Losing $50K to Winning Big: Craig Eppler on Private Lending, Rental Portfolios, and Launching a Debt Fund
Episode Details
Transcript
In this episode of From Adversity to Abundance, host Jamie Bateman sits down with Craig Eppler, founder and CEO of Eppler Capital Funds, for a conversation that is equal parts practical and inspiring. Craig comes from a rare background — having worked his way up from analyst to Chief Investment Officer at a financial advisory firm, with a stint at Vanguard along the way. That front-row seat to the world of alternative investing eventually led him to launch his own private debt fund, which has crossed the $10 million mark in just three and a half years. On top of that, Craig has quietly built a rental portfolio of 59 doors across Pennsylvania — all while running a fund that provides investors with consistent monthly income.
But this episode isn't just a highlight reel. Craig opens up about a $50,000 loss on a second lien deal that went to zero a painful but important lesson about property valuation, position risk, and the danger of trusting social proof over due diligence. Whether you're a passive investor, an aspiring fund manager, or a rental property owner, this episode delivers hard-earned wisdom and a refreshingly honest look at what building a private debt fund really takes.
Guest Introduction: Craig Eppler
Craig Eppler is the founder and CEO of Eppler Capital Funds, a Philadelphia-area private debt fund that crossed $10 million in capital under management after launching in March 2023. With a background as a derivatives trader at Vanguard and later as Chief Investment Officer at an investment advisory firm, Craig brings institutional-level thinking to private credit investing.
Episode Highlights:
- From Vanguard to Private Debt Fund: Craig shares how his background in institutional finance, managing alternative investments for high-net-worth clients, gave him the blueprint — and the conviction — to launch his own fund and serve investors seeking consistent monthly income.
- The $50,000 Loss: Craig breaks down a second lien deal in Texas that went to zero — a pastor-investor with attractive yield and trusted social proof that ultimately couldn't hold up under scrutiny of the actual property value.
- Building a $10M Fund in 3.5 Years: From personal outreach and chamber events to email newsletters and podcasts, Craig walks through exactly how he grew his investor base to 50 people and crossed the $10 million milestone.
- 59 Doors and a Debt Fund: Craig explains why he never abandoned his rental portfolio even as his fund took off — and why holding both equity and debt positions creates a more balanced and resilient investing strategy.
Key Takeaways:
- If you've been investing long enough, you're going to lose money on a deal — what matters is what you learn and how you adjust your criteria going forward.
- Second lien lending carries real risk; understanding property value and lien position isn't optional — it's the foundation of protecting investor capital.
- Raising capital is harder than it looks, even with an institutional background — relationships, consistency, and showing up are what actually move the needle.
Connect with Craig Eppler:
Website: eplercapital.com
LinkedIn: linkedin.com/in/ceppler
Are you an accredited passive investor?
Learn more about the Integrity Income Fund:
labradorlending.com/investors/passive-investors
Purchase The From Adversity to Abundance Book:www.amazon.com/dp/B0CGTWJY1D?ref_=pe_3052080_397514860
Leave us a REVIEW:podcasts.apple.com/us/podcast/from-adversity-to-abundance/id1618672867?mt=2&ls=1
adversity2abundance.com/reviews/new
Connect with us:
Website:adversity2abundance.com
Facebook:facebook.com/labradorlending
Instagram: instagram.com/labradorlendingllc
LinkedIn:linkedin.com/company/labrador-lending/?viewAsMember=true
YouTube:youtube.com/channel/UChYrpCUlqFYLy4HngRrmU9Q
Connect with Jamie:
LinkedIn: linkedin.com/in/jamie-bateman-5359a811
Twitter:twitter.com/batemanjames
Speaker 0
Today, we sit down with Craig Epler of Epler Capital Funds. Craig has a pretty relatable story, and he's really grown in the last several years in real estate investing. Interestingly, he comes from a financial services background. He worked at Vanguard and then another financial firm. Started out as an analyst, moved up the ranks, and got exposed to alternative investing, you know, private market investments outside of stocks and bonds, and has really moved over to focus on on that side of things. He runs a private credit fund, a private debt fund where they, take on investor capital providing consistent monthly income, and he invests inside of his fund, in different, into different businesses, including real estate, HVAC companies, etcetera. We we dive into a deal where he lost where, fifty thousand dollars, and, we talk about the lessons he's learned from that. And we provide lessons for you so that you don't make that a similar mistake. Craig also owns, I believe it's fifty nine rental properties at this point, almost sixty rentals, which is really impressive given the amount of time he's dedicated to this. His fund has reached the ten million dollar mark as well and has only been in operation for about three and a half years. So I think you're gonna get a lot of practical value and some inspiration from this this episode. I hope you enjoy this episode with Craig Epler. Thanks for tuning in. Speaker 1
From adversity to abundance, hosted by entrepreneur and seasoned real estate investor, Jamie Bateman, is the ultimate guide for active and passive investors seeking clarity, mental fitness, and the confidence to make inspired decisions in the world of real estate. With a decade plus of investing experience across various niches and a background as a combat veteran, former army officer, and multimillion dollar mortgage note company owner, Jamie brings a wealth of knowledge and inspiring stories to each episode. Through weekly episodes featuring insightful interviews with industry leaders and solo explorations of mindset and strategy, listeners will uncover actionable advice and tips to overcome challenges and build lasting financial success. Whether you're a seasoned investor or just starting, from adversity to abundance is your road map to turning obstacles into opportunities and achieving financial freedom. Speaker 0
Welcome everybody to another episode of the from adversity to abundance podcast. I am your host, Jamie Bateman. And today, we have with us Craig Epler. Craig is the founder and CEO of Epler Capital Funds. Craig, thanks for joining us. How are you doing today? Speaker 2
I'm doing well, Jamie. Thanks for having me. I appreciate it. Speaker 0
Absolutely. It's gonna be a fun and practical conversation, and we're gonna learn a little bit about some, through, learn about what you've learned through some adversity, over the years and talk about, your current fund and what you have going on today. I know you have a good amount of experience in the financial world as as well as, you've got a a lot of rental properties, and then you manage a debt fund, we're gonna get more into. But for the listener who may be unfamiliar with you, I know you're in the Philadelphia area. Tell us a little bit more about who you are and what you're up to today and some of the abundance that you're living in right now. Speaker 2
For sure. Again, thanks again, thanks for having me. Today, I currently own a rental portfolio of fifty nine units to be exact, across, Central Pennsylvania and some in the local Philadelphia market here. And my main job is running a private debt fund. We just crossed over the ten million dollar mark as of the end of the month. So that's a big milestone for us after starting three years ago. Along with that debt fund, we have some other side projects that include a medical office space, some different land deals. But but my main job right now is finding good deals to lend money to, and obviously raising that capital to find those deals. Speaker 0
That's awesome. Yeah. That's a that's a lot. That's really good. There's a lot I I would love to dive into. It sounds like you've recently added to your rental portfolio. I know your primary focus is your debt fund. Yeah. But, let's we'll we'll we'll just that'll be a little teaser, but, let's jump back into your backstory. I know, not everything not every deal you've you've done has been amazing, and I think if you're in in the real real estate investing space long enough, you're gonna lose some money on a deal. So I don't think you're alone in that. But before we get to that, I think you you used to work in the financial sector. Talk to us about your background and and kind of, you know, maybe getting out of college, how things went from there. Speaker 2
Yeah. I think I think your point about if you've been investing long enough, you're about to lose money. So I think if you can get that out of the way and and kinda get your mindset right there, then that's that's more helpful. It still doesn't help when it actually happens. It still it still hurts. But, yeah, I think I think that's super important. And, honestly, if someone came to me and said, hey. I have this awesome fun and I've never lost money. I would question whether Speaker 0
Sure. Speaker 2
Whether they've learned anything, during during the career. But, anyway, yeah. So I I went to your college, small school out in central Pennsylvania, did cross country and track there, which frankly, I think helped a lot in terms of discipline and investing and Yeah. The two are very closely correlated, I think. Mhmm. But I got a job offer. I did a bunch of interest in college. I had no idea what I want to do. Mhmm. But my final internship was at Vanguard, the large asset management company in in the Atlanta Philly suburbs. I was a derivatives trader there. So I so I worked there for about two years. Being a trader at a large company, like, that sounds super sexy. Mhmm. But in in reality, after the first few weeks of moving a lot of money around, you you realize that it was a very kind of simple strategy because, I mean, it's a great firm. I'm not gonna talk crap on Vanguard. Yeah. But they, you know, they you know, what what we were doing was very much matched in the, index since there wasn't a lot of strategy involved with what my job was. So Mhmm. I really wanted to get more on the strategy side and kinda understand how the how the larger investment world works. So I moved over to a investment advisory firm also in the, like, in Philadelphia area. And I said the Philadelphia area because I was living in downtown Philly and coming out to Malvern. I knew anyone who's, kinda local to my area knows that that's not far mileage wise, but during rush hour traffic, it takes about an hour, to get out there, which is pretty brutal. So during that time, I started listening to a bunch of real estate podcasts Yeah. Investing podcasts. And, I'm sure we can all go back to the, like, bigger pockets days and and a lot of, inspiration came from that. So Yeah. Speaker 0
I just had a similar thing. I I I can totally relate to that. I did a similar thing at an hour forty five minutes to an hour and fifteen minute drive each way for years, and that's what I did. So, eventually, I started listening to podcasts, mostly BiggerPockets at the time, and just started my mindset and got a lot more active in real estate investing. So totally Exactly. Totally empathize with that. So, alright. So what happened during that period for you? Speaker 2
Yeah. So I listen to these podcasts. I was like, you know what? These guys I mean, these guys know what they're doing, but they don't seem like brain surgeons to figure this stuff out. You know? Like, I can figure this out. Right. So my so my first step was I was tired of my commute. I had just gotten this racist new job. I was kinda feeling myself. I was a younger guy. So I bought a house, with the intent to live right next to where I work. So I bought a house in Malvern, which is right down the street. And right away, I was like, wow. This mortgage is considerably more at the time. I'm not most is in case in more of them. This mortgage is way more than my rent was when I was in downtown Philly. So I was like, you know, I have a three bedroom townhouse. Why don't I rent these other two bedrooms out? So I did that. At the time, my mortgage, I believe, was twenty one hundred including HOA. And I rented each of the rooms out for, eight hundred bucks each, all in. So I know it's not a true house hack, but I was living on five hundred bucks a month, which was a great way to stack cash. That was kinda my first entree into, real estate. Then from there, I kinda I I kinda get the courage to buy my first rental, out in Pottstown, Pennsylvania. First, like, three months, everything that digger on or everything that could go wrong digger on with that one. Mhmm. Looking back, it's kinda comical, the stuff that I stressed over then versus now. Yeah. Kinda lick my wounds and then start buying more real so I did that in twenty in twenty nineteen and didn't buy any more real estate for another couple years where I really kinda load put it up at that point. So I'll stop there. Yeah. I know there was a lot of information. Speaker 0
It's funny because I I, also in our my first, like I I had a rental in twenty ten. It was a condo, but that one was super passive. But after I decided to get really active a lot more active in the real estate investing space, Our first tenant was terrible. She was an attorney. She never really moved in, and she started threatening to sue us. She was threatening to sue. She lawyered up. She made up all these claims that there were airborne contaminants and all this stuff, which was not true at all. This was in a nice area of, Lock Raven Village up in Baltimore County. But, anyway, it was I was so stressed, so scared, so stressed. And now I don't I don't think that would phase me. I'd be like, okay. Whatever. And, you know, just move on. But, anyway, it's funny you say that because we yeah. We had a lot of things go wrong with that, and it it it was very stressful. But, it's not to say it wasn't real and I shouldn't take it seriously. But once you've once you've been through some things, it's like, okay. It's just par for the course Speaker 2
of the office. Yeah. Okay. Speaker 0
So so I guess at that time, how many rentals did you say you had? That was just your first Speaker 2
So this is twenty nineteen. I I just had the first one. Yeah. So so for the first three months, the tenant moved out. It was during the winter, so it was tough to refill. I had to do a turn. And like this at the time, it's all out of my, like, w two income. So I was like, these are, like, real real hits. Speaker 0
I didn't have Speaker 2
a huge cash reserve at the time. Right. So I was really feel this, you know, paying two mortgages and all the other things that go on. So licked my wounds a little bit there. And then I don't know what what spurred the next moment, but, I decided, you know what? I kinda got interested in leverage and and and how that works. So at the at the time, like, my, property in Malvern had gone up in value, I found a local credit union that was able to give me a line of credit or a HELOC on that house for one hundred percent of the value, which I don't think you can find anymore, but at the time, they were doing it. Also, I probably wouldn't even advise my old self to do this, but I No. Kinda levered to the max, and I bought using that, HELOC, I bought another sixteen units all with creative financing. And then from there, I was at a a family function. My dad was telling one of his friends, like, hey. Craig's doing some real estate stuff. It's kinda cool. And the guy's like and this is the time when rates were, like, were, like, zero. You couldn't get yield anywhere. My guy's like, I I got some cash in the round. Like, do you wanna invest? I was like, sure. So his loan then spurred another thirty two unit purchase, which brought me up to, forty eight doors. I sold a few and then just recently bought, sixteen. So Wow. I know it's a fast version, but Speaker 0
Yeah. But and so how leverage to get here. Yeah. How many properties, in total do you own right now? Speaker 2
I have fifty nine doors now. Speaker 0
Yeah. And it's, but several are small to mid multifamily properties? Speaker 2
Almost all of them are single family. I have some small multifamily. Okay. And then yeah. So that's Speaker 0
like, sixteen doors was not one property. That was single family. Speaker 2
Sixteen doors was twelve parcels. Speaker 0
Okay. Alright. So But, yeah, there's a quadrant. Yeah. And how are you buying those? How were you finding the deals to you have a guy who wants to invest with you. So you got the capital problem solved, but how are you finding the the properties? Speaker 2
So I bought those forty eight doors all in twenty twenty and twenty twenty one. A lot of people were scared because of COVID. Yeah. But in my head, I'm like, rates are next to nothing. Speaker 0
Right. Speaker 2
And stuff was sitting on the market that that that time for a little bit a little bit longer. At least the stuff that I was looking at. Right. So I frankly went on the MLS and lowballed a bunch of different people. I found all of it on on the on the on the MLS. I was either mislabeled. Like, for example, I bought a three unit portfolio. That's three, single families. They had it listed as a single family, but for but for at the time, this I know it sounds crazy, but it was it was listed at the time for one seventy five for three buildings or for three townhouses. But in that in that area back then, that was, like, really expensive for one, you know, for one of them. Speaker 0
Right. Speaker 2
So I, like, looked at it and just, like, just, like, I read the description and offered less. I mean, it it sounds like so like, kinda like kinda like stupid simple, but but that was really the strategy. Speaker 0
That's awesome. So alright. So I know you've okay. So just the rental portfolio itself, what does that look like if you're willing to share from maybe a cash flow standpoint today? Speaker 2
Sure. So at the time, like, that that was that was, I thought, my key to kinda getting out of the corporate world. Yeah. But the cash flow, these are these are c class rentals. Yeah. They had more ebbs and flows than, than than other types of real estate. So Mhmm. I never act have actually taken a distribution from that. Speaker 0
Okay. Gotcha. Speaker 2
Right now, my fifty nine doors, it's it's a little bit influx right now because I just did a, like, refinance. But I guess at a very high level, these properties have appreciated way more than they've ever cash flowed. So I was able to pull out a a a good chunk of cash here Yeah. Recently. Nice. And and the cash flow kinda pays for it in a little bit, but it's not Right. It's honestly not enough to to live off of Speaker 0
or something like that. Right? Yeah. I mean, I I like your approach in the in for several reasons. I mean, one, you're willing to take action, obviously, and when other people are scared, you know, takes take action. And two, I you know, I'm I'm a mortgage note investor. I have a a debt fund like you do. I have a mortgage note fund. It's it may be slightly more narrowly focused as far as the the assets that we buy, and I wanna get into how you got into that, obviously. But I don't pretend like the debt side is is just hands down better than the equity side. You know? So, like, I've sold one or two rentals, but I generally wanna hold them, because they do appreciate. Whereas if you I know you originate loans, you you lend. We buy notes at a discount, typically. But either way, when you're holding a note, you know, that the value of that note does not go up. It doesn't appreciate, really. So, I mean, there there are some factors that could drive the value of a note to go up, but it's very minimal. Whereas real estate in the long haul will appreciate, you know, over time. Speaker 2
Right. Speaker 0
And so and there obviously are tax benefits to holding real estate that you don't get on the debt side. And so I just it's you know, there are there are different approaches. There are different asset classes. There are different strategies. They each have pros and cons. And but I like the the fact that you it doesn't sound like you've sold all your rentals and got into, you know, the debt side, you know, whereas I I think a lot of people, especially in my space, a lot of the gurus will talk about rentals are terrible and, you know, you don't want to deal with tenants' toilets and trash and, you know, look at the look. Your property is appreciated so much that your, you know, return on equity is negligible at this point, and that may be true, and you should look at that. But that doesn't mean you need to just one eighty abandon ship and, you know, pivot entirely. So I like that you're you're you've you did the rental thing, and you're still continuing to grow that side. But then you've also transitioned over, and you have your fund that you've just crossed ten million dollars of capital under management. So, obviously, talk about, you know, what with the the debt side, and how did you get interested in that side, and and what what was your first, exposure to lending? Speaker 2
Yeah. So so I guess I guess, like, to kind of go more to the background of, like, why I started the fund. So I was at a investment advisory firm. I was in the guy that you talked to when you go in to kind of put, like, pitch you, like, your sixty forty portfolio. I was the guy behind the scene that did all the trading investing. So I started as an analyst there and moved my way after the by the time I left, I was the co chief, the chief, investment officer. So I kinda moved up the ranks there. And as I got more tenured there, I I I I honestly pushed to have more, like, alternatives in. And I consider alternatives anything from private debt, real estate, infrastructure, private equity, things that aren't stocks or bonds, which at the time a lot of those clients didn't really have access to or didn't really know about. They knew, hey. I'm gonna put forty percent of my portfolio in bonds. I'm gonna put sixty percent in stocks. And over the course of the long term, it'll go up. And I still think that's true. Yeah. But I also think it comes with a different type of risk than it did maybe twenty years ago. Mhmm. So I pushed to about twenty five percent of our whole book was in these, these, alternatives. And, honestly, I think they performed a lot better, and had a lower risk characteristics than, like, the, public market. So Right. Right. I guess I guess I guess I can fast forward. That firm that I was with got bought up by a privately backed group, and and we went from a firm of twenty people to a firm of two thousand people. Speaker 0
Wow. Speaker 2
And the field changed a little bit. I wasn't able to invest as creatively as I as I was before. Mhmm. And I was kind of at the at the point where I'm like, hey. I've I've always had these dreams. I've start I've start I've started my own fund. Yeah. I think I think I think this is the time to do it. And and also they also our, like, founders had sold, so there wasn't a lot of equity to be had either, which in my opinion in, like, corporate America is a big kind of wealth generator. If you wanna stay in your w two, if you can get stock options, things like that, like, that's Speaker 0
Right. Right. Speaker 2
Really good way to do it. Sure. And that really wasn't as much on the on the table anymore. And I kinda thought back to my client base there is, like, look. The average client that we had was sixty years old with a net worth of two to ten million bucks. Mhmm. Didn't really have a lot of knowledge about investing like we do, but really love the aspect of having a consistent income stream just like they did when they when they were working. So I'm like, if I could create a a a product for them that pay them every every single month that had a reasonable level of of returns, like, similar to the stock market long term, I think that might be something that they would find of interest. Sure. And at the time, I was looking in different deals. I was doing real estate stuff, and I was also investing in some other deals as well, which which I'll I'll I'll get in here too, which I'm like you know, the terms you can get are really advantageous from a risk perspective. Like, a lot of stuff has to go wrong for us not to get paid back. Right. So that was kind of the that was kind of the origin of the Yeah. And and I launched that in in March of twenty three. So Speaker 0
Okay. Yeah. And I love the fact that I I was actually just, talking about this on a different different podcast a little bit ago earlier today, but it is like we in the mortgage note space, we get people from we get engineers. We get people from commercial, you know, construction. We get people from we get just if they wanna start becoming an investor because they you don't have to launch a fund. You can buy a mortgage note and become an investor. Sure. But, you know, we get people from the mortgage space. We get people from real estate investing. We get people from, you know, all over. And so you you brought, you know, a good chunk of knowledge from residential real estate investing as well as the financial markets, which, I mean, yeah, you you were mostly, for a good bit, focused on the public markets, but you obviously went into the private market space. And, I mean, that that is valuable for sure for sure, especially I always like to say that when you're running a note fund or a private debt fund, it's really comes down to three things. One is finding the deals. You know? Two is finding the capital, the investors. Speaker 2
Mhmm. Speaker 0
And three is managing those two, which is managing the deals of the capital. That's how we break it down with three legs of the stool. And, you know, you understood really a a good bit of all of that, so it makes sense to me that that you would from a knowledge standpoint, you were ready to go to to launch a fund. That said, people might be listening to this or watching this and saying, like, so everything went smoothly through Craig's background. He's never had any challenges. This was he just got a job and got promoted and then started a fund, and it was ten million dollars. Super easy. I wish. I don't think so. Right? I I know it comes with a lot of stress, a lot of headaches, a lot of work. We don't have to focus on, you know, your day to day, but talk to us about a deal that didn't go so well for you personally. Speaker 2
Yeah. So so I guess for me I mean, like, like we said at at at, like, kind of the top of the hour here is is if you've been investing long enough in enough different deals, there's gonna be something that doesn't work out in your favor. I'll give a a quick story here. This is prior to the fund. So, you know, four four or five years ago, I was introduced to someone down in Texas, and it was an investor. It had come to me from a investor friend. He said, hey. This guy needs some money. Would would you be interested in, you know, lo lo lo lo lo lo lo lo loaning him some money on his portfolio. He needs to do some repairs, whatever. Mhmm. The the yield was pretty attractive, and I trusted that if it came from this guy that this other guy was kind of pre vetted. Mhmm. Also to add add, like, icing on the cake is is the guy that I had that the guy that I was going to lend money to was also a pastor at a church down there. So for me, the social proof was there. Like, you know, like, if after really not gonna pay me back. Right. Yeah. Speaker 0
So you had double it's like you knew that you you trusted the person who approached you about this. And then although you didn't know the person you were lending money to, he was a pastor. And so there's multiple reasons why this was attractive, and the yield was attractive as well. Speaker 2
A pastor and a, experienced real estate investor. He had done many deals before, so it wasn't like this was his first time doing this. Speaker 0
Right. Right. Speaker 2
Because pastor and real estate investor usually don't go in Speaker 0
the That's true. Speaker 2
But but, anyway, so so I lent him fifty thousand dollars, eighteen percent note, interest only, which is a pretty attractive note. Right? Right. But the but but what got me into trouble here was it was a second position loan. Speaker 0
K. Speaker 2
He he had claimed he's like, hey. I've I've a first position loan with the bank. It's for about seven hundred thousand dollars, but this portfolio is easily, quote, unquote, easily worth one point two, one point five all day. Mhmm. Well, when the no interest payment stopped getting paid, which is, like, month four Mhmm. I quickly realized that this property was was not worth anywhere near. Wow. What what I I went I went I went to the I went to the what Speaker 0
was the term of the the note originally that that you provided? Speaker 2
Twelve months, interest only. K. And his whole plan was just to flip it. Right? He was gonna he was he was gonna, sell Speaker 0
it. Gotcha. Speaker 2
So I didn't get that either twelve months or yeah. Good. Speaker 0
Was this your first, first deal or as far as lending yourself? Speaker 2
First second lien deal. I had I had lent on a personally position before, and it went went fine. But I reached for yield. Right. But I I had lent at, like, twelve percent. But eighteen hey. I mean, eighteen thousand twelve. Right? Absolutely. Speaker 0
One point five times as good. Exactly. So so okay. And and, you know, I've bought a bunch of and especially recently, we bought a bunch of second liens. And they they are different. And, you know, they're it's just we're not gonna get into all the details on that. But, you know, from a note buying standpoint, you've gotta be a bit more patient. They're more a little bit more borrower centric. They can be as far as trying to, you're not you're not as close to the property, you know, in first lien position. But that property value is still critical. I mean, it's it's Speaker 2
Oh my god. I Speaker 0
mean, I I I say just across the board, the biggest way to lose money in lending or note buying doesn't matter is misunderstanding the property value or miss or not putting enough time or effort into assessing that property value. You can never know for sure how much it's actually worth until the property is sold. The market will tell you what it's what it's actually worth. But that's how you lose money in this business is is not is is under you know? Lending money to somebody you don't know, obviously, or you haven't vetted, but also misunderstanding the property value. And I'm not here to lecture you. I'm talking about from personal experience myself. Okay. You know? And we're trying to educate the the listener. And so I'm I'm assuming there wasn't much, you know, effort put in or or research put in on the property value initially. Is that fair to say? Speaker 2
That's fair to say. Yeah. I mean, I mean, you can do a little bit of research, but I didn't know the neighborhood. Speaker 0
Yeah. Speaker 2
These were more rural properties. I mean, not to get into the details, but it wasn't even worth anywhere. You had a big headlint on it. So I actually had like, this guy just stopped paying. I actually worked with the bank to set up ownership. And after looking in and talking with a local real estate agent down there I deemed it was just better to let the fifty go because the amount of money I would have to invest to make it even worth the bank note. Right. It was it was just doing bad money at the deal. Sure. So, Got it. That was a deal that went to zero and definitely was a painful moment for sure. Speaker 0
Yeah. Alright. So you've already touched on it, but what would you what did you learn from that that you've applied to your investing in the future? Speaker 2
Yeah. So so to be honest, in our fund, we don't provide any loans for a, like, a second lien position anymore. Yeah. So all of our notes are backed by some sort of hard asset that has a first lien position on it. Speaker 0
Makes sense. Speaker 2
That's a, like, nonnegotiable now for us. Speaker 0
Right. I mean, I know some hard money lenders, private, you know, debt funds, people who do the lending, will have that rule, but then maybe they'll they might entertain a second position if they already own the first. You know, maybe maybe they're doing a first and a second, something like that. Right. Because then you have control and visibility over the entire, you know, both both the liens. Speaker 2
That's Speaker 0
right. But, no. It's definitely I've I've been in the mortgage note space for eight years, and we really didn't we didn't buy our first second mortgage until this year. So it wasn't something I was just jumping into. Yeah. And I've only bought from, you know, from people who I know, like, and trust and who are very experienced investors. Doesn't mean there's not risk there. To be clear, there's always risk. And there is, I would say, more risk with seconds than first, and that's why the yields are higher. Speaker 2
The risk and how much equity there is in the property. If you if you don't understand what you're buying, I'm not saying it's a bad investment. It's just a higher risk. And if if you understand what the risk is and if and if you can get compensated for that risk, then it might be a good investment. Yeah. Speaker 0
So let's get a a little bit personal, if you will. What was your, you know, your family situation at that time? Did the fifty k affect you personally? You know, how did things how did it go go for you personally after that? Speaker 2
Yeah. So to be honest with you, I was at a point where the fifty k, it didn't change my life at all Gotcha. Which is good. I I I wouldn't have let him the money if that was the case. Smart. I, I mean, I just learned this from over time, like, kind of, constructing portfolios, but I was never gonna put more than five to ten percent of my net worth into into one asset. Sure. Speaker 0
So Makes sense. Speaker 2
It hurt, but, yeah, it didn't it it didn't hurt my relationship with my wife. It didn't hurt it didn't hurt anything like that, which which is that was good. Yeah. Yeah. That is good. Speaker 0
And, again, I and we don't want to make these mistakes. Like, you know, obviously, we're not we're not looking, you know, with my show, we from adversity to abundance. I joke with people that I'm always looking I'm so super excited when they have adversity because there's some content for my show. You know? Obviously, I'm not happy that you lost fifty k. I'm I'm not happy when that anybody has to go through adversity. But, you know, but the reality is it happens, and and you can learn from it. And I think you're a better investor now because of because you made some mistakes Speaker 2
with Speaker 0
that deal. So what it so you you don't do second lien, lending at this point, and I'm assuming that you do a pretty credit pretty decent check on the property value as well and the borrower. Is that pretty Speaker 2
Oh, a thousand percent. I mean, a very small percentage of our fund is in real estate, but to your point, the only real estate deals we do in the fund are with people that I could honestly drive the property or I know incredibly well, like, close close connections. Right. Even then, I'm getting a position on it. I'll I'm gonna start I'll start a little, like, a tidbit as I was going through that Speaker 0
Yeah. Speaker 2
Fifty dollars loss is is I had a mentor at the time, which I don't think he knew that he was a he was my, like, mentor, but but he's Yeah. Speaker 0
Told I Speaker 2
told me this, and I honestly still hold this to this day when I look at deals with the fund. As he said, he's like like, going into deals that I do, he's like he's like, you have to make it more painful for them not to pay you back than if they were just kinda execute on your, like, debt payment, which sounds harsh. But, really, what he meant by that is, like, the term should be written in in, like, in such a way that if they stop paying you, you would actually end up better. Right? Okay. So for for example, if Speaker 0
you have Speaker 2
if you have an example. If you have a, two hundred thousand dollar property. Speaker 0
Yeah. Speaker 2
And and you loan them, like, one hundred thousand dollars and they stop paying, you then take ownership of of that that that that the actual property. You Right. Then own it to a you then own a, like, do you then own a, like, do you then own a, like, two a a two hundred thousand dollar asset, which Speaker 0
Right. Is Speaker 2
not obviously way better than having eight hundred thousand dollar note. Sure. It's a super simple example, but, like, you know, I think that's what he was talking about, and it it's still like, every time I I kinda look at a deal now and look at the terms, I'm like, is this painful enough for them? Again, sounds super harsh, but, you know, these these are people's money that I have access to and that I Right. Actually treat treat that very seriously. So Yeah. Speaker 0
For sure. And and, yeah, I mean, the truth is, like, in especially in the on the commercial side or, you know, it's business. I mean, it's it's, you're not trying to take you're not trying to foreclose or get a deed in lieu. That's not your Speaker 2
goal. To. Speaker 0
Right. But, I mean, you will if you have to, and that's the point of having collateral. Right? So Mhmm. And like you said, you've got you've got people's capital that, you know, people have entrusted you with, and you need to be a good steward of of that. So that comes first. I mean, with our our fund, the Integrity Income Fund, that's that's first is our protection of our investor capital. Right. Everything else is secondary, and I'm not just I'm not just saying that. Right. I take it very seriously. So talk to us about how you created the fund, and and we don't have too much more time, but talk to us about, you know, what what you buy in the fund, what an investor can expect if they, you know, reach out to you, regarding your fund. Speaker 2
Yeah. So so so I started this in March of twenty three. We offer our investors a fixed rate return of of eight to ten percent depending on how much money they put in. That payment starts day one. So if they put their money in today, they get paid the next month and every month thereafter. The investor gets to customize the term. So so we do anything from three to seven years. The investor can choose anything they want in between that. And on the back end, we're investing in old school cash cow businesses. So this can be HVAC. We have some oil and gas in there. We have some insurance companies. We have franchises. We have an ecommerce brand. So things that I can tie hard assets to, again, as a kinda asset backed loan. And what I'm really liking to do now is do a debt plus a little bit of the, upside. So I'll lend someone a little bit lower rate and go a little bit more upside on the back end via a profitability kicker. Speaker 0
Mhmm. Speaker 2
I think that's better for both. They get a little bit lower debt, so it kinda lowers, like, their cash burn. They can go out there and get other debt if they need to, or they can kind of restructure things. Speaker 0
And just to be clear to look for outside. I think it was clear, but just to be even more clear, you're talking about debt and equity for the the operator of that business. You're not talking about an equity position for your passive investor in your Exactly. Speaker 2
A thousand percent. I'm sorry. Speaker 0
Mix rate of return, eight to ten percent for the passive investor. But for these businesses that you're investing in, real estate that you're investing in, you you've started to do more of a little bit of an equity split where the fund gets an equity position in that So not Speaker 2
an equity position. It's a profitability kick, I don't know. Kicker. Okay. Alright. Speaker 0
But some of the upside depend depending on the business's performance, versus just a fixed note. Right? Exactly. Speaker 2
Okay. So so we have the we have the core fund there, and that's and that's and that's and that's really driven all the all the all the all the growth. But we do have, like, these side deals. I I I call also. So right now, we're raising money for a, like, a medical office space, which will probably be filled by the time this airs. But just to give a little taste, and then we have, some land deals that are going on right now also where we Okay. Partner with the group that that honestly flips land. Okay. Yeah. That that that that return is higher, but it's also riskier because your capital is tied to one deal versus a pool of of different investments. And land Speaker 0
land comes with its own landmine, so to speak, but it comes with its own That's for sure. It's tough to evaluate land, you know, or or value land, as far as the property value. Right. You know, compared to, you know, comps on a on a residential, you know, townhouse, that's fairly easy. There's a pretty small range of the what the property value is gonna be. Right? Whereas land can be Right. Yeah. A little bit of a different beast. But, there are also are, you know, benefits to it as well. So those side deals are those are attached to your fund, or are those completely separate from your fund? Speaker 2
Yeah. Those are completely separate. Gotcha. They they all roll into the fund. It's under the same different I mean, legally, not to go into the jargon, but Yeah. Different set up for each each of the deals. So Okay. Speaker 0
Got it. And you just crossed ten million dollars in capital under management. How did you do that in the last three years, basically? A little over three years. I mean, that that's pretty impressive. How'd you do that? Speaker 2
So a lot of it is just getting out there and talking to people and networking. I thought it was gonna be way easier. Because if you think about my career, right, I started at Vanguard, and Vanguard manages something like eight trillion dollars today or something insane. Right? So So So Speaker 0
ten million is a joke. Right? Speaker 2
I wasn't raising that money. But, anyway, so then I went down to the, advisory shop, and we were managing one point five billion, still way more than ten million. Yeah. So I thought in my head, I would be able to leave that group and raise this money super easy. It's a different kind of raise just because we're one individual asset while an adviser looks over the whole portfolio. So it is a slightly different thing. Sure. But but, honestly, how I was able to do it is just getting out there talking to people. I've tried a bunch of different marketing techniques. Speaker 0
Mhmm. Speaker 2
Some have worked, some haven't. But I found, frankly, what what works best is just, you know, getting out there, talking to people. And I'm finally to the point now, three and a half years in where my clients are starting to refer other people. Speaker 0
That's true. Speaker 2
It takes a little bit of time to get there, obviously. But once the ball is rolling Speaker 0
No. And we've seen the most this year. Speaker 2
Sorry. Yeah. Speaker 0
No. I'm just curious because, you know, they're like I said, there's we we don't have much time, but it's a critical piece if you're gonna run a fund or any kind of if you're gonna scale any kind of investment business, you're gonna want access to other people's capital to put that to work to scale your business, whether it's a fund or not. Getting getting out there talking to people, you're just going to the grocery store and approaching people? Or, you know, like, specifically, what do you mean by that? Speaker 2
So I I I was going to a lot of, like, like, real estate networking events. I Yep. Started a an email newsletter. I would go to, like, chamber events. Speaker 0
Mhmm. Speaker 2
I literally went through every person I'd ever talked to, my old firm, which is a lot of people, and just, like like, email them personally. Like, hey. I started this. Like, would you be interested in having a conversation or just sitting out for coffee? Mhmm. Or anyone who might be interested. And, like Right. After enough times like that, I mean Yeah. You just Gotcha. If you just keep it in the work and, like, you get lucky sometimes. Right. Right? Speaker 0
And then second part, I'm glad I remembered that I said there were two parts. But, how intentional are you about asking your current investors for referrals, or does it kinda just happen naturally? Speaker 2
I should be more, intentional. So I just went for the first time. I needed to raise some more money for this. I'm at a go off the space, and I just called everyone on my on my on my list. Right now, we have, fifty investors. I just went down the list. It took me a day, and I just called everyone. Some people picked up, some people didn't or call me back. But just by doing that, that was able to raise some money. So K. I don't have a regular cadence where I'm talking to them on the phone, but they do my, like, a they do my kind of fun updates to get the, like, the get the, like, like, a like, a weekly newsletter. I'm on podcast like this every so often. So I do Yeah. Try to get content out there and make sure that I'm visible. I'm not hiding in my little office here. Right. Speaker 0
And speaking of that, what do you have a team, or is it just you? Speaker 2
Yeah. So right now, it's myself. I have four guys working for me. They do a kinda combination of deal flow plus sales. And I have three interns, that do kind of a sales tax for me as well. Speaker 0
Yeah. You mentioned that to me before. I think that's genius. I wish we had more time here. Speaker 2
They're they're awesome, honestly. Speaker 0
Yeah. I mean, I I guess it's a you know, going in, it's not a long term commitment, but I guess it could turn into one. Right? Speaker 2
Yeah. They they they are they kinda on the onset? This is not a long term commitment. This is usually three months. If if it's a little bit longer, it could turn into six months. Speaker 0
Mhmm. Right. But I Speaker 2
have kinda SOPs written out for all of them right now, so it's a very easy plug and play. And I don't have them doing crazy detailed work that's going to affect the business, but it is stuff that I need to get done. I'm not doing them fluff work. Speaker 0
Sure. Alright. We're almost out of time. I've got some rapid fire questions for you. You ready? Speaker 2
Let's do it. Yeah. Speaker 0
How has financial abundance made your life better? Speaker 2
How has financial abundance made my life better? I was able to buy a bigger house than my wife. I had bigger plans for my daughter who's now fifteen months old to, send her to kind of the best schools that I can afford in the area. We've taken awesome trips. I mean, I'll think of those are kinda my top area. Speaker 0
What's a book or two that you could recommend for our listener? Speaker 2
Book or two. I'm reading a book right now. It's not real estate related, but it's good kind of mindset book. Mhmm. It's called the twelve hour walk by Colin O'Brady, I think it is. I'm not sure if Speaker 0
you've heard of that. No. I'm super Speaker 2
I'm inspirational about a guy who set the world record. He's the first one to walk across Antarctica with that without any help. So he's like he's like like, I'm dredging with this with this massive thing. Anyway Yeah. That's a Speaker 0
good thing. Okay. Speaker 2
I'm gonna look at my bookshelf right now. What's another good one that that I can recommend? Well, I'll stick with that one. I don't wanna just come up with something. Speaker 0
How about if you were given ten million dollars tomorrow, no strings attached, what would you do with it? Speaker 2
Ten million dollars, no strings attached? I would invest it. Speaker 0
Yeah. Speaker 2
I would invest it well, first, I I would take my time investing it. I found a lot of people, once they get cash, they put it to work too fast, including myself in the past. Speaker 0
That's that's smart. Speaker 2
So Yeah. I would either put it in a treasury bond just to kinda hold it for a little bit and make sure I make the right decisions, or just put it in the, S and P and then take out a line of credit to invest off of off of the off of that line. Speaker 0
So you can do that. What is there a max? Is it fifty percent, or how does that work? A line of credit on It Speaker 2
depends what asset you're in. But if you're in the S and P five hundred, you can usually depending on your, brokerage, you can usually leverage about seventy percent of that. So if you have ten million bucks, you can write a check to yourself for seven million. You have to pay interest on that, obviously. Speaker 0
Right. And you just go to your brokerage to do that? Or Speaker 2
Yeah. So Schwab or Fidelity or really anyone. Speaker 0
They're the ones that issue the line of credit. Speaker 2
Yeah. You you deposit the money, and then they have a direct line. You call and say, hey. I wanna open up a pledged asset line. And then they say, okay. We I I know it Speaker 0
I knew it existed, but I've just never entertained that. So Speaker 2
It's the HELOC. Right? If you think about the same thing, you're just leveraging an asset. Right? Speaker 0
Fair. Alright. What's one piece of advice you would give to someone starting out in real estate investing? Speaker 2
Yeah. And we talked about this a little bit prior to the call, but I think I think the biggest hack that used to be super popular on BiggerPockets and all the other shows, which I haven't heard much since, maybe I'm just not listening to these podcasts. But if I could if I could house hack again, I think that's the biggest unlock. If you're if you're someone who's younger, single, once again, real estate and doesn't have a lot a, like, a super high paying job, I would try to find a piece of real estate that's moderately priced, put down three to five percent, and rent the other two rooms. You can still make it I mean, it might not be one for one where you don't we can live for free, but at least give you the freedom to use the money you make to put into other things or stack cash for your next real estate property or Speaker 0
what what what whatever Speaker 2
you're kind of saving for. Speaker 0
I couldn't agree more. Speaker 2
To you again. Speaker 0
I think it's really smart. And I do think you were house hacking. I mean, I don't know what the technical definition is. I know Brandon Turner used to take credit for for that term, but I it's been done for years. And I you know? Yeah. Just because you Speaker 2
were breaking no expertise. Speaker 0
What's that? Yeah. Speaker 2
Right. It also requires no expertise. Like, it's not like a flip where, like, hey. Should know the right contractor. You should know a little bit about how this works. Speaker 0
Right. Speaker 2
All you need to do is know how to buy the house and then find people Yeah. And obviously vet them properly. But you can just get your buddies moving. Speaker 0
Absolutely. Alright, Craig. Two more questions. First one is, what's one question that I have not asked you that you wish I had? Speaker 2
Oh, boy. Put me on the spot on that one. That was that's that's a tough one. Speaker 0
That's what you're, that's what a lot of, investors Speaker 2
Plans for the future. Speaker 0
Like to ask. Plans for the future. Alright. Well, I thought about asking where things gonna go in the market, but, yeah. So what are your plans for with the fund or anything else in the future? Speaker 2
Yeah. So I don't I guess, for for me, for the fund for the future, I don't see this being a billion dollar strategy. Mhmm. My goal is to get this to about two hundred million dollars, to be honest with you. I think I think we can do that over the next five to ten years. Okay. And and I think I think at that point, like, I can make the decision then to to hire more analysts and make this a really big thing or or Mhmm. I think we can scale it with how we are currently structured up to about a hundred before we before we start hiring real personnel. Mhmm. So that's kind of the vision for the fund. Okay. Yeah. So Speaker 0
you're just getting started, sounds like. Speaker 2
That's right. Yeah. Speaker 0
Alright. So, technically, I already I asked two, but here's the third. Where can our our listeners find you online? Speaker 2
Yeah. So I'm on LinkedIn. You can find me there at Craig Epler. Our website is Epler Capital dot com. And I would say those are the two, two best ways. I'm not very much on Twitter or anything like that, but I'm on Instagram and and and Facebook, but you'll find all that stuff on LinkedIn also. Perfect. Speaker 0
Alright. We'll put all that in the show notes as well. So Awesome. Craig Guffler, thanks so much for having or for spending your time with us and for sharing your story. And, it's pretty cool what you've been able to accomplish, and it sounds like you're, you know, you'd like I said, you're just getting started. So appreciate the time, Craig. Speaker 2
Yeah. Thanks so much, Jimmy. I appreciate it. Speaker 0
And thank you to the listener. Thanks for spending your most valuable resource with us, and that is your time. Thanks, everyone. Take care. Speaker 1
Thank you for joining us on From Adversity to Abundance. We hope today's episode has equipped you with valuable insights and practical advice to elevate your real estate journey. For more inspiring stories and resources, visit us at w w w dot adversity to abundance dot com. If this episode has inspired you, please share it with a friend who could also benefit from our conversation. Together, let's turn adversity into abundance. Until next time, keep building your mental fitness and your real estate empire. 
