What Uganda Taught Me About Real Estate (That Most Wealthy Investors Miss) | Ep 117

James: So I recently returned from a trip to Uganda and while I was there, saw lots of sites, met some really cool people, and walked away with a couple real estate lessons that we're gonna talk about today on the Furlo Capital Real Estate Podcast, where we dive into the intricacies of passive real estate investing.

And our mission is to equip people to invest wisely, either in the us, Uganda, wherever, so that, um, whatever, to invest when best wisely in both property and people. So that together we can build wealth while improving housing. I'm James and this is my wife, Jessi.

Jessi: I'm here in the us.

James: Yeah,

Jessi: I actually stayed this time around.

I was a little jelly 'cause Africa is on my bucket list. Yeah, but not this time.

James: Not this time.

Jessi: That's okay. You came back with lots of stories. I'm, I'm excited to see how it. Interweaves with real estate.

James: Yeah. Yeah. Uh, I

Jessi: mean, some things directly I could definitely make, make the connection other things I'm like, I don't know where he is going with this.

James: Yeah. We definitely made the choice this time around to say, you know what, Uganda isn't the safest place in the world, and if something happens, we wanna make sure that there's still at least one

Jessi: parent,

James: one parent around.

Jessi: Yikes.

James: And so, uh, yeah. I'm

Jessi: glad you're home.

James: Yeah. And it was never, I never felt like I was in that much danger Sure.

Of, of losing my life. So, yeah. So it's all good, but, uh, but I'm here and yeah, I, I learned a couple things 'cause it was just, it was just very different there. Mm. Mm-hmm. And so I wanted to share, let's see, how many do I have? I came up with five things.

Jessi: All right.

James: Top five that thought were worth just five things, uh, that I thought were worth sharing.

So the first one is, uh, just this idea of patience is active. Not passive.

Jessi: Okay.

Okay.

James: So,

Jessi: so like you're actually doing something while you're waiting.

James: Yeah, exactly. So what's interesting was that in Uganda, progress often looked very different in seeing the United States. So in the us In the us like projects move forward.

Jessi: Mm-hmm.

James: Usually pretty reasonably, but not that, just doesn't feel that way in Africa. Never felt linear, right? It was, um, definitely I felt like a. Two steps forward, one step back type of situation. There were, uh, we talked about some land disputes Mm. That the people were visiting had. There's just infrastructure delays and issues.

There's supply, supply chain constraints. You know, we're like, Hey, let's go to the local Home Depot. Right. And grab some lumber. Yeah. No, not a thing that does not exist. It's actually really funny. Um, the guy we were talking with, he said, yeah, he went to. He went to Home Depot and was like, Hey, I, I'm looking for, uh, a two by four.

They're like, well, we don't have any of those. And he was like, well, what are those right there? They go, well, those are four by twos. And, and he's like, you're kidding me. Right. But what's interesting is like the people who are selling it, they aren't necessarily educated in math and that kind of thing.

Interesting. And so if they, it's like saying, oh yeah, no, my name isn't, uh, like his name isn't James. It's smudge. Which is just James Backwards. Backwards, but like according to them, like, oh, those are two totally separate names. And not recognizing like, oh, those are, that's interesting. Those are math measurements.

Jessi: So they did have the material, they just called it something else,

James: correct? Yes. And, but again, their supply was

Jessi: super

James: limited,

Jessi: very

James: small. They had like maybe two dozen logs.

Jessi: Oh my word.

James: It. That's

Jessi: such a different like scale.

James: Oh yeah.

Jessi: Compared to the us.

James: Totally. So

Jessi: there

James: got some supply

Jessi: constraints.

Interesting.

James: There's just cultural friction.

Jessi: Sure.

James: And other things, but yet they still kept moving, kept going on and, and I think that's, um, and I think that's the thing is like, I. It's like the trick is in that patience, you continue to move forward. Hmm. Right. It's just, it's waking up again. It's making another call.

It's meeting again with somebody. It's reworking some plan a second time. Um, there was a, there's another situation that they shared where they had built a fence or they got the materials to build a fence. Some Raiders came along, stole all the materials, and so they had to, that's so frustrating. Had to reorder, spent all the money all over again on the fencing material, and then they got a guard to watch over everything so that they could rebuild the fence.

And so just things like that. But it was like, that's what they did, right? They're like, ah, it's stolen. Okay, we'll just, we'll get it again. And they just

Jessi: kinda move on. Do you think that like the active waiting is, is less of. Um, you know where you're headed and you're just taking small steps to get there, and it's more of constant shifting and adjusting and,

James: um,

Jessi: like, yes, we have to be patient because we're, we're waiting on some things, but other times it's like, well.

If we just sit here, like nothing's gonna happen. We have to shift and change the plan.

James: Yeah. And again, it's not necessarily that you're like, you're not sitting around waiting. It's just that, that patience of a project's just not just gonna get done and go linearly and go fast and, and move. Like, okay.

It's, it's just a lot slower. It's just slower

Jessi: project

James: and it's recognizing it's two steps forward, one step back. That's just the way it's going to be.

Jessi: Mm.

James: You don't necessarily always know what it is, but you know it's going to be something.

Jessi: Yeah.

James: And so I think in real estate, especially with some high net worth individuals or investors, patients can become code for becoming disengaged.

Like, oh, I'm diversified, or I just hired good operators. Or I'll check the quarter report. That's it.

Jessi: Mm-hmm. But

James: I think. It's, it isn't creating that type of distance. It's really just that disciplined engagement without panic. I think so. Um, so again, it's, it's holding on during a refinance delay without panicking.

It's supporting a sponsor through, um, you know, through their operations and you know, if they're having any issues with it. Mm-hmm. Um, and just allowing the value add to mature instead of just chasing the next shiny. Internal rate of return.

Jessi: Mm-hmm.

James: Something like that. So I just, uh, so the final thought that I learned from it was really like active patience in some ways is strategic endurance.

Jessi: Hmm.

James: It's just kind of, yeah. You just kinda keep moving forward. Mm-hmm. Even in the setbacks, it's okay.

Jessi: Hmm.

James: So that was my first thing. Uh, the other big one is that man legal structure, it turns out, is actually an asset that we take for granted. So, uh, in, in Uganda, there's, um, again, these friends that I had, they bought a piece of land from a seller, and then the seller's son was like, whoa, no, no, no, no, no.

I'm like, it doesn't count. Essentially you're like, uh, it kind of does,

it's

Jessi: so wild.

James: But they don't have the same, uh, like,

Jessi: like titles,

James: title,

Jessi: boundaries and all that kind

James: of stuff. Legal types of stuff like that.

Jessi: Yeah.

James: And so people will like, and he's not the only one, but other people will try to plow the land and be like, oh, see, it was ours.

'cause we plowed it. I worked on it, so it must be ours.

Jessi: Oh my word.

James: I kid you not, there was one time, like they heard rumors that someone was gonna come plow the land, and so they plowed all through the night. So they go, Nope, it's already plowed. Clearly it's ours.

Jessi: Oh my word.

James: Yeah.

Jessi: That's so random. It's

James: just that it was kind of nice when it wasn't hot out,

Jessi: but I mean, it's kind of like, like, like you described it as this wild west.

Like, I'm gonna ride my horse over here and put a flag in the ground and this is now mine.

James: Yeah.

Jessi: Like what?

James: Oh,

Jessi: that's wild. That's

James: crazy. And they've had other pieces of the land where it's like people just, they just put up a fence in the middle of the night and go, it's ours now. Can't get in.

Jessi: Yeah. We fences at off,

James: so obviously, oh, it's totally a thing.

And so again, I think that's, they

Jessi: have any kind of structure of like recording who owns what or Yeah.

James: Kind of. Huh. But you're talking about a government that, uh, you know, if you are willing to pay the official a lot of money, the official goes, no, it's actually this person's over here now.

Jessi: Interesting.

James: And so that kind of stuff.

Yeah. It's not, happens, doesn't,

Jessi: doesn't stay supported or

James: uphill. Very wild west. Um, I do know a guy he bought, uh, gosh, how much was it? It was like an acre or two of land for like 600 bucks. So that was pretty sweet. But again, like,

Jessi: yeah, who

knows

James: if he'll keep, so for him it was like the race, like how fast can you fortify this place so that it's yours?

Wow. Pretty nuts. So when you're investing in the us, like dude, like you don't even think about it, right? You're not just investing in the building, you're investing in predictable contract law. Mm-hmm. In title insurance systems, court enforceable leases.

Jessi: Yeah.

James: Foreclosure clarity and zoning frameworks.

Jessi: Yeah.

James: And it turns out these are all invisible assets that we just take for granted.

Jessi: That is a really good perspective. 'cause sometimes I think we get frustrated, we know with legal proceedings or, or if there is kind of a dispute, but it's like. No, this is so much more straightforward than other countries I know.

And how it could be. So, yeah, that's,

James: yeah. And, and that's not to, not to say that US markets are risk free.

Jessi: Sure.

James: It just means that like structural clarity, it's part of that return. Mm-hmm. Whether you realize it or not, which I would think I would put myself in the, I hadn't really thought about it.

Jessi: Yeah.

James: And I was, and I usually the, or I would, what's the way I think about it, uh, the issues that we have are like in that last 5%.

Jessi: Yeah.

James: You know, which. It is a big deal. It's,

Jessi: yeah.

James: But I just think it's good to keep that perspective. Mm-hmm. I'm like, all right, all right. At least we have these things to fall back on.

Mm-hmm. And since we do have 'em, you should totally use 'em. Yeah. Don't try to do the Wild West thing. Understand them and know them the rules.

Jessi: Sure.

James: Which was, that was one of our, at the, um, our end of the year. Conversation. Mm-hmm. Beginning of the new year where I was talking about Yeah, man, gotta get things written down.

Jessi: Mm-hmm.

James: Or less handshake deals, even though I do love doing 'em. Mm-hmm. Um, 'cause

Jessi: it's just

James: yeah, in the us like we, we play by those types of rules. Yeah. So just a good reminder of that. Here's another really interesting one. Uh, I, so I met an observation and then I tried to shoehorn it into a real estate thing.

Um, so. There were places that we walked around where just clearly, um, by Western standards, deeply impoverished.

Jessi: Mm.

James: We're talking dirt roads everywhere, like no grass or green at all. Just dirt, dusty, dirt everywhere. Shacks of a house where it was just like all kind of cobbled together type of stuff.

Jessi: Yeah.

James: And yet. People around, all over the place. Smiling, laughing, hanging out, living in community.

Mm-hmm.

James: Literally just happy, like super joyful people.

Jessi: Mm-hmm.

James: And um, it was funny, we actually, we played this game. We played a what if game at one point in time and, um, it was kind of a weird, like the original version of it was, was weird, but ultimately I morphed it into, would You Rather?

I was like, uh, would you rather be someone like that living in poverty? But clearly like. Enjoying life. Mm. Versus someone who is like, they're working a good job.

Jessi: Mm.

James: But they don't necessarily have any friends. Mm-hmm. They're just isolated. They're doing the online thing, they're at home.

Jessi: Yeah.

James: You know, and it was kind of like, man, I like, this isn't a straightforward of an answer as I think it would be.

And so, um, I think there's something about as investors, uh, eating together, walking together, laughing together. As opposed to in a lot of America, like we have beautiful homes. Mm-hmm. We've got high speed internet, we've got some streaming subscriptions.

Jessi: Sure.

James: But we also have a lot more isolation.

Jessi: Yeah.

James: Here and, and I think with investing, I'd like to make the argument that we should strive for ways. To invest or just be in community.

Jessi: Mm.

James: It's not just about the investment. How much money can I make? Mm-hmm. But how do I again, which is part of our thing, right? Yeah. How do we improve housing together? Yeah.

And, um, and I'm glad that that's what we chose as our motto, rallying cry, whatever. Sure. I'm like, yeah. No, I think it's important to do it. And, um, yeah. And I think if you, if you've got a really strong balance sheet, but no trust circle

Jessi: mm-hmm.

James: Or you. You don't just, yeah. Again, you don't talk to or work with any other investors.

Mm-hmm. Not to say you have to invest together. Right, but just you wanna have that group, your network, network, your

Jessi: people.

James: Yeah. And I think you get, you get some things that actually makes you a better investor, right? 'cause it's gonna sharpen your judgment. Mm. It's gonna reduce your blind spots and it's gonna stabilize emotion during volatility.

I mean, even today I was talking with another investor who he had an opportunity. That it didn't make sense for him to pursue and he was like, Hey, do you want to, do you want to talk to him? And maybe it's a good fit for you. Yeah, right. Like that's an awesome, huge advantage for an off market deal that I get to look at.

And we've done vice versa where he's looked at stuff and I've helped him be like, yeah, all right, here's the numbers. Here's why we think it through 'em here. That kind of thing. Um, so I just think that relational piece, it's

Jessi: important. It's important.

James: Yeah. And I think you should, if you feel isolated, do something about it.

Jessi: Yeah.

James: There's clubs and other things and people like us.

Jessi: Hmm.

James: Just talk to, I think it'd be good. Yeah. It was just kind a, like I said, I'm kinda shoehorning it in. Yeah. Um, but it was, it was just kind of an interesting like

Jessi: Yeah. It's kind of like. You don't know if the the people are happy because solely because they have that community, but it is a very obvious factor that they were alone and they were living in poverty and they didn't have food and it's difficult and they were Raiders like, yeah, it just gets a lot more difficult if you're alone.

So,

James: yeah. Yeah, yeah. That was one of the interesting things. I remember I was once doing some work with some homeless folks and we were. You know, helping 'em out.

Jessi: Mm.

James: Food, clothing, care kits, that kind of thing. But also just having conversations with them. Mm-hmm. And I was shocked by the number of people where the problem was they didn't have any community.

Mm-hmm. No one that could call for help.

Jessi: Yeah.

James: And that's why they were there. And um, yeah. So I was like, huh. Interesting. Yeah. If you got a community, chances of being homeless are pretty low.

Jessi: Hmm.

James: But yeah. Um, that was three number four, uh, uh, scarcity creates clarity. And, um, I've seen this on, um, they talk about this also in like, in creativity where it's like restrictions creates creativity.

Jessi: Mm. I've heard that with kids before. If you, if they have too many toys, that's like. If I can't make a decision, water dog.

James: He's got too many toys.

Jessi: No, never.

James: So in Uganda, it turns out resources are pretty scarce. Yeah. As we've kind of alluded to, but so that forces clarity, right? Hmm. Every dollar matters, every decision has consequences, and every delay costs something real.

Jessi: Hmm.

James: And, and I think that. Contrast that to United States where man, you can have things where like amenities just get added for the optics of it, or debt just gets pushed to maximize projected IR mm or returns are optimized. Um, what in the world was I trying to write here? Um, I wrote applause. It's clearly not the right word I was going for, um, that I said Yay.

Yeah. A little flashy. We safer for vanity. Applause, applause rather tur for short term. I don't, I I don't know what I meant there. That's okay. That's, anyways. I just think sometimes comfort can make investors sloppy.

Jessi: Hmm.

James: Is my point. Yeah. And there's something to be said about. No capital's limited. We gotta be smart about this.

Mm-hmm. We gotta be intentional, we gotta be wise. Mm-hmm. Because I think if you just have a lot, you're like, oh yeah, a little bit of this, a little bit of that, whatever.

Jessi: Mm-hmm.

James: Which is awesome. Don't get me wrong. Like it's cool that you can

Jessi: have Yeah. Having abundance is, is. Nice.

James: But I just, and fun, I appreciated that there's a level of intensity and intentionality that comes with Yeah.

Jessi: You do have to be a lot more intentional. Like, oh,

James: this is all, you have

Jessi: limited resources.

James: I gotta make it work. Yeah.

Jessi: Mm.

James: Yeah. And we make assumptions, right? Like a liquidity always be available. Mm-hmm. Refinancing. Oh yeah. Always possible. Mm-hmm. And demand will always show up.

Jessi: Right.

James: And. In places like Uganda, you go, Ooh, that is definitely not, not the case.

The case. And I do think we see that's not always the case in the us mm-hmm. Which is just good to remember. And so, um, I'm kind of like, okay, how do you, um, how, you know, seeing that, trying to think of like an action item, right? It's like. Can you have yourself ask better questions, right? Can you say like, does this deal survive without the perfect execution?

Right? Again, you're getting back in the, like, the risk manage mitigation. Is the leverage necessary or is just ego driven? 'cause it lets you go after bigger deals. Um, and are we underwriting, durability, or for marketing appeal? That's a question. Like I can ask myself that. Mm-hmm. Um, so I just think that, um, if you have the mindset of, okay, I gotta make this count.

I think that actually helps you, mm-hmm. Preserve it more. Mm-hmm. Do better. And then, uh, this last one, um, it's a legacy thinking changes to the game. That's what I was talking about. So again, our friends, they're building a retreat center. Mm. And the goal of this thing is for it to last generations beyond them.

Yeah. And to train. People. Yeah. Veterinary work, farming work, mission work, that kind of stuff. Yeah. And, and again, it's, it is, it's a legacy project. Mm-hmm. Is really what it is. And um, and it was pretty cool. Like, and, and so I think when you are building something like that, it changes the nature of your decisions, right?

Because your time horizon extends, so you're not. Chasing like a temporary yield. Mm-hmm. Or return. You're, um, and you're trying to build for systems not hype necessarily. Mm-hmm. And I think oftentimes, uh, like high net worth investors, we can optimize for like, just like a high RRR, which usually means returns are better when they come in sooner.

Jessi: Mm-hmm.

James: As opposed to like just the best possible outcome. Mm-hmm. Period. Whatever that is. Sure. Um, 'cause you know, you want it to, to last a while. And so, um, I think legacy building, you'll ask a different question. You'll say, will this asset be valuable when my children are decision makers? I think it's, is a good question.

Yeah. And um, I know we, you and I, were, we're just starting to have those types of conversations. Um, it's kinda intentional. We had some family stuff come up, which is kind of prompted like, Hey, we should actually think about this.

Jessi: Mm-hmm.

James: And, um, should

Jessi: reevaluate what's

James: Yeah. And so what's most important.

Yeah. I know one of the things that I'm thinking about is like, okay, like we do have this portfolio.

Jessi: Mm-hmm.

James: Someday if things go well, like the kids are gonna have to deal with this. Mm-hmm. What does that look like? And how do we build it in such a way where they don't go, wow, what in the world was doing?

I'm like, well, dad was maximizing short term returns. Good job kids.

Jessi: Yeah.

James: Like, yeah, I don't want that.

Jessi: Yeah. I think that there's this shift in mindset to how, how does this benefit me? And with the legacy planning or, or thinking it's more how, how does this benefit others?

James: Yeah.

Jessi: Long term, when I'm not around anymore, what's gonna happen to it?

Yeah. You know, how's it gonna get used or be beneficial and. It's a more of a selfless thought.

James: Yeah.

Jessi: In managing the resources, which is good. Mm-hmm. Because we're not gonna be around forever.

James: I also think if you're going toward legacy stuff, you're gonna do lower leverage.

Jessi: Hmm.

James: It's gonna try to reduce your debt over time.

Jessi: Right.

James: You're gonna look for stronger operators, people who can, or organizations that can keep managing it. Sure. Even after you're gone, uh, you're gonna want cleaner governance in some ways. Mm-hmm. Which I've got a couple messy ones. Um, but just like clean structures.

Jessi: Yeah.

James: And just simple structures in general.

Mm-hmm. So not flashy things, but just enduring things. Yeah. I think is important. So Uganda didn't necessarily teach me about exotic returns, even though I did see some cool exotic animals.

Jessi: Yeah.

James: At one time, one point in time we had some baboons jump on top of our car. Super cool. Um, it was fun, but I think it clarifies some of those foundations, right?

Mm-hmm. Which is that patience, it can be active, should be active. That legal structures, they are part of the asset. Community is good and it compounds your investing returns. That scarcity sharpens your discipline. And I think that legacy can ultimately outperform, um, the short term thinking, um, short term optimization.

And so, um, yeah, and I think just, I think the big thing for me was like in, in places with very little. Money, resources. I saw some, some pretty relational richness there. I think that that just really, that struck me.

Jessi: Mm-hmm.

James: And, um, I like that. So, uh, yeah. I think one of the things that, that we're gonna be wrestling with for a little bit here right, is are we building portfolios simply to maximize our, our wealth today?

Or are we building things that are durable, that are legally sound, that are gonna be community connected?

Jessi: Yeah.

James: And, uh, yeah, and legacy oriented. So

Jessi: that's, are good driving questions.

James: Yeah.

Jessi: Oh, probably for most things, you know, not even real estate, solely real estate, it makes sense in that context, but also like, hmm, am I doing this in my relationships or am I doing this in my career choice or my.

I don't know.

James: Yeah, yeah. Those are, yeah, that's right. I

Jessi: got

James: deep. I got, these are good questions. You're welcome. Yeah. Like I said, it was a, it was a great trip and I'm glad that I got to go and support our friends and, and learn more about what they're doing there and what they're building and also just kind of fun fact, termites are a massive issue there, and so I can imagine, yeah, like there was just termite hills, huge metal all over the place.

And so everything needs to be built, um, in metal.

Jessi: Yeah.

James: And, um, otherwise

Jessi: were stoned. Go through that. Like there wood, wood, there are some

James: stucco

Jessi: stuff,

James: but most like the structure was was metal.

Jessi: Metal.

James: Like if you build, if you build the framing in wood, oh, oh yeah, it's gone now. Shoot through it. So, which also just makes it very expensive to build there.

Yeah. Because it's all gotta be metal and it's like sourcing. It's not,

Jessi: yeah.

James: Not a simple thing.

Jessi: Easy

James: to do. Yeah. Pretty wild. So,

Jessi: alright.

James: Yeah, just kind of a little, there's a little bonus.

Jessi: Make yourself a little grass hut, I guess.

James: Guess no. Well these people, they were making metal. Ones 'cause metal, which is like.

Hot too. They're just little, little ovens.

Jessi: Yep. '

James: cause 'cause it's, it's hot there all year round. Yeah. Yeah. Super interesting. So there you go. That was, um, those are some, some investing lessons that I got. My time in Uganda.

Jessi: Love it.

James: And so, uh, with that, if you would like to leverage these lessons that I've learned, um, you can check us out.

Um, I actually, I re I don't know if I even told you this. I recently redid the website.

Jessi: What?

James: I know, I'm gonna have to go check it out. It looks cool. furlo.com.

Jessi: I mean, I'm on it every day. Yeah. Checking it

James: out. No, it, uh, I made it a clearer, um, the homepage. Now has it be like, Hey, you can invest passively, or there's a property management piece.

Oh. Do it. And I just made that clear. That makes sense. I don't think it was clear. And it really gets kinda like the why and the heart behind why we exist on that, on that main page. And then just kinda choose your own adventure, what kind of investing and, and what kind of support are you looking for. So very cool.

Check it out and um, yeah, you can see our investing thesis and again, how we, how we view investing. So with that, thanks for listening. Have a great day.