In this conversation, Phil Boggia shares his journey from a career in federal law enforcement to becoming a full-time real estate investor. He discusses the lessons learned from his early investments, the importance of understanding cash flow versus equity, and how he evaluates sponsors and deals. Phil emphasizes the significance of building a network of trusted individuals in the investment community and shares insights on diversifying investment strategies across different asset classes. He also talks about his involvement with Accountable Equity and the unique culture of the organization.

From Law Enforcer to Full-Time LP: How Phil Boggia Created Financial Freedom

Pat Zingarella (00:00)

All right, Phil, thank you so much for joining us. Before we get started and before I hand it over to you to make introductions: Is your background as cool in real life as it is on your LinkedIn? I saw a series of roles before you were now, from US Marshal, Homeland Security, partner in a wine company, full-time LP. It seems pretty cool. Does that accurately represent your background?

Phil Boggia (00:24)

It's not as cool. Yeah, it's not as cool. I promise it's not like the movies, so I assure you it sounds cooler than it is.

Pat Zingarella (00:34)

That's awesome. Why don't you tell us a little bit about yourself before we get started, and then we can hop right into it.

Phil Boggia (00:39)

Yeah, so I was in federal law enforcement for 14 years. At the time, I had a supervisor who recommended Rich Dad Poor Dad. He was a real estate investor. In 2009, we were getting ready to be furloughed, and he said, "I don't care if we get furloughed because I make more money from rental income." That piqued my interest, so I read the book. Then I started buying small multifamily properties and just kind of went from there.

Pat Zingarella (01:09)

Yeah.

Phil Boggia (01:09)

And then eventually, I quit law enforcement about two and a half years ago and went into real estate full-time.

Pat Zingarella (01:16)

Nice, very nice. What was the journey like from the active investor to the LP investor?

Phil Boggia (01:25)

So, I started with a two-family and then eventually I went up to an eight-unit. During that time period, I invested in a syndication that was local to me in New Jersey. That's a funny story because I actually didn't fully understand it before I invested in it. I didn't even read the PPM. I just had a couple conversations, and the guy—

Pat Zingarella (01:45)

I'm hearing that quite a bit lately.

Phil Boggia (01:52)

The last conversation we had, he said to me, "You know, I'm excited to start putting some checks in your pocket." So I said, "Okay, great." I didn't realize there was zero cash flow for the first two years because it was this value-add multifamily product. I got in, and that was totally lost on me. In retrospect, that's so stupid, but that's the way it goes. It ended up being fine, but yeah.

Pat Zingarella (02:03)

Jeez. It happens a lot. A lot of people, especially a couple of years back, it was mainly like, "Hey, sure. This sounds good. Real estate goes up. I'm in." No, that's cool. So your portfolio now, what is the balance? Are you still doing the active stuff, or are you strictly investing in syndications?

Phil Boggia (02:24)

So, I'm strictly investing in syndications now. 100% of my income is from LP investments. I have some in real estate—just different asset classes, mobile home parks, multifamily—then I'm in some private credit and some private equity. That's just kind of how I have it chopped up now.

Pat Zingarella (02:54)

Yeah, good stuff. And how is it performing across asset classes?

Phil Boggia (02:58)

The multifamily deals I'm in, I invested in 2020. That was supposed to be a three-year hold and the exit cap rate was like a five-cap in the worst neighborhood. We're going to be okay because we're going to achieve the same results just through a sale. The sponsor did a great job; he's actually a really good guy. The market completely turned on him, but luckily his underwriting was good enough to where we'll get out of this okay. And then the private credit stuff, that's very steady for me. That's kind of like my baseline cash flow income. Then private equity stuff is all doing very well, thankfully.

Pat Zingarella (03:37)

And the private credit stuff, is that something that you've been investing in? I feel like it's becoming more mainstream now. Is that a newer pursuit, or what's your thought there?

Phil Boggia (03:45)

For me, it's new, yeah. I never really heard about it. I mean, I've read about debt funds and this and that, but I liked it because, obviously, there's no upside to it, but the steady cash flow is what I needed just because I had left my job. That's why it was interesting to me.

Pat Zingarella (04:04)

Yeah, sure. It makes a ton of sense. So what you're pursuing now, are you still making placements? What are you looking at moving forward?

Phil Boggia (04:16)

Yeah, so moving forward—that's a good question. I'm trying to figure that out now, but I'm looking to diversify across more CRE sectors. I currently don't have any exposure to industrial, so I'm interested in that. There are some sponsors I'm with now that I really like that I'm considering leaning a little bit more into. I'm always looking, I'm always reviewing deals, and I'm always open to hearing people's experiences.

Pat Zingarella (04:48)

Yeah, great stuff. Your progression from the first syndication, right—didn't read the PPM, didn't realize value-add was delayed cash flow—to where you are now: walk us through that journey. How did you progress past that? Lessons learned along the way?

Phil Boggia (05:08)

Yeah, so I ended up leaning really hard on people that I know were already invested in private placements. I learned a lot just through that. I'm not the kind of guy that digs through PPMs and reads them line by line and tries to understand. I mean, I do read the PPM, but I really lean on people that are a lot smarter than me that I really trust. Just hearing who they were investing with, what they look for, what they look at—that was all very helpful for evaluating my own deals.

I didn't particularly like owning real estate. Even as I went from small multifamily to single-tenant net lease because I thought that would be more hands-off, it was still... I had a small shopping center and a code official wrote me a violation because an 18-wheeler was parked there. Or we got sued by the school board because they want our taxes to be higher. During that time, I was still investing in private placements, and those deals were doing better than my active deals. For me, it just didn't make sense to keep doing things directly when I could just place that capital with sponsors that were smarter than me.

Pat Zingarella (06:22)

Yeah, for sure. You mentioned you lean on a lot of people you trust. One of the biggest things I hear from LPs is the difficulty of connecting with other LPs. How did you find those individuals? Were they already in your network, or what do you recommend people do to find that support system?

Phil Boggia (06:42)

So the group that I am with now—everybody that works for them at Accountable Equity, they're also investors. They are investors with Accountable Equity, but then they're also LPs in other deals. So we're always talking about where you have your money and what's performing well for you. Because nobody thinks that you should have all your money with one sponsor. That's huge for me because I just like bouncing ideas off them. And then as I start going to these meetups, you start meeting people and you hear about what they're doing. I'm not just saying this because I'm on your podcast, but if I hear about a sponsor, I go to Invest Clearly to see if they have a profile, just because I like seeing what people have to say and the reviews. That's what's helpful.

Pat Zingarella (07:35)

That's great to hear. It's funny; everyone always leads with, "Oh, you're not paying me to say this," and then says it. That's awesome. In terms of your deal flow, what does that look like? You mentioned you're looking at a lot of deals on a regular basis. Where is that coming from for you?

Phil Boggia (07:39)

So for me, I sign up for ads or I'll just click on a website, fill out the form, get added to the distro list, and just start looking at them like that. And then I think, however I end up on these lists, other deals just start finding me that way. That's how I review deals, really.

Pat Zingarella (08:32)

Sure. Do you have immediate red flag markers or green flag markers? How are you evaluating them quickly to know if it's worth your time?

Phil Boggia (08:46)

Since I live off this income, I'm hyper-focused on cash flow right now. I want equity growth, but in-place cash flow is important to me. So that's number one. I'm not really interested in ground-up development or something like that right now. As far as red flags, I'm not investing in first-time sponsors, generally. I'm looking at multiple market cycles, ideally back to the early 2000s or even the 90s.

I also like to hear that deals went bad for them. I'd like to hear that things didn't work out, and I just want to know what they learned from that or how they pivoted. But also for deals that don't work out—for example, if you only returned 80% of LP capital but you took a disposition fee, I don't love that. Things like that, you know what I mean? That's just kind of what I'm always looking at.

Pat Zingarella (09:51)

Yeah, sure. I'd like to dive a little more into the fact that you are living off this full-time. Most people are doing this on the side or building up toward that. What was it like for you making the decision early that it was cash flow over equity? What advice do you have for someone working a W-2 who wants to invest until it covers their income?

Phil Boggia (10:36)

When I first started out, I thought I was going to be buying duplexes in bad neighborhoods for the rest of my life. I thought that was the holy grail of investing. There have been a lot of mini pivots along the way, but I always knew that ultimately I wanted to quit my job. It's hard for me to give advice because there are so many variables. It took me 10 years of banging my head against the wall—buying these small properties, collecting the rents, dealing with all the issues, obsessively focused on harvesting the equity, reinvesting cash flow, and just slowly getting toward that goal of financial freedom.

Eventually, for me, that was diversifying across the pie. That's ultimately what I came to when I realized I didn't want to be owning properties myself. I guess I would say you really just need to figure out your risk tolerance. Do you want to do this yourself? Do you want to be in LP equity, or a mixture of both? For me, I couldn't find stable cash flow by owning multifamily. One month was great, then it wasn't. To leave a job and depend on that was something I couldn't do. I needed to put together enough capital to where private credit was very helpful because it was steady, then equity investments with cash flow, and then more equity growth focused investments. That's kind of what I'm always doing every six months.

Pat Zingarella (12:34)

Was that a work in progress, or did you put the paper down and say, "This is the plan"?

Phil Boggia (12:56)

Totally learn and adapt. It was just seeing what worked and thinking, "Oh, I'm going to lean into this a little bit more." It definitely wasn't like, "Hey, this is the roadmap." Like I said, I thought I was going to be buying two-families the rest of my life. You start to learn as you talk to people and learn different ways of looking at things. You don't really know where you're going to end up; you just have to keep pivoting and then you figure out where you want to be.

Pat Zingarella (13:26)

Yeah, very cool. You mentioned that you've got this network around you. Invest Clearly is all built around trust with GPs. What are your true "trust signals" when you're underwriting a deal?

Phil Boggia (14:07)

I think the way sponsors responded in really hard times is very telling for how they view LPs and LP money. It all goes back to the sponsor. My example of taking a disposition fee and not returning 100% LP capital is just one example of a sponsor that, in my opinion, is not really looking out for LPs. I'd really like to hear from sponsors about past deals that didn't go perfectly and how they handled that and what the net return was for LPs. That's really big for me.

Pat Zingarella (15:05)

How do you differentiate between what I like to call a "contextualized track record"—was it the market, or was it the operator? Does that matter to you?

Phil Boggia (15:38)

If all of their full-cycle deals were during that multifamily run-up, obviously that is a bit of an anomaly because everybody did well in multifamily during those times. I'm one of them. Everything that I bought from 2015 up until 2021 just went up. I didn't have any brilliant value-add plan; I just bought it, waited, and I got lucky enough to where it just went up in value. If a sponsor's whole track record is that, that's not very valuable to me, which is why I like to see multiple market cycles and how those deals performed.

Pat Zingarella (16:02)

Yeah, for sure. You're going to start looking at industrial. Do you underwrite asset classes differently?

Phil Boggia (16:53)

Definitely. From what I understand, this idea of on-shoring and certain manufacturing sectors having more demand now seems to be a tailwind for industrial. So that's what's interesting to me. In the multifamily space or mobile home parks, the demand for affordable housing is still a problem and that seems like a growing sector. So yes, it's very different the way I analyze certain things. That seems to be where the data is.

Pat Zingarella (17:39)

Awesome. You mentioned Accountable Equity. You recently got involved with them. What is your role and what made you decide to start working with them?

Phil Boggia (17:50)

Yeah, so I had listened to the CEO Josh McCallen's podcast when I was in law enforcement years ago. Eventually, when I started looking at private placements, Accountable Equity had come up, so I started investing with them. Then they put on these investor events called "Learn and Grow" at each resort—it's mostly in the hospitality sector. I went, I met Josh, I met the whole team, and I really fell in love with their whole culture and the way they do everything. I just asked to get involved, started helping them for free, and eventually, I am now part of their team. I just think the way they handle things was very rare in this space.

Pat Zingarella (18:46)

Yeah, that's pretty cool. It seems like a pretty unique niche that you guys have carved out.

Phil Boggia (18:55)

Yeah, it's definitely interesting. The debt fund I'm in is with them. I usually have a rule about how much I allocate toward one sponsor, and I broke that rule with them just because I liked them so much.

Pat Zingarella (19:17)

What is that rule? I'd love to hear about that.

Phil Boggia (19:36)

Well, I wouldn't say it's a set percentage, but I'm just aware of how much is allocated toward one sponsor. If one sponsorship gets into trouble, I don't want the whole ship to go down with them.

Pat Zingarella (19:50)

Yeah. Something to pay attention to, pretty much. Are you looking for new sponsors constantly, or are you looking to reinvest with the ones you have?

Phil Boggia (20:21)

I'm not super interested in new GPs. If you have a W-2 income and you're investing on the side, that might make more sense to find an emerging GP that you can do really well with. For me, that's not the case. There's brokers that reach out to me all the time like, "I've been a broker for five years and I have this great idea to buy value-add multifamily in Texas." I'm not interested in that. I like track records, ideally audited financials, and a whole bunch of people I can talk to that have invested with them. That's what I like to see because it's my livelihood.

Pat Zingarella (21:14)

For sure. I want to ask you the one question I ask in every podcast: What part of passive investing do you think needs to die?

Phil Boggia (21:55)

I would say there's a lot of influencers in this space that say, "Buy my course, come to my seminar, become financially free through LP investing." I think the point that gets missed is you need a significant amount of capital to deploy to be able to live off that yield responsibly. However you come into that money—selling a business, the lottery, inheritance, or taking 10 years of buying properties and banging your head against the wall—it's not that easy. You're not going to buy a course, invest a couple hundred thousand, and become financially free. It's way more complicated than that. If I can do it, anybody can do it, but it's not easy.

Pat Zingarella (22:51)

You have to be able to measure risk and make the right decisions. Marketing is not bad, but there's a threshold where you relinquish ownership and accountability because you believe someone, and then you get beat up. It is possible to be financially free, but there's a path to it and it's difficult mentally.

Phil Boggia (23:54)

Yeah, there were weeks where I'd say, "This doesn't make any sense, this doesn't work. What am I doing?" Even when I left my job, it wasn't easy. I've got three kids. Nothing's easy.

Pat Zingarella (24:11)

Definitely not. Last question: On your LinkedIn, you are a partner in a wine company as well. Is that accurate?

Phil Boggia (24:22)

Yes, we're partners. The wine is actually produced by one of Accountable Equity's properties at Bohemia Manor Farm. The person I'm partnered with is someone named Anthony Arrolada, who's relatively well known in his genre. We had crossed paths in our previous lives—me in law enforcement and him in what he was doing—and we had the idea to form a line, and here we are.

Pat Zingarella (24:59)

That's awesome. Phil, thank you so much for joining me. It's been really great getting to know you on both the LP side and through Accountable Equity. If people want to get in touch with you, what's the best way?

Phil Boggia (25:21)

You can reach out to me on LinkedIn or you can email me at pboggia@accountableequity.com.

Pat Zingarella (25:29)

Great stuff, Phil, thank you so much.

Phil Boggia (25:31)

Yeah, thank you.