Tim Mai: Welcome everybody to today’s Capital Raising Show. I’m your host Tim Mai and today I have my good friend and awesome speaker on the line with us, Dave Lindahl. They’ve been in the real estate investing space since 1996, so a long time. That’s what, 30 years? I don’t know. It’s been a long time, right?
Almost 30 years? And yeah and, been a long time. He’s like the OG when it comes to apartment investing, multifamily investing. I remember buying your home study course, Dave, back in 2002, 2003, when I first got started.
Yeah, it’s been a long time. They’ve specialized in emerging real estate markets and. Since 1996, he has created a portfolio of over 9, 000 units in 18 different markets across the U. S. And has raised over, 250, 000, 000 for all the deals.
And Dave is a principal in the Lindahl Group, a commercial real estate investment company that focuses on multifamily, office, and hotels. And Dave has also written two number one best-selling books on multifamily investing called Multi Family Millions and Emerging Real Estate Markets. Dave lives in Boston with his growing family of three kids, super cute kids.
Welcome, Dave to our capital raising show. Thanks, Tim. Glad to be here. Awesome. Okay. Let’s see if you can share with us a little bit about how you get started and especially how you get started in the multifamily apartment space while most everyone else gets started in the single-family space.
David Lindahl: Yeah. As you said, that was a long time ago. Back in 1996, I had left a stint in a rock and roll band that I was in for eight years. Yeah, and I just wanted to do something with my life, make some money, and start a landscaping company in the wintertime in Boston, but I can’t do much landscaping. I went into doing odd jobs, all kinds of odd jobs, snow plowing, and then a bank friend, a friend who worked for a bank asked me to do the rehab for a property that the bank was going to that foreclosed on and was going to resell and didn’t ask me if I wanted to buy it, just if I do the repairs.
And I said, yes, he helped me win that bid. I had no idea how to do the repairs and I realized that, either homeowners or investors are buying these properties and the investors are going to make a lot more money than I was making doing the rehab. So I bought the Colton sheets course.
Remember him? Yeah, for a long time ago, he was always on the TV. So I bought his course. I was so busy back then with my landscaping company, my jobs that I didn’t really get to it. But 6 months later, he had the new and improved edition. So I got that and actually opened it. 1 told me to go to my, tell me the best advice it had was go to your local real estate investment group.
Look around, and see that there are people that are just like you. They talk like you, they act like you, they dress like you. Some of them are broke like you. But they’re making it real estate. They know that you can do it too. And that’s what I did. That was a big eye-opener for me. And at the same time, everybody was doing single family.
And then I saw an interview on a biography with a guy by the name of Harry Helmsley, who started to break. Buying and selling multifamily properties in New York City and ending up on the Empire State Building. And so the biographer said, Harry, wasn’t it about apartment buildings that got you going?
Harry said that I always liked the idea that a group of people would pool their money together and give it to me every month so I could pay my mortgage. I could pay for people to do the maintenance on my property so I wouldn’t have to swing hammers and take out the trash. I could pay for management companies to babysit them to take their phone calls to collect the rent.
And at the end of the month, I’d have so much money. I’d have extra money after paying those expenses that I could go out, have some fun with a reinvestor, or put into my savings account. I thought, man, if that’s true, if you can, these people will give me money every month to pay off all those expenses, pay down my mortgage.
So I could end up owning the building. And yet I would have the money and cash flow that I want. And I found out 9, 000 units later, I found out that it’s true. So that started the road to 9, 000. We’re close to 10, 000 now.
Tim Mai: Wow, that’s amazing. And what, I know you in, in your bio, you mentioned 18 different markets. What are some of those state markets that you’re in?
David Lindahl: Yeah, so at one time as we were building our portfolio, we were actually in 18 different emerging markets. I wrote that book Emerging Real Estate Markets after I had learned, I discovered, in my first 3 years, I would only buy 3 to 6-unit properties in a city called Brockton because I was afraid to buy anything bigger.
My 1st deal took 9 months to do because I was afraid to buy it. And then I started learning about market cycles and timing and job growth and I made a lot of money in a short period of time. In three years, I had over 40 properties with huge cash flow, millions of dollars in equity, and I learned about market cycles and I learned that I was going to either lose it if I didn’t go into cash or go into another market.
So then I looked for ways to find another market like Brockton was when I first started buying. I got lucky in Brockton. It was just coming out of a downturn, it was at the bottom of the cycle going up. There was a new mayor in town. There were corrupt mayors before him. He had created jobs in the economy.
He built the MBTA system that brought transit out of Boston. So now you can live in Brockton, not own a car, and still work in Boston. So the demand for Brockton housing skyrocketed. And so I was in the right place at the right time. And I wanted to look for all the right places at the right time, not get lucky, but do it methodically.
I learned as much as I could about what makes markets move. It was really all about growth. I learned that the Montgomery market had just approved the key plan to be built going to take a couple of years to build it. But that was the beginning of the end of the downside of that market.
It was bringing in 15, 000 new jobs. Each market has a multiplier effect when it’s bringing in jobs, and it’s usually anywhere between 3 and 20. A multiplier is for every job that comes in, there’s an ancillary job that needs to be created to service that job, like the butcher, the baker, or the candlestick maker.
Montgomery only had 3, a multiplier of 3, but that still meant another 5, 000 jobs coming over and above the 15. The best market I’ve ever been in with a multiplier was Huntsville, which had a multiplier of 11. For each job that came in. So anyway, I joined the market with one of the things Montgomery had going for it was it had a barrier to entry, and the barrier to entry is great because it suppresses the supply on the market.
The barrier to entry from Montgomery was floodplains. You couldn’t build in the floodplains. So you get all these people coming in to build a key plan and also to occupy them. Additional 5, 000 jobs. So there are 20, 000 jobs coming in, but the supply remains the same. They can’t build any more multifamily.
Therefore, demand goes up and supplies remain the same as the market takes off. And so I hit that 1 right from there. I went up to Huntsville, and then over to Jackson, Mississippi, and then to Texarkana, Texas, all following job growth. It was in Texarkana, Texas that I was sitting at the bar having dinner because I was by myself.
And the guy next to me says he heard me talking. He’s Oh, you’re obviously not from Texas. You must be from Boston. And I said, yeah. And he said, what are you doing down here? And I explained to him, I was buying a multifamily. And he said, why here? And I explained my concept of emergency markets.
And he said, Oh, I’m a writer for kick linters magazine. He said I’d love to do an article. Would you be willing to do an article with me? And I thought, my father told me if I went into the month, I was the derelict from the rock and roll bands. You know what I mean? I had not made my parents proud for a long time, but when I knew my father read Kiplinger’s magazine, I thought if he saw me in Kiplinger’s magazine, he would be proud.
So I was like, absolutely. Do you want to do it right now? And he said, yes. And he wrote it. And three months later, it was in it. And I delivered it to my father. He was just shocked. I wish I could take a picture of him in my face. Wiley called me about a month later and said, Hey, just saw your article in Kipling.
Did you want to write a book about that? And I was like, this would make my mother proud. So I wrote about the emerging market. That hit number one. They asked me to write another one. So I wrote multi-family millions that hit number one. They asked me to write a third one. And I said, no way. They said you might want to write it with this guy.
He’s a pretty good persuader. So I was like, no, I’m not writing another book, because for me to write my books, I had to wake up an hour earlier in the morning. I’m a morning person. So I woke up at five. The only time I had was from four to five. So I would write from four to five for four months to get a book done.
And I was like, I’m doing that. I’m done doing books. And he goes I’m gonna have this guy call you. And I was like, all right, but I’m done. So I got a call from Donald Trump and he goes to Dave Lindon. I was like, yep. He goes, this is Donald Trump. And I’m like, yeah, Dad. I thought it was my father
He was like, is real kidding? You know what I mean? Yeah, right, Dad. He goes, no, this is Donald Trump. And I’m like, maybe it is. And he goes, I’m interested in writing a book. So I co authored his flagship book, commercial real estate investing 101. And out of his 17 books, it was his only number 1 book. So I’m proud of that.
That’s awesome. Anyway, that’s how I rolled into 3 families in Brockton. Into 18 different markets, 9, 000 plus units.
Tim Mai: That’s awesome. I completed it. Yeah. I remember your co-author book with Trump. I completely forgot about that. And you don’t have it in your bio by the way.
David Lindahl:
No, because he’s so iconic, either people love him or they hate him. So when you get, the people that hate him, they really passionately hate him and they send over nasty messages and it’s Hey, I wrote a book with him. So why isn’t it sending nasty messages about it?
So yeah, so we don’t have a book anymore. Why did he actually stop? Why have they stopped printing yet?
Tim Mai: Really? Wow. Okay. That’s interesting. 9, 000 units now. That’s an amazing number. Did you start out saying, Hey, I’m going to, yeah, I’m going to set up, set a goal to have either X number of units or X dollars of assets under management or anything like that?
David Lindahl: No. The first goal was 100 units. And then when I hit 100 units, I thought I could probably hit a thousand units. And when I started going into it, this was before I knew anything about emerging markets. I got up to probably about 175 units and that’s when I went to Montgomery. And I didn’t want to buy anything big in Montgomery.
I wanted to still buy the three to six-unit properties. But I was doing 1031 exchanges and I had more equity, I had to buy something like a 40 unit. I bought the biggest, smallest thing I could find, which was a 40-unit deal. And I bought that one and very shortly after I bought an 80 unit.
And between those two, I realized that it was actually easier to run these bigger deals and it was the smaller deals. It was easy to get financing. It was better quality management, the team members were just better quality because everybody gets paid, usually based on, the percentage of something like the management company, percentage of revenues, the broker, the percentage of the sales price, even the property inspector, the 50 per door to inspect the units, so you get the good ones.
And when I realized that my next. Okay. My next one was actually, it wasn’t Huntsville, it was Jackson, Mississippi for 350 units, and then I went up to Huntsville for 400 units, and that was my biggest mistake. Because I bought a 400-unit rehab that was oh, it was 36% occupied. No, it was 46% occupied, but the economic occupancy was 26%.
And I didn’t know what I didn’t know back then. And man, I took a bath on that one. I actually did. At one time I was out of pocket 6 million trying to, and I had, that was one of my first investor deals and I was out of pocket 6 million because I didn’t want to do a capital call to my investors and what I thought was going to take me two, two years for a 3 million profit took me six years for breakeven and that was brutal. Wow. So I learned a lot, I learned a lot on that one.
Tim Mai: That’s, yeah those types of deals always have great lessons from them, for sure. So your first few deals you didn’t have to do like a syndication? You didn’t do any kind of race?
David Lindahl: No, when I first, no, when I did my deals in Brockton I think I was broke.
So I had gone to a seminar to get as many credit cards as you can and use them, get ’em with the non-recurring fees and use them. So I actually bought my first couple of deals with credit cards 70,000, 71,000 deals, a $71,000 deal, and then a $74,000 deal. But then I didn’t have any credit card money, so I started doing single-family flips.
So I could use that money to buy more multifamily. And then after that picked up, I started refinancing the multifamily deals I was buying. I also had a hard money lender that would lend me money based on 65% of the After repaired cost. So that worked out. So, even though it was high money, I could refinance those deals, take a chunk out, make that for another day’s deposit, and keep the machine rolling.
It rolled pretty well until I started going bigger. The 40 units were 1031 exchanges. When I hit the 350, that’s when I learned about syndicating. That’s when I, that if I was going to hit my next goal, which was 2000 units, I was going to have to use other people’s money to get it.
Tim Mai: Gotcha. So the 300-something units, how much was the capital raised on that?
David Lindahl: The 350 unit was a 3.2 million raise.
Tim Mai: Okay. And so what did you have a lot of, by this time you have had a good track record. You have some experience. Did you run into many challenges with Raising that money?
David Lindahl: Yeah, it was the first raise. I was really nervous about being in control of other people’s money. I didn’t want to do it. And so I had some investors that were investing with me on the single-family properties, but this was too big, so I was going to I knew I was going to start doing a bigger deal.
So I started going to business groups and investors, and that’s basically how I raised those funds. I hated it too. I hated going to these. I hated going to business meetings. I hated going to Business Networking International. I became a member there, the Citrus Club, which is a national group.
Every state has one. I started going there. But yeah, it was like that first raid was brutal because I’m really an introvert. Yeah, I really don’t, I don’t like talking to people. I don’t know. It sounds weird, doesn’t it? I’ve been on so many stages. I used to follow Tony Robbins on stage in front of 20, 000 people.
They’ll never need an annex with Trump, but one on one with somebody. I’m awful. I hated asking people for money and it wasn’t until I think it was my third deal. Sometimes I would go to the networking event and I wouldn’t go in, I would go to the parking lot. Yeah. And this voice, going back and forth in my head.
Do it. Don’t do it. Do it. Don’t do it. And there’s one particular time. I was like, all right, I’m going home and the voice is no, you can’t go home. You need to rate this. You need money for this deal. And so this conversation is weird, but this conversation is going on in my head. What does it matter with these people?
I get this great opportunity, and they’re getting, shit money on their IRAs, their savings account, their CDs, and I can give them a much better return with less risk and all that. And I thought, and all of a sudden it hit me. It’s like you’re an idiot. You’re going in there.
You’re asking people for money. You’re trying to sell them on your deal. Just go in there and tell them what you’re doing. Offer an opportunity, and then see how that works out. And if they can’t see the opportunity, then, then tough for them. And if they do want the opportunity, then they’ll raise their hand.
And, one of my strategies back then, and it still is because we’re still raising money. I still go to family office events because that’s where a lot of the big money is. But my strategy has always been to pick off people on their way to the coffee, right? They’re individuals. I’m really bad at going into groups.
I’m trying to introduce myself. So I always try to pick off the individuals. 1 time. I went over to Europe for a family office meeting in Europe, and I was there for 2 days. 1 of the days I couldn’t get myself out of the hotel room. It’s you gotta go down there. I don’t want to go down there.
I don’t want to meet those people, but I spent all this money to be there. And I thought, what? During one of the breaks, I went down there and I said to a guy, I said, you know what, I set a goal for each break and got a guy going over the coffee and I said, look, I’ve got to go for this break to meet two people, to introduce myself and network with and I was wondering if you’re willing to be one of them.
Guy smiled, big smile. Absolutely. Puts out his hand, and tells me who he is, and what he’s doing. And I was like, damn, that was really easy. Worked out really well. So I went over to the next person, and I was like, hey. Now, my goal is to meet two people during this break. Will you be willing to be one of ’em?
And that works so well that I’ve been using it. I still use that today, to meet people that I don’t know. And the other thing I wanted to say too is one of the easiest things I’ve learned is to wait for somebody to say, what do you do? Instead of trying to give ’em a pitch, if you’re in front of a room trying to raise money and you get a chance to speak a little bit, then you practice your elevator pitch.
But if you’re in a networking event, you introduce yourself, you let the other person introduce himself, you ask them what they do, and then you wait for them to say, what do you do? And I’d say, oh, I invest in emerging real estate markets. And they’re usually like, what? Because I invest in emerging real estate markets.
And they think immediately in their heads that the emerging real estate market must be profitable. It must be making good money. So what I want them to do with that opening statement is to say, how does he do that? And then ask me, how do you do that? And then what I’ve learned just by that simple technique is.
They’ll start asking me questions, and their questions are usually their objections. And when I handle their objections, they will leave themselves down to the path where they say, Hey, do you have a partner with people? Do you ever, have you ever for anybody to partner in the deal? Let me know. So they actually close themselves by doing that and it’s so easy.
Tim Mai: That is awesome. So very interesting that your cap, your first capital raises from networking events would. What would you say if you could still remember the percentage that came, the percentage of investors that came from those networking events that you didn’t have a prior relationship with versus friends, family, or people that you had a prior relationship with on that first race? Do you happen to remember what the percentage is?
David Lindahl: Yeah, I remember that quite vividly because Tim, I was in a rock and roll band for eight years, right? I was crazy. And I had created quite a reputation for myself. So anybody that knew me was not gonna invest so I had to find people that didn’t know me, for a chance to get the money.
So just about everybody that invested in my deals at the beginning didn’t have any idea who I was. Oh, wow.
Tim Mai: That’s awesome. And then what that we’re going to go into this family office idea too, but are most of your raices 506 B or C?
David Lindahl: Just a combination. Depends on the investors.
Tim Mai: Okay. Gotcha.
And then, yeah, so you mentioned, targeting family offices. And is that one of your top ways to raise money?
David Lindahl: To raise a lot of money. Yeah. Raise money and create a platform for yourself, which I didn’t create for my education company in order to create investors for my deals.
I created the investment company because I taught my brothers and I, I grew up poor, I taught my brothers and sisters how to invest. And then when people from the town realize that there’s this crazy kid from a rock and roll band, there’s like a derelict, all of a sudden he’s doing well.
What’s he doing? He’s buying real estate. He’s buying real estate in Brockton. It’s like Brockton, that’s a crazy city. And then it was like, as it, they, first, they thought I was going to fail. But then as it continued, I actually became the third-largest landlord in the city of Brockton.
Oh, wow. And people wanted to know how I did it. So I started teaching at the local real estate investment group. And a couple of times there were some other guys, other people from, like visiting from out of state. And then they asked me to speak in their groups. And then before I knew it, hey, there’s an opportunity here for another business, because I’m a student as you are of Ron LeGrand, right?
I was with Ron LeGrand many years ago. Ron’s an awesome guy. And when I realized that I wanted to start teaching what I learned. He’s the one that taught me how to do single-family flips. That’s how I made my money from my Maltese. And so I, he had a platinum group back then. And he basically taught me how to create a platform and how to teach and how to do all that.
So that’s how that all got created. But nowadays, people are creating their own platforms and they’re creating their own podcasts. And that’s one of the ways, you become an expert in the space and by giving information, by giving content, people are drawn to you. So between that and in the family offices for big money, it’s typically the way we do races now.
Tim Mai: Gotcha. Okay. And I know you’ve taught thousands of students. Now I know more of your successful students than probably any other, educators, or mentors, simply because you’ve been around for so long and you, a lot of your students have become mentors themselves.
David Lindahl: No, not because I’ve been around for so long, it’s because it works.
Tim Mai: Oh, that’s true. Yes. What I meant was long enough for them to have their success and then became mentors themselves.
David Lindahl: Yeah. I’ve been teaching my family right now. I’ve been my student, which I’m proud of.
Tim Mai: Exactly. Yeah. It’s really awesome. And you probably have. Two, three generations of them too. Not only like your first generation of students.
David Lindahl: We’re celebrating our 20th year and our big partnering event in Phoenix in October, we’ll be celebrating our 20th year of educating.
Tim Mai: That’s awesome. That is, that’s phenomenal. So, between how you raise money and how your students raise money, what would you say are the top three ways to raise money?
David Lindahl: Certainly the events going to, there are all kinds of different. If you’re looking to raise money, you go to the events that you look at that you’re buying, that you’re looking to buy a commercial event, a multi-family event, a single-family event, and you meet people there and there are people there that are doers.
And there are people that want to be doers and want to be doing ones that are willing to invest as well. And in our particular case, there are a lot of people that will come to us. Okay. To learn how to invest and what a good deal looks like so they can be a good investor and other people’s deals.
So that worked out well as well. Going to just the local events is a great way to do it. Create the meetup groups. Now that coven is, it’s not over, but it’s close to being over the meetup groups of backup and they’re running again. And you can be going too. I had one of my clients go to seven different meetups a week, practicing the skills for raising money and creating a list and doing it.
Those work really well. Creating a platform is really difficult. There are a lot of guys out there teaching how to create a platform, but it takes some time to actually create a platform to be, to provide content to be known as an expert. It’s definitely worth the effort to do it.
You can get that particular point, but then, the family offices I’m good friends with Richard Wilson and the Wilson family office. There are a couple of the good ones out there as well. And if you’re going to go to a family office event, the thing to do is, you want to get on that stage because if you get on that stage, everybody knows you and you don’t have to network.
That was always my goal to get on that stage. With Richard Wilson, his fee was 15, 000 for 15 minutes. I gladly paid the 15, 000 so I could go up there and I would, and you can’t pitch anything. What I would do is talk about what markets are emerging right now. I talk about the market cycle and what markets are emerging right now.
People love the content. And then I would give away something free at my booth. For me, it was my emerging real estate book. So it’s hey, if you like this and you want to, you want my emerging real estate book, and you’re interested in investing, what I’m investing in. They come to see me and that works really well, but you don’t have to be on stage for those events to be worthwhile because I know for instance, he has a super conference in December and one of the things we’ll do with students is we’ll all meet there and we’ll talk about, we’ll have a meeting the day before and we’ll talk about, and actually we have phone calls before that.
And we talk about what it takes to actually network at an event like that, who to target, when to target them, when to be in the room, when to be out of the room. What to say and especially what not to say because when you’re at a family office event, those people want to cut like a 5 million check or more typically like a 10, 15, or 20 million check.
They don’t want to be in any secondary markets, they want to be in the primary markets. It’s just. Knowing the language of the family office advisor, or sometimes you’ll actually get some of the family office members there as well. But everybody, there are such great events because everybody’s there for the same reason.
Either you are looking to get money. You’re looking to raise money. So you’re a syndicator, whether it be a family timber, fish farms, or your family office looking to invest in these things. So you can get a return on your money. It’s so everybody knows that they have to either match or no match.
So the conversations are pretty quick. Hi, I’m Dave Lindahl, I invest in emerging real estate markets. What do you do? Oh, I’m so and so from some family office, but we invest in startups. It’s okay, it’s nice to meet you. Do you know any, I might say, do you know anybody that’s investing in emerging real estate markets?
Oh, yeah, this makes me feel down. Okay, great. Or if they’re looking for startups, I always try to connect with them. If I can be a connector at those events, I try to connect as well. You’re going to meet so many different people. And, by bringing value, you never know what’s going to happen. Like I forget there’s another event out there.
They meet in Newport, Rhode Island every summer. Can’t remember the name of it, but I remember I was talking to this guy and he said, Yeah, I’m raising money at the ski lodge. I’m raising 100, 000, 000 for the ski lodge that I just bought up in New England. I was, oh, interesting. And I said, I’m raising money for multifamily properties and okay, so then we park and then this, I meet this other guy a little bit later and he says, yeah, I’m looking to put 100, 000, 000 into the property.
And I was like, I know you should be, I put those 2 together. The guy that owned the ski lodge said to me, Hey, do you do business in Phoenix? And I said, yes, it’s one of the markets I’m interested in because I know a broker over there, and he’s got an off-market deal you might be interested in.
And he hooked me up with it. So if you can be a connector, it’s always good.
Tim Mai: That’s awesome. So family offices, whenever I hear about them, I hear that they do write a big check in your deal. They want a lot of control. And so based, almost like they become the majority partner, you become the minority partner.
How do you structure your deals with family offices so that you retain as much of that control as possible?
David Lindahl: Yeah, it’s all a negotiation. Obviously, they’re writing the big check. So we bring them and we never, it’s never anything less than a 50-50 in terms of control because we don’t want to give up control.
They don’t want to give up control. It’s usually an 80-20 split. That’s what they like to see. Sometimes it depends on the deal. Some people are some people in 9, 90, 10, 90, 10 for the family office, 10% for the investor, 80, 20 is typical but if you get a deal, you’re going to be bringing back like this big return.
I won’t settle for an 80-20. I want a 70 30 or a 60 40 because we aren’t going to make so much money on the deal, and even if they’re putting up all the money, they’re still not going to be able to put up that amount of money and get a better return somewhere else, in the cases where I bring a really good deal to the table.
So I negotiated that. I just found the right family office to do business with. So I’ll negotiate that, and I’ll also negotiate the acquisition fee. Typically, I like to get three to 5%, you say three to 5% on the acquisition fee for a family office. And they’re like their jaw drops, like what is mean, crazy.
And so I say three to 5% so they can come back with their 1% and then we can meet at two, two and a half percent. That’s a really good deal to the table, get paid for it.
Tim Mai: So what size deal before someone should consider a family office?
David Lindahl: They’re going to want to write a minimum of 5, 000, 000 checks.
So you’re usually looking at 15, 000, 000 deals. Okay. 12 to 15, 000, 000 deal. Gotcha. Gotcha. Okay. But let me just say this Tim. It’s that shouldn’t stop you from going to a family office to try to raise funds because, but because going to these meetings. What it will do, it will open up your eyes to the amount of capital that’s actually out there.
You know what I mean? Like me, I grew up poor. I had these limiting beliefs about money and what was available and what I could actually use and what people would do with me. And then you go to a family office event and this is like a spiel that I give to my mentorship students as well.
It’s like you go to a family office event and you will expand your horizon to the effect that how much can actually come in. I remember there’s this guy, Tom, he’s a surfer from Florida. He built me a surfboard, actually, it was awesome. And he’s Dave, I’m not going to go to that event because I’m just starting out.
I said this is the perfect time to go because then it will break down your barriers. So after the first break, he comes to me, he goes, Dave, you’re not gonna believe this. The guy next to me, he’s a surfer. Cause one of the things we always talk about is finding commonality, right? The guy next to me, he’s a surfer.
It’s awesome. He also manages a 2 billion fund. Wow. And Tony memorized money to let him know. So they connected from surfing and then the guy has a lot of money and so all of a sudden he’s holy shit, I need to go out there. I get it, do you get a 15, $20 million deal?
If you get any big deals, please bring them my way. That’s awesome. Tell yourself about the family offices.
Tim Mai: Okay. And then in terms of. Building relationships with family offices versus like your retail investors. Can you share with us what are some of the nuances in both building relationships and also maintaining that relationship?
What are some of the differences?
David Lindahl: Nobody’s going to do business with you unless they like, and trust you 1st and trust the big factor in the back end. And that’s why, as the CEO of your real estate investment company, you can delegate everything. Except the money race, because people want to talk about that, in terms of the retail investor. Typically you can meet somebody and you can start a relationship with them. They might feel comfortable after the 1st meeting and writing a check to you with a family office is different. You can meet with the advisor 1st. The advisor has to go to the family office, tell them about you.
Then you meet with the family, you might meet with them once, you might meet with them twice, but you actually start a relationship. They’re not looking, they’re not looking to do like a one-off deal. They’re looking to create a relationship that’s long-lasting, just like the deals I go into. One of the mistakes is that.
That people will make going into a family office and talking to them is saying, I can be like, I teach emerging markets. So we’re usually in and out of a market within 3 to 7 years. Family offices do not want to hear that they want to be in a solid primary market and they want to be in there for a minimum of 20 years.
20, 30. Yeah, so you make sure that you don’t tell them you’re going to be out of this deal in 5 years with X amount of return because I go, no, we’re going to be in this deal for the long term. And, this is what we’re expecting to get through value ads throughout the years.
So that’s the main thing too. They’re going to want to buy you really if it’s a great legacy property, you never want to be bought out, but if it’s in a market that you know that you’re going to be out of it, in a short period of time, they’ll buy you out and then go into, another market.
Tim Mai: Very cool. Okay, so whenever you bring a deal to them your goal would then be that they’re a longer term deal. So if it’s a shorter-term deal, you wouldn’t bother bringing it to their attention. Is that correct?
David Lindahl: Yeah, the deals that were, yeah, exactly. The deals that we know are going to be like a value add in a market that’s not in a secondary market.
That’s not going to, that’s not going to apply to a family office.
Tim Mai: Gotcha. Okay. Do you have any funds?
David Lindahl: No, actually, do you know, Kim Taylor, attorney, she’s been using her for a while. So I was talking to her about a fund just a couple of days ago. Actually, we see this opportunity in the retail space.
Right now. So we thought we’d raise a fund for it. First, we want to prove the concept of bringing a couple of deals to the table to our investors, but differently, I tried to raise a fund. It was 1 point that we were in a few years ago that we were actually closing like a complex and a half every month.
We’re in the middle of raises. 1 of the mistakes I made is we were trying to close 5 properties at the same time, which confused our investors. They’re like, should I go into it, we expose all the investors to all the different deals instead of just segmenting the list and exposing. This is a really important point for you guys that are syndicating don’t send multiple deals to your investors.
Do 1 deal at a time? So you mentioned a list, figure out who does what, and then you won’t confuse them. You’ll be able to do the race because of that particular 5-deal race. I had to come out of pocket a few million dollars and backfill those. because the message is just like, I don’t know what to do. I dunno what to do.
And a confused mind says no, as. I forgot what point I was getting to. What point was it about the fund?
David Lindahl: Oh yeah. So the fund, so we tried to, so then we thought let’s just create a fund, a 20, $20 million fund. But at this point, I don’t know how many properties we had bought, but we had trained our investors to be able to see the property, know what the returns were gonna be, and what the extra strategy was.
So when we did the 20 million fund, we’re trying to raise it. We had a really hard time raising it. It’s like, why are we having such a hard time raising the fund in Genie? My office said, so it’s because they want to see the groceries, they’re used to seeing the groceries. They want to see the groceries.
They want the money. And so we filled that fund with 4 deals and then we were able to raise it. Since that point, we were never really, I was never really interested in raising funds until recently, but still, we’re going to prove the concept before we do the fun.
Tim Mai: Gotcha. That’s good to know.
Do you ever raise money for other people’s deals or do you only do it for your own deals?
David Lindahl: I, we, this is what we do. So we’ve got a client base all throughout the country. So I like to sponsor deals. So when we have a client that is out there doing deals and they need a sponsor, first I want them to come to me.
The market that either I don’t like or it’s a deal that’s too small. I like a hundred-plus unit deals in emerging markets. If it’s too small, then we’ll refer them over to other people. Usually other clients because we’ve got so many at this point that in every primary, secondary, tertiary market, we’ve got successful investors in there, which we, which are happy to do deals with other people that are trained the same way, I don’t raise money for other people, but if other people inside of our client base need it, we associate.
Tim Mai: I know you, you’ve been doing this for so long. You’ve seen the market turns. What’s your crystal ball telling you now in this upcoming market, especially when it comes to raising money?
David Lindahl: There’s still a lot of dry powder out there, after COVID, but there’s a lot of good deals that were actually done during COVID, which is good.
The ability to raise money, the stock market is having its problems right now. Whenever the stock market crashes, usually the money flows into real estate. With inflation, the money flows into real estate. I’ll tell you, we were expecting this reset to happen right after the election and then COVID.
And then that screwed up the markets for a year, and then the housing shortage hit, which is screwing up the market, but at the same time, so it, the market has not reset yet, and depending on the depths of this recession, I’m hoping it’s a deep recession. So the markets reset, we can all get in, and better pricing is coming up.
But I think the thing that’s working against us is still the housing shortage and the demographic shift that’s happening right now. There are going to be more people over the next 10 years becoming 18 and over the prime renting years in the next 10 years that there’s ever been in history. My family is investing.
So I saw their great markets to be and I just said, multi-family investing when you’re investing in value when you’re investing in emerging markets, it’s always a great strategy. I just don’t know. We’re going to hit that big reset that we saw like in 2008, 2009.
Tim Mai: Okay. And then in terms of we’re going into a recession or we’re already in the recession.
Is there, do you? Yeah, we’re already in it. Do you see any changes or any difference in the ease of raising money in a recession?
David Lindahl: No, I haven’t, I’m just, so I’m not just starting out raising money. I’ve got people that come to us on a regular basis, asking us if they can pay his funds. So I’m not, you, you have,
Tim Mai: Do you have more of those people coming to you now than normal?
David Lindahl: When the stock, yeah, when the stock market started going down, they started coming. It always happens like that. Gotcha. Okay. Because, here’s the thing, especially people that are already investing with us, they just saw their portfolio, their retirement fund, their portfolio drop 50%, 40%, 60%.
But. They still got their real estate appreciation, they still got their real estate check, their quarterly check that came in. It was the same amount. It didn’t go down any end. Damn, man, maybe real estate, I should put more money in real estate.
Tim Mai: Yeah. So whenever the stock market goes down, that’d be a good time for us to make posts about investing in real estate.
David Lindahl: Oh, yeah, absolutely. And the other argument too is during inflationary times, real estate gold, and Bitcoin, are all great inflationary. And the reason, just so I can back up that statement, the reason that they’re good, real estate’s a good inflation hedge is because, During times of inflation, costs go up to cover the cost.
Rents must go up as rents and costs go up. If you can get your N. O. I. rising faster than the costs are, then your values go up. So that’s why real estate is a good hedge during inflationary times.
Tim Mai: Okay. What are some of your favorite tools or resources when it comes to raising money or syndications?
David Lindahl: I use right now we just, we’ve got everybody to invest next.
Okay, so we use that to put our deals out in the marketplace. I use active campaigns for my investor lists. To communicate with them, it’s different, I separate my education company and my investor list. Those are the main things we do. I have a graphic designer that designs all of the operating members and the offering memorandums.
Tim Mai: And so what are some of your big goals or passions these days? You’ve accomplished so much. So what drives you these days?
David Lindahl: My kids. Oh, I got it, I was just talking to somebody the other day. I’ve got this portfolio, but actually, our portfolio is at a low point right now because people are offering such crazy prices.
I’ll give you an example. We’re selling a. In Huntsville. This is the only time since 2006 that I have not owned in Huntsville, Alabama. And that’s because the last property that we had there, we decided to check the market, see what it was doing. This was a year ago. And the broker gave us an unsolicited offer for 5.
3 million. And we’re like, wow, that would be, that would give us, give the investors their return in two years that we projected in five. That will be good. And then we can potentially move this money into another property. So they said they were an all-cash buyer, and then we’re going to close in 30 days.
And they basically dicked around with us for, we were on day 45, we got to day 50. What’s going on? They hadn’t even officially signed the contract after the LOI. So then all of a sudden we get another unsolicited offer for 6. 2. Then another one for 6. 4. And then another one for 6.
5. So we’re like, we’re not in contact with these other people, we’ve ended up with the other three, which goes to 6. 4. They were all pissed off. You can’t do that. You signed an LOI. It’s like that LOI was only good for 48 hours and you never came to the table, you dicked around with us for 45 days.
You never came to the table. So we’re taking this offer and we closed it. And that’s the way it’s been. I’ve got a client out there that owns a bunch of property. She was never going to sell. She owns in Atlanta and in Nashville. And she just got offered these crazy prices and made a profit of over 24 million in a year selling properties.
And now, she and her partner moved to Utah and then just like hanging out, living the dream, that’s just the way it’s been. So our portfolio is the lowest it’s been since I started investing way back in 1996, but we’re ramping up for the next phase. I’m gonna take one more, once it’s in your blood, it’s fun to do.
I do it from home. Now I choose my markets wisely. I choose the markets that I can fly into at night and be home by myself flying to in the morning, being home at night too, so I can be with my kids. A lot of times I’ve got this business, most of it’s on autopilot in the sense that if I don’t want to go to a property, I don’t have to because I don’t like to travel anymore.
As Tim, we both lived our life on the road, for me, it was 12 years. I was building an education company and I was buying in emerging markets. I was never home, but I didn’t have any, I didn’t have kids. I come from a big family, but I didn’t have kids and it was exciting. And then I burnt out.
I probably burnt out after year six, but I kept doing it for another six years. And then I stopped six years ago, had kids and had twins. And then 2 years later, I had another completely off the road. Everybody else, managing my stuff. I was looking at new opportunities and basically outsourced everything, which is great.
And now we see the opportunity is starting to perk up again. And it’s going to be a good time to make another run. I can start teaching my kids how to do it.
Tim Mai: Yeah. So, which brings me to the next question. What I know is that your kids are super young, still very young.
David Lindahl: You know what, Tim, this is a true fact. My kids came out with a deed in their hands. I don’t know how it happened.
Tim Mai: That’s hilarious. That’s funny. So what are you teaching your kids that perhaps You don’t see other parents teaching, teaching their kids, what are you currently teaching them or what are you planning to teach them to prepare them for their investing career?
David Lindahl: I just teach them about money, I started from the very beginning, my kids. We actually, I live in a, I live in a high-end town, but there’s a Walmart the next town over. My kids love to go to, what they call Walmart. I don’t know why but they love going there to get a toy. They can either get a small, medium, or large toy, depending upon what’s going on in their lives.
And so I tell them they get to buy it themselves, and they get to earn their own money. So my kids at five years old had their first lemonade stand. I trained them that, you can either, I could, you can either do this for 5 an hour, or you could make so many of these and I’ll pay you 5 for each one.
It’s up to you, but I’ll, but I will tell you, you could probably make four of these in that hour. What do you want to do? You know what I mean? So it’s all I’m trying to prepare them financially to be able to actually manage what I’m going to leave them and grow it.
Tim Mai: I love it. That’s awesome.
All right, Dave, we’re going to be wrapping up our interview section here. But before, yeah, before we wrap it up, what, what would it be like? Like a really good word of wisdom or lesson that you want to leave with our audience here.
David Lindahl: I can tell you, in the 20-plus years that we’ve been teaching other people how to do this.
It took me three years to figure out that if you don’t get the mindset right, then you’re not going to be successful. And that’s with anything in life. And that’s the thing that turned me around and I didn’t even put the two and two together. I’m teaching other people how to do it, but my life didn’t change until I changed my mindset.
So it’s, business is a game of business skills coupled with mindset. Doesn’t matter how good you are at business skills. If you don’t have the mindset, you’re not going to be successful. One of the things we teach is, from this point forward, just continuously feed yourself, the good mindset books, blindside books, podcasts, or whatever, some great books, Dr.
Joe, Dr. Joe dispenser. That guy’s awesome. What got me started was Lead the field by Earl Nightingale, which is, yeah, on YouTube. It’s free. Three hours and 47 minutes. I think Waking the giant within it’s free on YouTube as well. And then, Tony, all Tony Robbins, this stuff is good.
If you just work on the mindset stuff, then the business stuff takes care of itself.
Tim Mai: I love that. All right. For the people that want to reach out to you, connect with you, where would you like to send them?
David Lindahl: If you want you can reach out to me at mentor.com you feel free.
If anybody wants to have a chat, call me at 781 878 7114. That’s the office. We get a free book offer. If you want a free copy of Family Millions, you can go to davesfreebook.com. You pay for shipping and handling. And you get the book and we’d be happy to send it to you.
And of course, we’re going to try to upsell you. We’re in the education spaces. Oh, somebody’s got it already. My friend from Miami. See you again. Yep. And also Rinaldo from Massachusetts. Come down and visit us. We’re in Rockland. Be happy to host you for lunch.
Tim Mai: That’s awesome. Yeah, there was Steve cut cell asking about reaching out to you about a deal that they have, if you want to come in as a sponsor on the deal.
So reaching out to your office number is the best way to do that?
David Lindahl: Yeah. You can call the office 7, 8, 1, 8, 7, and leave. I’m going to be on, I just realized I have to be on another call right now. The client says a group of doctors has a big fund and is looking to get into my feelings. But so just leave them the message and then I will call you back as soon as I get off this other call.
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