ITF 64 | Alternative Investing


A good way to achieve passive income is to get into alternative investing. Maybe you know someone who’s interested in private equity. Or maybe you want to get into self-storage or some other form of real estate. There is a lot of ways to raise capital, you just need to form your network and build trust with them. Join your hosts Craig Curelop and Zeona McIntyre as they sit down with Dan Kryzanowski. Dan is a capital raiser, equity owner, and LP investor. Listen to how his journey into alternative investing started at a wedding. Find out how he got into private lending and self-storage. Learn the difference between a GP and an LP. And, know more about Rocket Dollar. Listen to today’s episode and start getting into alternative investing today!

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Earning A Passive Income Through Alternative Investing With Dan Kryzanowski

Z-Money, how are you doing?

I’m doing good. I’m feeling excited. What is new in your investment life? Do you have any investing news?

This 2021 was a year of stabilization for me in my investment space. I finished three rehabs. We’re about to get them all in and rented out. Once those are rented out, we can breathe for a minute and then look towards the greater pasture of the commercial which I’m excited about.

I’m excited about it too because you’re going to come back and teach us all these things. Everybody’s waiting.

What about you, Zee? Is there anything big and new in your life?

I was supposed to close on a beach house. I have Panama City Beach, Florida vacation rental. It’s going to be delayed. It was fun to have a new place and it’s also a fun and scary thing. I’m excited because I’ve always wanted to have a beach place and this is also the most expensive thing I’ve ever bought to date. Wish me luck.

Speaking of Panama City Beach, we’ve got an awesome guest, Dan Kryzanowski. He’s from Rocket Dollar. He’s got a cool story about he got into investing passively, raising money and then stepping away from raising to start Rocket Dollar. Now, he’s back to raising money. It’s cool how you can jump from thing to thing. That’s the glory of financial independence.

This is a high-level episode. He uses a lot of jargon and terms. You might have to go back and reread this one but it’s got good meat and bones in it. Take a read all the way to the end.

If you have any retirement money that you are looking to invest with, you don’t want it in the stock market and you want to invest in real estate with it, Rocket Dollar is a phenomenal platform to use. With that, let’s bring Dan on the show.

Dan, welcome to the show. Thank you so much for coming. I know we’ve seen each other every FinCon that I’ve been to. I’ve seen you there. I’ve talked to you at almost everyone but now we get to dive a little bit deeper into your story. Why don’t we take it back to when did you first hear about financial independence?

I was a co-best man in a wedding on the shortest and the coldest day in Staten Island history. It was chilly. As I was getting ready, the other gentlemen, we’re getting to know each other. I say, “What do you do for a living?” He says, “Flip houses.” I’m like, “Okay. What does that mean?” He said, “15%.” My ears perked up. He then said, “Did you know you can use your retirement dollars?” At that point, the whole beautiful world of alternative investing, tax-advantage and taking back control of everything completely opened up for me.

What year did you say this was?

I’d say 2013 or 2014.

It’s winter 2013 and spring 2014. You’re at this wedding and this guy tells you, “15%.” What does 15% mean? How did that register in your head?

I’ll step back a little bit. For me, a good inflection point was the year 2008. My math is simple. I graduated college in 2000. I turned 30 in 2008, the financial crisis. From here, much like some younger folks’ experience with COVID, you get a pretty good wake up to say, “What do I want to do with my time? How do I want to play life out?”

When investing, you should bet on the jockey, not the horse. Click To Tweet

At that point, in the middle of 2008, doing the reverse commute to a General Electric, a GE office in Connecticut was not where I wanted to spend my career. What used to irk me all the time is I’ve had these ideas and I still would read the Austin Business Journal. This is a good decade before everybody moved to Austin or Denver or any of these fun cities. I felt like I was in World War II and would get papers in the mail. I still subscribed to the Austin Business Journal.

I read all these amazing things and people I met the first time I lived in Austin. I’m like, “I got to get there.” I knew that folks have had successes based on whether it’s in real estate or otherwise. This was the backdrop. I dabbled in the equipment of crowdfunding before crowdfunding. A comedy tour is my first investment to create a tax write-off and not much else. This was the true light bulb moment that I was like, “Wow.” I did quick numbers in my head and said, “If I put $100,000 here, this might pay for my rent for a while.” Real simple, basic things and going through the hierarchy of needs of what you need in life. I said, “I can be in a pretty good spot pretty quickly.” That was my first step.

I love that you mentioned the hierarchy of needs. I want to highlight that part. Can you go into what that is because that’s something that we talk about a lot in the financial independence space?

I’ll talk personally. We can also go macro because my head and heart are so attached to it but we as a country, are all experiencing in the next especially decade. For my little situation is we have air that’s free and we drink water that’s free. I know that might change. Good food is getting more expensive but relatively not too expensive here in the middle-class and then shelter. After that, everything one way or another is a choice of what to do and when to do it. Some luxury experiences if you want them in a different place than where you are now. With that as a backdrop and on the other end of the bell curve somebody is taking some tax somewhere.

You’ve got to recognize that but in terms of the hierarchy of needs and some folks do fire as a minimalist but I view it as you have your liquid bucket and then you can also take advantage of a 60-plus bucket. If I live until 80, I knew that I had another 30 years in this bucket and then 20 years in another bucket to start planning things out, for what I want and what I might want to achieve.

I want to steer us back to the story. I want to know a little background of what were you doing as your job before you met this person. It sounds like 15% was a big number for you. Were you traditionally doing index funds and planning for about 7% or 8% after inflation?

I grew up on a trading floor. To give you a little context and this will resonate particularly with the 40 and over the crowd, the Gen X-ers and such. My dad was a high school principal. My mom was a social worker. They were both pensioned. Having a house and having a pension and everything stuck retirement with your typical 60/40 allocation that seemed okay was going to work for them. Even with me going to Wharton, coming out of it and working for Wall Street, it was still my mindset until about 2008 when it got shaken up a little bit.

From there, as I started to dabble in Alts, I realized this is where you could start thinking in terms of one multiple for your startup investments but then also double digits in terms of things such as real estate. That’s why when I looked at 15% of something, nothing is truly “guarantee,” but the gentleman that I did invest with, hasn’t missed a payment in twenty years to his investors. In my mind, I consider it pretty close.

He didn’t convince you to go in and start flipping houses. He wanted you to pay him to fund his flipping and he provided a 15% return.

I was his bank and he was a gentleman by age. He had the track record of folks from fellow peers to doctors, people in their retirement that was his bank. I thought that was awesome and to this day when I have spare change, he gets it.

This is note investing. People can look at it in many different ways, hard money or the note. You’re a private lender and he did a wonderful thing by dangling the carrot in front of you to get your money. This is a win-win scenario. You’re happy with 15%. He gets money to go make more money on his flips. The best thing about it is, “Do you know how to find off-market deals? Do you have a wealth of contractors and all that stuff?” Maybe you do but you don’t have to know that stuff because you can focus on what’s generating money for you while still earning a pretty good return on the side.

ITF 64 | Alternative Investing
Alternative Investing: The hierarchy of needs is air to breathe, water to drink, food to eat, and shelter. And then after that, everything in one way or another is a choice of what to do and when to do it.


I’d like to talk about the pros and cons of this position. For a lot of people, it sounds scary. It’s like, “You meet this guy and then you’re going to give him all your money and what happens if he runs off with it.” What I’ve heard from people that I know that take private money is that they value that relationship much that they will pay that person.

They’ll do everything they can to keep that relationship good. Even if the deal goes bad because they’ll need that person for other deals. You’re in a pretty good position unless it’s somebody who’s never done it before and they’re going to run away and never do it again. What are some of the pros and cons that you’ve experienced in that position?

We’ll call it a hard money lender. I’ve had with the gentleman who I referenced, it’s been a great experience as we both started families and stuff. As I say, relationships matter. This is a good one that we have. There was a time, I had the baby bliss. A friend somebody I trusted said, “This guy I know is flipping a house.” I’m like, “I know how this stuff works.” I went up and visited. It was a nice part of Austin. It looked done.

I thought, “Easy money, a three-month loan.” The 3 months became 6 months. I tried to play lawyer. That was a bad idea. I became very rich on paper because of late fees. I learned the hard way of when things don’t go well, how things can vary state by state. Long story short, I got $0.70 on the dollar but I call it my real-world MBA. I’m much happier that this was earlier on before you start writing six-figure checks for what is effectively hard money.

If I meet somebody at a party or something and they say 15%, I’m in the same situation you are in. What gave you the comfort to give this guy hundreds of thousands of dollars?

If you had a hashtag me, relationships matter is a good one. As I shared, he and I were co-best men in a wedding with somebody I grew up with that since I was 7, 8 years old trading baseball cards, grade school basketball and you name it. I consider who he would consider as his best man something of value. The rest of the wedding party might’ve been cousins and such.

With that alone, that was a huge checkmark. I was a big pain in the ass before I wrote that first check. The first check was $10,000. I wasn’t going all in. Now, raising capital, I’m on the flip side of that. Sometimes it’s like, “Here’s somebody calling again.” I respect that somebody says, “I want to give more money to fewer people and I want you to be one of those persons.” I was on the flip side of that several years ago. Now, to the point where I can text him, he can text me and then you get magic, he gets some money in the mail in a few months. The upfront work is paying off.

A lot of times people think that you have to dive in 100% but you can get your feet wet like $10,000 and see how it works out. If it doesn’t work out, you find someone else. I know I did a $10,000 loan to somebody who’s doing flipping here in Denver. I had to keep asking every month for the payments some months he would miss. It took him forever to get my principal back. I ended up getting paid back in full with all my interest paid and everything, even late fees but I’m not going to do another deal with him because I had to chase him down. I love that idea of getting the feet wet and then hopping out. This was back in 2013 when you first discovered this.

I want to know what happens next because this is how you heard about financial independence. Where did that click for you?

The 2000s was my corporate decade at Merrill Lynch and GE. This was my Austin decade and called the FinTech-real estate tech world. I’m still working from 9:00 to 5:00 for a majority of this. I was in self-storage and I know self-storage is a headline but trust me a decade ago, it wasn’t on target. I was the first guy with a little bit of gray hair to be the account manager and had the benefit to meet all the is all the CXOs, CEOs, COOs, CMOs in the world of self-storage.

You can have a million likes on Facebook but trust is what makes the money move. Click To Tweet

I realized this is going to build a pretty good lifestyle. I know storage itself. It’s not that complicated. It’s a box, one person works the front, people come in and out once a year and that’s it. That was the scene that I saw as, “This could be something for the long-term that could be a niche and could be valuable for me.” As anything though, I was a sponge. You go to these shows, you got to be pretty when you see your clients but I did a whole lot of listening for that year. Outside of the course, my company’s motto being champagne every day and do what you had to do.

You went from giving loans a 15% pretty passively to then jumping into a fairly active business, at least to set it up and all that into self-storage. You skipped the whole residential side. Did you go right into commercial?

For me as an investor or even as I was unconsciously raising capital, residential wasn’t of interest. I get the concept of flipping houses and there’s always going to be a piece of my portfolio and my money went towards that but it was never of interest to me. I like the commercial side. I will preface that during my time at General Electric, I was in the real estate business and other hybrid joint ventures that were effective in real estate. I’ve had more touchpoints with CRE than on the residential side.

What year was it when you decided to get into self-storage?

This was when I was in the ’13, ’14 when I funded the first flip.

The flip got your wheel spinning and then you looked at what you’re doing in your career and you’re like, “There’s some connection here. I could do this in my career and I could do it myself.” That is a connection that I’m seeing that you made up. Let’s talk a little bit about your first commercial deal or your first self-storage unit. How did you learn about this stuff? Was it through your job? Were there other podcasts or books you read? You mentioned before, it wasn’t mainstream like it is now.

This was before podcasts were common. It’s a great benefit. Now, shows are easy to get on. That means that you and Craig with your background on getting VIP access, being on stage, it becomes natural for us to talk with other speakers and learn. Coming in new especially when you’re a vendor in this space, not as much. I was a sponge. At these shows and once again, you are wining and dining clients, which is fine but I’ve had a lot of good deep, sit downs with people whether it’s a back of the napkin or however to show me, “Here’s how a cashflow model works. Here’s what you get for paying 6% of top-line revenue.”

We went into good details. People that I’ve learned to respect versus people that were more of a face or headliner. Those that I’ve learned to respect, I would seek them out at every show and we’d sit for coffee. They had books, the quick reads, the thin 1,000-page books. I would read all their books, bring it all in. One of my other light bulb moments. I remember it was cold so it was probably February of ’14 if I have my year right. Another big light bulb moment for me was learning about economic occupancy. Physical occupancy is pretty simple. If you have 100 units with 90% filled. You’re at 90% occupancy.

Economic, for folks that might seem like a tough term. It’s when people say if the three of us and Elon Musk, were on the call, what’s our average wealth. Our average is 10 trillion dogecoins or something like that. The median is whatever we have here. That was the background. Once I learned about economic occupancy, coincidentally, the two folks that met with me and we sat. It was a coffee that turned into six hours, became two good friends. These are folks at this time that I felt were the top operator and top marketers in storage.

Fast forward many years, the one gentleman had a tremendous nine-figure plus exit, in storage. Also, my friend in marketing has a tremendous client base and other successes. They talk about betting on the jockey, not the horse. I’ve got on some of the right jockeys of who I wanted to be along with for this ride and continue to learn from. It’s been a great almost decade-long relationship.

I know you’re a master networker. I see you at all these conferences and stuff. That’s where it starts. I know a lot of people hesitate to throw down $1,000 for a weekend in Orlando or wherever you’re going to go for a conference but that you get paid back in multiples if you meet the right person. It’s almost impossible not to meet somebody at these events unless you stay in your hotel room the whole time. I highly recommend that. Why don’t we jump into your first self-storage deal, how did you find it? How did you fund it? How did you what role did you play? How did you use your mentors in that role?

ITF 64 | Alternative Investing
Alternative Investing: In private money lending, you should do everything you can to keep that relationship good. Relationships really matter.


My buddy John Manes has Pinnacle Storage Properties. He went on his own in late 2015. It’s a unique step and right when John did it, “I’m like I’m in. I’m your first investor.” My wife saw the light of where this could go and she’s like, “I’m in.” I mentioned it to a few friends and it goes back to that credibility point. It’s what matters and people said, “I don’t know much about storage but I trust you on this.” Fast forward a few years, and they’ve all been happy. I always think what’s great is if your hobby becomes your livelihood, it’s exciting.

What I was doing very unconsciously at the time was building this muscle while still working full-time to evangelize something like storage. We talked about like and trust, you can have 100 likes, 1 million likes on Facebook but trust is when money moves. Knowing that I earned the trust of people and seeing my friends and other peers move money into this deal. I did not take it for granted. I didn’t even notice it. I think John and some others have. When we speak a few years down the road, I’d say, “The last five years, I had this great ability to raise capital consistently with a certain group of folks that I love to interact with, on a subset of my own self-storage.”

Did you guys set this up like syndication or something like that? Were you a general partner where you were bringing in the funding partners or the limited partners? Were you doing asset management where you were doing all the numbers in the background? How did that look?

I was not a GP. For folks that are coming through a GP, it’s good to date before you get fully married. On the first few deals some of the partners were figuring out, who became the ultimate partnership, which was on the deal too. For me, I always like to say once again, if you’re like a jockey, where can the success and the upside be? Our arrangement was on the backside. It wasn’t your very typical GP but it wasn’t this one and done find your upfront, which ended up being much more lucrative for me on the backend.

Can we do a quick description as to the differences between a GP and an LP?

LP is a limited partner. My one buddy says Ken Harris who runs our real estate Meetup here. He says, “When you’re an LP, you get to look at the paint on the wall. When you’re a GP, you get to choose the paint even if the building has paint.” As an LP, you write that check and you have to have faith when you wrote the check and that’s it though. You can sit back and relax and hopefully receive some payment back. As the GP, you’re the one doing the work, which like in any spirit of risk-return as a general partner, you would hope that you are getting a much greater return at the end of the day, which if you do a good job and you pick a good property, that can happen.

Is this a property that you guys are still in? Can you tell us the structure of the deal? What was the total capital raised or the cost of the purchase? What’s the life span been like?

This was property 1 of a portfolio of 10 to 20 properties that were sold. The pref was 10%, which made sense at the time. It wasn’t a stair-step. This was an existing property. We’re able to cashflow on day one. This one was either an 8% or 10%. I invest in a lot of early deals.

What does that mean? 8% or 10% pref?

Let’s say you invested $100,000 at an 8% pref that pays quarterly. Every quarter as an investor, as an LP, receives $2,000.

That’s 8% annualized for the quarter.

I also invested as an LP outside of the benefits of raising capital. Mine was in a Roth IRA, which is post-tax money. If you have confidence in your investing abilities, I would say it’s a fair consideration to pay taxes now on the little seed versus what the big tree may become. I made a conscious decision to do Roth conversions on certain cash amounts in my retirement. Once again, I have the benefit of being corporate for ten years having a real sizable 401(k).

Then I said, “I don’t know where the world’s going to be in 25 or 30 years. I don’t know what the tax rates are going to be. Plus, I’m pretty decent at investing especially in alts.” That’s where you get this multiple. Let me pay now, not in the future. Looking at that property alone, it was like a three X and change. For that little property alone, it was a good one.

When you're an LP, you get to look at the paint on the wall. When you're a GP, you get to choose whether or not the building will even have paint. Click To Tweet

Concurrently, I referenced my wife’s investments. What was nice was that come tax time, we received a K-1. When you were going to compare two deals, my one buddy, that flips houses, you got 15% or double digits or whatever it was at the time that you received 1099. Effectively come tax time, this is like your checking account, savings account or CD. As an LP where it’s a K-1 structure come tax time, there’s a lot of depreciation and benefits. Our simple example, that $100,000 got you $8,000, I believe. You would presume that taxes were probably close to zero for all those years.

The reason for that is because on these big commercial projects, oftentimes they do a cost segregation study. Is that the same for self-storage? Can you explain that a little bit?

Yonah Weiss, who I love and if you’re on LinkedIn and you haven’t seen Yonah then I don’t think you’re on LinkedIn. He is the cost seg king. There are many others out there that are tremendous professionals at costs seg. I would say you went to buy stuff especially if you have some foresight of the tax code when it may be wise to buy something in one year versus another. Depreciate it all in this year versus another recognizing bonus depreciation. I’m not a CPA and I don’t want to mislead but by knowing the certain property whether it’s a calendar year, what revenue do you expect? If you’re also doing value add or add-ons in the back, all of that can play into lowering what you have to pay in taxes.

I can try to give the layman’s level explanation of it. When you’re buying a massive commercial asset like a self-storage unit, a multifamily apartment or something like that, it can be in tens of millions of dollars. If the IRS says, “This asset worth $10 million is going to depreciate over 39 years.” For residential, it’s like 27.5 for commercial it’s 39.

On a typical basis, you would appreciate that, you would take that value divided by 39. What a cost segregation study does is it says, “The refrigerator probably won’t last 39 years. The carpets, windows, the rugs and all that won’t last 39 years.” An engineer will go in and say, “We’ll depreciate all the refrigerators over five years.” You get to take some of that depreciation and upfront pay it.

In a year where you’re maybe making, $500,000, you have $500,000 write-offs because of that accelerated depreciation on that big asset. A lot of people who have a lot of money go into syndications for this reason only, for the advantage and they buy one massive property a year. Maybe they put a couple of million dollars in it so they can get those depreciation benefits.

I don’t know if you ever hear Donald Trump or whoever talks about how he paid $750 in taxes. He legitimately only paid that because he has these massive depreciation expenses, which the IRS allows you to do. That’s a way to avoid paying taxes. When you go to sell that asset in the future, you have to pay all that back. That’s when you start talking about maybe 1031-ing or maybe buying another one every single year to always have that amount of offset. That’s my soliloquy. Are you always like an LP in the deal, Dan? Have you found the deal? What’s your role in the deal usually?

I’ve been an LP in a fair number of deals. I’ve also received benefits as a capital raiser. This is varied as I talked about receiving a portion of the back-end proceeds up to a more traditional linear finder’s fee.

We know that you’ve been LP in quite a few deals and I know that you’ve done some money raising and all that stuff. Can you talk a little bit about, what does it take to raise money? How do you do it? How do you find the people? What payment have you been getting for that?

On the capital raising side, it helps to have thick skin. I’ll start with that. As I shared, I was born on a trading floor. When you’re used to a highly transactional business but also recognizing maybe if you’re ever an enterprise sale, a long-term sales cycle, I feel you need both of those muscles concurrently in the capital-raising side.

Particularly, if you want somebody that’s going to be a legitimate repeat investor that has a fair amount of money versus somebody that’s going to wring you up and down for the one favor like the $125,000 check you were saving for a VIP and they’re going to be your biggest headache. With that said, education is the biggest piece. Especially with storage, even if it wasn’t a storage deal, it’s something cool to talk about.

Secondly, even if somebody was funding from their piggy bank checking account, letting them know they can use their retirement dollars is another wow factor. It’s something country club cool that whether you’re in boots, Sebagos or hiking shoes, it’s a cool thing to talk about with somebody that is open to pass the bar alternative investing. I’d say first and foremost, it’s been leading with education.

ITF 64 | Alternative Investing
Alternative Investing: If you’re confident in your investing abilities, it’s a fair consideration to pay taxes now on the little seed versus what the big tree may become.


People think they have money to invest. Maybe they think they have $100,000. They give $100,000 to some flipper and now they have no more money to invest. You go to them and ask them, “Do you want to have money?” They say, “I don’t have any money.” Then you’re like, “Do you have money in your retirement accounts?” They’re like, “I’ve got like $300,000 in my retirement accounts.” You’re like, “You can use that, instead of earning 7% on the market, you can earn 15% over there. It’s doubled your percentage.” Is that the education that you were teaching these people?

That’s a very high-level one. I’ve had the benefit. I’ve talked to over 500 sponsors. Now that I raised capital, I’ll call them my peers here to share that piece of education and what I would suggest to anybody listening to that is raising money or thinking of raising money in the future, the one sentence as a good takeaway is to share with your prospective investors and your current investors to say, “Did you know can use your retirement dollars to invest in my deal?”

Folks that I’ve shared this on a consistent basis and you don’t have to be an expert but literally, that one sentence tends to get 10% to 20% of the raise done. You got to take off Friday because you got your raise done. I see this play out a bit more in the startup world than real estate but somebody says, “I’m here in Texas. I worked for Dell down here in Austin all these years. You worked alongside me. You went off and had a startup. I want to invest with you but I have all three of my kids are at SMU, Rise and all these private schools across Texas. I’m tapped out. I’m not liquid even though I retired from Exxon.”

You can remind your buddy to say, “What’s in your 401(k)?” “Your 401(k) is a $1 million. Did you know you can use part of that to invest in my company?” That’s what I think is a true win-win situation where somebody can take back a portion of their retirement. They invest in what they want when they want where at the same time somebody else is getting their deal or company funded.

As a capital raiser, what do you get out of it? Do you get a percentage of the money raised? Do you get a little piece of the equity? Maybe it’s both. What would you prefer as payment?

It depends on who you are raising money for. I am licensed and I’m also not a CPA or a lawyer. I’ll share what I feel is public terminology and information is that every state has its own regulation. For folks that don’t want to become fully licensed as a capital raiser because it is a good amount of testing with your SIE, Series 7, etc. Every state has its own regulation.

Take Texas for example. With the Texas State Security Association, you can have a license to raise money from Texans for Texans and then have a lady’s or gentleman’s agreement for how you’re going to get paid. Whether it’s going to be a few percentage points upfront or possibly a revenue share on the backend or a piece of the equity, much like an LP or the GP equity. It gives you that liberty. As you’re fully licensed, there’s much more that comes into disclosure but that said the arrangement would still be for linear upfront, which is pretty simple arithmetic or getting the equivalent of a piece of the backend equity. Over the past few years, I’ve entertained them.

I want to recap your story. In 2013, you were at the wedding. Your co-best man, you start investing in their deals as a flipper. 15% of your private money. You start learning about self-storage and all these funds through your job. You see how you can start doing this yourself. You start raising money and you were either an LP or a capital raiser for self-storage or for these deals. Is that what you’ve been doing from 2014 until now? What else have you been doing?

Part of it is yes. I said my hobby has become what I’m choosing. I feel one should never truly go on the beach and retire permanently. If you have the education to share and folks to mentor, that’s a great way to continue to live a long and healthy life. That will always be my thing. In terms of livelihood, it comes to this third light bulb moment, which is a good way to look at this.

In 2017, I’m on a plane to Las Vegas. I see a guy I knew and in between us as a guy with a big pink cowboy hat and I only bring that up because it was on the way to Vegas, not on the way back that these guys were all marked. Outside of that a good friend, Henry Yoshida and I know Goldman-Sachs gobbled up his previous company and I’m saying, “Henry, do you want to check out this storage deal? Did you know you can use your retirement dollars?” The end of that conversation is emailing him the deck but also this packet on how to get with the custodian and all this.

Share with your perspective and current investors that they can use their retirement dollars to invest in your deal. Click To Tweet

In Henry’s mind, the wheels were already turning, I didn’t know this at the time to say, “Instead of this 100-page PDF,” and everything you go through, I call it the legacy custodian in the space, “How can we eliminate all the friction legally possible so folks can make it quick and easy to sign up for one of these self-directed accounts and go through.”

This was in late ’17 as my light bulb moment. In terms of education, critics as going to these shows when everybody feels like a true expert on stage. Once again, much like my days in self-storage, fast forward to 2018, 2019, I chose to be on the founding team of Rocket Dollar and then be a sponge at these shows with folks that whatever is your real estate niche and had expertise in. I know in your past you’re with BiggerPockets.

Anybody there that’s been a name, I probably had a one-on-one with and gained a little piece of education from them. Now, coming full circle, I can share that as I’m talking to investors because I’m not pitching my deal to them. I’m saying, “Here are some insights I have as an LP. If my deal makes sense, great. If not, here’s my experience with dozens of other facts.”

Can you speak a little bit about what Rocket Dollar does? I know you guys do self-directed IRAs. Are there other products there that you’re helping people invest with?

Rocket dollar is a checkbook control self-directed provider versus being a custodial SD IRA shop as the product. Historically for the past 50 years, it would primarily be the self-directed IRA. You would go to a custodian, get your money over there, anytime. Let’s say I invest $25,000 with Craig every quarter, both he and I would be stuck on the phone with some legacy custodian to fill out their paperwork for the sake of even though the money would ultimately go. We would lose about an hour of our time. It’s not too beneficial.

Rocket Dollar says, “The rules are pretty simple. Don’t invest in yourself or one of your family.” It’s the general rule. Everything else is more or less as in play and we want you to have that checkbook control. Whether it’s a solo 401(k), which is a separate product from the SDIRA or within the SDIRA world, it is, created as an IRA LLC model, which means the custodian in the background checks the box on the LLC that says it’s a good asset. I would clarify going back to your question, the solo 401(k) is extremely powerful and especially at this time of year.

To put it in maybe less nerdy terms is Rocket Dollar is a place where if you have your 401(k) with Fidelity or Vanguard or something like that, you’re not able to invest in anything except the stock market index and stuff like that. By moving your money over to Rocket Dollar or some other self-directed platform, you can then invest in real estate and invest loans with people and all those kinds of things. The SDIRA is the Self-Directed IRA. It’s the same thing as an IRA but again, instead of investing in the market, you can invest it self-directed. Why don’t you tell us the difference between a solo 401(k) and a regular 401(k)?

A regular 401k is probably what everybody knows here. That’s what you have at your company. You have ten choices. When you leave your company, it probably goes let’s say from a VOYA to Fidelity. It becomes a rule over IRA. You get a bit more choices. Let’s say you’re on the Fidelity platform. With that said, you’re limited to what’s around their platform. You cannot invest in a friend’s startup, real estate, etc.

You need to be in a “self-directed account.” One of which is a solo 401(k), which is for self-employed individuals or say a husband-wife team without W-2 employees. All else equal, this is very powerful. Some of the product attributes is not only do you get to “max out” your 401(k) as your W-2 buddies with that $19,500, you can also take a percentage of your net earnings.

Let’s give a really simple example. A realtor made $100,000 this year. Of the 1.3 million realtors in the country, everybody’s 1099. It’s by definition. It means you’re self-employed. With this $100,000, the first $19,5000 can go as a contribution and then also 20% of your net earnings to your employer. In this little example, you can defer not to pay taxes on roughly $40,000.

ITF 64 | Alternative Investing
Alternative Investing: When raising capital it helps to have thick skin. You also need to be used to high transactional businesses and long-term sales cycles. You need both of those muscles when it comes to raising capital.


Based on quick math, you’re looking at close to mid-50s a year. If it’s a husband-wife team, you’re over $100,000 and that’s pretty powerful. You get the employee benefit as you might’ve been familiar with in W-2 and also this other much larger benefit that you can lower your tax basis now to go into your plan. Thereafter once again, invest what you want when you want.

Are the solo 401(k) and the SEP-IRA different products?

They are different products. They’re similar in terms of the contribution amounts but where they differ is what you can do. The solo 401(k) gives you the ability to invest in what you want when you want. I’m not a SEP expert but at least in the solo 401(k), one thing that I do love is the ability to borrow. You can borrow up to $50,000 or half the value of the plan as long as you pay yourself back over five years. Why is this relevant?

Let’s say you’re self-employed. Before you even do a friend and family fundraise, you say, “Let me borrow some money that I’ve been putting away for a few years for myself. If things go well, that’s great and if it doesn’t, maybe I retreat and get another W-2.” What’s beautiful here is you can do whatever you want with that money. From an investment standpoint whether it’s the solo 401(k) or a self-directed IRA, you cannot invest in yourself or your family. You can’t invest in your kids’ startup or buy a beach house and have your parents stay there on the weekend.

The majority of this stuff is not sure yet but everything else is in play. The nice thing about the solo 401(k) is you have the ability to borrow that money, do whatever you want with that and pay yourself back. It’s a huge advantage, particularly for entrepreneurs. The final thing I would share is that it’s a benefit. All my realtor friends that had rockstar years to benefit and lower your tax bases in 2021, you have to open the solo 401(k) by the end of the year to benefit the tax year. Be aware of that. It does take a few days. I would suggest doing it by mid-December or December 20th, which offers a solo 401(k).

I’m glad you’re saying that because I don’t know how other people are but for me, the year is winding up. I’m like on top of my bookkeeper. I’m like, “How much tax am I going to pay? Do I need to invest in syndication?” I’m looking around to make sure that I don’t pay too much tax and what I can do. I imagine there are some other people out there that are like, “It’s good to know about one more thing that I might be able to do before the end of the year.”

The big thing is the opening of it too. You want to have it open by the end of the year.

One more thing, Dan. Is this what you’re doing now? Is this your primary thing, the Rocket Dollar and growing that? Where are you now?

No. We didn’t even cross 2020 yet. I am still involved with Rocket Dollar. I came into Rocket Dollar, outside of Henry and I meeting on a plane. I immediately invested. I’m like, “This is going to be great and the evaluations are fantastic.” As an advisor, it’s smart especially for folks that have the benefit of some financial independence to be an advisor. Keep it honest, receive advisor shares and also, I purposely shifted out of the day to day although I didn’t have the COVID crystal ball, my life was moving more into the capital raise side into the actual physical tangible real estate deals.

I did other benefits to talk to 500 real estate sponsors. I invested an additional ten or so during the COVID year. We had a little more time to sit back and do diligence. I then decided with the gentleman, the team at BV Capital, in terms of and I call it the happy triangle real estate. You’ve got your tax, the underwriting side, your sticks and bricks in marketing and particularly with this bottom two. We all know with marketing, you can turn the lever up or down but to have really good real estate relationships with contractors, particularly in this market is a good thing to have and the team that BV shows this.

In terms of, I’d say competency, character and such and BV is Texas real estate. It brings institutional-quality deals to retail investors. There are over 500 accredited investors, which includes also registered investment advisors and some family offices that have come through. I do feel what is offered is great for a diversified portfolio. It’s some multifamily and industrial. Otherwise, as I shared it personally if I’m talking to somebody and it’s not this, I’m happy to share my experience of whether it’s senior housing or otherwise that I’ve invested with before.

I want to do a quick recap of your story. In 2013, you’re at the wedding, 15%. You’re getting into the house when you understand passive income notes and mortgages. You realize self-storage is a big thing. You start working on that on your own. You start becoming a capital raiser for a fund. As you’re doing that, based on your best closing line is, “Did you know you can invest in your retirement accounts?” You realize that people probably don’t know-how and there needs to be a platform for people to hold these self-directed IRAs and stuff.

One never retires permanently. If you have the education to share and people to mentor, that's a great way to continue living life. Click To Tweet

You started one, Rocket Dollar. You realize, “I don’t love this and I want to go back to capital raising.” Now, you’re back with a different institution that is now raising capital for different things. I want to ask one last question, what does your passive income look like now? Is it all note investing? Is it rental?

I’m thinking about my cap table because it varies. There’s still note investing. The major real estate sectors are multifamily, industrial, senior housing and self-storage. I’ve done loans to female entrepreneurs that are also on the construction side so not exactly on the note per se but more on the construction and development side. That’s been a great relationship and very lucrative.

I also am a mentor at Capital Factory here in Austin. I do at least 50 mentor calls a year. I’ve invested with a few of those companies. There is one great company called Blended Sense. They focus on video and they do it exceptionally. Particularly, let’s say if you’re a realtor or have a team because you don’t introduce yourself with a one-page CV. These days, it’s about a 90-second video and these guys are great. Check out the company. It’s fantastic. A few other real estate tech companies have dropped chips in. I get the benefit of also being part of this Austin ecosystem here both on the brick-and-mortar real estate and then on the tech side to see what’s out there.

The way you earn your income and the way you invest your passive income is you earn your income by raising capital and oftentimes you’re taking an equity stake or whatever. That becomes your passive income or while you take payment as passive income.

There are two buckets but some of my friends are VCs and they invest in these companies and I’m like, “Use to retirement.” They’re like, “I can’t do that.” I’m like, “You’re 55. You’re going to be 60.” It becomes the same bucket once you turned 60 because there’s no early withdrawal penalty at 59 and a half. With that, I do recognize and respect the buckets that I can’t touch for a while. I get that.

That money is constantly churning and moving back. Otherwise, I do have a decent line using more of my liquid stuff. The real estate’s pretty cut and dry. If it’s a 3, 5-year deal, it might be plus-minus six months. The majority of my stuff is in more real estate than on the tech side but getting a feel of like, “Three years down the road if we’re at 3X or 3X, can I pull out some money?” That’s a typical question I’ll ask upfront and I’ll very lightly model that one.

We are heading into the final part of the show. Do you have any words of wisdom for our audience before we get there?

Could you use your retirement dollars to invest?

Let’s head into the final four.

Dan, our first question is what are you reading now?

I got two things and I wish I had the first book because it’s by a good friend Bryan Perry called Eternity. The cover looks like a cheesy Twilight thing but it’s a great read. He’s a new author. It’s written very raw and self-published but the last time I went to a coffee shop and didn’t put something down and then dreamed about the character. He’s fantastic. Number six for my StrengthFinders is The Art of Woo. It was not one of my top five but it was number six. Those are my two books.

What is the Art of Woo? I’m wondering if I need to add it to my book list.

I’m only on the first few pages of it, maybe it was the nice birds here that moved me. Check it out or at least Google woo and see what it is. See if you need it.

What is the best piece of advice you’ve ever received?

My dad said, “Don’t shame the family name,” especially with a last name like mine, people will remember you. It is pretty relevant and I feel a lot of Goodwill dividends and good karma coming back because of the efforts that I gave to folks over that.

ITF 64 | Alternative Investing
Alternative Investing: With Rocket Dollar, you don’t want to invest in yourself, everything else is more or less in play, and you want to have that checkbook control.


Don’t shame the family name. I’ve got a unique last name as well. Anyone sees my last name, they know it’s something to do with me.

I have a gift from my first boss down here in Austin, Texas. It says, “Do something if it works, do more. If it doesn’t, don’t do it.” We came out of the Great Depression but this was a gift that I’ve kept on my desk since 2008.

What is your why?

Baby pictures, I do have a child that came out of the womb with hair and it is mine but it’s pretty awesome. My little dude is fantastic. I’m sure all parents get that but that’s definitely the why. It’s for him.

What is it that you keep wanting to smell despite the fact that it doesn’t smell particularly good?

I wish the answer would be a $2 bill. I’m going sentimental here. This was funny. For some reason, we all had travel delays for COVID and I had 2 or 3 old T-shirts back to my mom’s house. My dad passed a few years ago and when we got home, my son being five years old was curious and asked. It still smelled like my dad who passed a few years ago. Although it’s not personal for me, I thought it was cool. My son asked me a few weeks ago and I washed the shirt and everything. I wore it and washed it because I don’t think things should sit there on the side forever. Not for me but for my son, it was cool. We go back over the holidays, for him, that’s my new startup idea. How do you bottle the smell of every generation?

That was more touching than I was expecting it. Where can people find out more about you?

LinkedIn is great. I’m always on LinkedIn. Please mention that you met me here and I’m very receptive to having one-on-ones with folks. If you come to Austin, I buy you barbecue or vegan food or whatever works for you.

If you’re a vegan beer or barbecue drinker and you’re in Austin or if you want to figure out how to invest your retirement as a self-directed IRA, make sure you’re hitting Dan up. Dan, thanks much for coming to the show. It’s been a pleasure having you. It’s been a long time coming because we have known you for so long. I’m sure I’ll be seeing you at the next FinCon or the next something con.

Thanks, Craig and Zee.

That was Dan, the man. Zee, what do you think of that?

I like Dan. I met him at FinCon and I feel like he is one of those people who gives back. He’s excited about being in the mentor space. I feel like Rocket Dollar is a cool option people. Instead of using a custodian and doing all that, you can invest seemingly from your checking account the way they set it up for you. It seems like a low barrier to entry to utilize those funds that may not be making as much as you want.

I use my retirement accounts to invest in a lot of syndications and notes because I know that’s what I want to do when I’m older and have less energy. It’s practice for me. I know I can’t use that money now so it’s okay if I don’t get it back in the exact amount of time that I need. If it takes six months longer, I’m okay with that.

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About Dan Kryzanowski

ITF 64 | Alternative InvestingDan Kryzanowski is an active capital raiser, equity owner, and passive investor, generating double-digit yields and lower taxes via commercial real estate. Dan’s investment portfolio includes 2,600+ storage units, 1,500+ multifamily doors, and dozens of industrial, infrastructure, and residential properties. Dan has personally raised millions of dollars from accredited investors and family offices, and empowered his partners to raise seven figures on multiple occasions.

Dan is the Founding Vice President at Rocket Dollar, unlocking the $10T pool of untapped retirement assets for the alternative investment community. He previously led commercial real estate initiatives for GE Capital in Mexico and South America. Dan’s “superpowers” include Self-Storage, Self-Directed accounts (Solo 401(k), SDIRA), and Scranton, PA!


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