When it comes to achieving true financial freedom, there’s a vast difference between chasing hype and building a repeatable, trustworthy system. On a recent episode of “Raising Private Money,” Jay Conner sits down with Lane Kawaoka—an engineer turned real estate powerhouse—who has raised over $200 million in private capital and owns more than 10,000 units. Lane’s journey isn’t just impressive in numbers; it’s a how-to guide for investors ready to scale thoughtfully, avoid rookie pitfalls, and reach financial independence.
From Corporate Engineer to Real Estate Leader
Lane Kawaoka’s introduction to real estate investing wasn’t marked by overnight success. Instead, it evolved from years of disciplined learning, beginning with the investment in single-family homes as early as 2009. Eventually, he transitioned from his high-paying engineering job to focus full-time on real estate, not because it was easy, but because he saw the power of repeatable systems. As Lane began raising private money, he relied on building strong relationships, first with friends and family, then expanding outward, always putting trust and alignment at the forefront.
Breaking the Million-Dollar Ceiling
Many new investors gather their first million through hustle—buying rentals, flipping properties, and leveraging local relationships for their first private loans. But what gets someone to one million often won’t get them to ten million and beyond. Lane’s “Wealth Elevator” framework breaks down the journey into distinct floors.
The first floor involves building a solid base through savings and owning rentals. The second floor ushers in accredited investor status, where access to more lucrative, risk-managed deals becomes possible. The third floor is where investors with $3–4 million net worth begin to focus on preservation, shifting from aggressive growth to capital protection and diversification into vehicles like T-bills, life insurance, and private money lending.
Those in this second-floor space—the million to multi-million range—still need to take calculated risks. Simplistic “set it and forget it” strategies no longer suffice. Instead, these investors must evaluate deals with a discerning eye, balancing risk and reward as they work towards their ultimate financial freedom.
Systematic Decision-Making and Honest Conversations
Unlike many in the industry who pitch investments by inflating numbers and projecting excessive optimism, Lane prefers a system-driven, data-first approach. When considering a deal, he and his team start by examining raw financials—rent rolls, profit and loss statements, and cap rates—without manipulation. They look for conservative assumptions, such as cautious reversion cap rates and realistic rent escalators, instead of painting a rosy picture.
Importantly, Lane prioritizes transparency. He discusses not just why an investment could succeed, but openly points out possible risk factors. This willingness to “test the deal before looking at the answers” builds authenticity and long-term trust with investors. He draws a clear line: if a prospective investor requires constant reassurance or isn’t comfortable with the possibility of loss, private placements in real estate may not be the right fit.
Alignment Over Aggressive Pitching
The essence of Lane’s capital raising philosophy is simple: alignment. He treats raising money as a process of mutual fit, not of one-way persuasion. Potential investors are encouraged to think carefully about whether their personal goals, timelines, and risk tolerance align with the realities of multifamily deals, private lending, or syndications. Lane’s team offers open communication and a clear-eyed view of both the protections and limitations of their investments. Rather than pushing for a sale, they aim for every investor to go in “eyes wide open,” knowing both the upside and the possible storms ahead.
The Path Beyond Financial Freedom
As investors ascend the “Wealth Elevator,” the strategies continue to evolve. Those who reach higher floors diversify further—into energy, private equity, and more—often building a network and even a personal advisory team, much like a family office. Ultimately, success isn’t about the biggest short-term gains but playing the long game with structure, adaptability, and community wisdom.
Lane Kawaoka’s journey demonstrates that sustainable wealth is built on systems, relationships, and self-awareness. For anyone ready to upgrade their investment game, focusing on process and alignment—rather than hype—may just be the key to climbing the wealth elevator all the way to financial independence.
10 Discussion Questions from this Episode:
- How does Lane Kawaoka’s view of raising private money as a system—not hype—challenge conventional approaches?
- Why did Lane Kawaoka feel reluctant to take on other people’s capital, and how did he overcome this?
- What were some key lessons from Lane Kawaoka’s shift from single-family to multifamily syndications?
- Why is “data, not drama” so important in real estate investing, according to Lane Kawaoka?
- How does Lane Kawaoka’s engineering background impact his investment strategy?
- What does alignment between investor and operator look like in Lane Kawaoka’s approach?
- What key underwriting metrics does Lane Kawaoka believe investors should always evaluate?
- How do wealth-building strategies change after reaching $1 million net worth?
- What steps do Jay Conner and Lane Kawaoka take to protect investor capital?
- How do transparency and communication affect investor confidence in uncertain markets?
Fun facts that were revealed in the episode:
- Lane Kawaoka transitioned from a career as a licensed professional engineer, where he managed over $250 million in construction projects, to owning and operating more than 10,000 real estate units.
- Instead of pitching deals right away, Lane Kawaoka built his early investor base by organically growing a podcast audience and community, starting with teaching people how to buy remote rental properties before moving into larger syndications.
- Lane Kawaoka describes wealth building as an elevator with different floors: the first involves buying rental properties to become an accredited investor, while higher floors focus on preserving wealth and transitioning to safer investments like private lending and eventually emulating family offices.
Timestamps:
00:01 Building Trust in Investing
05:02 Investing Lessons and Challenges
07:45 From Rentals to Syndications Growth
10:34 Reversion Cap Rate Insights
16:40 Risk, Projections, and Key Metrics
20:09 Reversion Cap Rates and Assumptions
21:31 Market Shifts and Risk Management
26:03 Wealth Strategies for Growth Stage
29:24 Emulating Wealthy Strategies
31:15 Connect with Lane Kawaoka:
https://www.TheWealthElevator.com
32:27 Private Money Raising Frameworks
Connect With Jay Conner:
Private Money Academy Conference:
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https://www.jayconner.com/MoneyReport
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https://www.JayConner.com/trial/
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It is available FREE (all you pay is the shipping and handling) at https://www.JayConner.com/Book
What is Private Money? Real Estate Investing with Jay Conner
http://www.JayConner.com/MoneyPodcast
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal.
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Wealth Elevator Insights: Lane Kawaoka Explains Levels of Wealth After Million Dollar Net Worth
Jay Conner [00:00:02]:
What if raising private money was not about hype? What if it were just a system? And what if that system could scale to hundreds of millions of dollars without you being a Wall Street insider? Well, today’s guest has done exactly that. Welcome back to Raising Private Money. I’m your host, Jay Conner, and today I’m sitting down with Lane Kawaoka, a guy who didn’t just raise private money; he’s raised over $200 million of it. And I’ve been so blessed to be in a mastermind for a number of years with Lane. Now, Lane owns and operates more than 10,000 units, runs the wealth elevator, and comes from a background most real estate investors don’t. He’s a licensed professional engineer who’s managed over $250 million in large-scale construction projects. But here’s the key part. Lane didn’t start as a real estate guru.
Jay Conner [00:01:01]:
He walked away from a high-paying corporate career and built a repeatable machine for attracting accredited investors. One built on trust, data, and alignment. He invests with his own capital, he backs deals with debt, and he raises money for multi-family RV parks, mobile home parks, and hotels at scale. He’s also the host of a top-ranked investing podcast and the author of the Wealth Elevator. So if you want to understand how sophisticated investors think, how real private money actually gets raised, and how to build long-term wealth without guessing, you’re in the right place here on this episode. You’re going to get to meet my dear friend Lane right after this.
Narrator [00:01:52]:
If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place to raise private money. We’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money. Because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:02:20]:
Welcome to the show, my friend.
Lane Kawaoka [00:02:23]:
Hey, good to see you again, Jay. It’s been a while.
Jay Conner [00:02:25]:
It has been a while. So good to see you here on the show. Now let’s go ahead and dive right into it. Now, Lane, you’ve raised over 200 million, $230 million in private money. Let’s go all the way back to the beginning. What was, did you have any beliefs, and if you did, what were some of your first beliefs that you would like to unlearn before anyone started investing with you, and you know, loaning you their capital or investing in your deals?
Lane Kawaoka [00:02:57]:
Yeah, I mean, initially I kind of just fell into this, this world. I mean, a lot of my kind of friends and family were the first initial, as they, some sometimes say chumps, I guess, right. When you’re kind of getting a track record and getting going. That was well back in 2016, but before that, you know, I’ve been investing in little single-family homes since 2009, 2010. So I mean, I had, it’s not like they, they haven’t heard of me doing this stuff for quite a while. But yeah, I was always reluctant because, yeah, when you take on other people’s capital, it’s a lot at risk, right? You know, emotions get involved, relations get involved. I mean, you know, I think I try to, you know, build relationships with every single investor, try to meet them face to face and, you know, try and be that, you know, that, that person they talk finances with and build that relationship. So it gets, it gets heavy, right? Stakes are high.
Lane Kawaoka [00:03:47]:
And initially, like, you know, I was very reluctant to do it.
Jay Conner [00:03:53]:
How did you overcome that?
Lane Kawaoka [00:03:55]:
Well, so initially, when I jumped into this world in 2016, it was, I wanted to just be a passive investor. You know, I, I was, you know, running around a lot of groups. I mean, before, you know, I kind of ran into you. I think that was years before I ran into you. And, you know, you get around other operators that are kind of just starting, right? I call them the people under $1 billion of assets under ownership or acquisitions. And I, you know, I was just looking to invest my money because at the time I was trying to sell my 11 single-family homes and redeploy it into syndications of private placements, specifically in multifamily and specifically with projects that had a value-add play. Because before that, I was just doing the buy hope and pray strategy, and my equity was building up, right? And as good investors understand the concept of return on equity, at some point, you kind of have to trade in your pieces and re-leverage, and you know, but also enact the power of value add, right? By increasing rents or decreasing expenses to bump the NOI. And that’s, that’s the magic of commercial real estate, right? So I wanted to tap into that.
Lane Kawaoka [00:05:02]:
I was completely sold on it. But then the question was like, well, all right, where the heck do I do that, right? Because if you go to the secondary markets, which stock markets, big REITs, right, you’re getting diluted so much by all these hidden fees and you’re not really directly into the investment and then there’s a lot of crowdfunding websites out there that supposedly get you into a deal more directly, but in reality, a lot of those folks, I mean, you can’t really tell which one is a good deal, in which one paid the person to be a sponsor or just paid to be on the platform. So, I mean, I didn’t know this at the time, so I was just kind of a chump, just meeting people, getting a good feeling. And, you know, my first 15 deals that I invested in as an investor, I mean, I would probably look back, and it took me pretty quickly to realize maybe two or three years later that, oh, shoot, maybe I shouldn’t have invested with that individual. Right. And then I realized, look, you know, a lot of these people just didn’t have the track record or the pedigree. And I was like, you know what, it kind of had a soul-searching moment there, and I was like, you know, if someone is going to do it, it’s somebody with like, you know, professional background. You know, I was a construction manager, and, you know, and I kind of took it upon myself to like, you know, if I’m going to invest my cash, I’m going to be in the general partnership myself and kind of see what’s happening and help out.
Lane Kawaoka [00:06:26]:
Right, Right. I mean, some people want to get on the other side of the curtain, but they don’t want to do anything. Right. I wanted to be more of an activist investor. So that was kind of where it all kind of started. Right. Like I, I was, I, I kind of got screwed a little bit, and I got upset and I wanted to do something about it and become, you know, my own advocate.
Jay Conner [00:06:47]:
Now. Lane, most real estate investors, at least from my observation, struggle to get past their first few private lenders. So what did your early capital raising conversations sound like before you ended up with such a big, you know, track record?
Lane Kawaoka [00:07:11]:
Yeah, I know what you’re talking about. Right. Like, I mean, anybody can raise a million or $2 million from your friends and family round. Right. Or people that are, you have a physical connection to, but once you burn through that, you’re kind of sol unless you have a big flywheel of folks. I kind of, you know, after I did a little bit of that friends and family realm, I kind of fell back on my organic traffic that was coming in. You know, I’ve been podcasting since 2016 and built up, built up a bit of a following. Right.
Lane Kawaoka [00:07:45]:
But the nuance there, which again, I don’t know if it’s useful advice, but it’s just my story, is that I was talking about buying little rental properties. In fact, I had a coaching program where I would teach people how to buy little rental properties remotely. And, you know, did that from 2016 to about 2018. 19. Right. But if you remember my story, like, I was investing in multifamily syndications starting in 2016 myself, but really didn’t turn on that switch that you mentioned to kind of open up for private capital through that channel until I had gotten a little bit more of a track record, 2018 and beyond. So it wasn’t like people came on the list and they initially got bombarded by these deals. It was more.
Lane Kawaoka [00:08:35]:
So I had built up a community and track record of at least two or three years in something else. And then, yeah, you know, we. I guess some people will say, Well, you switched in beta there later. But I guess I call it more of an organic transfer than I wanted. I never felt comfortable talking about something I didn’t do. Right. Like in my new book, the Wealth Elevator, I taught that everything is an experience share. So, not something I’m just making up, something I’ve gone through.
Lane Kawaoka [00:08:59]:
And I can look back years back and have the, you know, let me, let me, let me revise that a little bit. That’s already been taken into account. And that’s what I wanted to do. I wanted to get into these multifamily syndication deals starting in 2016. Get a little bit of the first-year jitters out. As I said, there’s always some. I went through it and then, then I started to bring in and talk about it more, you know, like, to my audience after 2018 and beyond.
Jay Conner [00:09:28]:
Now, as I said in the introduction, you come from an engineering background. Some of my friends would call the engineers a thinker’s brain. So you have an engineering background. How would you say, how does thinking in systems and processes change the way you raise and deploy private money versus maybe some other operators?
Lane Kawaoka [00:09:57]:
Yeah, I think what sets us apart from other people is like, we actually tell people reasons why not to invest first. I mean, it all kind of falls on, like, I mean, our process. When we look at a deal, we pull up the raw financials, the rent rolls, and the P&Ls, and we throw them into our analyzer first. You know, the one that’s not, you know, with the cookbooks and the fictitious and numbers and the overzealous reversion cap rates and overzealous rent increases. Right. Like, I kind of want to, in a way, like, do the test but not look at the answers first and see what I get.
Lane Kawaoka [00:10:34]:
Ls, rent rolls, thrown analyzer, and see where, where I get, you know, like for example, a lot of folks they’ll, they’ll use like these days. I mean, I see. I don’t want to say exactly what market is because I don’t want to get in trouble. But you know, it’s a, it’s a very common Sunbelt market. And I think they’re using a reversion cap rate of five and a quarter. To me, that’s super aggressive, and we would underwrite that with Nothing less than 5.75. You know, if people don’t understand what that is, I have a full E course on my website. We give for free about how to, you know, this is the talk of reversing the cap rate.
Lane Kawaoka [00:11:13]:
If people go to ChatGPT and have, you know, just put that in, say what a reversion cap rate? You know, I think you can kind of teach yourself. But a lot of these things, if you’re unaware of them, you just don’t know. Another example is rent increases per year, an escalator. Right. Like if I’m, if I’m building a bridge, like this is the last project I worked on when I was an engineer, because I quit in 2018, I was building a bridge in Washington. And you know, as you guys know, projects always take, you know, it was get delayed for years. So you add an escalator on there to account for inflation. Right.
Lane Kawaoka [00:11:46]:
Typically, in a construction project, you just throw the standard 3% in there for inflation. Who knows if that’s right these days? Right. But you know, in these multifamily deals, what you try to you use an underwriting escalator every year of like 2 to 3% that you think the income is going to be going up. You know, some of these markets, and you know, hopefully I don’t upset people in Oklahoma City, but Oklahoma City is not a very good market. So I wouldn’t really use anything higher than 2% a year on my escalators. Right. Right now, maybe Phoenix, Arizona, which is a very cyclical market.
Lane Kawaoka [00:12:17]:
So that’s another topic for another day. But you know, you might be okay using something, you know, 2% or higher there. But these are the things you spot check as an investor that we do, and you know, we take a systematic approach of like looking at the numbers first, seeing if the, if we get the same projections or it meets our, our projected returns criteria before we even kind of move into the second stage. So it’s a very like. I know, maybe it’s like an anti-social thing or an engineer thing, but I want to look at the numbers first before I even waste time talking to the operator or looking into the deal from that point.
Jay Conner [00:12:54]:
Well, what you just said about looking at the numbers first reminds me of a good friend of mine, Darren Bentley. He’s an amazing podcaster. His phrase, one of his favorite phrases. I hear him say it all the time. Data, not drama. Data, not drama. Let’s look at what the real numbers are. I started raising private money back in 2009.
Jay Conner [00:13:19]:
Started investing here in eastern North Carolina in single-family houses in 2003. My first six years, I just relied on local banks, mortgage companies. I don’t even know what hard money was. Of course, hard money is very, very different than private money. But you know what’s interesting, Lane? When I started raising private money in 2009, I had never asked anybody for money. I’ve never pitched a deal. The reason for that is that we separate conversations between offering the opportunity and what we pay, and how we protect our private lenders, and then actually having a deal, a single-family house, to have them loan money on. With that being said, a lot of particularly.
Jay Conner [00:14:05]:
Well, I was going to say new real estate investors, seasoned real estate investors, think that raising money is about pitching. With that being said, you have said that attracting or raising private money is more about alignment. With that being your philosophy, what would you say? What does alignment actually look like in practice? The way you do it?
Lane Kawaoka [00:14:34]:
Yeah, I mean, it’s something I’ve learned over the years. I mean, when I first started to do this in 2018, I mean, there was very much, you know, bespoke on one with all the investors. You know, I used to say, yeah, let’s get on, you know, let’s just talk shop, you know, once or twice a year. Now I think very quickly, I got up to 300 investors, and now I think I’m about 300 reactions to that. Right. People who’ve actually invested, you know, multiple five figures with us, and you know, obviously, we regrew the team. Right. I still like to have that personal relationship.
Lane Kawaoka [00:15:10]:
Right. So when people meet our company, they talk to me, number one, and what I’m trying to do, and I try to get a sense of when certain people fit in a way. And it’s good when people have invested in private placements and syndications in the past, but I tell them, like, hey, this is actually worse than the marriage. And you know, because you can’t just get divorced six months or 12 months after the wedding, right? You and I are stuck with each other for better or worse. You know, you sign these PPM documents, and that’s really the pits, right? Like, you know, nothing before that is a sell or pitch. Everything’s in those disclosures, in those documents. So and if this isn’t for you, then you know, please let us know now.
Lane Kawaoka [00:15:55]:
Right? Like, let’s try and get going back to you. As you said, that alignment, you know, people, you know, and this has been further confirmed that you know, commercial real estate got hammered, right? It is down 20 to 30% from the peaks of 2022. Right. And we’ve kind of lived through that, and you know, still fighting and still surviving. Luckily, we had a lot of projects before that were, that were very successful. But you know, you go through the process, and what I’ve kind of realized is going, you know, going back to my earlier piece about data, right? Like, look like even if you’re investing in Jay, I’d be like, look, hey, here’s how the numbers work. We’re going to do the sensitivity analysis. I don’t know if occupancy will go down to 50%, right? I mean, that’s why you’re investing in real estate.
Lane Kawaoka [00:16:40]:
Because in theory, if you can look at the supply and demand, right, like you can make your own conclusions for that, but you know, it’s a lot less risky than investing in an operational business, right? But you know, you, you, you kind of look at the numbers and you’re like, well, look at certain, certain risk factors, right? If this goes up and down this much, you know, this is where the projections will lie, you know, like for example, we’ve done oil and gas in the past, right. ? Ike I think that’s a. Just using that as an example where it’s a very, it’s, it’s actually a lot easier in a way. You know, there’s a lot of things in the black box and the underwriting but just for convers, you know, by under one of the big inputs that drives the numbers that you know, again I think this is just super easy conversational wise to conceptually understand is you have on the spreadsheet one usually a big sell that like drives the numbers like the reversion cap rate for multifamily, for example for oil and gas, it’s the price of the oil, right? Or there was a horrible deal that I told nobody, nobody even touched with a ten-foot pole, was like this crypto mining machine. Like several years ago. And I asked, like, well, what is that one cell in the spreadsheet that drives this model? Right. For that one, it was like, what the heck, the price of Bitcoin was? Which is super speculative. And it doesn’t really matter how you operate it.
Lane Kawaoka [00:18:07]:
It’s just how well you understand, that asset with it going in price. And just like the oil, right. If you’re able to underwrite it at a certain number that is conservative, then you, you know, you should be all right. And I’ll highlight that you should be right. But anything can happen. There’s risk in everything at the same time if you don’t risk it. No biscuit, too, at the same time. But I think it’s smart to go into a deal where you, you know, that the underlying assumptions are conservative.
Lane Kawaoka [00:18:35]:
And, you know, you go into battle knowing that you’ve kind of protected yourself in that manner. Now you’ll never have 100%. You know, nothing is 100% safe. If you believe that, do not invest in any private investments, Period. Right. But you, I think it’s good to go, going eyes wide open. What, where that is, and how, like, how conservative your assumptions, how well can things bend, how durable are the numbers before you go in?
Jay Conner [00:19:05]:
That is very, very wise advice. And, you know, what kind of appetite does a. Inv. An investor has? And you know, investing in, you know, these, these types of investments. I mean, you know, if you’re, if, if you’re going to be wanting to, like, get an update every week, this is probably not for you.
Lane Kawaoka [00:19:26]:
I’ll give you a good example. Like, you know, if, like, if I, you and I were talking about a deal, right? Like, you may want to diversify. I know you’ve done multifamily, but you know, say you and I were talking about the reversion cap rate, right? Right. I’m like, hey, Jay, you know, this isn’t the only thing to look at, but I would probably say it’s number one of the top three things that past investors should check under the hood and spot check. You don’t need to be an underwriting specialist, but these are things to spot check. And you know, as I said, you have a class B in Dallas, right? I think, I mean, don’t quote me on this, because things change all the time, but let’s just say the prevailing cap rate for class B in Dallas is right around five and a half these days.
Lane Kawaoka [00:20:09]:
I don’t know exactly where it is, but just for conversation sake, now what I’d like to see as an investor going in is maybe a version cap rate of 6%, right? Something to increase the cap rate, which is a little counterintuitive to new investors. But when you increase that reversion cap rate, that is the assumption that you’re selling it into a worse market, a softer market. So you, you know, you’re a smart investor, so you’re like, all right, what’d you use for the. What you assume that the market’s going to be, which is encapsulated in that reversion cap rate at the end? And they’re like, oh yeah, you know, seems reasonable, right? Today, these things are selling at five and a half. You guys are assuming that we’re selling into a 6-market. I think you and I were both gambling men and maybe internal optimists too, right? That we may see that stay at a five and a half or get better, right? Which is where the returns skyrocket, which was kind of what was happening before 2021. But I think, you know, you know, if you and I are friends, right, like, and this is like any other investors, like, I want to just be able to tell you, like in the face, like, look, things could happen, but these are the assumptions. So if the cap rate jumps up to like what we saw happen was the cap rates jumped up a percent and a half, right? That’s where you get a decay of 20 to 30% off peaks.
Lane Kawaoka [00:21:31]:
So in that case, to use that Dallas class B example, if you started at five and a half, the market went to like a damn near seven, right? Like, and at that point, like, I guess what I’m trying to do is, at least so I can sleep at night, is like, at least. Look, Jay may still be upset with me, but at least he knows what happened, right? Like, we, we all, you know, we’re all partners at the end of the day. We all jumped into a deal where we assumed that the market could get worse to a.. From a five and a half to six market, but the damn thing went three times as badly as that. An analogy I like to use is like, look, we oughta. We had a storm coming in Florida, which, by the way, increased insurance a lot these last several years, which is now, now starting to come back down a little bit. So that’s good news. You know, like, we build a sandbag wall for 10ft up in there.
Lane Kawaoka [00:22:26]:
And most people who’ve done this before say it’s pretty reasonable, pretty freaking reasonable. But what we saw was a 30-foot wave and which is why right now is a great time to get involved in this stuff today while you’re buying a lot lower. But you know, like, I, I think where I have a problem, where investors are, you know, they come back and, you know, a lot of it’s emotional, right. Like, what do you mean you didn’t build a 30-foot wall? Right. Well, first of all, everybody had the same assumptions or should have understood it in the beginning that, you know, we build a 10-foot wall because that is reasonable. If you don’t like it, please do not invest. Right. So at least, you know, both you and I as friends when going into the deal, right?
Lane Kawaoka [00:23:13]:
We know what broke, not Lane, you screwed me, that you and I were friends. I, you know, I didn’t bring that wave, you know, I didn’t want to put that wave on the top of that sandbag wall.
Jay Conner [00:23:27]:
Right. And you did your best in that alignment conversation to point out the risk to them.
Lane Kawaoka [00:23:36]:
Right.
Jay Conner [00:23:37]:
It’s like with our private lenders, and we focus on single-family houses, but with our private lenders. Well, for one thing, in my world, none of them are sophisticated, to tell you the truth. They’re just looking, it’s lazy money, and they’re looking for a higher rate of return, safely and securely. So as part of alignment, well, we give them as much protection as we can. We give them the same protection that a mortgage company or bank would get. We’re not borrowing unsecured debt. We give them a deed of trust or mortgage. We name them on the insurance policy as the mortgagee in case there’s ever a claim on that.
Jay Conner [00:24:15]:
So I’m, I’m really in tune with you, Lane, as I already knew I was. As far as your alignment now, this is your favorite topic to talk about that we’re moving into right now as we go into the last segment. And that is you love talking about the different levels of wealth after building, where you talk about different levels of wealth building after they got $1 million net worth. So tell me what, tell me in the audience what you think about that. Tell us about the levels of wealth building, wealth building after $1 million net worth, and why the strategies that get people to $1 million often break down and don’t work after that point.
Lane Kawaoka [00:25:08]:
All right. Yeah, this is essentially what I got in my book, the Wealth Elevator. So what I have in there is like essentially a table of all these levels, all these levels that I’ve been through over the last decade, almost two decades now. When I bought my first rental property in 2009. Now, when I first started in 2007, I graduated from college, decent income, but essentially zero net worth. At that point, I was what she calls on the first floor of the wealth elevator, right? Like I wasn’t in credit card debt and I had a good salary, but I needed to just buy little rental properties and plug away until becoming an accredited investor, which we call the second floor of the wealth elevator. Now, going from the second floor to the third floor is a little bit of a nuance of once you’ve hit your end game. I think a lot of your investors, Jay, kind of fit this category of folks that have that lazy money.
Lane Kawaoka [00:26:03]:
They don’t really need it, but they want to keep it working in a safe position like your private money lending, right on your flips, where I think a lot of. There are a lot of investors who haven’t hit that stage. And it’s different for everybody. I would probably loosely call out anywhere from like 3 million to $4 million net worth. The reason is that at that point, you could just put in life insurance or T-bills and T bill and chill at that point. But, you know, what are the guys doing between $1 million to two and a half million dollars, right? Like that’s what the second floor of the wealth elevator is. And that’s essentially what the book, I think most of the content is, is for those folks in that second floor and for those people, you know, you’ve got to take on a little bit more risk to get a little bit more reward because you’re still in the growth years and you still have a lot more time on your side. Right? You know, I’m not giving anybody financial advice because I’m apparently, I’m not a certified financial planner, so I can’t talk about asset allocation mix and things like that.
Lane Kawaoka [00:27:05]:
But, you know, maybe just repeating what I’ve heard from that world, and it’s somewhat true, reluctantly I would admit, is that when you’re younger, and you know you should be taking on more risks, right? And as the years go by, they titrate you down to more of those bought, your bond count goes up as opposed to your equities. To me, it’s a similar, very similar, right. Like in the private real estate or private equity world, initially, when you’re growing and you’re more risk-tolerant, you have more time on your side, you get into more common equity sides with higher returns, higher risk. But at some point, you kind of take the foot off the pedal and go into cruise control. And this is Kind of where the book talks a lot about titrating or transitioning to that phase. And you know, but you know, it’s, it’s not like you’re investing a hundred percent in multifamily value add syndications and then you go to private money lending right away. No, it’s not like that. Right.
Lane Kawaoka [00:28:02]:
You kind of slowly transition into that world, and you’ve got other investments. Right. Like I, you know, these days we do private equity investing in businesses. We won’t be oil and gas; we do energy. Right. Other asset classes other than real estate. Now, I’m not going to get into what the best mix is because I don’t think there is a best mix. That’s why we do events where people get to interact with other accredited investors on their level, and they can kind of mastermind on these types of deals.
Lane Kawaoka [00:28:34]:
I mean, just the way that you and I met, right? Investing as operators, what are the best practices? Because none of this is on Main Street. Those people are just investing in the standard protocol, the 60- 40. And I think the people who are listening to a podcast like this are definitely on the other side of the tracks. But, you know, we all get to a point where networks grow, hopefully to 3, 4, 5 million, 10 million plus. And I do talk a little bit about what happens after the third floor of the wealth elevator when you’re getting beyond there. Typically, if you’re not a business owner, you know, it’s going to be pretty hard to get to, you know, 15 million, 20 million plus in your generation. But the idea is to line yourself up to become that family office in the future. Right.
Lane Kawaoka [00:29:24]:
You may not be $100 million net worth, but there are certain things that you can emulate that I’ve seen that I implement myself that we also talk about at the end of the book, there too, right? Like hiring your own legal team, your own CPA in a fractional standpoint, but then sort of outsourcing the deal finding for you, because right now I think everybody listening is looking for your own deals. Right. At some point, you start to use professionals who are kind of your guns for hire out there. And a lot of this is what I’ve kind of learned and am trying to emulate what family offices do. I’ve been lucky enough to interact with a lot of these people, and maybe it’s from my podcast, or a lot of times we’ll buy properties from these types of individuals. I know you and I, Jay, we’ve been in these different masterminds together, and you know, there’s a lot of wealthy people there, right? I mean, it’s all your network is your net worth. And essentially, what I do is I try and pool these best practices and then put them into the book.
Jay Conner [00:30:26]:
Well, Lane, you’ve got an amazing book, lots of wisdom. People who are interested in growing their wealth, I want them to get a copy of it. So what’s the best way for them to connect with you? And. And get your book? The Wealth Elevator.
Lane Kawaoka [00:30:44]:
Yeah, they can go on Amazon, the Wealth Elevator, and, you know, a special offer for Jay’s folks. If you guys buy it, leave a. Leave a nice review. We’ll hook you up with the MP3s and the digital version. Can’t stop your friends from sharing it with your friends. Of course. Right? I know you’re real estate investors. You guys are always looking for a bargain, right? Deal hunters out there.
Lane Kawaoka [00:31:08]:
But, yeah, just, you know, if you do that, just shoot us an email team at the wealth elevator.com and maybe put G in the subject line, and then we’ll hook you guys up.
Jay Conner [00:31:18]:
That’s awesome. So there is Lane’s website, www.the wealth elevator.com, wealth elevator.com. And of course, that is his book. Lane, thank you so much for coming on and sharing your wisdom on this episode.
Lane Kawaoka [00:31:34]:
Yeah, thanks for having me, Jay. We’ll be seeing you around.
Jay Conner [00:31:37]:
I hope so. All right, well, that’s a wrap for today’s episode. If you’re listening to this and you realize that raising private money is not about charisma, it’s not about hype. It’s about systems alignment and trust; then you got exactly what you needed from this conversation with Lane. Lane did not talk about theory. He laid out how real wealth is built after a million dollars. And you can really learn all about that in his book, how sophisticated investors think and why the people who win long term are the ones who play offense with structure, and according to Lane’s advice, not emotion. So if you want to go deeper into Lane’s world, check out his book, The Wealth Elevator.
Jay Conner [00:32:27]:
His website, thewealthelevator.com, listen to his podcast, and grab this amazing book. Because the frameworks that Lane shared today are the ones he’s used to raise over $200 million in private capital. And if you want to learn how to raise private money for your own deals without begging, chasing, or sounding salesy, make sure you subscribe to this podcast and share this podcast with one other person that you know to make a difference. Like, subscribe, share. If you’re on YouTube, ring that bell well. We break down exactly what works from real operators who are doing real deals with real money. I’m Jay Conner, your host, and this is Private Money Raising Private Money podcast. I’ll see you right here on the next episode.
Narrator [00:33:24]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide, that’s www.JayConner.com/MoneyGuide, and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on Raising Private Money with Jay Conner.