The following conversation was conducted over email and edited for flow and clarity.
Andre Albritton is the founder of The Millennials Next Door. He helps millennials redefine wealth. Based in Atlanta, Georgia, but born and raised in Orlando, Florida, Andre’s company offers free financial content, courses, and online summits about investing. However, Andre doesn’t just teach people about real estate; he invests in it, too. In this interview, we talk more about his investing niche, Real Estate Investment Trusts (REITs).
Acquania Escarne of Wealth Noir (WN): Hi, Andre, I am glad we can get together and share your story with Wealth Noir readers. You are a real estate investor focused on a very specific niche, investing in Real Estate Investment Trusts (REITs). Can you explain what a REIT is to our readers?
Andre Albritton of The Millennials Next Door: The official answer is a real estate investment trust (REIT) is a company that owns, operates or finances income-generating real estate. But I’ll break this down more and describe a REIT as a company that invests and makes money through real estate. REITs are popular amongst investors because they have to pay out 90% of their taxable income in the form of dividends to shareholders. So, while a company such as Facebook makes a profit, they don’t have to pay any dividends at all, but a REIT must pay dividends. And we all see REITs without ever knowing. For example, Lamar (LAMR) is a REIT that owns thousands of advertising spots for billboards that we drive by on a regular basis.
WN: I am also a real estate investor, but only in the last few years did I learn about REITs. What made you decide to invest in REITs rather than real estate flips, rentals or other active real estate investing methods?
Andre Albritton of The Millennials Next Door: Growing up, it seemed the only way for African Americans to become wealthy was to own more land and real estate, which is an avenue to wealth but not the only way. I worked in a financial firm where we managed funds for high net worth individuals and I started to notice the majority of clients didn’t own a second home and it was shocking to see.
Later on, I found that advisors would have them invest in REITs, so they were still making money off of real estate but not taking on the risks. Now, I am a big REIT nerd and self-proclaimed REIT king where I teach others because it’s an investment option our community does not hear about.
WN: That’s a great mission. Tell us a bit more about the first REIT you purchased.
Andre Albritton of The Millennials Next Door: My first REIT was 10 shares of Seniors Housing Properties. At the time, they had a good history of dividends and a history of making good decisions. Unfortunately, the REIT hasn’t been doing well recently and had a few obstacles in 2020. They also changed their name to Diversified Healthcare Trust. I sold my position, but I don’t feel bad about my decision. Honestly, it was very empowering that I purchased my first REIT. Much like the saying “The hardest step is the first.” Even though I lost money, my process of picking a REIT was great practice and I have had better success since then.
WN: Do you have a selection process or step-by-step method you use to evaluate a possible REIT? How did you know what to purchase? Please share any useful tips that will help our readers get started.
Andre Albritton of The Millennials Next Door: Here are three tips that people get stuck on when picking a good REIT. First, the REITs I pick need to have some type of longevity, preferably dating to or past the 2007-2008 crash. I want to see how the company did in a past recession and how the company bounced back. That puts me at ease knowing that a company may not necessarily be recession-proof, but they demonstrated they can be resilient. The dividends take time to build up, so I want to make sure the company is here for the long run.
Second, pick a sector of REITs and use common sense. For example, I’m focused on hotel REITs because the prices have plummeted due to the COVID pandemic. I used my common sense to realize people aren’t traveling right now and hence hotels won’t be packed like usual. But if a vaccine is found, the hotel industry will come back over time and hotel REITs tend to pay higher dividends. A lot of people overthink the economy, so using common sense is beneficial with these investments.
Last, but not least, it’s important to understand your personal investing goals. And I believe that everyone needs to have a goal for investing, otherwise it becomes too easy to pick a REIT or stock company that will never reach your goal. An investing goal might be to make an extra 25% in value within three years and only a few REITs actually grow in value that fast. Or perhaps the goal is to find a REIT that pays consistent dividends, then an investor will need to research companies with consistent dividends. When a goal is clear it becomes easier to pick the right REIT.
WN: Thanks for those steps. I bet they will really help potential investors. What was the greatest lesson you learned while investing?
Andre Albritton of The Millennials Next Door: The major lesson I learned while investing is to be consistent and start early. We have to walk into investing with the expectations that we won’t become millionaires overnight but over time. From working in a financial firm, I understand high net worth individuals have been investing for years and just staying consistent. Some years will be low in return on investment (ROI) and other years will have a substantial high ROI. The money is growing because investors have the time to recover from the bad while continuing to pump cash into investments. This is especially true for REITs for those who are considering investing. The dividends will build over time with the magic of compound interest so the earlier you invest, the more time your money has to grow.
WN: Outside of investing in REITs, I also know you host online real estate investing summits. What inspired you to start connecting with people virtually?
Andre Albritton of The Millennials Next Door: I started doing online summits in 2019 because I wanted to face my fear of speaking in front of others and it has been my biggest revenue generator. At the same time, I’m able to reach other people in different states and countries. The lesson here is to do what makes you feel uncomfortable. Online summits have been a pleasure to run and I plan to continue this trend with the addition of in-person events. This year especially has been great for running summits since more people are finding themselves in the house. This year, my summits included TMND Investment Virtual Summit 2020, TMND Real Estate Virtual Summit 2020, and TMND Passive Income, The Come Up (date to be announced).
WN: How do you organize an online event? What are some of the challenges you’ve faced in the past and how did you overcome them?
Andre Albritton of The Millennials Next Door: Like most things, I think about what I want attendees to walk away with and the complete vision for the summit. Then comes the fun part, how to reverse engineer the event.
Granted, I have had practice, so I am much better than from where I started in 2019 and it shows with the number of attendees and content. The typical process is surprisingly easy, however. I gather my potential speakers and get everyone confirmed as soon as possible. This step tends to take the longest time since people have busy lives. Up next, I handle the marketing aspects such as a flyer and verbiage for the event. Selling tickets is the next step alongside being the most nerve wrecking of the whole process to me.
In my head, I plan a perfect event, but if no one is buying a ticket it all can come crumbling down rather quickly. Luckily, I haven’t run into that issue yet. And last but not least, I run the actual event online while being a one-man customer service wrecking ball. I’ve had bad customer service for something I paid for and would never want to put anyone through tough situations. Overall, it is honestly a fun event I like to organize. The difficult portion is always finding speakers and working with so many schedules.
WN: Everyone is always brainstorming ways to become a full-time entrepreneur. Do you ever think you will be able to turn your side hustle income from REITs and conferences into your full-time job?
Andre Albritton of The Millennials Next Door: That thought comes across my mind at least once a week, especially during Covid lockdown. But I don’t see myself leaving my job since I want to retire earlier than most, hence building up cash is the key. And luckily, my summits don’t require much time during the day, so I have been able to successfully balance my 9 to 5 job and my entrepreneur business. One day, I would like to turn this into a full-time job so I can pursue other ideas I am passionate about, but that will not be anytime soon.
WN: Let’s switch gears. I want to learn more about your podcast, The Flavor. What is your podcast about and who is your target audience?
Andre Albritton of The Millennials Next Door: When I started my journey into personal finance, I kept hearing the same notions that real estate is the only way to become a millionaire or you need to own a business to be wealthy. Though those are two great avenues, there are multiple ways to become wealthy by investing money to make it work while you sleep. Hence, on The Flavor podcast, I bring on a wide range of guests with their own flavor to investing money. My target audience is anyone who wants to learn about other non-traditional ways to invest money and just wants a little taste before they really buy into a new investment. Basically, the podcast is the food court at the mall and listeners can grab taste samples from my guests.
WN: So far, who was your best guest to interview or what was your favorite episode and why?
Andre Albritton of The Millennials Next Door: All of my guests have been amazing, so this question was harder to answer than I thought it would be. If I had to decide, it would be the ninth episode with Clint Lewis. We talked about investing in franchises, but he also owns a financial planning firm and has a real estate license. He was very passionate about teaching others how he came to own nine franchises so he can pass on the knowledge because there is enough money out there for everyone.
WN: If you could flip a switch and get everyone to do one thing related to their personal finances, what would it be?
Andre Albritton of The Millennials Next Door: Personal finances aren’t difficult. I preach a lot about focusing on the monthly margin, which is an individual’s monthly income subtracted from their monthly expenses. What is left over is the margin. And there are two ways to increase the monthly margin: increase your income or decrease your expenses.
That is the hardest step people don’t seem to understand. But when an individual increases their monthly margin, they have more opportunity to focus on important items such as paying down debt, investing more, saving for vacations, saving money and anything else. We all need to focus on monthly margins while being responsible with the money. I am not saying you have to save every single dime that hits the bank, but you have to be aware and responsible.
WN: OK last question. Are there any exciting products or offerings you have coming up? Anything you are currently working on now?
Andre Albritton of The Millennials Next Door: I’m continuously adding on to my favorite online course about REITs called REIT Investing & Dividends: Complete Course. And I’m working on my next summit that will focus on just passive income streams. The goal is to introduce multiple ways of creating passive income that is taught by top notch speakers. That way attendees learn more about different ways to make money to create a better life for themselves.