Navigating Apartment Investing With Yacht Captain Scott Kidd

 

Welcome back to Real Estate Investing Demystified! Today, we’re thrilled to introduce Scott Kidd, a seasoned yacht captain with over 25 years of maritime experience and a multifamily real estate investor. Join us as Scott shares his incredible journey from navigating luxury yachts to mastering real estate investing. He recounts captivating stories of sailing to exotic locations, mingling with the elite, and transforming his experiences into lucrative investments. Discover how the world of yachts and real estate intertwine and learn valuable insights from Scott’s unique perspective. Don’t miss this episode packed with luxury, adventure, and investment wisdom!

Get in touch with Scott Kidd:

• Website
• Free Gift

If you are interested in learning more about passively investing in multifamily and build-to-rent properties, click here to schedule a call with the CPI Capital Team or contact us at info@cpicapital.ca. If you like to co-syndicate and close on larger deal as a general partner, click here. You can read more about CPI Capital at   https://www.cpicapital.ca/.

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Watch the episode here

 

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Important Links

• Scott Kidd
• Yachtie Real Estate Investors Meetup
• The Go-Giver
• The Go-Giver Leader
• The Go-Giver Sell More
• Invest With Scott Kidd – Free Gift

 

Navigating Apartment Investing With Yacht Captain Scott Kidd

We’re excited about the show.

Our guest is a yacht captain. A lot of people call it a sailboat, like the similar ones we have back there. They call it yachts. We’re talking about luxury, one of these insane yachts that you see on TV. I had the pleasure of being one of those yachts years ago.

How was it?

It was incredible. It was a different level.

I believe you told me a story you had that you asked for breakfast and anything he wanted. He was ready to go.

 

 

I’ll tell you a quick story. I was invited to go on this yacht. I was asked to fly out to London. I flew out to London. We jumped in this motorcade of these cars. It was an airport, but it was a private entrance in the airport. I’d never been to the private side. You don’t go through where everybody else is going through. We jumped on a private jet and flew to a city in Southern France called Perpignan. From there, we boarded this yacht called Fathom. I was given my own quarters, my own room, and it’s nice. I had an actual window. You can see the water right there.

We sailed to Ibiza and spent eight days there. I remember waking up in the morning, I was an early riser, and I woke up and one of the staff came up to me and said, “You can’t wear shoes on a yacht. It’s a teak wood on the floor, so you can’t wear shoes.” The girl came up and she was like, “Would you like some breakfast?” I’m like, “Sure. Do you have a menu that I can have a look at? What would you like?” They’re like, “We make whatever you want.” I’m like, “I want some pancakes with blueberries. I want some basted eggs.” It’s not a problem at all. She made breakfast for us, a couple of jet skis. There was the tender that we could take anywhere we wanted at our disposal.

Luxury experience.

It was incredible. Every time we left the room, the room got touched up. It wasn’t once a day. It was every time we left. It was a truly incredible experience. Other yachts came when we would dock. We went to this little island. I have a gold bracelet from their island, which is an island close to Ibiza called Formentera. I remember having this fish that was under the salt. It’s the way that the Spanish do it.

All the yachts that were there would meet and talk to each other. They are friends. They are on each other yachts. The eight days that I got to experience, it was a part of these rich and famous lives. It was in early August that I went on the yacht. The following week, everybody was going to the Formula 1 in Monaco. Everybody was going there. It was truly an incredible experience.

He took his yacht from one after.

The yacht would go there, but he didn’t spend all year there. I’m saying that these festivities continue all year long, and billionaires and wealthy people come and join as they can. There’s this circuit that they go to all these top events around the world. Our guest is going to shed some light on the world of yachts and real estate investing and how those two worlds can and are merging. Maybe you can tell our readers a little bit about our guests.

We’re joined by Scott Kidd. Scott is a licensed USCG Master with over 25 years of maritime experience, specializing in new builds, refits and yacht management. His expertise spans IT mechanics and heavy equipment. He has cruised globally, including the Mediterranean, Gulf Coast, Great Lakes and the South China Sea. Scott is a Legacy Mentor and Multifamily Real Estate Investor in several states and runs the Yachtie Real Estate Investors Meetup group in Florida. Welcome to the show, Scott. We’re happy to have you here.

Welcome to the show.

Thank you so much for having me. I’m happy to be here. It’s my pleasure. I always love catching up with people and talking about multifamily real estate and boats. I could sit here and talk all day. My wife and my kids sometimes have to shut me down.

We’re here to know the story.

Let’s start off by telling us a little bit more about your background and then how you got your start in real estate.

I’ve been doing yachts for many years. It came to fruition because I was in the IT business before, and I was forced to close down. I got laid off. It was part of the boom-bust in Austin, Texas. I was back in Jamaica, where I’m originally from. My dad is Jamaican. My mom is American. I was back there. After we closed the business, I was doing some things. A friend of a friend asked me if I wanted to work on a yacht at the Fort Lauderdale Boat Show. He asked me if I knew anything about boats, and I said, “No, not at all.”

I was in the negative there financially. I said, “I’ll give it a shot.” He said, “Just get here.” I borrowed the money for the ticket. My friend gave me some money and put some cash in my pocket. I landed with about $20 to Fort Lauderdale. I didn’t know anybody in Fort Lauderdale, but I never looked back because it ended up being a passion for me and I love it.

That ended up with a wife, kids, family and everything. It provided a great lifestyle and family-oriented finance and everything for my family. It’s grown into opportunities in multifamily real estate, which happened many years later. A friend of a friend and I were at the beach having some cocktails, and he told me that had bought and sold a 46-unit apartment building in Houston, Texas.

He had made a large sum of money. He only did it in a few years. I said, “You can do that.” He said, “Yeah, you can do it. Anybody can do it. I did and so can you.” It was my light bulb moment because, like a lot of people, I bought my first house for our family. Our family was getting bigger, and we bought another house, rented that one, then went from there. Flash forward ma

ny years later, I didn’t know that these options and opportunities were available in multifamily real estate and commercial real estate. Even though I had worked as a captain for a guy who was a real estate developer, I thought it was wealthy individuals inviting each other into these deals and putting them together, which still works that way in some ways.

Historically, it was like that before the JOBS Act. It was more for a selected view. It wasn’t to the masses. You didn’t have the Grant Cardone of the world talking online and raising hundreds of millions of dollars.

The 2012 JOBS Act was great. I wouldn’t be doing what I’m doing without it, and even nowadays, there are still a lot of deals that are invite-only. A lot more deals are becoming more open to the public and available, and people can learn so much. I learned so much about all of this by a lot of word-of-mouth networking and

 

Every 506(b) deal is an invite-only deal, technically.

It’s who you know and what people know you for it. It’s been a blessing because the sky is the limit. There are so many things. I’ve met many people who are doing many great things from being on the yachts. I didn’t know that was a career. I didn’t know multifamily, that I could get into it.

The Yacht Industry And Lifestyle

Talk about your acumen when you’re told by a friend that the option of the yacht has nothing to do with being a captain, but it seems like you work your way up the ladder to get to that position. Talk touch on that a bit. In the same way, you pursue real estate investing, multifamily syndication, and real estate and private equity. It seems like you’re a guy who finds an industry and then works his way to learn about it and be successful in it. Talk to us about your successful yacht world.

That’s very much the way it is. I was lucky enough, that the first person I worked for was a great mentor of mine. He showed me all the ropes with everything and taught me all about the charter business yachts and introduced me to a lot of people. I was trial by fire and had to learn by doing. I made a lot of mistakes, but I learned from them.

One thing that I always say if I were to do it over again, when I was younger, I wish I would’ve failed faster that way. I’ve learned more and learned quicker.” It was the same thing with multifamily real estate. You don’t know what you don’t know, but until you’re exposed to that person, deal, or something, you may not have known that that’s how it works.

I did a lot of research and I’m constantly researching. As you know, in any business, you have to be informed and know what the market is doing. Real estate is local and specific, and you have to drill down heavily into the area you’re working on. You have to get there first. Speed of execution is very important.

The thing that’s helped me a lot from the yachts is every one of these wealthy individuals we work for wants everything done yesterday. That’s the speed that we need. We need to anticipate what they need and what they want before they even think of it. If they need it, we need to anticipate and make sure it gets done. That’s been very helpful. Especially in multifamily, you have to try and see what’s going to happen and be very proactive. There are things that you’re not going to anticipate, but if something happens, you need to be able to execute quickly.

I’m wondering, what year did you become a yacht captain? I believe you’re still a yacht captain. What year did you pivot into multifamily when you had that conversation with your friend there?

I became a captain in 2002. I started in 2000 professionally on the yachts, then in multifamily real estate, it was roughly 2020, a little bit before, maybe late 2019. That’s roughly the timeline.

I want to touch on a point. You’re on these yachts. You have these mega-rich clients there, and they all come from different, I’m totally guessing, but diverse backgrounds, and they’ve made their riches in different industries. Having been curious about how your clients have made their riches, what was it about multifamily or real estate that was the roadmap to success that you decided to go down on and not any of the other things these people had done?

The main thing I understood was real estate because I had to have a place to live, especially a multifamily. I saw it being attainable mainly because my friend did it, and he told me, “You can do it too.” Everyone needs to live somewhere. There are so many government programs that support multifamily, unlike any other commercial real estate. I’m still a yacht captain. I’m in New York on the boat. All of these people, a lot of things that have made them wealthy, not necessarily the business. What I’ve noticed a lot of times is that they found a niche.

They focus on one thing. They’re very compulsive and obsessive, and things that we would probably say, “Tomorrow’s another day. We’ll tackle it tomorrow.” They will stop at nothing to solve that problem. They will keep going. They’re very quite tenacious in spirit because it’s going to bug them. They’re not going to sleep anyway until they solve this problem or get this done. I’ve found that that’s a very common trait with a lot of these guys.

Being a yacht captain, you’re surrounded by wealthy people. In a multifamily, we partner with accredited investors a lot of the time. We’re always on the lookout to meet high net-worth investors and so forth. Do you ever find yourself having conversations with the people you meet and talking to them about your business and them possibly being intrigued? I’m curious about that.

Sometimes, but usually, the people that are the clientele or owners of the yachts. It is similar to a family office or a private equity group. They have a group or those guys.

Investment committee.

They’re not necessarily the ones who make the call on that. They might have Mike over there in charge of their family office. It does come up sometimes. The guy who gave me my first captain’s job was a real estate guy. He talked to me extensively about real estate and how he did it. He’s since passed on, but he is a great guy. He gave me some advice on buying my first house and stuff like that.

Grant Cordone says that it is the biggest mistake to buy your first house where literally the middle class of US and Canada who built these two countries have done it by buying their primary residence and having most of their money.

I wanted to pay for my own house. Grant Cordone has his way. He’s probably got a multitude of revenue streams that can cover his rent wherever he wants to live. It’s easy for him to say that. For me, I’ve started a young family. I grew up, “You buy your house, you don’t rent.” It did springboard me to, “I bought that one and moved into another one.” It helped me progress along the way. I wouldn’t have had the money to get into mult multifamily had I not bought those.

Not only you, but I’m talking about two generations in the US and Canada that I’m very familiar with have made, not only money for themselves but also their children and grandchildren because they bought their primary residents.

You look at any time anything goes bad or anything happens, it’s the people who own the assets that generally can ride the wave out of there. If you don’t, you’re stuck, succumbed to the large inflation and everything else. If you look at a couple of hundred years ago, the people that were deemed to be wealthy were the landowners.

 

They always are. A couple of quick questions for our readers to get a better understanding of somewhat rapid-fire questions. As far as the yacht industry, we want to have a better understanding. When you get hired, do you get hired for one particular boat, or do you get hired by an agency that puts you as a temp captain on multiple boats? How does it work?

It depends on the job details and the job description. You have private yachts that are strictly private where you work for one family, and then you have charter boats that are possibly like the one that you were on that possibly chartered for the week or two?

The family-owned one that I have was the Chatwal family. We are good friends from New York. They were a hotel magnet. They are selling most of their hotels now, including my good friend Vikram. They were in a hotel business anyway, so they would charter the yacht out. They were breaking even. It wasn’t a profit machine.

That’s a little-known thing that most of the public doesn’t know. They think the yacht goes out for $4 million or $5 million a week. You think, “It’s a lot of money. It’s going to make some money,” but the carrying costs are so high. Generally, you are lucky if you make 30% to 50% of the annual costs. You generally offset maybe the cruise salaries or something like that. Generally, the yachts are potentially a write-off or something for that person. The person who is a billionaire might only use it for a couple of weeks a year. It’s more useful for them to keep it moving because if it just sits there, it’s going to deteriorate. A boat, like a lot of things, if you don’t use it, you lose it.

If a yacht just sits idle, it will deteriorate. Like many things, disuse leads to decline. Share on X

If you did get a job with a family and you’re sailing for them when they have it, I’m guessing you would also sail when they’re chartering it. Does a captain stick with that boat in most cases?

Generally, it’s a full-time operation. It’s a 24/7 operation. In the program I’m on now, there are two of us captains. We rotate 6 weeks on and 6 weeks off because when they purchased this one a couple of years ago, we went straight up to New England, the Caribbean, then we went to Florida, and then up to Alaska  in2023 and now we’re back East Coast with Florida, Bahamas. We’re up in New York and New England. We haven’t stopped. That’s why there are two of us. We manage everything from soup to nuts. There are 2 chefs, 2 engineers and multiple crew because those positions are in high demand so they have to rotate as well.

When you start looking at all the little nuances and everything, a lot of money goes into it. It’s a large loss for this particular client. It’s generally, “Do you want to spend it on your boat and have a good time or do you want to spend it on taxes?” It has to be a passion for someone because it’s a very small percentage and it’s a very unique industry.

In some more context, just to get an idea. If you are chartering, let’s say, a six-bedroom yacht in the Mediterranean for a week, what does it cost for something like that? It doesn’t have to be a mega yacht.

Let’s say, 150 or 200 feet, or something like this.

The Fathom yacht.

That one is bigger. It’s a 200-foot yard. You could be looking anywhere from 500,000 Euros to 1 million Euros a week, depending on the build or style of the boat, but possibly more, up to 2 million Euros, depending on the vessel.

That’s all in. Is that for the crew, gas, and everything?

No, that’s just for the boat. The fuel, the dockage, or whatever you’re having, your food and drinks, and whatever excursions and stuff like that. Let’s say it was $1 million a week. They have what they call an APA, which is an Advanced Provisioning Allowance, which nowadays is about 30%. That would be an additional $300,000 that would cover the fuel, dockage, food and drinks, and any other incidentals you might spend while there. Possibly, other charges for internet, depending on where you are in that area might be an upcharge.

That is a lot of money.

In addition to that, you’re looking at usually 15% to 20% gratuity for the crew.

Let us ask you a follow-up question here. When you could afford to have your own yacht, would you own one? Is this something that a lot of people are in a certain industry? Would you buy your own yacht?

I would not because I know how much goes into it. My wife is a charter broker, and I want to keep her working.

If you are going to buy a yacht, what yacht would it be? What’s your favorite yacht that

Mine would be a Feadship, without a doubt, built in the Netherlands. It’s a great group of guys that build yachts all around the Netherlands. They’ve done very well by me because I’ve run one before. They’re very helpful and they support their product. They build high quality, and they support their product after. There’s nothing you couldn’t call them about. They’ll give you a multitude of product support. It’s also a chance to go to the Netherlands. One of my things before I hang it up is that I want to build one, like the one behind me there. I want to build one like that as a project manager and run it for a little bit.

Being part of the crew sounds quite desirable, but it’s probably a lot of work because you have to go to all these locations and stuff.

Not for the captain.

I’m the dad, the brother and the manager. Like they say, the problems go up and downhill. I have to deal with everything all day. Mine is more of a mental game. When we’re on charter and stuff, sometimes we’re at eighteen hours a day.

Transitioning From Yacht Captain To Real Estate Investor

Let’s switch the conversation back to multifamily and a bit more investing. Multifamily, a friend of you told you about it, you get involved, do you ever get mentoring and coaching in the process?

Yes, I got some mentoring. Now, I’ve done quite a few different mentorships and coaching. I did some personal development and business coaching, which I joined back onto another group coaching by the same coach, Dr. Jamil. He is a great guy. I do coaching also with the Multifamily Octane group. I belong to a bunch of masterminds, RaiseMasters, Fund Launch, and Michael Blank. It gets better and better in putting yourself around all these people.

That’s a bit costly.

It can be, but it could put you into the next deal that covers all of it or at least for me, sometimes I didn’t find that deal, but it made me realize how much more I had to learn and how much more there is out there. Many people doing many amazing things. I’ve never been a pessimist. I’ve always been a very positive person because what other choice do you have? If you have an issue, you’re going to lay in bed all day, or are you going to get up and get after it?

There is so much more out there, and people are doing so many amazing things. Share on X

Being part of the coaching programs is great because, obviously, if you’re looking for deals, you can find deals. If you’re looking for a partner, usually the coaches help you find a partner, but I was going to ask you, other than coaching, when you first got into multifamily, did you decide to start by investing as a limited partner, as a passive investor first?

Yes. My coach is Tate Siemer. I was working full-time on a yacht. I said, “I want to be a GP, this and that.” I spoke to probably twelve different syndicators, and all of them immediately went into about the deal and this and that. He was the only one who said, “You have to make sure that it’s right for you to learn faster. You may want to become a limited partner to where you can see how everything works and then be asked to be involved.” I ended up investing with him because he said, “I don’t have to be involved in all of those things and I can oversee and see what’s happening and learn.

It did help me a lot because I understood how all the learned what the legal documents are. I learned what expectations are as an investor. I’ve invested in more. As far as my portfolio, I plan to be a co-GP and an LP, get a little bit more of those and build my own smaller multifamily personal portfolio. I’m starting a fund now. I have all those together to where they’ll keep feeding each other. One matures, and we spread it to the rest of them. That’s my long-term strategy because everything’s a long-term strategy.

Building A Multifamily Real Estate Investment Fund

Let’s talk about your vision long-term vision. You talked about the somewhat diversifying around the structure you use to be involved in deals. LP, co-GP fund, is the long-term vision for your attention and focus to be around a fully functioning multifamily private equity firm where you’re acquiring deals, managing deals and have a gazillion employees. Is it more about being cherry-picking the best groups to partner with, be more opportunistic and versatile? What does it look like to you?

Long-term for me, it is because I started focusing on raising capital and investor relations. Long-term, for me, it is building out the fund and partnering with great sponsors. Although I can analyze deals hundreds or probably in the thousands, my skillset aligns more with investor relations, capital raising, and the fund structure. I already have developed a lot of these relationships with great sponsors that I know and trust. That way, I can be a part of the vetting process and help a lot of my investors and other people I know learn more about it and help them know that these options are available.

If it’s my fund, for me with my own money, I understand the risk. I’ll take it. I hope that’s not the strategy, but if I lose, I know the risk. If it’s the investor’s money, I’m much more meticulous, much more careful. I don’t want them to lose anything because I wouldn’t sleep at night.

To touch on that for our readers, when you talk about this concept of creating a fund and looking for sponsors to partner with, is you create your own fund and then investors invest into your fund then you as the fiduciary pick and choose different sponsors, meaning people who put deals together, a multifamily operator to invest with, or even other asset classes. You decide where to invest and you can be somewhat versatile.

I want to mention that pension funds. People manage everybody’s pension, family offices, university endowments and sovereign wealth funds. They do the exact same model. They have a fund, and they find operators with whom they partner. Blackstone has done that as well. Now they’re a bit more involved on the operational side when it comes to real estate, but they also partner with larger sponsors.

This is not an idea that Scott has created; this idea of allowing investors in his circle of influence to have exposure to multifamily deals is not just an investor seeing something on social media and investing with a first guy. Scott dedicates his time to vetting multiple sponsors, knowing the good, the bad, and the ugly in the background, and seeing who the right group to partner with is, which makes the best investment possible for his investors. I wanted to touch on that.

Keep in mind, at CPI Capital, that’s not the model we utilize. It’s our own deals, and we look for partners like yourself. I would say that you have a competitive advantage over us because as we are focused on our market, which is the Florida market, Tampa, Jacksonville, East Coast and what have you, we’re hyper-focused there.

The market might slow down, and rents might be coming down and what have you. The economy might slow down, but with you, you can pivot. You can go and invest with somebody else in Texas, or you can invest with somebody else in Arizona, and so on. It’s a better model for the end user investor to have a fund manager, a feeder fund manager or a boutique private equity manager looking after their funds through the process that you talk about.

They can have a diversified portfolio.

It’s great that you mentioned that because a lot of people don’t understand that this is the same thing, like their self-directed IRA or their IRA that they’re doing. They have with their pension fund or 401(k), they have a guy that manages that. They’re in charge of that. They can choose where the stuff goes, depending on how it’s all structured. A lot of them don’t know that they can invest in multifamily real estate. It’s by a lot of the fund managers that deal with the stocks and everything else. They don’t push that because once the money leaves that fund, it’s outside of there and they don’t get any fees off of it. It’s not under their control. It’s something that people need to know, and they should keep in mind that there are other options. If you do a self-directed IRA, you can put it in whatever you want.

People need to keep in mind that there are other options. If you do a self-directed IRA, you can put it in whatever you want. Share on X

To add to that a bit more and sometimes investors think that, “If I’m investing with Scott and if Scott is investing with CPI or any other group, am I getting diluted?” Most times, Scott comes to us and says, “I’m bringing on a big check. I want better economics.” In some cases, Scott’s investors might even get better economics than CPI investors would get because of the power Scott has over. You have that leverage that the investors have. It’s not only access to many sponsors and how background knowledge about all of them and the industry knowledge is also the fact that you can do better for your investors going through.

It’s great that you mentioned that because a lot of people don’t understand. They’re like, “I can cut out the middleman.” you’re paying for expertise and you’re also paying for someone to negotiate on your behalf to get better returns, a better split and possibly a better long-term value for yourself. You’re also going to have options. You’re not just going to be into that one. You could potentially be into multiple in that fund. Exactly.

Thank you so much for that background. Hopefully, one day, as we do better here, we can charter a yacht and sail around the world with Scott.

You did promise me one of my birthdays coming up here that you would.

I’ll put you in touch with my wife and she’ll set it all up. We’ll meet at the dock and we’ll go have some fun. Amazing,

Let’s get to the next segment of our show.

It’s called the Ten Championship Rounds to Financial Freedom.  Are you ready?

I’m ready.

It’s just whatever comes top of mind. Here we go. First question, who’s been the most influential person in your life?

I would’ve to say my parents.

What is the number one book you would recommend?

The best book of recency is The Go-Giver.

I never heard of it before. What is it about?

There’s a whole series, The Go-Giver Leader and The Go-Giver Sell More. It’s about leading by giving and you’ll do better in life by adding value and giving. It’s in a story form about these multiple situations that the high-level business people are. It goes into some details and it makes you think that you have to be grateful and have gratitude. I’ve learned in my life that the more grateful I am, the more gratitude I have, the better my life gets and the more things come to me in multiple different ways I never even thought of.

Next question. If you had the opportunity to travel back in time, what advice would you give your younger self?

Fail faster.

Dave Chappelle talks about that. When he bombed in front of an audience, it was the best experience he ever got. The fear was then gone and he had to go back to the drawing board and do better. It was that failure that built him as a comedian. It’s fail faster. I 100% agree with that.

That’s the one that resonates with me the most.

Next question. What’s the best investment you’ve ever made?

We bought an 8-unit and we ended up going through the wringer there, but we ended up 3X in our money in 8 months.

What’s the worst investment you’ve ever made and what lessons did you learn from it?

I bought a shipping container and I shipped some stuff to Jamaica. We were buying and selling a few things, and it did not go well. The store that I partnered with got washed out. The container is still there, and I lost the money. It’s $20,000 or $30,000.

How much would you need in the bank to retire now? What’s your number?

I don’t know if I necessarily have a number, but I want to have a certain amount of income coming in cashflow. It’s not very much.

Passive income to live off of. If you could have dinner with someone dead or alive, who would it be?

I would say Bob Marley.

If you weren’t doing what you’re doing nowadays, what would you be doing now?

He’s a yacht captain and a real estate investor. Something above and beyond that, what would you be doing?

For me, I’d continue doing the same thing. I love being a yacht captain. I love real estate. I’m going to do both of them until I’m done.

There’s nothing else you’d rather do. Next question. Book smarts or street smarts.

Street smarts.

Last question. If you had $1 million in cash and you had to make one investment now, what would it be?

I would invest in a friend of mine’s debt fund.

Thank you so much. I appreciate it. Last thing here, what’s the best people can reach to you?

It’s InvestWithScottKidd.com/FreeGift for my Captain’s Pre-Departure Checklist for Apartment Investing.

Thank you so much for being here with us.

Thank you so much. I appreciate it.