Stewart Heath: From $20M up to broke—what saved him?

Stewart Heath is a certified public accountant with 40 years in business, and we spoke about the lessons he learned from building—and losing—a multimillion-dollar real estate portfolio. He explained how chasing aggressive growth left him vulnerable in 2008: “As of June 30th of 2008, I had a net worth upwards of $20 million…90 days later, I was probably underwater $5 million.”The turning point came when he realized reserves and risk controls mattered more than fast expansion. He now focuses on what he calls “boring real estate assets” that produce steady income and minimize exposure. “Eliminate all risks except vacancy risk,” he told me, describing why he avoids floating-rate debt, speculative developments, or turnaround projects.Heath also shared practical frameworks, from requiring a minimum 5% cash-on-cash return after debt service and reserves, to educating investors with tools like “100 Questions” they should ask any sponsor. His approach is clear: build stability, preserve cash flow, and prepare for the unknown. Listeners will come away with concrete steps to protect wealth in both calm and volatile markets.Key takeawaysMaintain cash-flowing assets as a foundation, not just high-risk betsAlways build reserves into every real estate transactionEliminate all risks except vacancy to protect distributionsUse 5% minimum cash-on-cash return as a baseline filterSometimes the best investment is the deal you don’t doDiversify income streams beyond your main business