, man, I’m the best landlord leasing agent in this city.
00:09:14:09 – 00:09:39:22
Aaron Fragnito
Why does everyone want to live here? This is great. And then I realized six months later when four out of five of the tenants were not paying rent anymore because they didn’t get a job or go to school, and, so pretty much, had to end up evicting the majority. The building I also remember looking at a property in a class D market, and I looked down from the third floor out the window, and I see someone trying to break into my car and like the middle of the day and, Newark, new Jersey.
00:09:39:22 – 00:09:55:20
Aaron Fragnito
And just like I was so moved on from that, you know, definitely had some very questionable, tenants and properties and locations. I owned the property on, the it was called sunset, but after I purchased it, I realized it was called sunset. And I was like.
00:09:55:22 – 00:09:56:07
Andrew McNair
Oh.
00:09:56:07 – 00:10:08:23
Aaron Fragnito
Conscience. I was sitting in my car one time, so, like, waiting for an inspector and some. And someone tries to start breaking into my car, like, crying and open all the handles, and I’m like, bro, I’m in here.
00:10:09:00 – 00:10:10:05
Andrew McNair
That’s insane.
00:10:10:05 – 00:10:19:08
Aaron Fragnito
Yeah, and luckily, the doors are locked. If they weren’t locked, I probably would’ve been robbed, you know? And this, like, middle of the day, you know, it’s not even like night time. So.
00:10:19:13 – 00:10:22:23
Andrew McNair
So the property on sunset, you don’t want to be there at sunset.
00:10:23:00 – 00:10:40:20
Aaron Fragnito
No, no, don’t be on gun set on sunset. You’ll be in trouble. You’ll be in sunset then. Yeah. For sure. And then I, I bought the property across the street. Now, listen, if I still held these properties are worth like 3 or 4 times that I was paying for them, you know, I was doing the $70,000 duplex to sell, going for like, you know, 400 grand in this market.
00:10:40:22 – 00:10:41:20
Andrew McNair
It’s insane.
00:10:41:22 – 00:11:02:16
Aaron Fragnito
You know, it’s like 30 minutes from Manhattan. So it’s a decent market. But, and, I was, selling the property, so I, we, we, close on the property where we’re selling it, and I know we’re buying. We’re behind the property, and, the sellers get get their friends to remove the boilers, like the night after we bought it.
00:11:02:16 – 00:11:20:17
Aaron Fragnito
So. So we you know, we close like, 3:00 on, like, a Friday and then, you know, or the boilers was gone. The next day we go to the property, you know, they had, kept a copy of the key and there was no break in. They just kind of went right back in and just removed the boilers after they got their money from the closing.
00:11:20:17 – 00:11:24:18
Aaron Fragnito
So, you know, I learned a lot on gone set up. And listen.
00:11:24:19 – 00:11:29:21
Andrew McNair
The scenarios teach a character. Yeah. If you lived to tell it they’ll teach you some character.
00:11:29:23 – 00:11:53:18
Aaron Fragnito
Oh my gosh class D real estate is a curveball. Yeah. So we don’t do that anymore. We do like class C. I mean, we like to take a class C like in a great location in a great town that’s just like completely mismanaged and outdated, but as good bones and reposition into a class B, so we do actually see a lot of value there won’t go below class C really prefer like C plus and like a B.
00:11:53:23 – 00:11:56:07
Aaron Fragnito
That’s our sweet spot. And now we’re saying, yeah, those.
00:11:56:07 – 00:11:57:12
Andrew McNair
Sound like great opportunities.
00:11:57:12 – 00:12:14:15
Aaron Fragnito
Yeah, yeah. And I was seeing class A on sale two, which I love. So that’s exciting. But, All right, so, so you’re, you’re learning, the ropes here and in the class D, class C world, you’re you’re cutting your teeth here on these, questionable properties. And, and at that point, you’re like, what the heck am I doing here?
00:12:14:15 – 00:12:18:22
Aaron Fragnito
I’ve got myself in, some deep water here. Is that it’s going through exactly right.
00:12:18:22 – 00:12:38:08
Andrew McNair
And you get to a point where after you’re at 136 apartments, you’re thinking, hey, I got another business. Like I have a full time business. And if I go forward any further, I’m going to have to create an entire separate business of property management and vertically integrate, because there’s just no where else, because you’re constantly in decision fatigue mode.
00:12:38:10 – 00:12:57:03
Andrew McNair
And so I was like, you know, before I do that, I’m going to exit these properties, and I’m glad I did. And this is when I had the just epiphany. It’s like, you know, the larger the properties are, the more it becomes a team sport. And I’d like clients to come along on the journey with me because I invested $3 million in these properties.
00:12:57:03 – 00:13:20:15
Andrew McNair
And then the decade it turns into $10 million. I mean, that’s a great story that a lot of clients would love, love to participate in. But they are in their 60s, their 70s, which is what we specialize in giving advice to as retirees at our wealth management firm. And I said, you know what? We’re going to create something in-house like Cygnet, CGI, a baby swan that clients can come alongside us.
00:13:20:17 – 00:13:37:06
Aaron Fragnito
Yeah. Exactly. I mean real estate is such a management intensive asset class. And we start our management company around 50 units by necessity. You know we had fired two management companies at that point. One was even stealing money from us. It was crazy. And so we were like, yeah, we got it. We ran the numbers.
00:13:37:06 – 00:13:53:20
Aaron Fragnito
We’re like, we’re not going to make any money on this. We’re going to lose money starting a management company. And we’re like, we got to do it because we just were growing so quickly. We can’t really find a management company that achieves the aggressive goals we want to achieve with our repositioning and renovating these buildings and so on, and then leasing them up quickly.
00:13:53:20 – 00:14:12:02
Aaron Fragnito
So we did that and really like that. Now we’re around 200 units like finally starting to break even, you know. But it’s it’s tough because every time you buy a property you, you know to really repossession NASA, you want to hire like an additional person sometimes. But sure. So but yeah, I agree. We, we don’t buy anything less than 50 units.
00:14:12:02 – 00:14:29:13
Aaron Fragnito
We’ve found out, you know, the hard way that the smaller stuff, even like the 20 units and stuff are hard. You know, we bought plenty of those through the years, but, you know, you lose 5 or 6 tenants on a 20 unit building. You’re repositioning the building and that’s that’s it. You’re going to basically be writing a check just to cover the mortgage on a lot of those months.
00:14:29:13 – 00:14:47:03
Aaron Fragnito
So, but on a, you know, 80 unit, you lose five tenants, you’re still easily covering the debt and all the other operating costs. So and even more as you get above 100 units. So, yeah, I, I completely agree, bigger is better real estate. You can afford to have a super at the property, you know, a leasing staff just for that property.
00:14:47:03 – 00:15:05:14
Aaron Fragnito
And you have a economies of scale. And then, you know, the whole management end of it management, intensity of real estate and learning, the business of property management and owning and finding great deals is so hands on. Anyone who is busy with a full time job won’t be able to master it, just it’s not not possible.
00:15:05:14 – 00:15:10:15
Aaron Fragnito
So the whole syndication model is is really smart. You know, I remember we start.
00:15:10:15 – 00:15:33:15
Andrew McNair
Off and who wants to I mean when you get to retirement, do you want to like stare at your computer screen looking at your stocks, your real estate portfolio, looking for listings, then then taking, you know, the afternoon to go lead in someone into a property to view it before they start renting it. And so all of that is just maddening for someone that’s still working or if someone’s retired.
00:15:33:17 – 00:15:49:17
Aaron Fragnito
Yeah. Exactly. Exactly. And and and also just like the learning curve to it, it’s such a you know the deals we buy are off market and no one else knows about them. We’re often the only bidder on the table and we give them a great prices. You know if you buy anything sitting on the internet, that’s how we sell our properties.
00:15:49:17 – 00:16:03:14
Aaron Fragnito
We put them on loop net with a broker because we want bidding wars. We want to get top, top dollar. And when we buy them, we do the exact opposite. No one knows about a pocket listing. We get in there, we bid quick and we get it before anyone else bids on it. So, or even seasoned a lot of times.
00:16:03:14 – 00:16:17:05
Aaron Fragnito
And, it’s not going on the internet. No one knows about these deals. So. And that’s generally how, you know, commercial real estate is traded at great prices. And all right. So you actually when did you start your, wealth management company?
00:16:17:07 – 00:16:36:20
Andrew McNair
So I started that, when I was about 20. I started that out of my trunk, out of my Toyota Camry. So many great businesses are started out of a trunk. And so, those brave souls, those clients that invested a half $1 million with me, you know, and I had literally had to grow my goatee, so I looked older than I was.
00:16:36:22 – 00:16:54:01
Andrew McNair
And. But I’m thankful for those original clients. But that’s when I started Swan Capital and my thought process was, is, you know, let’s specialize in working with retirees. That’s I was always an old soul even growing up. And I thought, you know, I can understand what they’re going through. They don’t want to worry about their money. They want to sleep well at night.
00:16:54:01 – 00:17:01:00
Andrew McNair
And that’s why I named it Swan Capital. I didn’t name it McNair financial. It was going to be Swan Capital.
00:17:01:02 – 00:17:10:04
Aaron Fragnito
Yeah. Exactly. That’s amazing. You’re able to raise those types of checks and require those types of clients at such a young age, you know, with just your own business behind you.
00:17:10:06 – 00:17:26:06
Andrew McNair
Yeah. I mean, you got to know your stuff. You know, a lot of times people want to, you know, become an overnight success. But, I mean, it takes ten years. I mean, it takes six, seven years of doing that for work. And and I wish people would tell their grandkids and their kids like, start early, work for free.
00:17:26:10 – 00:17:48:23
Andrew McNair
Because when you work for free again, you can get into some really big conference rooms and some roles that you would otherwise have to take years to get to. But since you’re free and offering your time for free, a lot of people will take someone under the wing. And that’s what luckily someone did for me. So by the time I had my own firm, I’d been in the financial industry for 5 to 6 years.
00:17:48:23 – 00:18:08:08
Andrew McNair
And so here they are. You know, you know, they’re about to retire. They’re in their 60s, and they got someone that’s 20 that understands the issues they’re going through at a high level and doesn’t know everything, but knows a few things very well. And that’s why it’s so important to, you know, work with someone that specializes in your age group and in the investment category you’re trying to invest in.
00:18:08:10 – 00:18:28:16
Aaron Fragnito
Yeah. Yeah. Okay. Incredible. So now Andrew, let’s fast forward to you launching. So essentially from what we gather here, you got tired of tenants trashing toilets in class, seeing the properties and people getting murdered. On your real estate and you, you pretty much ex did. Sadly, your time to market pretty well. You bought around 2010, 2014 or so.
00:18:28:20 – 00:18:31:23
Aaron Fragnito
When did you exit that initial portfolio? For the most part, yeah.
00:18:31:23 – 00:18:49:23
Andrew McNair
I started exiting right around, the Covid time when I saw that, you know, there was a lot of desire because money was cheap. And I saw the writing on the wall that home insurance was going up in the state of Florida, where most of my properties are here on the Gulf Coast, where I live in Pensacola, Florida.
00:18:49:23 – 00:19:13:18
Andrew McNair
And I said, you know, this might be one of the greater times. Like I could refine it was one of those pivots, right? You you go to 200 homes, you refinance all the accumulation of value that you’ve built up in these properties and start all over again and go down that rabbit hole. I was like, hey, or based on the, you know, the ROI was through the roof because what I had in these properties was very little compared to the net cash flow.
00:19:13:20 – 00:19:30:12
Andrew McNair
But based on the cell value, I ran the calculation. I said, based on what I can sell, it based on my net rent. I might as well go to another investment where I can make a better return. And so that’s where I did that calculation. And so important that I wish every investor started with the end in mind.
00:19:30:12 – 00:19:51:06
Andrew McNair
Like if you buy a stock, if you buy a property, you need to say, here’s my exit price. This is what I’m trying to exit out. This is what I’m going to interact in versus you watch one HGTV show, you think, oh, I can fix this up. I can add some lipstick, I can turn this around, but you don’t really have an exit price of what you would sell this for and what you must rent it for, and you have to run it like a business.
00:19:51:06 – 00:19:53:19
Andrew McNair
If you’re going to do active real estate.
00:19:53:21 – 00:20:16:19
Aaron Fragnito
At People’s Capital Group, we help you invest in real estate, build your wealth by owning professionally managed apartment buildings in the northern new Jersey market. We want to show you how owning real estate is attainable, even for the busy professionals that don’t have the time or experience investing in real estate. Now we only work with select people who are serious about building wealth.
00:20:16:23 – 00:20:50:20
Aaron Fragnito
So find out if you qualify at People’s Capital group.com. Yeah, yeah. Understood. And also you know there’s a point in time where you kind of squeeze the juice out of the asset you own. You know, we, tend to buy a property, we refurbish it, we lease it up, you know, and a lot of times we’ll leave a little bit for the next person, like, we’ll maybe renovate 60, 70% of the units in the building, but we’ll leave that last third because first of all, those might be, you know, tenants that, are looking to exit or just, you know, at a time like you actually sell a building for a better, you know,
00:20:50:20 – 00:21:15:11
Aaron Fragnito
cap rate, a lower cap rate when there’s like more some value out of the building. Like if you squeeze all the juice out of it, then it actually goes for, you know, a lower, or less attractive multiple on, you know, it’s an ally, right? So, essentially a higher cap rate. So we, we find that, you know, if you pretty much, work your way through a property after 4 to 5 years, it is a good time to exit.
00:21:15:13 – 00:21:22:03
Aaron Fragnito
Did you do a 1031 or how did you avoid all that capital gains tax? It sounds like you had a great amount of appreciation.
00:21:22:05 – 00:21:39:00
Andrew McNair
Yeah. My situation is really unique and it’s not right for everyone. So my story is, you know, when I lost everything at 19, I made a promise to myself, and I made a promise to God that I would do it differently, like I would be diversified, but I also would give a lot of my money away. And so, which is pretty radical.
00:21:39:00 – 00:21:57:03
Andrew McNair
I ended up giving most of all of that money away. And then for me, for someone that’s as ambitious as I am, it kept me hungry to continue on and continue building the company I built and also do it all over again. And so I always, you know, encourage people. A lot of people say, well, I could do it all over again.
00:21:57:07 – 00:22:14:16
Andrew McNair
I’ll give the money when I die. And I say, oh, I mean, that takes no real faith, that takes no courage to do that. There’s some egregious evils, things that I’m passionate about, that I want to be the means to the end, to fix in my lifetime. And so I’m willing to put my money where my mouth is and actually give towards those causes.
00:22:14:16 – 00:22:33:00
Andrew McNair
And so, that’s one way is doing we did what’s called a charitable LLC. You could do it with a donor advised fund. There’s different charitable strategies that you could have employed. And the others can. But for me, that’s the route I went. So I ended up donating those properties before I sold them. So I didn’t pay anything on the capital gains.
00:22:33:00 – 00:22:39:12
Andrew McNair
I was able to offset my income for years. And so that was pretty fantastic. And it was a win win for all the charities.
00:22:39:14 – 00:23:10:16
Aaron Fragnito
Wow. That’s amazing Andrew, I love that, you know, and, I also love giving back. You know, I’m, very strong in my Christian faith as well. And I remember, you know, reading about you, when your team first emailed me. And at first I was like, another wealth advisor on the show pass. And then I read, like, about your philanthropy and your faith, and, I just really connected on your faith there in your philanthropy and I said, you know, I actually I really want to get to the level where I can give, like Andrew gives, because to me, that is true success.
00:23:10:16 – 00:23:29:00
Aaron Fragnito
You know, when you can give back and really make a difference, you know, and just, that that’s actually what it’s all about. That’s really why we’re placed here. I believe that is one of the most important things we can do as as God’s children and taking care of other people in this world. So, what are some of those missions you’re passionate about?
00:23:29:02 – 00:23:50:20
Andrew McNair
Yeah. For me, you know, I think it’s very clear we want to help the widow, the orphan, the sojourner, the foreigner, and those that are impoverished. And so I tried to be very intentional with the charities that I give to making sure that I’m not giving frivolously to charities that are going to abuse it and have high administration costs, cost.
00:23:50:20 – 00:24:09:20
Andrew McNair
So we’ll do a lot of due diligence on the charities that we give towards. But we want to seek after those situations that are called out. And I feel really strongly about fixing. And so, that’s what we do. So, our charitable LLC is called Luke 1611. And even if you’re if you’re not a believer, you don’t believe in God.
00:24:09:20 – 00:24:32:06
Andrew McNair
I think that really that’s why there’s so much anxiety, depression in this country, even though we’ve never been more successful in history, there’s probably never been a more successful empire in history. But we’re so, I don’t know, burnt out. We’re so tired and we again, not found a lot of joy in all of this, this economic success that we’ve got.
00:24:32:06 – 00:24:54:06
Andrew McNair
And so I would encourage you, you know, to reflect and ponder and say, hey, I can keep on moving the goalposts. I can keep on moving that scoreboard of net worth to a higher and higher or higher income. And I did that. And what happened was I just didn’t find any fulfillment until I started giving money away and then saying, hey, I can really this is a cause I’m actually want to get my hands dirty.
00:24:54:10 – 00:25:09:00
Andrew McNair
But I also want to get my money actually active and have a better rate of return on my money. And that’s really weird. For someone that owns a wealth management firm, there’s no greater return than I can start given my money. Now. Like a lot of people say, well, I’ll just grow my money and I can do a good job.
00:25:09:00 – 00:25:25:09
Andrew McNair
I’m a great money manager. I can grow my money. Then I’ll give it when I’m dead. It’s like, well, that’s pretty. I don’t know, I think it’s pretty proud to say that you can do better in other people’s lives that are suffering now. Like if you go to like, Charity water. I had Scott Harrison on my podcast, who founded charity water.
00:25:25:14 – 00:25:46:09
Andrew McNair
It’s like there’s 70 million people without water or 700 million. Sorry. Excuse me, I missed the zero. That do not have water that’s easily accessible to them. And you’re saying, like, if those people got water, they could actually start businesses, and actually help their family and have exponential rates of return that we can’t do with our own money.
00:25:46:11 – 00:26:03:15
Aaron Fragnito
Right? Right. And just water. It’s something we take for granted. We literally like, leave it running while we brush our teeth. You know, it’s just like so readily available. We don’t even think about it. You know, to me, water is like, that water bill is too high on that property. Send the plumber over. That’s my biggest, like, interaction with water for the most part.
00:26:03:17 – 00:26:20:07
Andrew McNair
I mean, how many of us have had, like, a foundation leak or, you know, like, water is literally just wasting away, and you’re like, my water bill a month ago was like, I don’t know, a couple hundred dollars because we have a massive leak versus someone in another country is walking, what, five miles or half their day is going to get the water.
00:26:20:07 – 00:26:24:21
Andrew McNair
And coming back? And then how can they get ahead when they spend half their day going to get the water?
00:26:24:23 – 00:26:46:07
Aaron Fragnito
Yeah, exactly. Exactly. You know, I’m a big fan of, World Vision, which is a big part. You know, a lot of their focus is, on bringing water to people all over the world. And, I’m actually running a marathon for them in October. I’m raising $4,000 for that. So any, one. Oh, cool. Yeah. To any of our listeners who can get in touch with us, we can show you where to donate.
00:26:46:07 – 00:27:04:24
Aaron Fragnito
But I love World Vision. Yeah, I love sponsoring kids. They’re just helping out. And, you’re absolutely right, though. You know, I’m guilty of this, too, of making that excuse like, oh, I’ll build my business to a certain level. I’ll get this certain amount of comfort financially, and then I can give more, you know, and I think we’re all guilty of that.
00:27:04:24 – 00:27:21:18
Aaron Fragnito
And it’s a beautiful message to say no. You know, we are so blessed. So blessed to be in this country, in this, world here. You know, it’s really just an incredible opportunity that we have. And I to find ridiculous on how, like, people are more depressed now than they were, like in the 1800s or something, if you think about it.
00:27:21:18 – 00:27:37:06
Aaron Fragnito
You know, man, life was so hard back then, you know, even before that. And like, now it’s it’s incredibly easy for the most part. You know, you just put the time and and the effort, you know, you can really get ahead in this world, especially in America. So it,
00:27:37:08 – 00:28:06:06
Andrew McNair
I mean, it’s challenging. I mean, it’s really convicting. I mean, that’s why I wrote my book, The Living Crisis is if you go back to the Great Depression, I mean, the Great Depression, where we had super high unemployment, 25% unemployment, which is unfathomable today. And you see, a generation which often is referred to as the greatest generation, who gave percentage per capita of their income more back then in the in the height of the Great Depression than we do in the great expansion today.
00:28:06:11 – 00:28:20:16
Andrew McNair
And to me that’s like, wow. Like we can always complain about how house affordability is a problem. We can, you know, complain about how it takes to income, you know, and my income’s not beating inflation, but it’s like compared to the Great Depression, we have no excuse.
00:28:20:18 – 00:28:27:15
Aaron Fragnito
Yeah. Yeah. And they stormed the beaches of Normandy to save us from Nazi Germany. You know, like, thanks for the haggling, guys. I guess we owe you one.
00:28:27:16 – 00:28:30:24
Andrew McNair
Thanks. We’re not speaking German today, right?
00:28:30:24 – 00:28:55:18
Aaron Fragnito
I yeah, yeah it does. It slows. Yeah, I don’t know. I do not know a lot of German. Neither. That’s great. That’s great. No, it’s it’s a beautiful message, you know, and it’s so important we, we give back, you know, we, we do try to get back here. Also, we take a percentage of our AUM, and we donated to a couple different causes as well.
00:28:55:18 – 00:29:10:17
Aaron Fragnito
World Vision being one of them, you know, which I’m really behind. So, and, it’s important to spread that message, you know. So. And that’s why I want to have you on the show here. I love your message. I love your faith. I think more people need to live out loud like that and give back and be philanthropists.
00:29:10:22 – 00:29:34:21
Aaron Fragnito
It’s not about getting a bigger house or a nicer car or better vacation. You know, I I’ve read a statistic, something like, once you make more than $80,000 a year, like the level of happiness in your life, like does not go up significantly more. And I know that for a fact, right? You cap out like and I because I’ve met family offices with hundreds of millions in net worth and there’s no they’re not happy.
00:29:34:21 – 00:29:48:23
Aaron Fragnito
You know, they’re just like totally pissed off. And I’m like, come on, man, you’ve so much, you know, just be grateful. So yeah, it’s it’s really spot on. Yeah. Yeah, exactly. So, Andrew, where can people learn more about how to get in touch with you and your causes?
00:29:49:00 – 00:30:14:22
Andrew McNair
Yeah. So, our website, swann-capital.com. So sleep well at night. Capital. That’s all the information on me. My my podcast, the Rich, young and Powerful podcast. We bring on philanthropists. We’ve had everyone from Kurt Warner, Larry the Cable Guy, Doctor Ben Carson. And because there’s so many great organizations, so many charities out there, I wanted to take some time and spotlight those, people who are actually living what they preach.
00:30:14:22 – 00:30:35:07
Andrew McNair
Like they are not only saying, hey, there’s a problem. They’re like, hey, I’m going to give my money, my resources, my platform towards that problem. And I think all of us can do that. We don’t have to be, you know, Chris Tomlin, the singer. Like we we can just take wherever we’re at and wherever we’re planted and do really good with the profits from our business, like you just mentioned.
00:30:35:13 – 00:30:50:20
Andrew McNair
And this is why, like, I shut down my office four times, a year and we pick a charity of the year. Of course, we write a check, but we actually get our hands dirty, like, I have. All my 16 employees will come out, which cost me thousands and thousands of dollars in payroll. And, we invite clients.
00:30:50:20 – 00:31:08:01
Andrew McNair
Why? Because I want them to be introduced to all the local charities that need people. They need volunteer. They need the money that you have in your pocket, like we don’t. We’ve never had a money problem. We have a transfer problem. It just needs to get out of the pockets of some people that have it into the hands of great organizations that can do more good.
00:31:08:03 – 00:31:14:02
Aaron Fragnito
Exactly, exactly. It’s beautiful message. Now I love that. I love that so much. What’s that a website. One more time Andrew.
00:31:14:04 – 00:31:22:08
Andrew McNair
That’s swan-capital.com. Or you can go to my book on Amazon which is the Giving crisis that’s right there on Amazon.
00:31:22:10 – 00:31:51:08
Aaron Fragnito
Excellent, excellent. So to our listeners yeah definitely check out Andrew’s resources here. Really a leader in the space of that thought process of giving back, making a difference for philanthropy. I mean, that’s what encouraged me. I also read the purple book, Rich Dad, Poor Dad many years ago. And, you know, my vision is to be a philanthropist, ultimately to get to a time where where I’m not worried about AUM or running around and, you know, running my business really want to get to a point where I’m passive in my business and able to give back.
00:31:51:08 – 00:32:07:22
Aaron Fragnito
And that’s my main vision for my wealth creation. And that’s what I want to instill down to my child and to my friends and family as well. So and to our viewers and listeners here. So if you’re if you’re getting value out of our podcast here, the Passive Cash Flow podcast, please give back. You know, it’s important to give back.
00:32:07:22 – 00:32:18:09
Aaron Fragnito
Pick a cause that means a lot to you. A charity means a lot to you. If you don’t know, you can get in touch with Andrew. You can get in touch with us as well. We have a few selected. We like the wounded Warriors. We like World Vision.
00:32:18:11 – 00:32:38:09
Andrew McNair
There’s so many great ones. I mean Native Mission, Samaritan’s Purse, I mean, there’s so many great organizations out there, that you can get plugged into. And we have more resources than we had 20 years ago. Like with charity navigator, that is vetting some of these charities and looking at their financials. Again, we have so much more transparency that we may have had 20 years ago.
00:32:38:11 – 00:32:52:05
Aaron Fragnito
Absolutely. Yeah. You can do charity watch and there’s other websites you can go to and kind of see exactly how much they’re doing putting towards administration costs and things like that and how much a CEO is getting paid. All that information so you can make the right pick for yourself. But thank you so much to our listeners and viewers.
00:32:52:05 – 00:33:10:04
Aaron Fragnito
Of course. I’m Erin Frank Nieto, co-founder of People’s Capital Group. We’ve been helping people build and preserve their wealth in new Jersey, multifamily over the last, boy, 13 years or so here, we can complete about 280 transactions, have over 100 investors. So if you want to learn more about our upcoming opportunity there, you can go to people’s Capital group.com.
00:33:10:04 – 00:33:27:19
Aaron Fragnito
You can get in touch with us at info People’s Capital group.com and like and share and subscribe. If you’re finding value out of our content here we have the, Passive Cash Flow podcast come out new episode every two weeks. So check us out. All major platforms and YouTube put a lot of content on YouTube, masterclasses, webinars.
00:33:27:21 – 00:33:36:01
Aaron Fragnito
Oh man. All types, boss and guests here on the podcast as well. So check us out there. Thank you so much, Andrew, for coming on the show.
00:33:36:03 – 00:33:37:05
Andrew McNair
Thanks for having me. And anytime.
