Dave: Hey everyone, Dave here with another episode of the Phil Tech Connect podcast. Today I’m speaking with Craig Epler. Craig is the Chief Executive Officer of Epler Capital Funds, which he started a little over a year ago in March of 2023. He’s got over a decade of investment experience and also runs a real estate holding company that’s purchased more than 40 rental properties across south central Pennsylvania. He’s going to share with us a bit about his journey from analyst to CEO, what he’s learned along the way investing in different properties and businesses, and anything else that comes up. Craig, how are you doing, man?

Craig: Awesome, thanks for having me, Dave.

Dave: Yeah, pleasure to have you on. You’ve got an interesting journey. We’ve had people in the finance industry on, and we’ve usually gone more in that direction, but here we decided we want to learn a bit more about your journey and actually starting Epler Capital Funds and everything prior to that. So let’s start back in the day—you’re an analyst at Vanguard and you’re learning the trade. Where does that lead?

Craig: I’ll take one step even further back. Fresh out of school, got my MBA, thought I wanted to do the very traditional Wall Street path thing. Had a bunch of internships in college, had no idea what I wanted to do, so I went the conservative route, worked for Vanguard fresh out of school on the derivatives trading desk, which was an interesting experience. Didn’t really like the big company feel, so I transitioned to a smaller shop also in the Philadelphia area, went from 15,000 employees to a firm with 20 people, so a very different feel. Started there as an investment analyst, looking at investing more holistically instead of one specific area of the market.

Dave: I was living in Philly at the time and commuting out to Malvern, so for anyone who’s local, that’s quite the drive on 76 out there. So I spent my time listening to investing podcasts like a nerd and figuring out what I thought was cool, and stumbled onto real estate.

Craig: So, started buying real estate like you mentioned, back in 2019, and got hooked. During COVID, got really bored and started buying a bunch of portfolios out in Harrisburg, Reading, York area. So started doing that, that really got me interested in kind of the private investing route, really seeing that there were a lot of things to invest in outside of stocks and bonds. That led me down the path of investing in these kind of smaller private businesses that were great businesses but flew under the radar of the kind of sexy Bitcoin, stock, bond world.

Dave: Let’s talk about the real estate for a little bit because real estate investing is one of the more common ones. What was it like investing in your first property?

Craig: The first one was scary. I took out a home equity line against my primary residence to buy that first rental, and everything that could go wrong did go wrong. It was a low-stakes property out in Pottstown, Pennsylvania, but the numbers lined up. I was buying it for $50,000 and they were paying $900 in rent, so the numbers checked out. I’m like, worst-case scenario, at least I hold this property, but anyway, I matched all out on my little Excel sheet, and as soon as I bought it, the tenant stopped paying rent. It was in the middle of the winter so it took a while to fill it, the turnover cost… every nightmare that you hear about in real estate happened on that first one.

Dave: Wow, it sounds like you just fell into it all, but you kept going. You didn’t get deterred. When you went for property number two, was there a different approach or learnings, or you just had that, okay, that was like a lot of flu and I’m sure this one will be better. How did you get back on the horse here?

Craig: Honestly, after the first one, I put my tail between my legs and ran for a little bit, and let that one work itself out. Then I thought back, I’m like, when you invest in the stock market, you usually don’t invest in one stock, right? Like you buy a basket of securities. That’s why the whole mutual fund and ETF world is there. So I’m like, if I have more properties, ostensibly, that should lower my risk because if one tenant isn’t paying, then at least another one is; if there’s a property that needs fixing up, at least another one isn’t. So I’m like, if I can get to a bigger number, it should lower my risk, and that kind of pushed me, and I went on a buying spree there and was buying a small portfolio every one or two months for a bit there.

Dave: Very cool. When I went on the website to check it out, it looks like my understanding was, oh, this is a way to get us stable returns between like 7-9% and not be exposed to the volatility of the stock market or whatever. So was that the impetus for starting Epler Capital Funds, that you wanted to diversify away from real estate?

Craig: So the whole idea came from at my old job I was on the portfolio team there but I did talk to clients and what I kept hearing over and over again was, hey, we want to be invested but I’m really scared about the market being down 30% the year that I need to draw money during retirement. I really just want a stable income that I can pull off of, similar to what I was earning during my working years. That kind of light bulb clicked. I’m like, okay, I’ve been doing this private investing, what I have here is pretty stable, it spits off a very consistent income every single month. What if I combine my experience in the traditional wealth management space and put it in like the private asset space? So that’s where the promissory note idea came in and said, okay, if people could just have something like a CD or a treasury bond that paid monthly interest with the returns that about what the S&P have done over the past 100 years, I think that’d be something that’d be fairly appealing to most people. And that’s where the idea came from, and I meshed like the wealth management piece and the private asset piece and put it in one.

Dave: Does that make sense?

Craig: Yeah, no it does. And you had said something before we popped on the recorded portion of this call about your philosophy for investing. I hope you’ll understand what I’m referring to. I think a lot of people are thinking about the unicorns, the home runs, like that’s the way investing is done or needs to be done. You have a different angle here. Could you elaborate a bit?

Dave: Yeah, this fund and while those investments in like the startup space to 10x are obviously great, this Fund in my approach here is really just to hit singles and doubles and not to strike out. This is a consistent income play. Worst-case scenario, there’s a hard asset backing everything here, which again, this isn’t a fund in which you’re going to get 30% on, right? You’re going to get a consistent 9%, and that’s it, and you’re going to live off of that income. But I think there’s a place for both of these things in your overall portfolio. But the way I look at it, singles and doubles help pay the bills. If you can sprinkle in some of the Venture Capital stuff to hit your home runs, and everyone wins for sure. I think sometimes people are not considering the opportunity for a single or a double and how that can really compound over time, and then the de-risking along the way. Maybe there is some portion of your portfolio, 10% or something like that, that’s just a moonshot. It works great; if not, it doesn’t, but it doesn’t have to be all or nothing because just as an entrepreneur, like the minute you lose all your capital or your cash flow or whatever it is, and you’re out of the game, you’ve lost the game, like you’re just out. But at least while you’re building up this stable kind of set of maybe relatively passive income, you’re always going to be in the game, and you’re going to be able to ride the ups and down. Really interesting talk with you, Craig. I haven’t had an investment-focused conversation yet on this podcast. For people that want to learn more about you, the funds, the holding company, how should they get in touch?

Craig: I’m on LinkedIn, Craig Epler, and our website is EP capital. You can contact us there, and I’d be obviously more than happy to chat to anyone that’s in the PH Community.

Dave: Thanks so much, Craig.

Craig: Thanks, Dave.