10 Rules Passive Investors Must Follow Straight From Top Gun | Ep 73

James: Are you writing investment checks that your body can't cash? Well, let's talk about that today as we're gonna talk about Top Gun.

Jessi: That was so good.

James: I knew you'd like it on the Furlo Capital Real Estate Podcast, where we dive into the intricacies of Top Gun and passive real estate investing and our mission, should we choose to accept it.

Wait, same guy. Different movie is to empower, equip to help. Investors to invest wisely in both properties and peoples and airplanes, so that together we can improve housing, save the nation, and build our wealth. I'm James, and this is my co-pilot, Jessi, all of that.

Jessi: Ooh. That was amazing.

James: Thank you.

Jessi: It's like such a cool intro.

James: Yeah, you're welcome. That's okay. I'm bringing it. So because we're talking about the best movie of all time,

Jessi: we are getting a new dog.

James: Okay.

Jessi: And his name is Charles Uhhuh, which I think is very refined. And lovely. It's very British, but his Yes, it is. But his call sign for training and such is Chuck.

Yes. So I feel like that fits Okay. Very well. There we go. Kind of, I was wondering where we were. We were kind of talking through all of this and it was like, we wanted Charles, and then we were like, Charles Vincent, and he has this long name, and you were like, ah, that's, that's really long. That's gonna make it hard for like training purposes, you know?

Yeah. If you just wanna call him quick. So. Chuck.

James: Chuck. Yeah. Yeah. It'll be good. Looking forward to him. And he's a duck dog. He's a yellow lab. Chuck Duck dog. So we went from Dachshund to. Lab, but he is a smaller, we went big Dachshund British and now we're doing small yellow lab.

Jessi: Yeah.

James: So we're trying to find that happy medium ground.

Yeah. No, it'll be fun. Would be great. And he and I will probably watch Top Gun. That's right a couple of times. You gotta to,

Jessi: you've got to.

James: Yeah. This last week I was rewatching the movie Top Gun Maverick, which is just a great film. And so it had me thinking like, man, what are some lessons? What are some lessons here?

So I I put together 10 of them. And about five of 'em are good. So I'll let you be the judge on which one are good,

Jessi: but I'm, I'm sure Ill, and

James: 10 was really important.

Jessi: I'm sure I'll like all 10.

James: Yeah, sure. So

Jessi: the, some are a stretch.

James: I, most importantly, I spent most of the time trying to get good quotes Yes.

To represent it. And yeah. So lesson number one. Is the quote, start with the quote, I think is, don't think just Do, which is from the latest movie. Yeah. Right. And he's Maverick is constantly telling Rooster that, and part of this idea is that in the film, Maverick emphasizes like. You gotta stick to the mission plan for success, right?

Mm-hmm. They've got this time thing. You gotta hit, you gotta weave through the mountains, you gotta, yeah. Like there's all these things for it. And to the point where you no longer have to think about what am I trying to do?

Jessi: Mm-hmm.

James: You just do it because you've prac. 'cause you know what the mission parameters are.

Jessi: Right.

James: And I think with, for passive investors, the lesson there is that you wanna have clearly defined investment objectives. Mm. And, and you wanna stick to your proven criteria so that when an investment comes along. You don't have to think. You don't think you could just do. You just do. That's remember how like when we first got started, we looked at a hundred properties, right.

And now was so that we could instantly recognize a deal when one came along.

Jessi: Yep.

James: So that's the exact same idea.

Jessi: Makes sense. Yeah. You know, if you're, I mean, you are thinking it's just ahead of time.

James: Yeah. Okay. That's right. You putting

Jessi: in the effort and the thought and the processing and the plan kill and then Yeah.

Yeah. Yeah.

James: Boom, boom. Then. All right. Lesson number two, choose your pilot carefully. As Maverick says, it's not the plane, it's the pilot. Again, these are all from the latest movie, even though I, I had to sprinkle in a couple from the original to make it work.

Jessi: Wait, what's the, from the original movie, it's a.

His, his where he is at the, at the thing, at the dinner, or, I don't know. It's at the party. I feel the need He's at the graduation. The need speeding. No. And his and his, you're person's the

James: best of the best. No,

Jessi: his, his, I don't know, what do you call that gentleman? His mentor, whatever is like his

James: coach. Yeah.

What do they call him? His his co commanding officer?

Jessi: Yes. His CO is

James: like, yeah, Viper Vi Viber.

Jessi: He's like, yeah, and if you can't find somebody, call me. Gimme a call. I'll fly. You call I'll fly with you. Yeah, yeah, yeah. Because that's like. You know, with that mobster

James: accent. Yeah. I can't off, I can't do the bike.

Jessi: That was terrible. Oh, I'm butchering it. Oh, it's amazing. It was so great. Pilot. Your pilot matters.

James: Yes, your pilot does matter. And Maverick was chosen because he, because of his expertise, because of his skills. Mm-hmm. Despite a whole bunch of skepticism. And so you wanna choose your sponsors or general partners who have that proven track record, like Ma Maverick, right?

Mm-hmm. He, he had been there, done it for lots of years. Even if their style might seem a little unconventional. True, it's true. It seemed a little crazy. And yeah, they just execute reliably under pressure. All right. Lesson number three. Competence isn't enough. Character matters. All right, how about this quote?

I'm, I'm totally gonna mix movies here, but I just love the quote. You're dangerous, but you can be a wide wing man, anytime.

Jessi: All right.

James: Proceeded by a cuss word that I excluded from the quote anyways. Yeah. So that's. Maverick is a dangerous guy, right? And so but he proved that he, his character out.

It's not in the field, in the skies, I guess on the, the job. I think an opposite example of that would be hangman, right? He technically was like the best pilot. He was great.

Jessi: Mm,

James: he was skilled, he was precise, he was confident, like iceman, ice cold, no mistakes, you know, that kind of thing. But he was very arrogant and very selfish.

Mm. Right. And so that made him unreliable and teammates didn't actually wanna work with him. Right. Which became a lesson or a a problem. Yeah. And so the lesson is for passive investors to be carefully to evaluate the skill and the temperament of the sponsor. Mm. They might technically make great deals, but if they're just hard to work with or they're, you know, you're questioning their character and integrity and reputation.

Mm-hmm. It may make sense to move on with someone slightly less skilled, but actually cares about their fellow pilots. Makes sense in the seats with 'em. Different

Jessi: parameters for valuation.

James: Yeah. Yeah, exactly. All right. Lesson four. Thorough pre mission briefings. Mm-hmm. Or a thing, due diligence, man, they. I was paying attention to this in the movie.

Like they go over, here's the objective, here's what we're doing here, which is actually a classic storytelling technique when you're telling a story, right? Like before you do it, set it up. You tell people, here's what I thought was gonna happen to set. And then usually it doesn't work out that way, and that's expectation.

But anyways, they go over, over and over and over and over and over and over and over again. Here's what we're doing. And then even at the end, like when they're on the battleship getting ready to go, like they go over the plan again. It's like, dude, we've looked at this so many times, but they do it anyways.

I've

Jessi: got a good quote. It's when, his Charlie Okay. Is like reviewing the flight friend. It's like after the fact too. She's like, my review of your flight was spot on or something like that. Yeah, yeah, yeah. That's one of my favorite scenes.

James: I was gonna go with stinger. Who I had to look up his name.

Yes. He was the guy in charge of the battleship at the very beginning and then also at the very end. Yeah. Where he goes, this is what you've been trained for. Make us proud. Right. Nice. That's that same idea. That's what did so just, they had a, a ton of prep. It was super meticulous. And I think that's part of, as a, as passive investor, you wanna do the due diligence, you wanna understand the business plan, the financial as supplement assumptions, the market information, like all that stuff.

Yeah. Like you wanna review it. Invest the time up front so that like, so you just so everyone's on the same page about what's going on.

Jessi: That way, you know, when you come up against a bad deal, you can go. Slider. You stink. Stink too.

James: I love it. I love it. All right. How about this one? Trust your wingman.

Hmm. Which I think is like, there's a piece of that. It's like communication and transparency. Mm-hmm. Gotta let 'em know what's going on. Hmm. I went with a quote. Talk to me Goose. Yeah. That's good one, which said multiple times in both movies. Yep. Yeah. And, and that was 'cause Maverick's success depended on having someone who he trusted, who he told everyone to.

And, and same thing, like you wanna have a sponsor who's gonna give regular updates, they're gonna be transparent about what's going on, have open lines of communication where you can call 'em and they'll pick up the phone and talk to you. And that's especially true in turbulent times when things don't go as expected.

Yeah. You know? So yeah. I think it's important to, to trust your wingman. Number six. Timing is everything. We talk a lot. Bus, we talk a lot about this in real estate. Okay, here's the quote I went for. Remember boys, no points for second place. That's awesome. Yeah. Slider. You're smarter than you look.

So anyways, yeah, I think you know, in the film they talk about the precise timing of the bombing run and like, just how important that is for mission success. Mm-hmm. And I think a lot of times for investing that also matters in terms of like, getting in at the deal at the right time. You've got your capital ready to rock.

'cause a lot of times I like for us, especially for some of our, like our flips, we're just not raising, relatively speaking a lot of capital. Yeah. And like, we'll put it out there and it's like, man, like if you're not ready in three days. Hey, you might miss out. Mm-hmm. But now, ready to commit in three days, I should say.

Usually we have a few weeks Okay. To then collect the funds, but to actually collect everything. But you gotta be ready. Yeah. Like, so I think just timing's important, you know? Yeah. Gotta, you're ready

Jessi: to move, things are gonna move.

James: Exactly. Mm. Yeah. Yeah. Yeah. The deal training is a training and you gotta gotta be ready to hop on board.

Like, there's a Homestar runner reference in there somewhere. But anyways all right, number seven manage your risks. That's talking about downside protection. Mm. I thought of the quote, which Charlie tells him, you know, you're not gonna be happy unless you're going mach two with your hair on fire.

Right. That's his, her whole point there is like, dude, you, you just, you like doing crazy stuff. Mm-hmm. Investors, we don't. Right, which actually most pilots they're constantly assessing risk to avoid catastrophic failure, right? Like, that's the whole goal, right? Yeah. Keep the plane in the air, don't go down live to fight another day, right?

Mm-hmm. And, and that's like you want as I. Jim Collins says in his books like Good to Great and such, he's like, you wanna stay above the death line. That's the goal. Yeah. Right. And so that's very true for pilots as well. And I think that's true for passive investors. You know, it's okay to not make a lot of money.

It's bad if you lose all your money. Yeah. And so you just wanna constantly be aware of the risks. Especially when you're evaluating it, ask about what those are. What are they and what are we doing to mitigate them.

Jessi: Mm-hmm.

James: Someone like me, I'm always gonna include a section about it and I usually add way more than I need to, or not that I need to, I will try to be as comprehensive as possible.

Mm. And potentially even farfetched on some of 'em. Just like, this isn't gonna happen, but it is a risk. Yeah. You know, that kind of thing. So you wanna do that? Mm, yeah. I am curious, just a little aside here, if if you were to have a call sign. What would it be? What would you call yourself?

Jessi: Hmm.

James: Hmm.

Jessi: Ooh. I know

James: I'm making you think here.

Jessi: Ooh, I know. I've never

James: thought about it for myself. Go ahead.

Jessi: I'd be mantis. Mantis.

James: Yeah.

Jessi: Not like the the Marvel, charact, guardian galaxy. Yeah. Sleep. Not that. No, not that. But mantis like. A praying mantis. Okay. Because Okay. They're like fierce. Mm. And they strike when they're ready.

Mm. But they're also Okay. Very sleek. Okay. And interesting. And that's fair. Yeah.

James: Yeah. My problem is there's a bunch of them that, people that have already done that I like, like, I like fan boy. That's just, boy, it's just a fantastic, nice, fantastic name. And that would be kind of my, like, I, I think I would go more towards the, like, I wanna make you smile as opposed to be fierce mm-hmm.

Type of thing.

Jessi: Sure.

Which is Well, yeah. I mean, a lot of them kind of, they don't really describe, you know, like a warrior or battle. They describe your character. Mm. About, you know, like Maverick is like flying off the rails here. You're a wild card. Right. You know? Yeah, yeah, yeah. It might

James: smiles smile.

What's a, what's a, what's a good nickname or a call sign for somebody who's very optimistic about life? Hey, positive, happy, positive. Yeah, I don't know. I like Bob Silver lining. Oh dude. There you go. Yeah, I like it. Alright, number eight. You gotta know when to abort the mission. Mm, eject. Eject.

Yeah. Yeah. Or my other quote was, you don't have time to think of there if you think you're dead. Yeah. And so just that idea of, again, I'm, I'm trying to make these fit, just work with me here. But yeah. You know, so gotta know like. Yeah. When, when are things going bad? When you got it out? And so they're trained to recognize when it's time to just like disengage, Hey, it doesn't look good.

I gotta get out of it. Mm. And I think that's important for investors to know, like, Hey, here's when to pass on a deal. Mm-hmm. I think that's good. I, I think oftentimes we can get, there's two traps that you can run to as a passive investor. The first one is just like the big flashy numbers gets you excited and you start dreaming about all the returns.

Mm. And you, like, you just get mentally bought in to the top line stuff before digging into the details. And then I also think there's a, what you would call, like a sunk cost fallacy where you eventually, you spend a lot of time doing the research, maybe even visiting the property, talking to the sponsor and getting into it.

Mm-hmm. And you're like, you're convincing yourself. To do it. 'cause man, I just sunk in all these hours into this deal. Right. If I say no to this one, I'm gonna have to sink in hours all over again. Right. And so you kind of commit to it so you, even though it's not great. Yeah. You're still like, I wanna avoid that.

Jessi: Yeah. I got another good quote for that one.

James: Go ahead.

Jessi: Have, we're running way low on fuel.

James: Mm. Gotta land this plane.

Jessi: Gonna land this plane.

James: Makes sense.

Jessi: This isn't good.

James: That's good advice. I'm,

Jessi: I think I'm getting

James: all these quotes mixed up and all. No, you're fine. You're good. Okay. These are good. I'm helping you out.

All right, lesson number nine. We're getting there. You gotta balance the emotion with discipline. Hmm. This is Viper talking to Maverick at the end of the first movie, he goes up there, we gotta push it. That's our job. Mm-hmm. Right. That's just that idea. That's right.

Jessi: Push the limits.

James: Yeah. Yeah, yeah.

And, and Maverick even makes this emotion. He has this emotional history with Rooster. That impacts both of their judgment mm-hmm. About their flying and what's going on. Mm-hmm. And you just gotta balance that. It's not saying never be emotional, but you gotta figure out how to balance that. And I think for passive investors that's that exact same thing.

You gotta, you gotta recognize the emotions of say, like fear and greed. Mm. Right. Or even just like impatience Yeah. Around stuff. I had a, I had a owner today, I manage his property and he was just asking me a whole bunch of questions about like, reporting stuff and mm-hmm. Like the first month. Just started.

Yeah. I'm like, we're seven days in and I'm like, gotta be patient here. There's, she's like, I don't see any receipts. I'm like, yeah, there are none. Like, and okay, that's not true. There was a cleaning that happened. I was like, where's the cleaning receipt? I was like, well, I actually paid for it myself ahead of time.

'cause you hadn't collected any rent yet, so you didn't have anything to pay it with. Mm-hmm. And so eventually. And, and the way that it works, it's all based on a cash basis. So I've charged it to you, but until I actually take the money out of your account, it's not gonna show up. Mm-hmm. So it's not there yet, but if you switch to accrual, it's there.

But anyways, it was like, mm-hmm. I, I told him, I was like, you just gotta be patient. Wait a couple months, you'll see the trends and you'll, it'll all click into place. Like one month's, not quite enough. But once you see two mm-hmm. You go, oh, okay. I see what's happening here. So it's like, yeah, man, just gotta be patient.

Which she admitted. It's like, I've never done this before, so I'm just nervous. I'm like, totally get it. Yeah, it will be fine. They moved in, they're paying rent, it's fine. Yeah. And lesson number 10, play the long game. And I'm not doing the play playing with the boys, but can along in song. Instead it's it's when Kain, the beginning of.

Top Gun Maverick. It's kind of a weird, honestly, he's like, he's got like that super fast. Plane that he's trying to go like mock 10.

Jessi: Mm-hmm.

James: It's like there's that whole thing that happens and they never do a callback to it at the end, which I kind of thought they would, but whatever. Anyways, Cain says to Maverick, the end is inevitable, Maverick, your kind is headed for extinction.

And Maverick says, maybe so. Maybe so sir, but not today. Mm-hmm. And which I guess the set it for like, he's still needed on the, on the airfield I guess. Mm. But anyways so he's got this decades long. Career that reflects like perseverance, patient and just kind of this long-term dedication. He's right where he needs to be.

Mm-hmm. He's not an animal. That's okay. And I think with passive investing, you wanna have that same long-term strategy, right? Yes. There's short-term turbulence. Mm-hmm. It's okay, but you don't want that to distract you from that ultimate goal. Yeah. And so you wanna have that.

Jessi: You wanna play the long-term game with the boys.

They'll just do quick flybys on the air tower.

James: I know. Which I did appreciate a control

Jessi: tower

James: in Mavericky. He does another fly by in it and it bothers Cyclone. His co I was like, yes, feels good. Anyways, yeah, that's the movie. Fantastic movie. It's one of my favorites. Both are good. The

Jessi: original,

James: both are fantastic.

Ah, it's just, just so great. So yeah, and a lot of good lessons to, there are a lot of great lessons pull out there. I'm sure there's like, I mean, it's dozens more anytime that I see people who are dedicated to getting better, doing excellent. Giving the best that they can. Best of the best, like, yes, with honors.

Oh, wrong Li again, that's Men in Black. But but I just, I, I've, I like watching that kind of attitude. Mm-hmm. And I think and that's how I try to approach real estate investing myself. Right. Like, yeah. How do I be the best of this? The elite. Yeah. And you know, and bring my, A game. Mm-hmm. And you know, don't think, just do.

Yeah. No, I do a lot of thinking. Yeah. A lot of thinking too. But yeah, so I enjoy watching all sorts of stuff like that. I mean, honestly, that's, that's, I think that's one of the appeals of movies like Star Wars as well. Like there's these people who are like, they are, they're this idea of a Jedi is someone who's on top of their game.

They're, they're always top performers. And so

Jessi: that was a quote I almost said, patience. Young Padua.

James: Ah, yes, yes. Wrong movie, but yes. That's good. That's good. Awesome. Well, there you go. And if you would like to invest with the elite, the best of the best you can check us out online at Furlo.com. And there you can learn all about us, our investment thesis and our track record.

What was it? You know, because of our deep expertise. And our skill precision I shouldn't, when I say that, no, we do have Skillion, but anyways yes, check us out online and yeah.