EP.18 // How Alternative Investment Strategy is Crucial to Achieving Financial Freedom w/ Jack Krupey
On today’s show we have the CEO and Founder of JKAM Alternative Investments: meet CEO and Investor Jack Krupey, out of sunny San Juan, Puerto Rico.
On today’s episode we have alternative fund manager Jack Krupey, CEO and Founder of JKAM Alternative Investments, live in our Newark studio after a flight up from San Juan, Puerto Rico. Jack talks about his journey from a corporate operator to full on entrepreneur, how learning about alternative tax strategies helps create the best scenario for freedom and flexibility, and how he always puts his money where his mouth is by investing his own capital into deals before bringing those deals to potential investors.
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Key Points from This Episode:
Jack quickly learned about Real Estate right after college. He read about the power of real estate, acquired his first property, and learned the ins and outs. Partnered with a private equity fund that was purchasing non-performing notes and loans.
After living under the aggressive taxes of New York, Jack began passively investing in multifamily syndications in order to get passive income that was tax deferments. He ended up building his first fund around where he was personally investing his money.
Jack left the job at the firm in order to pursue greater flexibility and to avoid the aggressive tax burden that came with living with New York. He began pursuing alternative tax strategy. Puerto Rico taxes its residents at a mere 4%
Jack’s competitive edge is using ingenious and creative tax structures for his clients. A wealth manager, CPA, and attorney create the proper team to give you the best tax strategies.
If you’re married and one spouse is a real estate professional, the couple’s income is taxed as Real Estate Professional. So if a doctor makes 3 million dollars annually and their spouse is a Real Estate Professional, you can hypothetically invest the entirety of your tax burden into property investment and take advantage of that depreciation to negate the tax burden.
In order to vet sponsors, Jack meets them in person, he’s joined three mastermind groups, and this allows him to thoroughly vet sponsors and those who have worked with them. He especially focuses on sponsors who have been through the 2008 market to have a considerable amount of experience. “History doesn’t repeat itself, but it does rhyme.”
Jack currently raises capital for his own fund by investing himself and using his personal network to friends, family, and those he meets at networking events. He loves 1 on 1 meetings with potential investors to show his plans and track record. Jack prefers to test deals out with his own money before recommending them to investors that he works with.
If you invest consistently and systematic with your investing you will statistically come out with growth. This is part of Jack’s strategy
Jack creates a diversified fund, for instance using 34+ assets in a single fund, in order to create a strong, diversified investment.
Jack’s morning routine includes a 45 minute walk outside on the beach while he listens to a business podcast or a book on Audible. Puerto Rico is often an hour ahead of EST, so he doesn’t have to wake up “ungodly early” to get a jump on the day!
Jack’s number one piece of advice is learning their personality; some people want to do the work, some people should focus on being passive! Know your goals; if you have an operational background, pursue more hands on deals, otherwise you should focus on the passive philosophy of investing.
Relevant Links from Today’s Episode:
ABOUT JACK KRUPEY
Jack Krupey has been investing in both real estate and distressed debt since 2001. He has built long term relationships with experienced real estate developers, sponsors, and syndicators over his 20 year career. Jack leveraged the 2008 financial crisis as part of a private equity fund that yielded impressive returns off of distressed and restructured debt. He repositioned properties as well as modified and restructured loans for borrowers.
In 2014, Jack entered into a partnership with a large private equity fund and led the asset management arm of the firm that made over 3 billion dollars in purchases of non-performing and re-performing mortgage debt between 2015 and 2019.
An entrepreneur by nature, Jack decided to start JK Asset Management to focus on alternative assets such as value-add multifamily real estate. He then launched the JKAM Diversified Real Estate Fund in September 2020 and is launching a 2nd Diversified Fund in 2022.
