Brad Sumrok: So I was like, Brad, how did you do it? I’m like, yeah, I raised 15 million in 72 hours. That 72 hours took me 20 years to build up the database, the experience, the track record, the confidence. Tim is one of the most authentic and genuine people I’ve ever met. Sincerely believe he’s coming from a position of giving and that means a lot. You’re going to make huge progress. 

Tim Mai: Welcome everybody to today’s Hero Capital Raising show. Today I have my good friend with some rock on the line with us. Some rock and some rock, right? Brad and I go quite far back. We both got started in real estate investing around 2002. And I went the single-family route.

Brad went the multifamily route. And since then he has been, among the top of the top real estate investing educators, especially in the apartments, and multifamily niche. Since 2002, Brad has owned and invested in over 8,500 units. Crazy amount of numbers over 800 million assets under management, and has raised over a hundred million dollars, for these deals.

In 2012, Brad received the n AA Independent Award Owner of the Year award, and Brad has taught thousands of real estate investors. He’s probably one of the top guys. in terms of the number of millionaires that he has created or was responsible for in this multifamily niche. I’m super proud of you, Brad.

You accomplished amazing things. His students combined, have increased their net worth by millions of dollars together and have purchased over five Billion dollars worth of apartment buildings over 500 complexes over 60, 000 units crazy numbers. Welcome everybody. Brad some rock. 

Brad Sumrok: Yay. Awesome. I remember you from way back. It was like 20 years ago. 

Tim Mai: Yeah, the foreclosure seminar that you and I attended. So share with us a little bit of your journey. I know it’s been a long journey and you accomplished so much and helped so many people accomplish so much and so share with us. You know what got started in the business and also especially what got you into the education side as well.

Brad Sumrok: Yeah, it’s, I mean I never thought I would be doing what I’m doing like so many people. Thank you. I was taught to get a job, study hard, get good grades, go to college, get a better job. And then just repeat that process. If you want to climb up the ladder, you have to go back for more education.

I got an engineering degree because my dad never finished engineering school. And so that impressed upon me how I needed to get that degree. So I can have a great life. And then I got a job as an engineer and honestly, I hated it. I was, like, the world’s most average engineer who came in late, left early, and took long lunches.

Wasn’t getting promoted. I wasn’t in my room, but I have to do better. So I was like, I’m going to go back to school, get an MBA and I actually started studying for my 3rd degree, which was law school back in 2000 or 2001 and then I read the rich dad poor dad book when it came out around that time.

And I remember taking my books. And I put them off the table and I was like, I’m going to be a real estate investor and I had no idea about being a real estate investor. So then I started looking at seminars and things like, how do I learn to be a real estate investor? I went to the 1st seminar I went to 10, I think you were there and we were knocking on doors.

Yep. Close properties. And I was like, oh, man I don’t know. I don’t know if I see myself doing this. I’m not going to have that. Oh, man. I don’t know if I see myself in that and then I went to another seminar. Where they taught single-family housing on day 1. it was at lifestyles unlimited back then in Houston, Texas.

Yeah, I learned about single-family housing, and on day 1 I went home that night. I wrote all my goals. I was going to buy 40 houses. In the next 5 years and replace my 10, 000 dollar job income with 10, 000 dollars of investment income. And on day 2, they talked about apartments. And I was like, the heck with single-family rentals.

I’m going right into apartments. And that was my decision 20 years ago. And I never looked back. 

Tim Mai: Wow. I should have followed you back then for sure. Yeah. And how did I know we’re gonna fast forward a little bit, but you were. That was in 2002, right? And then you started your education business when?

Brad Sumrok: Yeah, my wife and I started it in 2013. Okay. Next year will be a decade of educating others. But, yeah, I forgot to answer that. So how I got into education was. I went to a seminar, I did apartments, and my 1st, and 2 deals I did with my own money real quick here. I ran out of money and then, my 3rd deal was a syndication because I found this 250-unit deal and I didn’t have any money.

In my 1st 2 deals, I used all my own money. And then my 3rd deal, I raised 2M dollars and bought 250 doors. But the whole point is I was part of it. The lifestyles group had a network and so I was part of that group and so it just made it easy to raise money if you had a deal.

I quit my job in 05, because, in 05, I was making more money with apartments than I was with my job. So then, I was 38 years old and I was technically retired from corporate America. And that’s when I started mentoring other people. It wasn’t with my own company yet, but I was like a mentor.

At the lifestyles organization, I just found that that was my group because when I went to that seminar, I was the best. Skeptical person in the room. I thought it was a bunch of crap. I thought about going to seminars with a bunch of crap. I went on a leap of faith. I spent 500 bucks.

I was embarrassed. I didn’t tell any of my friends. But it worked, and so that’s how I got into the education business. 1st, I was working with my original mentor, and then, I started doing that with lifestyles and no 6. Or 5 or 6, and then in 2012, I left. And at that point, I had already had a couple of 1000 doors and I left.

And I was out of the education business for a year. And then I was like, man, I really miss you. Mentoring and helping other people. In 2013, me and my wife started our own and next year will be in our own education business for a decade. So that’s the short story.

Tim Mai: Yeah, do you happen to remember by any chance how many students you have impacted that would have gone through 1 of your seminars?

Brad Sumrok: I could probably work in my CRM system, but we’ve upgraded that 3 or 4 times, but it’s been probably. I don’t want to embellish the numbers, but thousands and maybe tens of thousands have been to our seminars. And then, over 600 documented millionaires from investing in apartments that are in our various mentoring programs and stuff like that.

Tim Mai: That’s phenomenal. That’s awesome. That’s a good number to put on your bio too, by the way, over 600 yeah, over 600 documented that became millionaires. That’s really awesome. So share with us, regarding the first race that you mentioned, what were some of your biggest challenges in doing that race?

Brad Sumrok: Yeah, so I think the biggest one for me, the biggest challenge was confidence because. And by the way, if you’re just getting started. You don’t have to buy your own deals with your own money, but that’s what I did because I was following the advice of my mentor. And at that time, back in 2 or 3, the model that I was following was not syndication.

It was by as many doors as you can with your own money under 1 roof. Tim, I have done that and oh, 2, I bought 32 units was my 1st deal and oh, 3, I bought 30 units is my 2nd deal. But now I was out of money. So the 3rd deal, the broker brings me 250 units and I probably have 25 grand left in my bank account.

And what most people would have done is they would have said I need to get out of these 1st, 2 deals, and whatever. But because I was part of an investor community, then I already knew people that wanted to invest. They already knew me. They knew I had a track record. I already had trust and credibility with a couple of 100 people.

So that 3rd deal was my 1st syndication. Honestly, when I went out with it, I didn’t know if anyone was going to invest with me. But because I was. I had made the pre-decision a couple of years back to be in a community of other investors. And so when I put that deal out. Through word of mouth through email, the people that I knew, I already knew these people at the time it was 200 units and it was 30, 000 the door.

I only needed 2 Million dollars, which at the time was like this huge amount of money, but I was able to get 27 people to put in between 50 dollars and I probably had about 150 to 200 already in my database. It actually came easy, but it wouldn’t have if I were out there on my own if I were just, if I were just, not part of, an investor club or an investor community, so that’s how I did it.

Tim Mai: That’s awesome. I know that the community helped a lot, but were there any kind of roadblocks that you ran into some challenges that you ran into in that 1st race? 

Brad Sumrok: Yeah, because, at the time, their syndications were just starting to get popular. I had to find it.

A securities attorney and I had gone through some of the training and I met a securities attorney through that program. So I already had a securities attorney in my database in my service provider, Rolodex. So that’s something that’s important because. You need to know that in advance, you need to know what type of offering you are going to do.

Are you going to do a 506 B? Are you going to do a 506 C? Are you going to advertise? Are you not going to advertise? And so that’s something you want to have figured out. And I think the other part is just the confidence. There are so many students that I’ve trained in their 1st year.

They’re always thinking they watch everybody else and. Some rock communities raise money, but then when they and so it’s 1 thing to you, you get confidence a couple of ways. 1 is by watching other people doing it. And realizing that they’re not any smarter than you, but there’s still nothing like going out and doing it for the 1st time.

And then I just remember some of my students calling me to go, but I can’t believe I have a million dollars in the company bank account. People are actually giving me money for my deal. And so it’s an incredible experience, but it’s confidence, it’s mindset, confidence, and being surrounded by other people.

Tim Mai: That’s awesome. That’s yeah. So let’s go into that. So what would you say? Been through your own race. I know you’ve raised over 100 million for me personally. And then, of course, your students also raise a ton. What would you say are the top 3 ways that you see the best when it comes to raising money?

Brad Sumrok: Everybody has their own top 3 ways, but I’ll just tell you what mine are. Yeah, some people have different strategies so mine is number 1 is. As Tim and many of the listeners are getting to know me. I only see maybe 1 or 2 people that I actually know here.

But 1 is for the past decade, I built up my own educational platform. So we do live events. We do mentoring programs, we do masterminds. And those are what I call high-ticket programs, but not everybody that comes to my seminars joins those programs. So a lot of them want to invest. And so it’s, by building my own community I come across hundreds, if not thousands of people that want to invest in my deals.

So that is like 1 of the best places. Now, if you’re sitting out there saying, hey I don’t want to be an educator. I don’t want to do my own events. 1 is going to other people’s events. Okay, and that’s another thing that I like to do. I go to not only do my own events, but I go to masterminds where people have money.

Not just real estate. I go to mastermind myself as an attendee. And so multiple probably once a month, I’m going somewhere and I’m around 7, 8, 9 figure business owners. And they all make a lot of money and pay a lot of taxes. And when I tell them, I haven’t paid taxes in 4 years, they perk up and they listen and then I tell them how to do it.

And then a lot of them come into my deal. Building the community, leveraging other people’s events, and going to other people’s events. And then social media and I am not anywhere as good as I should be, or could be on social media. But just by posting what I do hey, I just closed the deal.

Hey, I just did an event. Hey, 1 of my students just closed the deal. And I get a lot of inquiries from that. And so what I do is I just keep adding to my investor database. And I segment them the best I can, are they accredited? Are they non-accredited? Where do I meet them? What’s the nature of my relationship with them and stuff like that?

So then what I’m doing is a raise. Depending on the type of raise I’m doing, I know who to send the emails to. 

Tim Mai: That’s awesome. You probably came across a wide variety of different types of investors. Which profile, which investor profile type is yours, is among your favorite? Are they entrepreneurs? Are they doctors? Are they athletes? What’s the profile type that you like the most? 

Brad Sumrok: I would say there’s really 3 okay and it’s hard. It’s hard for me to just give you 1. So 1, I think I already covered, but it’s like a, it’s like a busy professional that makes a lot of money and pays a lot in taxes. And for them, the idea of going out and finding deals and analyzing deals and overseeing deals.

It’s just a lot. It seems like a lot of work and it is. And so that’s 1 of the 3 people that I would talk to. Now, the other 2 might be a little contrarian. Okay, and the other 2 for me are people that have jobs and want to get out of jobs because that was me. 20 years ago, and other people might be doing single-family or notes, or they’re doing smaller deals, but they want to move up.

Now, let me explain that because. Like in my education program, those are also the people that I talk to about being an active investor, like being on the GP team, being on the syndication team. But what I find Tim, is that a lot of people that are GPs that are syndicators GP means general partner and I’m gonna use that term synonymously with the syndicator. A lot of them also become passive investors.

Okay, and so it’s not an either-or world where I’m a syndicator. So I never invest passively. And so a lot of my students might be in 1, 2, 3, 4, and 5 deals as a. Limited partner or a passive investor before they ever find their 1st indication.

Tim Mai: Yeah, very cool. And what’s so if you don’t mind sharing, what are some of them? Especially for someone starting out, and you’re doing their first race I guess let’s let’s go with that ideal person. What would be the, where’s the first place that you suggest for them to go to do their first race yeah, is it events like you mentioned, is it there, everyone on their contact list like what are some of the few top ways that you’d hey focusing on this one.

Brad Sumrok: Yeah, look, it depends on where somebody’s starting out, but I think that I can only share what I’ve done. Right and so there are a lot of ways to get started, but the way I got started is I went to a seminar. And I became, I call it what you want. I bought the upsell, right? I bought the mentoring program and I felt like an idiot, but it worked.

And so I got the education and I got the coaching and I got part of the investor community. That’s why I’m passionate about what I do. And I, by no means, am I here to be self-promotional. And there are a lot of ways to get there. But not so number 1, let me just generalize number 1, you need to, you want to get educated.

Because if I were to invest with you. And it was your 1st deal, you got to ask the question why would somebody with money invest with you? And a lot of people out there were like, oh, you’re helping them. You’re not asking for money. You’re giving them an opportunity to.

Yeah, that’s partially true, but people with money already have a lot of opportunities. I got money and if you don’t, you’re going to want to. Say, like why would I give you money? Not you, Tim, but if you’re brand new with no experience, why would I invest in your deal versus somebody?

I know that has. 899 deals, so when you’re new, it’s good to leverage the experience and track record of somebody else with experience. Okay. By being by, if I ask somebody what are your qualifications? This is in corporate America where you could say, Hey, I have a degree, but where did you learn this stuff from?

So I would say get educated, invest in yourself. And then I would also say, you wanna be a part of an investor community, or at least you want to be attending and building an investor database because people invest with people they know and trust. And if the first time they’re hearing from you is at a conference, And you’re pitching them a deal, they’re not likely to invest with you and not to mention and not to mention is that compliance, if it’s a 506 be, it’s not even compliance.

Probably, because you don’t have that pre-existing relationship with somebody, right? Okay. All right. These steps are to educate and build up your database. Through people and getting people to know I can trust you. And again, there are a lot of ways to do that. Right? 

Tim Mai: So let’s assume, they, so they get started, they joined a group, and now they’re connected in the network and. They’re like, you know what? I’m going to go big. I’m going to raise a hundred million dollars this year. So if you were that person and your goal is to raise a hundred million in your first year in the business, how would you do it?

Brad Sumrok: I don’t know because I’ve never raised a hundred million. 

Tim Mai: I’m just like if you have to guess, like, how would yeah, like knowing what you know now and, knowing what it takes to raise 100 million, how would you 10x yourself as a newer person to expedite that?

Brad Sumrok: Yeah that’s a great question. So actually right now that’s where I’m at now. It’s because I’ve raised over 100 million, but it’s been 20 years. Okay. And I’ve been going deal by deal. I don’t have a fund. And every deal that I do, I could bring 5, 10, 15 million into a deal.

Okay and again, to me, the whole process is. Follow the yellow brick road. I would ask myself who do I know that’s raised 100M? Grant Cardone, maybe. And what is Grant doing? And how does he do it? But here’s the other thing and this is and I don’t want to get too choppy on this, Tim.

I think anybody out there could raise 100 million, but if you’re starting from 0, and I don’t just mean 0 experience, but 0 contacts, 0 database, 0 notoriety, 0 followers on Instagram or. Or tick-tock or Twitter or LinkedIn or whatever Grant is able to raise that kind of money now, but he started with a 40, 40-unit deal, right? We all look like an overnight success. But overnight in my database, I just did a raise and I helped. I raised 15 out of the 18 million dollars on a 50 on a 51 million dollar deal. I was like, Brad, how did you do it? I’m like, yeah, I raised 15 million and 72 hours.

That 72 hours took me 20 years to build up the database, the experience, the track record, the confidence. And going back to your question, Tim I’m not here to say you can’t. I can’t do anything. I’m just saying that whatever it is that you want to do, find somebody that has done it and follow in their footsteps.

That’s what I would do. I wouldn’t try to reinvent the wheel. I’d be like, okay, who out there is raising that kind of money? And let me, let’s find 4 or 5 of those people and let me see what I could do to sit down with them, add value to them, learn from them, and follow in their footsteps because 1 of the hardest things to do is reinvent the wheel.

Tim Mai: Yeah, and just so everyone knows Brad is the strategy brother suggesting is exactly what I’m doing with this capital raising show. So I’m brand new to the multifamily commercial space. And I asked myself those exact questions like I want to be. A capital raiser and what is it going to take for me to raise at least 100 million dollars? And so that’s why you’re in this interview, Brad. So thank you for contributing and being a part of my learning process here. 

Brad Sumrok: Here’s the other thing, let’s say you want to raise 100 million and you’re new. Tim, let me ask you this. If I were new and I told you I was raising 100 million, just think of the questions you would ask me.

If you’re new, who are you investing with? But if I said, hey, I’m investing with this guy and this gal and this person, and here’s their track record. So you want to be associated with success. As well that’s what I would do. 

Tim Mai: Yeah, for sure. For sure. That’s exactly it. Yeah. Yeah, and same, very similar strategy in terms of putting my own money into some of these guys’ deals.

So that way, when the opportunity comes up for me to help them raise money on their deals. I can write off of their track records as well. And it’s really, yeah, really cool. The stuff you’re sharing here, Brad. So what are some of the top ways that you use to build your authority in the marketplace?

I know you do a lot of education, but let’s assume someone. Yeah, let’s assume someone doesn’t have an education platform. What are some of the ways you would teach them to set themselves apart to set themselves as an authority that someone would invest with them? Yeah, so there’s a lot of ways that, but again, going back to the basics, invest in yourself, get educated.

And then I would say look, and I don’t want to say, don’t try to raise 100, 000, 000 a year by all means, if you think he could do that, do it right? Think big, but getting a deal under your belt is important. I like to think there are some kind of rungs of a ladder.

And the thing is you could climb the rungs faster. Okay, so I’m not saying, you go as slow as everybody else and dumb, do 1 deal a year, whatever. That’s not what I’m saying, but, once you get the 1st deal under your belt, it’s easier. What a lot of my students do is they come in green and they want to do it. I talk about doing over 100 units on your 1st deal.

Let’s just do the number 100 units. And you’d be lucky to find something at a hundred k a door right now, but let’s just say a hundred units at a hundred k a door is 10 million, and at a 70% leverage, you’re looking at a 3 million raise. So then ask yourself where am I gonna get $3 million?

But if you have the ability to maybe bring. 500 K a million, you could be brought in as a co GP is a co syndicator with somebody with experience. And 1 of the ways that a lot of people get into the game. Do they get a piece of a syndication team or a general partnership team?

And so that way, you don’t have to do everything yourself. Because if you’re trying to do everything yourself, find the deal, analyze the deal, secure the loan, raise the money, manage the deal, it’s a lot. And that’s why, and that a lot is why a lot that a lot is why a little bit of people do it, they get stuck.

But if you start realizing that you can be part of a team. Where you can contribute as a general partner, then you can build up your ability. I have a lot of students right now. They want to be doing deals. They’re just getting started. Tim some of them are starting their own Facebook groups.

Some of them are starting their own meetups. Yeah, some of them are taking what they learned from my program and then they’re coming back and. And they’re sharing it in a local meetup or on a podcast. As I said, we’re in a Facebook group. Or, they could be a guest at somebody’s event or something like that.

So all of these ways. But the point is you got to put yourself out there. You got to share what you’re learning. And if you’re sitting there thinking oh, my God, I’m new. I don’t know what I’m talking about. Just know that your goal is not to know more than anybody else.

Your goal is to add value to your avatar. And if your avatar is somebody that doesn’t know anything, or that it’s investing in the stock market. Or precious metals and you can talk to them about real estate. You can talk to them about cash flow appreciation and taxes. Now you’re adding value to them. And so you become an authority. 

Tim Mai: That’s awesome. And what are some of the ways that you keep in contact with your investors? Do you send out an email newsletter or physical newsletters? What are some of your strategies there in terms of maintaining that relationship? 

Brad Sumrok: Yeah, you want to nurture that investor database.

If the only time you’re going to them is when you have a deal, you’re going to be like, oh, here comes Brad again, and you must have a deal, as opposed to being like, hey, everybody, I just want to update you on a regular basis. And it could be weekly, monthly, bimonthly, but get into a cadence where you just say, hey.

Okay. Let’s say you’re a full-time investor and maybe, you’re building up an investor database. You can start with something monthly or bimonthly and say hey, we’ve looked at. 5 deals this month, we made 2 offers. We didn’t get the deal and here’s why we were out bad, but we, we felt like.

Maybe we didn’t want to overpay for that deal. And so you can take everything you do and make it into a positive you don’t want to say, oh, man, I can’t find anything out there, but you just say, I looked at 10 deals. I made 2 offers. I didn’t get them. They sold for way over what they were worth. Trust me, I’m only going to buy deals that meet our tight underwriting criteria.

These are the types of deals we’re looking for, but these types of returns. Till next time see you later, Brad some rock and then, you send something out again and you. You get into a regular cadence and then you find that it’s not the 1st or the 2nd time they’re hearing from you.

So now you’re adding value to them. You’re sharing with them what’s going on, what you’ve been doing. And now when you have something, they’re more likely to be interested. 

Tim Mai: That’s awesome. And do you like it in your own business? Do you do any physical newsletters? 

Brad Sumrok: Like I do a monthly digital newsletter.

So if you mean I don’t send out like a Yeah, like a piece of paper, okay. I do, and I also do videos like, let me ask you this everybody give me some feedback. If I, if all you could do is hear my voice. Does it have the same impact as seeing my face? Yeah, exactly. How many people like seeing My face? I know it’s not. I think it’s a beautiful base, but maybe you guys don’t.

If you can connect with them 1 way is to do a written email newsletter through your. CRM system, but every 1 of those things I do, Tim, I have a video from Brad. I’ll say, hey, everybody. I’m excited to be reaching out to you again. It’s the beginning of the month. Wow. Last month was a great month and in this newsletter, we’re going to be talking about a deal.

We just closed and my favorite market is this month that I want to feature and maybe 1 of my students that overcame an obstacle I want to share that success story with. So they’re seeing my energy and passion and not just having to read through a copywriting of an email. 

Tim Mai: That’s good. That’s what I like. Is there any kind of specific software tools you use for that or just normal YouTube or just.

Brad Sumrok: Yeah, I’m not the best technology person in the world, but I like my company. Uses, and it’s combined. For our education company, we use keep, which used to be infusion soft.

But then when I do my capital raises I have my whole database for both my education company and my investors in keep and I have them segment and then tag. Keep enables me to do a lot of things with emails. I could insert videos. I’ll do a video on my phone and upload it into the video.

And then from there, I could insert it into my CRM system. And I could. I could put in buttons for signing up for this webinar. I can put in a button to take you directly to the link to subscribe to the subscription documents. That’s what I use. I don’t know if it’s the best 1 out there, but that’s just the 1 that we use.

Tim Mai: That’s awesome. That’s great. Now, Brad, I know you’ve been in the business long enough, 20 years now and you’ve been through the last market crash. What is your crystal ball telling you now? And, with this upcoming market?

Brad Sumrok: Yeah look I have been through the 28 downturn and I don’t have a sob story from it.

Meaning I actually did pretty well and I can tell you a couple of things. Number 1, we are not in 2008. There are a lot of differences. And 1 of them is there’s a lot more demand for housing than there is supply. And that was a little different back in 2008. And the other 1 is back right before 2008 happened.

The working-class family, it was really easy for them to buy homes. They could get a loan on a single-family home for a very low credit score, nothing down state of income, and now they need a 660 credit score. They need 20% down and the price of housing is shot up. The interest rates have shot up.

The has shot up and so all those things favor. Renting, and so there’s a lot less. Available housing units, single-family and multifamily combined, and they’re all households being born in the demographics. Make it harder, occupancy is at an all-time low. I’m sorry. At all time high vacancy is an all-time low or a very near an all-time low right now and rank growth is at or very near an all-time high and the supply-demand is imbalanced.

Is huge and the affordability of buying a home versus the affordability of renting and a lot of markets is also pretty big. I’m very bullish. I just closed on a. 1100-unit portfolio on Friday. Wow, congratulations. Before that, we did a 51 million deal in Nashville. So like, I’m not just telling people to buy like I’m actually buying.

Tim Mai: That’s awesome. Are you doing any Class A? I know you teach a lot in Class B and C, correct?

Brad Sumrok: Yeah, look I do whatever I bought a class a last year. I bought a class right in uptown Dallas right off of 75. if anyone here is from Dallas, it’s right between. West Village and Knox Henderson for 238 of the order.

At the time, it seemed so expensive, but now things in that area are selling for 400 a door. It’s crazy. Yeah look, my, my bread and butter deal was B and C, but I’m not limited to that. And I bought a’s and I have students buying a’s. And it’s, it’s the same, but there are some unique differences as you move up and down the property class spectrum.

Tim Mai: You mentioned that you don’t have a sob story from the 2008 market crash. Can you share, why you think that is so, is it because of the asset type that you went after or what had you thrive in that market? While a lot of people got taken out.

Brad Sumrok: I always look like you’ll never meet somebody in any business that says, oh, I’m so aggressive.

I love taking risks with your money, you’ll never meet somebody that says that, but a lot of people do. And how they do it is that back in 07, for example, there were people getting. 80% loans. Plus 15% mezzanine finance, which is a fancy term for a secondary lender that would come in. That was like, if you had a Fannie Mae 80% loan, they would approve a secondary lender mezz financing. There are people getting a deal into deals with literally 95% leverage 5% down and a lot of those people. When the times got tough, they were underwater. And they also, look, a lot of people can put a deal together, but as an LP, as a limited partner, there are a few things you want to look at.

Number 1 is. What is there, how much, what is their capital stack in terms of? Syndicated equity versus debt and maybe private equity and who’s getting paid 1st, 2nd, and 3rd. And then the other is Tim, I hate to say this, but there’s a lot of people putting the deals together. But if you open up the hood for their own financials.

They have very little net worth and liquidity. I’m going to be brutally honest if I can, because people are like, Oh, it’s not about.

The money anymore, and I just want to give back, and there’s a lot of truth to that, by the way, I’ve never really been money motivated but I’m challenge motivated. I’m competitive to me, with money and cash flow and a number of units and a number of deals. It’s like a scorecard.

And if you’re a competitive person I’m 55, Tim, I, and I feel like I’m just getting started because I look at, some of my, some of the people I look up to are like Tony Robbins, Grant Cardone, 2 different personalities, 2 different types of people, but they’re in their 60s.

and you gotta ask yourself, are they slowing down or do they have their foot on the gas? I like to have my foot on the gas because. Because it fulfills me, right? It’s challenging. I’m in the back room of my beach house right now in Florida. And, I’m surrounded by a lot of people, there are tourists and there are 70 and 80-year-old people around here, and I’m too young to not be pursuing anything. I want to do more deals and I want to do bigger deals, but I also want to help more people. And you know what? That’s synergistic because the bigger the deals that I do, the better of a mentor I am. And then I can come back and share with people like, hey, here’s how I like 2 years ago, the biggest deal I ever did was 35 million dollars.

And then I read the grant card and I paid him. I’m just if I could share this, I paid Grant 100,000 dollars for 4 coaching sessions. 1 on 1 and I didn’t go there to learn apartments because I already know apartments. But grants, I’m being transparent here. Hi. His mindset, his confidence, his belief in himself is bigger than mine.

Mine is a lot. It’s still probably bigger than mine, but it was a lot bigger back then. And so I wanted to be with him for 4 hours because I wanted to learn what he thinks, how he thinks, how he sees the world, how. How he’s so confident and how in your comfort zone. We’re comfortable doing 30M dollar deals.

And he said the only thing that’s stopping you from doing 100, 000, 000 is yourself. And so he said, I challenge you between now and the next call, which is 3 months for you to have 100, 000, 000 dollars under contract. Wow. I was like, what the hell?

Annie Dickerson: Do you know what your investors are looking for? Because you were like an ambassador for them. You’re like a representative for your investor group. So you’ve got to know what they want. So you can go out in the world and find that thing. And once you find that thing, if you’ve nailed it, I guarantee when you go back to your investor group, they’re going to say.

That’s exactly what I’m looking for. I’m totally in. Tim is one of the most authentic and genuine people I’ve ever met. Sincerely believe he’s coming from a position of giving and that means a lot. You’re going to make huge progress. 

Tim Mai: Welcome everybody to today’s Capital Raising show. I’m your host. And I have an amazing guest on the line with us today.

Annie Dickerson with Good Egg Investments. They, gosh, I’m going to read her bio for you here, but it’s so impressive. As I got to know Annie and her team more, it’s They’re doing amazing stuff. Annie… 

Annie Dickerson: Stop it, Tim. You’re making me blush over here. 

Tim Mai: Yeah, so Annie is an award-winning real estate investing expert with 15-plus years of real estate investing experience.

In 2022, Annie was named real estate investor of the year by the Motley Fool. Annie and her… Any and her business partner, Julie Lamb, are founders of Good Egg Investments, which was named the best real estate syndication company in North America in 2020. Together they have helped thousands of investors around the country to invest in commercial real estate assets totaling over a billion dollars.

Any and Julie are authors of the book, Investing for Good. Host of the Life and money show podcast and creator of the real estate accelerator and the lead mentorship program designed to help people learn to raise private capital for real estate investments. So with that, everyone, let’s give India a big welcome.

Annie Dickerson: I’m thrilled to be here with all of you. 

Tim Mai: Awesome. All right, I am super excited to hear your story and you guys have been growing so far, so much so fast. As, as I put the words out for the type of guests that we want to. have an interview on this show. You came very highly recommended.

And so I’m super excited. So many of you can share with us a little bit about yourself, how you got started in this business, and what made you decide to get into this business.

Annie Dickerson: Oh my, yeah. The first thing you should know about me is I never intended to get into this business. Hearing some of your stories, you have a very intentional path and I applaud you for that.

You are. Leaps and bounds ahead of where I started because I came into this business screaming and kicking. I was like, Nope, not going into real estate. And so actually I started my career as a fourth-grade teacher with Teach for America, big plans to close the achievement gap opportunity gap. And after a couple of years as a teacher, I wanted to make a bigger impact was the common theme throughout my story.

So then I went from Teaching to game design. I wanted to make educational games for kids. And so did that for a few years and then moved down to the Bay area where we are now to get into adult learning and development. So taking that game design experience and infusing it into creating training for companies like Google and Facebook and whatnot.

And real estate was never on my radar. Never. When we moved to the Bay area, my husband became a real estate agent, which he still is now. And as soon as he did that, I said crossing real estate off my list. We can’t both be in real estate. We can’t be that couple. So I’m like, okay, you do your thing, do your real estate thing.

I’m going to focus on climbing the corporate ladder over here. And So he did and his business started to grow and I, a couple of years in, he was like, Hey, could maybe be on the side, maybe you can help me with my business. I was working as a creative director at the time. He was like, maybe you can do some design work, marketing, that kind of stuff.

At the time, I knew nothing about any of that. And I was like, I, I’m really. Busy with my job here. I don’t have time, but maybe I’ll read a book. And in the process of doing so, I looked at his website and I was like this is within my wheelhouse. So in the process of redesigning his whole website, what happened?

I fell in love with real estate, but not what he does through selling residential real estate, but the small multifamily. And so I thought. I’m going to quit my job and we’ll just buy a whole bunch of these small multifamily homes and I’ll be set. I can retire for life and I don’t have to do anything else.

And that was my plan. And, I got obsessed with it. Every time we get together with friends, they ask, what are you up to? How are you doing? It was all I could talk about. I’m like, check out this market. I’m looking at this property. You guys know, right? When you have that bug, you have that passion.

It just spills out. And so I was talking to everybody I could about it. And every time they were like, Oh my gosh, this is amazing. Teach me how to do it too. I want to learn. And I’m like, great, I’ll teach you everything I know, pull up a chair, and okay, here’s how you do it. You start going through the, you guys know all the steps, right?

Yeah. Research the market. You have to get in touch with brokers. You got to look at the properties. You got to underwrite. You got to do all this stuff. And two or three steps in without fail. Every person’s eyes started to glaze over. They were like wait no. You misunderstood.

I don’t want to do any work. I just have this little bit of money that I want to put into real estate. I would, I’d rather you do the work. Could you just do the work for me? I’ll just give you my money and we can invest together. I’m like, I don’t know these little properties. But then that’s what led me to then say is there a way, how can I do this?

And that’s when one thing led to another, I discovered syndications. And at first, you guys might appreciate this. I thought capital raising was the worst part. Of the whole thing. I thought, okay let me just do everything else. I can focus on the acquisitions. I know my way around a spreadsheet.

I can talk to brokers, but capital raising. I don’t want to do that. Somebody else does that part. I can partner with somebody on that. But fortunately, I had an opportunity early on to be a part of a deal where. They convinced me to try it. They said, maybe you should just try it. You don’t have to raise a ton of money.

Maybe just bring a couple hundred thousand to the deal. And I very reluctantly said yes. And as soon as I started, I loved it. It was the coolest thing ever because it was the perfect mix of what I was doing as a teacher. And what I was doing as a designer and I was educating people on this opportunity that they wouldn’t otherwise have access to.

And so that was back in 20, early 2018. That’s when Julie and I partnered up. And since then we’ve done about 40 syndications. We’ve got thousands of investors and it’s just been a wild ride. 

Tim Mai: That’s an amazing story. Wow. So did you join any type of mentorship group or mastermind group?

Annie Dickerson: Everyone. And we’ve been part of almost every one of them. And you know what they say, don’t reinvent the wheel. Others have done it before you, you just pick, you’d be a part. So we’ve been part of almost, I think pretty much everyone. I think somebody mentioned Brad Sumrock. We were part of that group.

We’ve been part of Michael Blanc’s group, Joe Fairless’s group. We’ve. Coached with Trevor McGregor and Rod Cleave. So many of the greats in our industry. And, from every one of them, we’ve gotten bits and pieces and nuggets. And what we’ve been able to do is alchemize that into our version and our brand.

And that mentorship, I highly recommend it because. It’s a tough industry to break into, especially these days with more players getting into it. And so to the extent that you can follow somebody’s path that they’ve already created and you can shortcut your time to success.

So I attribute a lot of our success to those mentorship programs we were a part of. 

Tim Mai: That is, that’s awesome. And you mentioned that capital raising was like the bug that got you or that you ended up liking so much. So did that become a major part of your business model to specialize and focus on the capital raising side?

Annie Dickerson: It did. And I, it was unintentional, but looking back, it was the best possible path. And here’s why when you’re starting and you’re trying to get into, let’s say the acquisition side, there’s a ton of costs involved. You got to fly there. You got to visit, you got to meet with the broker, schmooze brokers, and then you’ve got to spend a lot of time, right?

Building out. The analyzers looking at that, maybe you hire an underwriter. So there’s costs associated with that due diligence and the acquisitions, the END, all of that versus when you’re starting out and as we did, we were just talking to friends and family in the early days. I would just hit a record and I’d create a.

Quick. I used a tool called Bomb and I created these quick little, 60-second videos. One on one I’d have my little whiteboard and say, hi, say hi, Tim. I’d wave it in the video. And that was total, it was free, right? And we didn’t have these huge costs in this huge risk. We were just trying to educate people, tell them about these opportunities.

And we got to a certain point where we realized. Holy cow, we’ve got 500, 000 or a million dollars in potential money on the table. And that was a very low cost. Julie and I bootstrapped it from the very beginning. And we only each put in a few thousand dollars for startup costs. And so what that did was it allowed us a low entry point into this business.

And we started to build up this brand and this presence. And we focused on the capital raising side first, because it’s what we knew and what we loved. And as we started to tip the scales we were able to bring not just 500 K or a million, but now three, five, 10 million plus to the table. Now we’re at a point where we can negotiate.

More of the deal in these partnerships and we’re at a point where brokers are taking notice because they’re like, Hey this group is legit. They’ve got a great track record. And that’s the other thing was because we were able to be part of multiple deals, we were able to build our track record fairly quickly as well.

And so now all of that has put us into a position where we have ongoing capital that we’re attracting, which has. allowed us to continue to do more and more deals. 

Tim Mai: That is amazing. In terms of the structure, the legal structure itself, do you mostly go in as a co GP or do you mostly go in as a fund to fund?

Annie Dickerson: So that has also evolved. So in the early days, we were mostly co-GPing deals, and over the last few years, especially as we’ve hit that 5 million and above threshold we’ve had more of a JV structure. And as of last year, we’ve shifted to more of a fund model, not a fund of funds, but actually, a multifamily equity fund where we put multiple assets into a single fund.

So that is our current structure and that’s what we’re moving forward with. 

Tim Mai: I see. That’s pretty great. Since 2018 and now, what would you estimate as the amount of money that you and Julie have raised? 

Annie Dickerson: It’s about, so we’re, we’ve currently got an active raise going on as well. So it’s about 120, 125 million at this point.

Annie Dickerson: A lot of, I got to tell you just for reference for everybody on the call, the first deal that we raised for in 2018, and this is how fast it can happen. In the first deal we raised for in 2018, we raised a total of 420 K. We thought we were going to hit a million at the minimum, but we only hit 420 K, which included.

100 K from me and my mom. So that’s, we were struggling then that was only five years ago. And now we’re well over a hundred million and we’ve got the capacity for endless amounts of capital. And it’s, I just want to say that it’s possible to do within a short amount of time. 

Tim Mai: That’s awesome. So let’s talk about that first race. You said you struggled through that first race or share with us the struggles that you have that you had. 

Annie Dickerson: We had every struggle and we made every mistake. We are okay. So first of all, this is okay. So Julie and I partnered up and this was the first opportunity that came across our desk.

Where we were like, okay, this could potentially work. This was in Huntsville, Alabama, which was a market that I was personally investing in as well. So I knew the market very well and we thought, okay if she could raise it because she was running her own business before we partnered together, she could raise 500 K on her own.

I could surely raise four or 500 K together. We should be able to raise a million. And so that’s what we committed to being able to raise a million. And first of all, there were a lot of new things. That’s what, that was the big mistake. So these days, when we try to introduce a new thing to our investors, we know that change takes time.

And so we try to get way ahead of it and educate on the market or the new asset class or the new operator, ahead of when the opportunity comes out. Or we try to introduce an opportunity that only has one difference. Maybe it’s a partner we’ve worked with before. Maybe it’s an asset class we’ve done before, but maybe the market is different.

That people can handle. The problem was with this deal. Everything was different. It was a partner. They had never heard of it. It was a market that they were not familiar with. And it was an asset class that was new to them. It was a portfolio deal as well. So there were a lot of these characteristics of this deal that we had not taken the time to familiarize our investor base with.

And as you can imagine, we released the deal and there were question after question objections, and they just weren’t comfortable they didn’t trust this deal and so it was fighting an uphill battle from day one. And on top of that, there was a lot of GPS in that particular deal, which we’ve since learned from when you have too many cooks in the kitchen, it usually doesn’t work out well.

So we learned a lot on that first deal. And so we’ve changed a lot of things since then. 

Tim Mai: Wow, that’s, yeah, those are some like golden nuggets just in that short simple answer that’s great. For the folks that are listening to this and they’re fairly new to this, maybe this is their first race or so, what would you say are some of the ideal scenarios to come in, let’s say?

Let’s say we want to come in as a capital raiser, and coach GP onto this deal. What are some of the things we should look for to make our first race easier? So what type of partner we should look for, what type of deal, and those kinds of things? 

Annie Dickerson: So what I would recommend is first don’t start with the deal.

If you’re looking for the easy path, don’t start by thinking about the deal or even the market or anything like that. Start by thinking about your investors. Who are your investors? And the people you already know within your sphere, the people you’re already talking to, who are they and what are they looking for?

We always coach our real estate accelerator members on coming up with an investor avatar and figuring out who’s your target audience. What are their pain points? And what are their aspirations? Because they, you’ve opened up a line of communication with them around real estate investing, and they’re still listening, which means there’s something that they want, something that you’re offering that helps them with a pain point that they have.

So figure out what that pain point is. Is it because they’re trying to replace their income so that they can quit their job? Okay. Then you’re going to be looking for deals with higher cash flow, which I know they’re hard to find these days, but anyway, you want to get a sense of what they’re looking for. So then you can then go out and as you’re talking with partners and looking at potential deals, you’re the matchmaker, what your pool of investors wants and your pool of investors is going to be different from our group of investors.

And you know what they’re looking for. So now, when you talk with potential partners and they say, I have a deal, it’s got super no cash flow for the first two years, it’s a development deal. And, but there’s tons of appreciation on the backside. You’re like that’s a great opportunity, but unfortunately, it’s not a match for my investors.

So that’s what I would say if you’re looking to make your first raise. And quote, easy and or successful raise, you’ve got to know what your investors are looking for, because you were like an ambassador for them. You’re like a representative for your investor group. So you’ve got to know what they want.

So you can go out in the world and find that thing. And once you find that thing, if you’ve nailed it, I guarantee when you go back to your investor group, they’re going to say, that’s exactly what I’m looking for. I’m totally in. 

Tim Mai: I see. So what would be like the top? Maybe the top three questions to ask to quickly find out what they are looking for. What would be a good fit for them? 

Annie Dickerson: So better yet, I think, because I experienced this back when I was working as a creative director if I ask you a question about what design you want or what style you like, you can use words and tell me, but ultimately it’s really hard to figure out what’s in your head.

Versus what’s in my head. So I find that the quickest path to the answer is to give them an example and it doesn’t have to be a full investment summary. We’ve done even just like you can pull out a Google slide or a PowerPoint slide and just pull a random stock image of the type of asset that you’re looking to invest in.

Plop that on there. And then under that, maybe it’s like Class A, built in 2021, in Orlando, Florida, and this many units. And then that’s all you need. And then you can, if you want to, you can build out more and say, this would be the projected cash flow. This would be the business plan, but at the very minimum, you’d have something like that.

And then you use that to start the conversation and you say, Hey, this is. Along the lines of the types of opportunities I’m looking at, if I were to find something like this with roughly, let’s say year one cash flow around four, four to 5% 1. 7 X equity multiple IR around, 14, 15, would you be interested?

And that makes it very real for people because often people don’t know what they want until you show it to them. And then they can tell you, yep, that’s what I’m looking for or no, that’s not what I’m looking for. So I’d recommend that rather than asking those open-ended questions, you take the initiative and create an example that can be super simple and use that example to then crystallize it for your investors.

Tim Mai: That’s, wow, that’s good. I like that I like the way you approach it. Since that first day, what gives us a deal that you have had a lot of challenges with later, now that you’re, now that you’re more established like a recent deal that you had challenges with raising and share with us what those challenges might be.

Annie Dickerson: Let’s see more recently. I can tell you about last year. This may not be along the lines of what you’re looking for, but last year we launched our first multifamily fund in April. In 2022, right before the Fed starts, the Fed starts just hiking up the rates. And as soon as that first-rate height Hick hit, everything came to a screeching halt.

And what we initially thought, cause we had pulled our investors, we had given them sample deals. We were pretty sure. Of how much we were capable of raising. And as soon as the market shifted, all of that came to a screeching halt. And we found that we had to be creative in thinking about, okay, how do we, here are the things.

Just like in the pandemic, when things first stopped in 2020, we also at that time had to figure out, okay, what are our investors’ fears? So the same thing at this point almost a year ago, we had to say, okay, why did everything stop? What are our investors scared of? How can we educate them? So they know what’s really going on and why there’s this opportunity here.

And so in that case, and I would argue, there’s still some of that going on now with some and. Uncertainty in the market and investors may be unsure, so all of you on this call, have an opportunity to step out as a leader during this time. It’s like when you’re on an airplane, right? And there’s turbulence.

You don’t want the pilot to come on. Oh, first of all, you want the pilot to come on and say something. You don’t want to hear anything. That’s the worst, right? If you’re like, the plane’s going like this and you hear no news, you’re like, We’re all gonna die, right? The second worst is if the pilot comes on and they’re like, Oh my gosh, there’s turbulence.

I’ve never seen anything like this, right? And then you freak out. What you want is you’re experiencing all this turbulence and you’re like, Oh my gosh, we’re going to die. And then the pilot comes on and he says, Folks, this is just routine turbulence. We’ve seen this before and we’re going to be fine.

We’re going to be through it in the next two minutes. Just buckle up and sit tight and we’ll be back online soon, right? And then that’s what we have the opportunity now to do. To step into that leadership and that initiative is all of us here. You’re here, which means you’re taking the initiative to network and get ahead of the curve.

And so take these conversations and the data and the bits and nuggets that you’re gathering and bring those back to your investors to still that down and tell them, Hey guys. It’s all going to be fine. Here’s where we are in the market. Here’s what’s coming down the pipe. And here’s why right now is the best time.

And if you do that because there are so many other operators out there who are scared to step into that. If you take, And if you embrace that fear and you step into that courage and you take that initiative, you are going to have investors who become raving, loyal fans. And because you are showing them a path through their fear.

And if they then follow you and they take that chance and they invest with you and they see indeed. Hey. It was the best time they’re going to trust you for life. And not only that, they’re going to start to refer their friends and family over to you too. So I see right now, just like last year, just like at the beginning of the pandemic is a huge opportunity to step out with that leadership.

Tim Mai: I love that. Yeah, like being the knowledge provider, the one that brings them clarity that helps them. Yeah, see a bigger view than what the market is saying right and so that’s awesome. I love that. When you’re looking at your investor profile avatar.

Which buckets are your biggest group of investors? Are they tech people from the Bay Area? Are they entrepreneurs, or business owners? Give us an idea. Sort of an insight into your investors. 

Annie Dickerson: Happy to. Yeah. And when Julie and I first partnered together, we had a very specific avatar in mind and that was moms.

We named our avatar, Jen. She’s 38 years old. She’s got three kids. She’s got a golden doodle. She lives in the Pack Heights neighborhood in San Francisco. We know everything about Jen. And as we’ve built our team knows everything about Jen too. And in the early days, We targeted everything toward Jen.

And what that does for anybody here who may not yet have an investor avatar, is the value of having an investor avatar is that you find yourself in the early days. So often sitting in front of a blank screen, you need to write that newsletter. You need to create that blog post or that video or whatever it is.

And if you don’t have an investor avatar, you’re trying to reach. Everybody, it’s impossible. You’re going to sit there and you’re going to write one sentence and you’re going to be like, no, that’s not right. Delete, delete, delete. And you’re going to say maybe I should talk about this. Okay. Let’s start.

Nope. That’s not right either. You’re going to spin your wheels. Cause I’ve been there. I’ve done that for hours and it’s the worst because you’re just stuck. And when you have an avatar, what that does is now you’re sitting down and you’re like, Jen. What are the questions Jen has? Okay. Jen’s wondering if she’s busy with laundry.

She wants to hear something while she’s folding her laundry. Okay. How can I create a podcast or a quick video for her? Okay. And what would I teach her? She doesn’t know how the whole process works. Okay. Let me see if I can just teach her real quick. How does this process differ from a rental property or something else she’s more familiar with?

And so it gives you a really easy way to start to get what’s in here, which is the gold out into being able to teach people. And so early on, Jen was our avatar. A couple of years ago, we realized that Jen, we created a Jen 2. 0 because she evolved with us. She became a savvier investor because she was reading our blog post.

She was watching the videos and she knew what a cap rate was. She knew how to vet a market. And so she was a little bit savvier. And then most recently within the last year, we’ve discovered we have not just Jen and Jen 2. 0, but we also now have. Bill and Richard. So Bill is a business owner and he’s looking to get his business Operating on its own.

So he can then focus on investing and Richard is a retiree. He’s made millions. Now it’s about capital preservation. And so we’ve realized that even though it isn’t that funny, our messaging was all targeted toward Jen, and then Jen 2. 0, we just naturally attracted all these other avatars.

And people ask us all the time, ” Are all your investors women? Because Jen is a woman, but no, and we never say women only. We don’t take men here. It’s just that helps our brand to have a personality and it helps our brand to be more cohesive. And so starting from day one, our investors were 50, 50 male and female.

And they continue to be. We attract a lot of physicians. We attract a lot of moms too, and now retirees and business owners. And so that’s in a nutshell, who our core audience is and also the value of having that investor avatar. 

Tim Mai: Okay. So would you recommend that everyone start as an avatar and then let it naturally grow the way you have it and not try to focus on three different avatars?

Annie Dickerson: That would be my recommendation because it can be difficult juggling multiple types of personalities and what they’re looking for. So I would recommend starting with one. If you don’t know who that person is, Often you can look in the mirror. Most often people’s first avatar is who they are because you know yourself the best.

You don’t have to do user research to figure out what your pain points are. You already know them. And so that’s the easiest place to start outside of that. Look to your, the people who you’re already talking to about these opportunities. See if there are any common threads. It doesn’t have to be. Gender doesn’t have to be age.

It could be, maybe they’re all looking to quit their jobs. Maybe they’re all looking to start a business or a side hustle, or maybe they’re all looking for cash flow, whatever that is, those can be your characteristic traits. But yes, I would recommend starting with one. It’s hard enough with one. So just start with one.

And then as you get success with that, start to think about branching out. 

Tim Mai: So once you find your avatar, you decide on this one avatar, how can you best market to them? 

Annie Dickerson: All right. Here’s what you do. Super simple. Sit down, set a timer. Let’s give you five, no more than 10 minutes.

Okay. Let’s say we set a timer for 10 minutes. Thinking about that person, jot down as many questions as that person might have about these opportunities. All of the questions you think this person currently has in their brain, that’s keeping them from moving forward and investing with you when the timer goes off.

You’ve got a list, at least, even if you’re, you get off to a slow start and you, at the end of 10 minutes, only have 10 questions, that’s 10 great pieces of content that you could create. So that’s the first step is to think about all the things that this person needs to hear from you to get, we always talk about it like a bridge they’re over here and where they may not know a lot about syndications or multifamily or how this whole world works.

They need to get over here where they’re savvy. They understand how this works. They trust you and your job is to build the bridge. In between, and this list of potential content. That’s the first step. That’s going to tell you how to build that bridge. Then you’re going to take, then you start with that first one and you say, okay, this person at a high level, they don’t even know why multifamily, why should I invest in multifamily versus.

Self-storage or stock or whatever they’re else they’re investing in. Okay. Let me knock that first one off the list. Let me create, whatever your strong suit is or you are most comfortable with. If you want to create videos, blog posts, write an email, whatever it is. I find in fact, if you struggle with it.

Writing blog posts instead of trying to write a blog post, open up an email and just right there in Gmail or Outlook or wherever you type your emails, just pretend like you’re writing an email to this person. Dear Jen, this is a great question that you asked about why you invest in multifamily. I think about this question all the time.

And when I first started investing, this is what I struggled with. And here’s how I figured out the answer because we’re all used to writing. Dozens, if not hundreds of emails every day, you already do that well. So start there. And even if you do a video, you can take that and then read that.

That becomes a script for a video. So I find that taking it out of this Oh my gosh, I have to create a piece of marketing. I don’t know. I’m not a marketer. I can’t do it. Just write an email. And then. That’ll get it out of your head. Then you go back and you say, okay maybe I make this part a little bit more formal, or maybe I changed the story and I had this part in instead.

And often you can take that email and just plop it onto your website and that becomes a blog post. And again, you can put that in multiple places. Tim, what are you doing now, right? We’ve got this live streaming. We’ve got people in Zoom. This is going to be a podcast, right? So, we call that spider webbing.

You take one piece of content, you spider webbing out into all these different places. And so you’re minimizing your work, but you’re maximizing your presence. And so that’s where I would start. Make that list of what your avatar wants to hear about, and then start writing those emails and turning those emails into pieces of content.

Tim Mai: That’s great. Yeah, I love that because I know I would struggle if you tell me to sit down and write an article, get it I won’t do it. But, framing it as writing an email Oh I can do that. That’s easy. 

Tim Mai: I love that. And then in terms of. So that’s from the content perspective and attracting them.

What else what’s another good way to find where they’re hanging out so that you can then connect with them and further that relationship? 

Annie Dickerson: That’s gold right there where you said, where are they currently hanging out? And so here’s the thing is a lot of people say I’ve got to, I’ve got to build my brand.

I’ve got to build my website and I got to point everybody to come back here. Come to my website. And that’s hard. There’s so much noise out there and it’s going to be hard for you to put up this billboard and suddenly everybody comes to you thinking about the user experience. What you want to do is go to them.

So once you’ve got your version of Jen, part of that should be, where does Jen currently hang out? Does she go to in-person meetups online? Where is she hanging out? Is she part of Facebook groups? Is she on Instagram? Is she on Tik TOK? Where is she? Online. Where can you find her? And for us, Jen, as a mom, was hanging out back in 2018.

Anyway, she was in a lot of these moms, Facebook groups, the ones where you ask everything from, how do I save for my kid’s college to, Oh my gosh, my baby has a rash. And what is this thing? Those types of moms groups, right? And so we said Jen’s hanging out there. She may not be the one talking about investing, but she’s, at least we know she’s here now.

How can we insert ourselves into that conversation and provide value, not advertise and say, come to us, but be of service? And so one of the things that we did that was super helpful in the early days was we would go into these moms, Facebook groups, and we would. Think of topics that were not directly tied to real estate, but getting at that same pain point of building wealth, and creating cash flow.

And so we were thinking moms, they’re thinking about saving for their kids’ college. And so we would go into these moms’ Facebook groups, and they have a search bar and we would just type things like five to five to nine plans because that’s commonly what a lot of parents think about when they think about saving for college.

And so lo and behold, there would be these threads sometimes from, 18 months ago, even many years ago, talking about saving for college. But the beauty of Facebook groups is as soon as you comment, it brings that thread right back to the top. And so we would find these threads where people were saying.

Yeah. Hey, how should I save for my kids’ college? And most people were saying five to nine plans. That’s what I do, or I put in a savings account and we would come in and we’d say here’s what we’re doing. It’s a little bit different from everybody here, but here’s what we’re trying. And here’s how it’s working.

If you want more information, feel free to message me directly. And we’d post things like that and our inbox would just blow up. People would be like, Oh my gosh, I’ve never heard of this strategy before. Tell me how this works. And we’d have all these one on one conversations. And, a lot of our, one of our biggest investors to date came through that exact strategy.

She was looking for it, she had just had an inheritance. Over a million dollars. She didn’t know what to do, and she didn’t know us from anybody, but she saw us have a presence in this Facebook group and talked about this alternative way of investing. And after a little while, she reached out and said Hey, can I just learn a little bit more?

She didn’t tell us anything about her inheritance at that point, which was smart for her, she was just like, I’m just curious. And so we established a relationship and over time she’s, she and her husband have now invested in over 15 deals with us, well over a million dollars, all from a Facebook conversation.

So this is a very powerful strategy. 

Tim Mai: It is. I don’t know if the people listening realize how Big of these ideas are. I was just thinking, okay, that’s it. We can end the show, we can all go home now. This is so good. I love it. This is such a stealth strategy.

Annie Dickerson: Yeah. Yes, it’s stealth because you go where Wayne Gretzky said you got to skate to where the puck is going.

You have to figure out where these people are, where they already hang out. You got to go there. That’s how you’re going to find your success. You have to figure out what they’re already talking about and figure out how to insert yourself into that conversation. If you try to force yourselves on them, you’re not going to have any success.

So that’s why it’s key that you know who your investor avatar is. So you can do these stealth strategies just like. 

Tim Mai: This is so good. All right. It’s so good. I have to ask you for one more. Give us one more. Yeah, around, around this marketing side of it. Like one more good. 

Annie Dickerson: All right. Okay. One more.

I’ll give you one. The one that’s coming to the top of my mind right now is accountability. Because all these ideas are great and we could sit here talking all day about this marketing idea. This is so great. You’re taking all these notes. And then tomorrow comes and you’re like, I don’t know if I could do that.

Let me go do something else. And then just days go by and it doesn’t happen. Here’s what we did back in the day. We said we wanted to commit and we saw the potential. We saw the opportunity and we said, okay, how can we hold our own feet to the fire? And so what we did was we committed, we announced this publicly to all our friends and family, that we were going to put out a weekly newsletter.

And this is a little nuts. So this is only for, not for the faint of heart, but that’s what we did. We said we were going to put out a weekly newsletter. And not only that every newsletter is going to have at least one brand new, fresh piece of content for our investors. Which means every month we were putting out at least four new pieces of content.

And that allowed us to then build our vault of content very quickly. Over a year we had dozens, if not hundreds of pieces of content, and that’s what helped us to build that investor base. And I love what writer Shonda Rhimes says, she says writing for TV is laying track for an oncoming train.

And that’s what our newsletter was to us. It kept us accountable because we knew that the newsletter was going to go out every Tuesday. And whatever we had to do, bend over backward, whatever else we had going on, that newsletter was going to go out, and darn it, it was going to have a new piece of content in it.

So we had to figure out how to make that happen. And so that was our oncoming train. And because of that, because we want, we committed to that and we said, this business is all about trust. We held our feet to the fire. We committed to this. We have to keep this on track. And so that’s a huge part of why we’ve been able to build our presence in our brand to this point because we got so much practice with building the content and we knew exactly what our investors were looking for.

Because we kept putting out that content. So whatever that is for you, doesn’t have to be a weekly newsletter, you commit to once a month putting something on YouTube or daily posting in a Facebook group or something like that. Whatever it is, I challenge you just to commit to one thing.

Don’t try to do it all because you’re going to get overwhelmed very quickly, but just pick one thing and commit to that. And from there, once you’ve got a handle on that, then start to expand from there. 

Tim Mai: That’s perfect. You answered my next question without me asking it, which is about building trust and authority.

Wow. And with chat GPT being popular these days, it can help a lot with writing some of these articles. So yeah, I. I love that. And then I know the newsletter you mentioned was a big one for you. Do you also do physical mail out at all, or just all digital? 

Annie Dickerson: Yeah, we haven’t, I know several groups do.

We haven’t expanded to that yet we’re finding pretty good traction, just with our online presence. 

Tim Mai: That’s great. Yeah, I know I received Joe Phelous’s newsletter and it does keep him top of mind for me for sure. It’s Oh, it’s here again. 

Annie Dickerson: Yes, that’s right. That’s right.

Tim Mai: That’s cool. And then what are some of your favorite tools that you use in your business?

Annie Dickerson: Oh, my goodness. Okay. So we’ve got all the regular ones, right? Google, Slack, YouTube, and all these things. But let me dig deeper and think of some things that you all may not know of. On the design side, when you’re creating things for yourself, like the images for your blog posts and whatnot, or finding images for your website, there is a great free stock image site called Unsplash.

com here, maybe I can. Put these into the chat for anybody here. Unsplash. com is a great one. So that one I use, almost all of the photos from our site come from there. And as a creative director, I have a high bar when it comes to imagery. So that’s a great one. Another one, if you’re looking for one.

Color palettes for your website as a color hunt. co. I use that all the time and we use that as we put out new deals as well. Google Slides, believe it or not. So I think somebody mentioned Canva. So Canva is great. And if you don’t want to, if you’re not a designer and you don’t want to learn a new tool, I find that Google Slides and PowerPoint are great design tools.

And they can do most of the things that you need. I’ve built and designed whole websites, believe it or not, inside Google Slides. They are powerful design tools and you don’t necessarily need to venture off into other tools for that. Let’s see, for huge investor polls, you always want to know what your investors are looking for, and what they want to invest in.

We’ve used Google Forms in the past. That’s a great, simple tool to use. We’ve also used a tool called Survey Sparrow, which allows you to create more fun, custom, more interactive surveys. For our CRM, we use ActiveCampaign. That one I couldn’t recommend more highly. It’s to get you off the ground with investor communications.

And especially with automation, it’s a really good tool. Easy to use, easy to learn, and powerful. Beyond that, let me think if you’re using it. WordPress. There, so early on, we built our website using Wix because we were just intimidated. We didn’t know how to build a website and Wix like Squarespace is very like drag and drop, right?

And WordPress tends to be a little bit harder to learn, but over time, WordPress is more SEO friendly and it’s also more powerful because it’s got all these plugins. So there’s a plugin for it. WordPress is called Elementor that does turn it into more of a drag-and-drop website builder. There are so many more.

But those are the initial ones that come to mind through our real estate accelerator program. We share all of the tools that we use. Oh, 1 more. I got to share 1 more with you. If you were creating videos, if you’re creating videos, you’ve got to get an app called Big VU.

It is a teleprompter app and it is so cool. Oh my gosh, this changed my life because, in the, I see somebody say, I love big views. I love it too. In the early days, I used to try to create videos with just a bullet-pointed list and I would hit records. I messed up, hit stop, hit record, stop over and over again.

And what big view allows you to do is take a script something you write and turn it into a script. And what it does is you hit a record right within the app and the script starts to scroll up. On your screen, all you have to do is just read because the script is close to your camera.

It looks like you’re looking directly at the camera. So you can often get it in one take. So that’s another really good tool as well. 

Tim Mai: That’s great. You are such a. An incredible resource of information and resources. Yeah, this has been one of the most informative interviews I’ve done, because of the way you answer and the way you expand on your answers. I love it.

Thank you so much. 

Annie Dickerson: Good. I’m so glad to provide some value. I just want all of you to know, I’ve been in your shoes. I know how hard it can be. I know how overwhelming it can be. And, it’s hard, there’s so much out there. It’s hard to know what to do and when to do it.

And so that’s why we open up our entire business. Everything in the back end of our business, we share with all of our coaching members. And if there’s, whether you guys decide to join or not, that’s not, I don’t, you don’t need to but know that I’m here as a resource, because I want you to know that, you can succeed in this business.

And it’s a wonderful business. It makes a huge impact. And if there’s anything that I can do to help any of you, I’m always here. Happy to share anything that we talked about today or anything else. 

Tim Mai: That’s great. Now I wanna talk about, where you see the market is going, and then also too, I know you started your funds last year, right?

And so do you, are you still moving forward with the fund model in this changing market? And do you see that as an Advantage or disadvantage versus syndication with where the market’s going? So if you can share some of your insights into that. 

Annie Dickerson: We just launched our second multifamily fund in December.

So we are continuing to move forward with the fund model. And so this one is similar. It’s a multifamily equity fund, and it’ll hold probably two to four or five assets in it depending on the sizes we’ve got our target markets and whatnot, and, I think it’s a terrific model. It’s not, again, it’s not for the faint of heart and it can be difficult starting with a fund model because here’s why when you’re launching a fund, people are investing in you.

Because you are making the choices and you are going out and finding those assets. Whereas when you do syndication, you launch a specific asset or a specific deal, then they’re vetting that deal. You are a part of that, but they’re the onus is on the deal to perform. And so it can be a shift and so that’s why we’ve built our track record and now we’re switching to this model.

But what that allows us to do as our business grows is now have that capital more at the ready. We’re not behind the eight ball, we’re in front of it. And so we’ve got that capital at the ready, which then allows us to go out to more brokers and know exactly what we can offer and what we’re looking for in that fund.

And people are always hesitant to jump in on the first of anything. But the second fund, because we’ve already got that. The first one, and that’s doing well. The second one has already got great traction and momentum, and we’re about to announce the first asset in the fund.

So it’s all going well. And, before we even, we haven’t even announced the first asset in the fund, this is a shell. Of a fund that we’ve announced, we’ve said, here are the things that we’re looking to buy. And here are the markets that we are looking to buy in. And just from that, because of our track record, because of the trust that we’ve built over time, we’ve got millions of dollars in the bank for people waiting to invest with us just because.

they have that trust in us. They don’t even need to know what the asset is. And that’s what I want all of you to know is possible. If you put in the work to build that trust, then eventually it doesn’t matter what you’re going to invest in. They’re going to follow you anywhere that you go. 

Tim Mai: That’s awesome.

How much is your previous fund? How much is this fund? 

Annie Dickerson: So the previous fund was 30 million and this one is around that same range as well. 

Tim Mai: Gotcha. And so I guess I assume you are having fun. Let me take that back. Where do you see this market going, Yeah, what do you see this market going?

Annie Dickerson: That’s the million-dollar question. I see a ton of opportunities. Honestly, I see a ton of opportunities ahead. 18 months ago, seller expectations were here and the market was starting to shift and you know how sellers are. They’re like. No, I still want, let’s say it’s, 50 million. I still want that 50 million.

You said I could get it two months ago and buyers are like, no, the market is softened. I don’t know. I’ll give you 40, 45 and they’re like, no, I want 50. And they’re like, no. 45, I’m going to walk away. And the seller’s no, I’m going to hold out for 50. And then a few months later, as the market continues to go, the sellers are okay. I’ll take that. 45. I’ll take that 45. Come back. Come back. I’ll take that 45. And you’re like no. Now I’m 40. And they’re like, what? You said 45. And you’re like that was two months ago. And so that’s what’s been happening right over the last 12 to 18 months.

That’s the slide that’s been happening and sellers are having to wake up to that. And the perfect example of that is this asset that we are going to announce soon. It was under contract at 70 million. It fell out and we’re getting it for, I think we’re getting it for 57 million. Wow.

Within a short time, right? And that’s what’s happening across the board. There’s all these opportunities starting to pop up. They’re not all over the place yet, but I very much believe that they will be running rampant here within the next 12 to 18 months as seller expectations come in line.

So all that to say, this is the perfect opportunity to get your investors ready and investors aren’t sitting on the sidelines. As I mentioned, we put out this fund, and our investors are coming. They’re ready to invest because they see inflation. That’s what, that’s, what’s going on in their minds.

They’re like, I need to put my money somewhere. It’s losing value. And so it’s, This is the perfect opportunity because these opportunities are coming down the pipeline. Investors are wanting to invest. So everybody here, you have the opportunity to step out. As we talked about earlier in that leadership, let people know this is what’s coming.

And this is the opportunity that you have, and I’m going to lead you in that way. And I’m going to find these great opportunities for you. Come with me. I invite you to come with me. And so that’s where I see things headed. And we’re working hard to position ourselves behind the scenes to make sure that we are ready for that opportunity when it comes.

Tim Mai: That’s great. So with you have already reached, over a billion dollars worth of assets and over a hundred million dollars that you’ve raised. What’s yours? Yeah. Yours as in good eggs, big goal. Where are you wanting to take this business? 

Annie Dickerson: Oh, wow. So recently we did. If I highly recommend there’s a book by Cameron Herold called vivid vision, I highly recommend a short little book. You can read it on a quick plane ride. And the concept of a vivid vision is you look three years out. In your business and or in your personal life, you come up with a very clear vision of what your business is going to look like at that time.

So we recently did this. And in fact, we had all of our team members do it at our recent team retreat too. We had them do it for their personal lives as well. Write a letter to yourself three years in the future. About all the things you’re proud to have accomplished at that point in your life. And people shared and they were tearing up, they were crying because it’s amazing what you can do, what you can accomplish, and the pride that you can take in that.

So as we thought about three years in the future for Good Egg we’ve done a great job so far of speaking to and providing opportunities for Jen and Jen 2.0. We’re starting to branch out into our other newer avatars, Bill and Richard, but we see that so far we’ve provided a great deal of flow, but we always talk about life by design.

That’s the ultimate where we want to get them to yes. Real estate is great, but it’s a stepping stone to get you to this life, this amazing life that you can build for yourself and your family. And so what we’re going to be doing between now and then is building out all those things. We want to build out not just deal flow, but investor retreats, life-by-design summits, investor masterminds, and financial literacy for kids.

So all these programs where we’re taking into account the full investor, not just you, how much are you putting into this next deal that we’re opening up? And we’re also looking at expanding our impact. Something that we were able to do within the last couple of years is start to donate a portion of our proceeds to a nonprofit that’s important to our investors.

So we pull all our investors to see what they’re passionate about. And with every deal that we close, we donate a portion of those proceeds to one of those causes. And so over the next three years, we are also looking at creating a good egg foundation and expanding that impact there as well.

So lots of moving and shaking. 

Tim Mai: I love it. I love it. Yeah, so I mean for the people listening and they want to connect with you partner with you invest with you learn from you get access to all these great things that you’re you guys are doing, where would you like to send them? 

Annie Dickerson: The best place to go if you, especially if you are wanting to get some capital-raising support is our website, therealestateaccelerator.com. That’s our coaching and mentorship program. As I mentioned earlier, basically we open up. Our kimono essentially, and we’ve taken everything in the back end of our business. That’s worked for raising capital. We’ve white labeled it and we give it to you, including now over 80 blog posts that you can copy and paste.

So you don’t even have to write all those emails and turn them into blog posts. You can just copy and paste, and add a little snippet to the beginning and the end. And boom, you’ve got an instant thought leadership platform. And yes, I will put the link in the chat as well here for anybody here. But yeah, through that you can apply and feel free.

You can reach out to me at any time at Annie at good egg investments. com. You can also learn more about our business, good egg investments at our website, good egg investments. com.

Tim Mai: Awesome. Thank you so much for that. One last question for you. What are you teaching your kids that perhaps most parents are not teaching this?

Cause I have two teens, God, I’m two teenagers. 

Annie Dickerson: I’m so glad you’re asking this question. This is one of my favorite questions to ask others as well because we’re in such a unique position to be able to pay it forward and shape the next generation. And I think. Oh my gosh, just all these conversations around entrepreneurship, helping them to think about entrepreneurship in a new way, before COVID, one of the most powerful things I did with my kids was help them to set up a lemonade stand.

And now let me tell you, the most powerful part of this was we had the lemonade stand and within two hours or so it was a high-traffic area. They had about 200. That they had made from lemonade. And I’m like, Whoa, I need to switch my business. Anyway, So they had 200. So we get home, we pile it all up on the kitchen table and they’re thinking, Oh my gosh, I’m rich.

Like I could just, Oh my gosh, I quit everything and just do this. And they’re starting to grab the money. I’ve got two, two young boys. And I was like, Oh yeah. Legos they could buy. I’m like wait, Remember, I bought that jug that holds, held the lemonade. That was 40. Let me take my 40 back.

What about the cups? We paid for the cup. Let me take that. And the napkins, right? And we’re slowly watching the piles of cash go down and they’re like, what? What? What’s happening? And I had a frank conversation about startup costs and what that means. And when you start a business.

That’s an investment, but next time, guess what? You don’t have all these same startup costs and you get to keep more. And so I think it’s in little ways like that, where you can show them with real-life examples. I have a good friend, Adam Carroll, who did exercise with his kids, teenagers. He went to the bank and he actually, we all know mMonopoly

He got the same denominations as Monopoly has in their play money in real money. He went to the, he got like however many, like a hundred ones and 55s, whatever it is. And he had his kids play Monopoly with real cash. And he found that the decisions that they were making with real cash were starkly different.

From with play money. So to the extent that we can give our kids these opportunities to test things out and to make mistakes while they’re living under our roof and while we can be there for them. I think that’s going to make a difference as they go out in the world. 

Tim Mai: Wow. I love that.

That’s awesome. Annie, thank you so much for doing this interview with me today. It’s been. Phenomenal. I love it. It’s one of my favorite interviews. Yeah, you’ve been so generously sharing and giving your knowledge and I appreciate you for doing this interview with me today.

Annie Dickerson: All right, back to you. And thank you to all the listeners, everybody here in this session lives as well. It. Makes my heart so happy to be able to share with you. These are hard ones that we’ve learned and tested through time. And I want nothing more than to share it with all of you so that you can see success too, because I fully believe a rising tide lifts all boats and we’re all in this together.

So again, if there’s anything I can do to help you with your business or even connect you with anybody in this space, feel free to reach out anytime.

Dan Handford: To be a successful capital raiser, you just have to be yourself, right? And there are going to be people that will be attracted to you. There’ll be people that will go in the other direction. Don’t worry about the people that are going in the other direction. Just be you. Tim is one of the most authentic and genuine people I’ve ever met.

Sincerely believe he’s coming from a position of giving and that means a lot. You’re going to make huge progress. 

Tim Mai: Welcome everybody to today’s Capital Raising Show. I’m your host Tim Mai. And today I have an amazing guest coming on with us, Dan Hanford. Dan spoke at our event this past weekend with his son.

Caleb is 10 years old and yeah I’m super excited to interview Dan and specifically ask him more questions around what he’s teaching his kids right, how he’s teaching his kids to invest and so I’m gonna share with you Dan’s bio here real quick. Dan and his wife Danae along with their four children three girls and a boy resign from work in Columbia, South Carolina.

Dan has an extensive successful background in starting multiple seven-figure businesses. from scratch with a large group of non-surgical orthopedic medical clinics located in South Carolina. His family of companies have annual budgets of over 10 million dollars. Large operations that Dan runs.

Dan’s the founder of the multifamily investment nation where he educates A nationwide group of over 40, 000 members on multifamily as well as self-storage, of those types of assets. Dan is a managing partner of PassiveInvesting. com, a private equity real estate company. investing firm acquiring large 20 million plus apartment complexes and self-storage facilities across the southeast using private accredited investors fund.

Since 2018, his company has raised over 530 million dollars with a 1. 3 billion dollars asset under management. So with that, let’s welcome Mr. Dan Hanford. 

Dan Handford: Yay. Thanks for having me, Tim. I appreciate it.

Tim Mai: Yeah, I would like to jump right into talking about your son. We got a lot of feedback from the events and that was the highlight of the event so love to hear from you.

What are you teaching your kids that perhaps a lot of parents are not teaching their kids and how can we all incorporate that? 

Dan Handford: Yeah, I think one of the biggest things is making sure. That you teach them about finance at an early age, and even if I always told my wife, I said, once they turn 5 years old, they’re getting a bank account.

So I want to make sure that they can have that bank account. I want them to be able to. Sit down with them and show them kind of what income and expenses are and how they can put money in and how they can pull it out. And, I act as their bank. Instead of I don’t go to banks anymore I don’t know how many of you go to banks, but it’s been a long time since I stepped foot

And for me, whenever they want to deposit in their bank. I don’t necessarily. I don’t act as their account, but when I was saying they have an account like we are, we beg with first citizens. So with 1st Citizens, each 1 of the kids has their bank account but when they deposit it, they basically send it, give it to me and then I take it, move it from my account, and put it into their account.

So I don’t have to worry about going into the bank or anything like that. I just take the cash or whatever that they earn and just put it in my pocket. And so I explain that to them as well about how I’m pretending like I am the bank and how I’m doing it and I’m processing it and then whenever I make transfers or deposits for them, I always make sure I can print out the order, not only I say print out, but I will show them my two older kids have emails.

So I will email them with their statements and things like that. So they can have a look at it and keep track of it. Thank you. And then I’ve told all of them that once they reach a thousand dollars I will allow them to be able to invest in one of our properties and they don’t go in and sign all the PPMs and the documents and stuff like that.

They’re again investing through me, but I allow them to be able to see the investor pitch decks and they get the monthly updates. They get the distributions. I want them to see all of that happening so they can get that. So they can like it, so they can see what that feels like. And so that’s the biggest thing that we have done is, making sure that they have a bank account teach them how to save, how to make sure that they’re, they’re giving and tithing and things like that for our local church and making sure that once they have kept track of their capital, I, one of the most challenging things when you have money, Is to do a disservice to your children by buying them things that they should be buying for themselves.

And it’s a challenge because, for me, it’s a lot easier just like, when they turn 15 or 16, when they start driving. It’s a lot easier for me just to go down to the car dealership, buy a car, right? Go down there, pay for a car, and be done with it. But I’ve sat down with my kids and I’m like, you will enjoy it.

Driving that car so much more if you put the work and time and energy and effort into earning the money to be able to pay for that car. So we will have a family vehicle that the kids can use if they need to use it or whatever, but I want them to be able to buy their first car, right?

That’s usually like most people’s. The first major expense is a car, right? But I want to be able to teach them that so that they can do that on their own. And I know that long term that will benefit them long term as well, because they’re going to now know how to earn money, right? My oldest daughter has a cookie business, right?

So she goes around and has order forms and they’ll fill out the forms and she changes them based on the seasons and things like that. And she’s not earning a ton of money, but for a 12-year-old, she’s probably earning a couple of hundred dollars a month, and she does something that she likes.

She enjoys baking. She enjoys that piece of it. And she’s also now recruited my son to help sell cookies for her. So now I earn a little bit of a commission on selling cookies, but then I taught my daughter. I’m like, listen, like. When you sell these cookies, you can’t be baking them. So you need to have a Salesforce.

And of course, I’m like your son. I mean your brother Caleb can be part of your Salesforce and teach him how to go out there and sell. I think one of the greatest skill sets that we can give our children is the ability to sell, right? Whether they’re selling themself or they’re selling something to somebody else, that’s one of the greatest skill sets that somebody can have.

And so that’s one of the things that we try to instill in them is the ability to communicate. And sell and even to the point of being able to write properly. My son, my wife is a former school teacher and she comes from a long line of school teachers, her parents or grandparents, great grandparents like it’s a long line.

And I told her when we first got married, we’d been married for 14 years. I told her, I said, I’ll take care of it, earning the money and the finance and that kind of stuff. And, she still worked when we first got married and stuff like that. As far as outside of the home, I’m not saying she doesn’t work now.

Don’t get me wrong. She does. But one of the things that I told her is I want you to be able to make the decisions around our kids’ education. And so one of the things that she said is that she wanted to make sure that we were able to teach our kids for an entire year and homeschool them.

But she didn’t want to do it when they were too young, because she didn’t want to have to worry about teaching them how to read and write and do the math, but she didn’t want to wait until they were in their teenage years when, at that time, mom and dad aren’t cool anymore. So you don’t want to hang out as much, hopefully, we can mitigate that a little bit, but so the fifth grade is like that, that perfect medium, medium year, if you will. And my son was actually on the plane flying back and forth to Dallas, he was writing a paper for his homeschooling class on his computer, on his laptop.

And I asked him, I said you I, at first I read it and I was like, wow that’s good. So I’m like I’m surprised you wrote that, and so of course I read through it and I found a few little mistakes here and there, and I said, I said I said, daddy, you like to write.

I said I enjoy writing. I feel like I’m a good writer. I feel like I can communicate well. And I said he said he doesn’t like it. He goes, and I said what don’t you like about it? And so I don’t like all the grammar and all this, all this, all the different pieces that, that you have to learn to be able to understand how to write and how to be, how to, and how to communicate properly and the whole language aspect of things.

And I said I said it’s very similar to. So last weekend we were in Nashville on Wednesday night before we came to Dallas. And we were watching the piano guys. I don’t know if you guys have ever heard of them or if you’ve ever seen them in concert, but if you haven’t, go to YouTube, and type in piano guys, it’s phenomenal.

We went and saw them in concert there. And then, I know it’s called piano guys, but they have one of their primary guys as a cellist. So my son plays the cello as well. He also plays the trombone, but he likes the cello a lot. And of course, one of the things that the guy on stage said was that he was talking to the kids specifically.

And he said playing the cello or learning the cello is very challenging. And it can be quite boring. But he said 1 day. All of a sudden things will just click and you’ll be playing and it’ll just be like you’re on a cloud. You’ll just be like, it’ll just be like, it’ll just be amazing for you, and of course, that motivated Caleb a little bit more on that side of things.

So I made that connection with him with language and I said, listen, that’s a very similar analogy to language where you’re learning all these different nuances and pieces and it’s just frustrating. But one day you’ll get all that stuff put together all the pieces will come together and you’ll just start to write, and it’ll be like natural for you, and so be able to teach them that kind of skills I think is very important, which is one of the reasons why we are homeschooling that we did my daughter last year she’s 12 years old but she did we homeschool her last year had a great time doing that.

This year has been a little more challenging and having a boy homeschooling him a little harder to focus on the intention, but it’s been good for us to have him around and be able to, take him to different events and then expose him to a lot of different things and being able to teach them a lot of those different skills.

I think bringing them to events. I don’t think we bring our kids to events like you had last week enough. Myself included, right? I’m not saying I’m not pointing the finger at everybody. I’m saying, if you have kids, I would encourage you to bring your kids to events like that. Get them around people that are talking finance, that are talking real estate, that are talking investing.

And so it becomes second nature to them. My parents didn’t teach me any of that kind of stuff. I had a bank account and I learned some of that, some of them, balancing a checkbook. And then I got into high school and I had a class that I had to do like home finance or something like that.

And I was bored to death because I already knew all of it. Because my parents have taught me all that piece of it, but I never learned anything about investing or real estate or the stock market or the economy or anything. Those are things that I’ve been very. Diligent about making sure that our kids fully understand and are aware of.

Tim Mai: That’s awesome. And your kids sound quite fairly young. How old are they? 

Dan Handford: So we have four of them. We have a 12-year-old girl. We have a 10-year-old boy, Kayla. So you guys met last week. And then we have a six-year-old girl and a four-year-old girl. 

Tim Mai: Gotcha. Okay. Yeah. Yeah. That’s it. That’s fairly young.

That’s awesome. And then in terms of their allocations, like how much to tie, how much to save, what kind of allocation do you recommend for them or teach them? 

Dan Handford: So right now we have at least 10% going to tithe. And then the rest of it goes into savings. And whenever they want to buy something, of course, there are things that we will, of course, buy for our kids, but there are certain things where I’m like, I can’t use the phrase we can’t afford it because the kids, I’m very upfront with our kids.

I don’t try to hide anything from them. They know we have money. They know what my net worth is. They know how much money I have in the bank account. They know everything right. My parents never told me any of that stuff. And so I’m like, I want my kids to know. I don’t ever want there to be a question about it.

And so I can’t, I joke with them sometimes. Oh, we can’t do that because we can’t afford it. And they’re like, give me this look like, yeah. Okay, Dad. Yeah. Whatever. But I want them to be able to have the joy of earning money, saving it, and then being able to spend it on things that they want to spend.

And I have some of our kids that love to spend it on other people. Like they would drain their account. Spending it on somebody else. And that’s a whole nother like the educational process to those kids, to that child. To teach them that, yes, we want you to be loving and caring and giving to other people, but you can’t give everything away.

You have to save some for X, Y, and Z. And so being able to have a bank account. And actually, it’s my six-year-old right so it’s my six-year-old she’s. She’s got like the heart of gold. She just wants, every time I come home, she always tries to give me something and it doesn’t matter what it is.

She’ll find a rock in the yard. And go, Hey daddy, I got you a little rock. I got you something from the yard. She’s just, she just loves to give. And it just reminded me this past Sunday, I’m going to, oh, we’re all getting ready for you to go to church. And she comes into the bedroom and is talking to my wife and she is getting ready.

And so she’s going by her name Chloe. So Chloe’s going through her list of things that she has done to get ready for church. And she’s like, all right, I brush my teeth. I put my clothes on. I got my, my, my shoes on. They’re all ready. My hair is all done. And I got my gift for some, it was her name is Lois.

I got my gift for Lois when I got to church. And that’s part of her light of getting prepared in the morning is, yeah. Giving something to somebody, which is a, which is a great kind of personality training skill set, but we have to teach them like, you can’t just spend that on everything on everybody.

Even like me, my son, and my other daughters. If they want something, I always ask them, “How much do you have in your bank account? Can you afford to pay for that? And even just this past week, my daughter was buying a Christmas present.

She wanted me to buy it on Amazon. So I went on and we picked out what she wanted and I ordered it and I told her, all right. It was 20 and 11 cents. And she runs up to her room that she hadn’t given me all of her cash just yet. So she ran up to her room, got her 20. 11, and came down and gave me 20.

11 out of her, out of the money that she had earned. And, yes, can I pay for that for her? Yes. But the joy, you guys know this if you get something from somebody else. Or if you try to give something to somebody else, a present that you didn’t buy, it’s not as special to you as if you went out and earned the money and bought the thing and gave it to somebody, right?

And so it’s more impactful when they’re spending that money, spending their own money to be able to impact other people. 

Tim Mai: That’s awesome. Have you considered or planned to have some kind of a family fund family trust that you know that you and the kids invest out of that trust and they get to be on the board of advisors and make the decisions as well?

Dan Handford: Yeah, we’re actually in the process of setting up a private nonprofit foundation that they will control and run after we’re dead after my wife and I pass away and that helps to avoid the estate tax as well, because if you donate that while you’re alive into this nonprofit, then it can reduce your overall Oh net worth so that you’re not having to give 40% anything over above 12 million.

You’re not having to give 40% of the estate tax. And so that’s 1 of the things that we’re setting up, but we can also set it up so that they can be up-served on the board. They can start, they can direct the investments and I can teach them that now while I’m alive to be able to do that.

But then I can also pay them a nice salary or whatever out of that nonprofit to be able to do those different tasks. And that allows them to be able to do whatever they want to do with their life. They don’t necessarily have to go and be an entrepreneur or be a real estate investor or go and earn money.

They can go and be a missionary overseas. They could go and just volunteer at a different nonprofit. And they don’t have to worry about a certain wage that they’re going to be earning to be able to. decide as to whether they can or cannot do something because of that particular barrier if you will.

And so that’s something that we are setting up right now. We don’t have it set up just yet. We are setting that kind of public, excuse me, private nonprofit foundation specifically for that purpose. 

Tim Mai: That is awesome. I love that and that’s just giving me a business idea out of that because I’m negotiating with a seller right now, 2400 acres of land 60 million.

He’s in his 90s, and we’ve been talking about different tax strategies and so he has two kids that would inherit this money and something like a structure like this would definitely. Part of that, I guess, would make sense, but that’s awesome to hear that. So let’s talk about your background.

You have started from scratch, several very successful businesses. Can you share with us some of those businesses and then also how the success in those businesses is now helping you in this real estate syndication business? 

Dan Handford: So one of the businesses Early on that I started wasn’t, but I was in chiropractic school.

So I’m a chiropractor by trade. I just gave up my license this past year, which was cool to be able to do. It was one of those things where I’ve been wanting to do it for a while but just didn’t know for sure if I’d ever need to fall back on that. So I kept it up and I just decided my wife and I had sat down and discussed it.

And instead of having to continue to do the continued education and things like that, I just decided to go ahead and give up that license. But I started in chiropractic and while I was going through schooling, I started a business selling spine models. So it was a business called shop anatomical.

I still have the business today, shop anatomy. com. And we sell all kinds of skeletons and skulls and brains and hearts and all kinds of plastic models for colleges, universities, and doctor’s offices across the world. And with that, I started that in chiropractic school because I heard when I was in some of the classes.

When I first started, I heard a lot of the students complain about how expensive the spine model was in the bookstore because you need a spine to be able to learn all the different articulations and things like that and adjustment points. And so I went down to the bookstore and. I think it was 190 a spine that they were selling.

And I went online, found the manufacturer, and saw that the manufacturer’s retail price was 90. So the bookstore was increasing the price by over a hundred dollars. Of course, I knew they were getting it for cheaper than the 90 because they were a distributor. So they’re getting a better rate. And so I went directly to the manufacturer and said, Hey , if I can get an order of 20 of these spines together, what would you get for me?

What could you sell them to me for? And they say we’ll set you up as 1 of our dealers. And because you can do that, I told him I could do it like 3 or 4 times a year because. New students are coming in every year. They did it in quarters, not semesters. So usually four people, four new students come in every year.

And so I told her, I’m like, I can do it, I can probably do that four times a year. And she said I’ll go ahead and set you up on our top-tier discount. And I’ll sell you that spine, including the shipping for 42 and 48 cents. And so I’ve put my kind of background in building websites and web design, web hosting, networking, things like that.

But that skill set worked and built out a basic website. We have developed to accept payments. And also created some flyers and stuff like that. I went. Each one of the classes got in front of the classroom and told him about this spine model. And they’re going to be able to save a hundred bucks.

I sold it for 69, 95 is what I did. And I gave him the, I included the shipping and I even threw in like an anatomy chart with it to like a skeletal chart or something. And within the first week, I sold 80 of those spines with cash in hand up front. And then the next two weeks I sold another 40.

And that was really what started that whole business shopping anatomical dot com. I was able to pay my way through college. I was able to start my clinic when I first got out of chiropractic school. I started my clinic right out on my own and was able to use the profits from that business to be able to start that next business.

And even today, we have a group of medical clinics. We don’t do chiropractic in them anymore. I don’t run the day-to-day operations. I have a good CEO who runs it. He’s been with me for probably 6, 7 years now. And he runs the day-to-day operations, but that business allows us to start the chiropractic business.

which eventually morphed into the medical business where we do a lot of prolotherapy PRP stem cell treatments for orthopedic conditions. We do a lot of non-surgical orthopedics and sports medicine, and those clinics are a hundred percent debt free. And so that creates a problem that creates a tax problem because you don’t have the write-offs from the interest on the debt to be able to offset some of your income.

So now you’re paying a large chunk to the government. And it wasn’t just once a year, it was four times a year with the quarterly payments. So we’re writing large six-figure checks every quarter and it was getting frustrating. And I decided that I wanted to start investing in real estate because that would allow me to use the depreciation to be able to offset some of that income.

And especially, having a real estate professional status allows you to offset all of that income. And so in 2018, I decided to step away full-time from our clinics. I promoted my COO at the time, who is now the CEO, and told him I was stepping out. I made that decision on a Friday, told my wife about it on a Saturday, and then on Sunday, I called the COO and told him about it.

On Monday, we made an announcement to our team, and I stepped out, and I haven’t stepped foot in the clinic during business hours since then. So it’s been running. I don’t want to stay on autopilot. For the most part, it is because my team is running it. I’m just not having to go in and I still have a corporate meeting with them once a month to make sure that I’m looking at the KPIs and the numbers and the stats and making sure that my vision for the clinics is still moving forward.

And we will likely exit those clinics and sell them in the next, probably, 1 to 3 years, somewhere around there. But the income from those clinics is what allowed us to be able to start investing passively in real estate syndications. So we invested passively first.

Hired a mentor in the space and started to learn how to do it myself, did some co-GPs with a few other groups, and did three deals with those two groups. And then in 2018, we started our very first and closed on our very first acquisition of a 130-unit property out of Greenville, South Carolina.

And we bought it for $8. 9 million and I think we recently sold it for close to about 13 and a half million, somewhere around there. And made a nice, we were able to outperform the projections for the investors on that one and everything. But we were able to build our track record, build our credibility through the most, the brokers as well as the sellers.

And it allowed us to be able to continue on the trajectory that we are on right now. And in that first year with the first deal that we closed plus the Cog P money, we raised right at 4 million in 2000, and in 19, we raised 32 million. In 2020, we raised 61 million. Last year we raised 196 million and this year we’ll have just crossed over the 290 million mark raised just this year alone.

So that’s where we come up with that little over half a billion in equity that we’ve raised since 2018. 

Tim Mai: That is impressive. Super impressive. Before we talk about the raises that you’ve done when I met you in person, I knew of you, I knew of you for a while but I met you in person at your event in Charlotte, a few months ago back in July.

And right off the bat, you’re super approachable. You’re very easygoing. And then when, when I invited you to be interviewed on this show and speak at my event, you were very open to all of that. And like your personality and even you even offer to help promote the event, like you are just very generous that way.

Have you found I’m sure you have, but I would love to hear how that has played a role in your ability to run successful businesses and your ability to raise a lot of money. 

Dan Handford: It is. When I sit back and think about it, it’s just who I am. And when, we, when I spoke last week at the event, we know one of the things I mentioned there was.

To be a successful capital raiser, you just have to be yourself, right? And they’re going to be people that will be attracted to you. They’ll be people that will go the other direction. Don’t worry about the people that are going in the other direction. Just be you. I know there are probably people that don’t like me, but you know what?

I don’t care. I know there are going to be people that don’t like me. Matter of fact, I have people that I don’t like, right? There are people in this space, not on this webinar for example, but there are people in this space and multifamily that I do not like. I don’t want to be around them.

I don’t want to be associated with them. Am I still nice to them? Sure. I’m going to still be nice to them. That’s just who I am, right? But there are certain people that I am, so I’m just saying that there’s going to be people that aren’t going to like you. And you just have to make sure that you are being true to yourself and you’re being authentic because people can see through that, right?

If you’re not being authentic and you’re not being yourself, they can, it’s just, and it’s weird because sometimes there are people that I meet and I’m like, I don’t know what it is about that person, but there’s something’s off. I don’t know what it is. And so I have to distance myself from people that are like that because every time that I’ve tried to go against my intuition.

Or my wife’s intuition, it’s always come back to bite me. And so I’ve made a policy that if. If I have something like I can’t put my finger on that is just, it just makes you go. I don’t know what’s wrong with that person, but I don’t want to be around. Then I’m not going to be around. And it’s not just people.

It’s opportunities and it’s different things that come across your desk where it’s that deal just looks, I don’t know, something’s wrong with it. Sometimes you can’t put an exact finger on what it is, but you just so to go back to your question about how my personality goes in with this.

I will say that one of the things that can make it without that will make you successful as a capital raiser is the ability to communicate and communicate effectively. And if you are not a good speaker, if you’re not a very good communicator, you should work on those skills. You should work on those, that, those, that, that set of skills and there’s.

groups out there that can help you and can teach you and guide you in that. I feel like I’m more of a naturally gifted person when it comes to that. Because I never had any formal training in it. Yes. I had speech classes in high school and things like that. I never went to Toastmasters International or some of those different, well-known speaking groups, which I think are great groups.

I know a lot about those different groups. I’ve referred a lot of people to those groups, but. I think that’s one thing, Tim, that a lot of people don’t focus on is the personality that it takes. To be able to raise a significant amount of capital, it doesn’t mean that if you don’t have that personality you shouldn’t raise capital, it just means that you need to find somebody else on your team that can help you with that skill set and have something that has that complimentary skill set, whether it be a staff person, like a team member or whatever.

Or if it is a partner that can help balance out some of your skill sets because usually, the person who’s doing the underwriting enjoys that they’re more of an analytical type person, and they’re not usually going to have the personality that’s going to be very strong to raise capital. And I’m just being frank with you because that’s usually how it is that the more analytical kind of underwriting, they geek out over that stuff.

They were there that the ability to have the personality to raise capital is not usually. Tied up. Now, it doesn’t mean it can’t happen. I’ve met some people that are underwriters that do that, but I’m just saying that’s not the norm. And I think that’s one of the things that’s helped our business be so successful [email protected] is that we have three managing partners and each one of the managing partners has, it’s their skills that are complementary to the other partners.

The challenge that a lot of people get into is that They go to different events and different conferences and they meet people. So let’s just say you’re a person that likes to underwrite properties, right? You just love that stuff. You just like you, you can do that all day long. You just love it. You just geek out over it.

Then you go to a conference and you find somebody else that loves to do underwriting and likes to geek out over it. You guys hit it off. That’s it. The worst person to get into business with. You do not want to get into business with somebody else that does the same skill set that you have. You need to be finding, now that’s a great person to be friends with, it’s a great person to like, have them check your underwriting when you’re done or whatever, but it’s not somebody you want to go into business with.

You want to find somebody who has a complementary skill set to you so that you can balance each other out. It’s the same thing in any type of relationship, whether it be your marriage relationship, whether it be your friends, or whether it be if you’re going to start a business somewhere else, those kinds of complementary skill sets are very powerful in a lot of different businesses and a lot of different relationships that you might have.

And so for us, that’s what we try to do is try to find some of those complementary skill sets that we can, so we can work well together. 

Tim Mai: That’s awesome. And are you the one in the partnership that does all of the marketing and all the investor relations? Correct. Very cool. In terms of marketing, if you’re looking at your investor pool of investors that have invested with you, where would you say are the top two or maybe the top three marketing channels that have attracted the most amount of them?

Dan Handford: You’ve opened up a can of worms with that question, Tim. Cause let me lemme, let me answer it this way. Okay. There is not one thing that we do that consistently provides a significant amount of leads. And I say that because a lot of times we go to conferences and we ask that question, right?

Because it’s a valid question. What are you doing that gives you, and brings you the most stuff, but the most investors? And to me, the question should more or less be, what are all the things that you’re doing to be able to attract investors? Because I believe in what’s called a multimodal approach to marketing that you can bring in.

People from your different marketing sources can be very impactful. Let me give you a story that will hopefully allow you to connect with what I’m trying to say here. It’s probably been about 10 years now. My wife and I went down to Sanibel Island, Florida.

That has now been demolished by Hurricane Ian. But that area in Sanibel Island, Captiva, that part of the Fort Myers, Florida area is just. An amazing area. The water is just crystal blue and green. It’s like it’s just a great spot. We had never been before. And so we wanted to go visit.

And we ended up, we drove down. Yeah, we drove down to Sanibel Island. We were going to spend 10 days down there. And so we got and if you’ve ever, if you know anything about that South area, there’s a resort there called the South Seas Island resort.

And we stayed at the resort and we had a balcony and we could jump off the balcony into the Gulf of Mexico. That’s how close we were to the edge. It was a great spot. And every morning we would wake up and we would enjoy a cup of coffee in the morning. So we had our cup of coffee and then my wife would get her book out and read and I would get my book out.

I would read and we’d spend probably, I don’t know, probably 2 or 3 hours every morning, just relaxing and reading our books. And in front of our balcony was the shoreline. Like I said, And there was a little bit of a, I don’t want to say it’s a pier, but more like a dock. So it’s just right there and didn’t go very far.

And every morning we’d see 1 or 2 people come out there and they take their fishing rod out there and they throw their fishing rod out and they, they try to catch something and not 1 person caught anything and then Three or four days into this, I, around the corner of one of the buildings, I see this guy coming across the building and he’s got a wheelbarrow full of like all the like bait and tackle and whatever else you need to do to go fishing.

I’m not a big fisherman person but anyway, he had all this stuff, all the gear, and he had 15 fishing rods in the back of his wheelbarrow, right? And right behind him when he was walking, he’s like carrying this thing going walking down the sidewalk right behind him is his wife and she is, of course, got a book open in this reading the book as she’s walking and he goes and there was like a little bench right off right before you got to the pier or the dock.

There was a little bench where you could just sit there and be right by the water. He pulled his wheelbarrow up and put it right behind the bench there and his wife came around and just sat on the bench. And then he got, he started putting his fishing rods out to get 1 fishing rod out, throw it out there.

And then put it into the ground, and then he’d get the other one out. So I was fishing right out there, put the, put it in the ground. By the time he got like 12 of them in there, one of them started to bite, right? And so he runs over there to try to get the one that’s biting.

By the time he gets that fish off, Another one starts to bite, and then another one. And now he’s like recruiting his wife. We’re all watching this going, what has just happened here? And it hit me because that’s the exact approach that we should take when we’re marketing for investors. You cannot just rely on one or two things and do the same thing that everybody else is doing.

You’re gonna go to the same spot, try to get a fish for the same investors in the same spot that everybody else is fishing for. You gotta start thinking, be thinking outside of the box, and try to find some ways to be able to reach investors that not everybody is doing.

And as far as the multimodal approach, the challenge with that when people first get started is that they go, yes, I want to do a multimodal approach. Then they go, where do I begin? Cause how do you do a multi-modal approach with one thing? It starts with one thing. You start with one thing, keep that thing going, start the next thing, keep that thing going.

And you continue to build on that. And there’ll be some times where the podcast brings us more investors one month, and then the next month it might be our YouTube channel, or doing events like this, where I’m in front of other people or speaking or. Whatever referrals or whatever the case is, there’s never been 1 thing that we’ve done where I can go.

That has been the reason why we’ve been so successful. The reason why we’ve been so successful is that we have a multimodal approach to marketing and a multimodal approach to reach investors and can use that same philosophy in the marketing aspects of reaching residents to live at our properties as well.

So there’s this not, this isn’t just stopping here. This goes into multiple different aspects that we have for this type of business. 

Tim Mai: Very cool. Now when I first found out about you, you were doing a lot of virtual events, and now I see you’re doing live events now. Are you going to continue to do the virtual events as well?

Dan Handford: No, we are not. So we have decided to only focus on the once-a-year events. In June, and it’s going to be right now is where we’re planning on still having it in Charlotte for the time being. 

Tim Mai: Gotcha. Any reason why you’re moving away from the virtual event model? 

Dan Handford: Part of it is mostly just about the time and the headspace of putting together a virtual one and trying to do the in-person one.

Because putting on an in-person event is a lot more work. And we still do. I don’t want to say they’re technically virtual events where we do weekly webinars. We’ve been doing free weekly webinars for, I don’t know, since at least 2019, the beginning of 2019 is when we started those.

And I just did a webinar today. 230 people were part of that webinar, right? And usually, about 20 to 30 percent are new people. The rest of those are people that have heard you before or heard a webinar before, but if I can every week continue to do these free weekly webinars, I’m getting in front of 30, 40, and 50 people a week.

That’s powerful for us, right? And depending on the topic will attract more people. And then, 1 of the unique things that we’ve been doing lately is we’ve been doing joint webinars with other groups that are similar in size. So they’ll, we’ll come up with a topic that we can teach our passive investors.

And then I’ll email all of our investors, they’ll email all of their investors, we’ll invite them to this webinar. And whoever comes to the webinar, we share the list. And of course, that’s another way that we’ve been able to build our list as well as being able to like you said earlier on, just try to be very giving and open with our investors. And I’m not just going to invite anybody to do that. But I think a lot of people sometimes get too protective of their investors to the point where they don’t want to recommend anybody.

And most of the people, not most, all of the people that we’ve done joint webinars with, I have invested in their deals. So I trust the group. I invest in their deals and sometimes multiple deals. And so I can recommend them and on the opposite side. Those people have invested in our deals.

And so they know our group. And so it’s not just a, I’m getting anybody that I meet at a conference to do a webinar with just to get their investors. I’m doing it to be able to build our investor base, but also make sure that our investors are investing with people that. Okay. I invest in that.

I trust, right? Because at the end of the day, I want to make sure that people we recommend are going to be good quality people that we can, you know, trust and put our own money behind. 

Tim Mai: That’s awesome. And so that way we don’t forget later. Do you want to share a link so that way the people listening in can check out your webinars?

Dan Handford: Go to multifamilyinvestorNation.com. And that’ll bring you up to our webinars. I just did one today on equity waterfalls for apartment syndication next week. I think we’re doing one of the steps around multifamily acquisitions. We have one, our senior multifamily analyst Chris Neary, who’s going to be doing that one.

In the beginning, I was doing all the webinars and then as we continue to grow our team, we’re up to 45, a little over 45 people now that work full time directly with passiveinvesting.com. We’ve been able to leverage our team and allow them to be able to start to educate and teach as well.

Tim Mai: All right. And then in terms of joint ventures with other operators do you also look for co-GPs at all whenever you do your race? 

Dan Handford: Yes. So we usually have between about two to three co-GPs that’ll help us out. Most of the time, it’s groups that we have already worked with multiple times.

And we have a few that pretty much have helped us out on every single one of the projects that we’ve ever done. We are typically the ones that raise the majority of our capital, but we do have a few of those groups that do participate with us. We have a few others, we have a few new groups that want to invest or, JV partner with us and CoGP.

We have a little bit of different criteria with it. So what we had to do with it. With the type of education that we do, we have a lot of people that want to raise money for us. And so we only allow people to raise money for us if they have had a track record of raising money for another group and they’ve raised at least 1, 000, 000 dollars or more on a single deal.

And they have that track record for it. And so we don’t want to have. Compliance issues down the road if we have 30 people raising 250, 000 on our projects, we want to make sure we have people that can raise over 1M dollars typically between about 3 to 5M, and that we can be able to grow with us and we can also grow with them.

Tim Mai: Gotcha. Okay. And then we talked about the marketing channels, what about the avatar of your passive investors? Do you have the bulk of yours, since you, you came from chiropractic would be the bulk of yours. Do they have physicians, or do you what’s a mix of your investors?

Dan Handford: I would say the majority of them are more business owners.

Business owners, entrepreneurs, real estate investors, and we have, we do have some positions, quite a few attorneys, engineers, professionals. That’s a good, pretty good mix of what we have. We also have some cool celebrities that have invested with us that you would know.

We also have some Fortune 500 CEOs that have invested with us. A lot of those are referrals from other investors that have invested with us, which is pretty cool to have but that’s pretty much the avatar that we have. I would say it’s still skewed more, 50 plus as far as the age range, for sure.

Tim Mai: Oh, very good. Very good to hear that. And so 50 plus let’s, do you. Do you intentionally do your messaging to resonate with that age group at all or is your messaging just more general and then it just so happens that the 50-plus are the ones that you have the most of?

Dan Handford: I would say that the language is geared towards that kind of an avatar because there are people that are in that age range that are dealing with things that.

People in the lower age range are not. It’s not necessarily that we don’t attract those lower-aged people. I’m 39 myself, right? I’m not 40 yet, but I’m getting there. Some days I feel like I’m more like morem. I’m already 40 if you will, but, for the most part, the marketing is very dialed into that specific audience.

I will say though, that we don’t. We don’t market. One of the things that is a big hurdle and challenge is trying to attract and market for people who have no clue about real estate investing. One of the most challenging types of ways to raise capital is to educate people who don’t know how to don’t know anything about real estate.

I’m not saying it can’t be done. I’m just saying it’s a very challenging path to go down to be able to raise capital. And so our philosophy is, let’s try to get in the rooms of people who already know about real estate investing and want to invest in real estate.

And that way there’s not an uphill battle of teaching them why they should be investing in real estate. 

Tim Mai: Gotcha. That’s good too, definitely good to know. With your goal, you’re already at 1. 3 billion. What’s your big goal? Are you trying to get to a trillion assets under management? Where are you going with? 

Dan Handford: Yeah, so I get this question quite often. And I will say this. And we do have goals of getting to the 2 billion mark and the 3 billion and things like that. Right now we have sold some property. So we’re sitting at we’ve acquired about 1. 7 billion in assets.

We did successfully close that deal. Those 2 deals last week at Myrtle Beach that I mentioned from the stage last week. Those were about an 80M dollar kind of deal together. And we, yes, we have goals to reach and get to that kind of 2 Billion, 3 Billion, things like that. But at the end of the day.

Our primary goal is to find great quality assets for our investors to invest in, that we also want to invest in, and that we can find assets that we can sleep well at night at, that we’re not going to be worried about losing their money or losing their capital. I sometimes think about what we’ve done since 2018 and go, we have over half a billion dollars in just private equity that investors have wired to us over the last four years.

They trust us to make sure that we don’t lose their capital and that we make a decent profit, usually north of 20%. Right Now, we don’t underwrite for 20%, so don’t get me wrong. But the ultimate goal would be to try to find deals that you can do that to you, you can get to 20% or higher.

And so our goal is to really, the bottom line is to grow our wealth and our investors’ wealth from multiple generations. So whether that means we have a billion in assets or 10 billion in assets, I don’t care. I want to make sure that we’re doing the right thing for our investors because there are so many there.

I’ve met so many syndicators that set up their process to make them more successful than their investors. And I want to make sure that when we’re, we are always looking out for our investors and we do that, we do the right thing by our investors, because at the end of the day. I can’t do what I’m doing in this business if I don’t have my investors.

And so I have to make sure I treat them properly. And by the way, I’m also one of my investors, right? I’m usually the number one investor in all of our projects, right? Between myself, Danny, and Brandon. Between the three of us, one of us is usually the highest investor in our properties. And so we, of course, want to make sure that we’re setting ourselves up and our families up so that’s set up for success as well.

Tim Mai: That’s great. I know you haven’t been through the 2008 market crash. And so how are you and with this market that’s changing right now? How are you navigating through this market? Where are you getting resources to know how to navigate through something you haven’t been through before? 

Dan Handford: Sure.

So I will say that we’ve hired some great solid people that have gone through multiple market cycles and even before 2008. One of our strong, strongest team members is our director of asset management who manages all of our assets. And he has a 30-year background in this space and used to work for a large national REIT called AIMCO.

And he managed a three to 4 million portfolio with them and shrunk the team from 12 people to four people and took on more property. He was able to manage them because of the processes and the systems that he put into place. And so that is 1 of the biggest things that we have done is be able to hire people and surround ourselves that are smarter than ourselves.

I think a lot of times as entrepreneurs and business owners we tend to like, not want to hire people that we think are smarter than us. I love hiring people that are smarter than me. I love it. I want to surround myself with people that I can trust and that I know are smarter than me.

That would be, really the biggest thing I would say for us that we’re doing, but I will say this too that one of the things that we’ve done from the very beginning. We’ve always made sure that our deals are well capitalized. What I mean by that is, we typically have between one to four million dollars in operating reserves at every single one of our properties, depending on how much we need to be able to continue to pay the expenses of the property and the debt service for six months.

If for some reason the property goes down to 0% occupancy, it’s done as that’s doing a very good job right now, because we have lots of operating reserves in the bank right now. And if we need to dip into that, but help pay for debt service or extra expenses or whatever we have it. And the problem is right now in the current market, I’m already getting people reaching out to me that have deals that they bought three years ago, and their debt service has now gone so high because they didn’t buy an interest rate cap and they’re coming to us saying, Hey, can you help us?

And I feel really bad for those investors, but that’s what’s going to happen. I think more and more, especially as we move into 2021, 2023, and January. Because those are some deals that I feel really bad for those investors. I hope nobody loses any money, but those are going to be some deals that are going to start to come out.

I think in Q1 and Q2 that we should all be prepared for, and be ready to help. I don’t want to say. Make a bunch of money because I would rather make a bunch of money, but also be able to, those people, those investors not lose their money. And so it’s one of those things where I put myself in those investors’ shoes.

I would like somebody to help out. But it’s going to be interesting over the next several months to see what’s going to happen in the market. 

Tim Mai: Yeah, that definitely will be interesting. So for the folks that want to learn from you, learn more from you, reach out to you, connect with you, partner with you, invest with you, what would you like to send them?

Dan Handford: Sure. I’ll send you to two different places. First, if you want to just connect with me and follow me more and see some of my content you can go to my LinkedIn profile. And you can just go to the link within. com, link within. com. And you can directly link with me on my LinkedIn profile to do that.

And then the other thing is if you’re interested in wanting to invest with us you can go to our website, passive investing. com, top right-hand corner of the website, it is a little blue button that says, join the passive investor club. You can click on that. And join us and one of our investor relations team members will reach out to you, discuss your investment goals and see if our group is the right fit for you.

And then we mentioned about the M f I N the M f I N con coming up in June of next year. So if you wanna go to MFI n con.com, you can find out some more information there. And if you want a promo code, I’ll do that for you too, Tim, for your group here. That’d be awesome.

And you can use the promo code webinar 300, and that’ll give you $300 off the ticket. And we’re gonna have Alex Rodriguez there. We’re gonna have Dr. Robert Cini the book, the guy who wrote the wow book Influence. And then we’re also gonna have the c o of Taco Bell. He’s gonna be there speaking, on organization and leadership and managing a large team.

It’s gonna be a really cool group there. And we’ll have probably about 45 to 50 other high-level multifamily investors that are gonna be there. And last year we did it, we had about a little over 400 people that were at that event. And this year it’ll probably be close to about six to 700.

That’ll be there. But this is an event that’s geared towards really high-level investors really want to take their business to the next level. They want to surround themselves with real others, with other high-level people. 

Tim Mai: Yeah. And I was there last year. It was phenomenal.

And so I signed up only for the last event and my 18-year-old son and I will be there this year as well. So for those of you who are coming, yeah, I’d love to see you there. And then what’s your last word of wisdom that you’d like to leave us all with today? 

Dan Handford: So something that one of my mentors years ago taught me, which has served me well is.

If you can’t measure it, you can’t manage it. And so we talk a lot about our businesses and how successful they are. But if you don’t put in this, put systems into place, but systems in place to be able to measure what matters, then you will not be able to manage that business properly, whether that’s from an asset management perspective or whether that’s from acquisitions or asset management or investor relations, or even just your relationships with your wife and your kids.

It is very important to be able to measure what matters so that you can properly manage it. And you might be thinking how do you do that with your family? It’s all about the balance of family and family, your family life and your business, right? If you’re not measuring how much time you’re spending with your business versus with your family, It’s very hard to manage that, right?

But we can consciously think about the amount of time you’re spending away from family and with family and be able to have that data point to be able to measure. It’s going to be very hard for you to be successful in that piece as well. 

Tim Mai: Dan, thank you so much for doing this interview with me today.

I greatly appreciate you and appreciate your generosity and your wisdom. 

Dan Handford: Thank you. Appreciate it. Glad to be here.

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.

Erin Hudson: What I do every morning, I wake up every morning, I get out my journal that sits on my desk, and I write down my five thankful. Grateful for whatever it may be, for my kids, for a clean house, for opportunities, for boldness, for being awesome, for being unstoppable, whatever that may look like.

Kendall LeJuene: When Tim asked me to help out with this while he’s dodging the hurricane. I was very excited because I’ve done some research on Dr. Hudson and I did a little social media digging and saw that she’s very passionate, it looks like, in fitness and real estate and business and family. And so I was very excited to get the opportunity to interview her. And so a little bit about Dr. Hudson. Dr. Erin Hudson is a Director of Investor Relations at Quattro Capital. She’s a dedicated mother to five wonderful children. Her extensive entrepreneurial track record consists of owning Hudson Wellness Centers in California. She’s the owner of Legacy Builder 7, a company focused on value-add real estate investment opportunities.

She has raised over 31 million in capital and she is just getting started. Awesome. Love that. She has made it a point to get her kids investing in real estate, both her 16 and 17-year-olds own their own Airbnb. That is incredible. Dr. Hudson travels the world to build orphanages, provide shelter for those in need, and loves the less fortunate.

We are so delighted to have Dr. Hudson on our podcast today. And so without any further ado, let’s go ahead and welcome Dr. Erin Hudson. 

Erin Hudson: All right. Thank you so much for that warm welcome, Kendall. That was so you. I appreciate it. It is an absolute honor to be here and I just have a couple to ask for you.

I noticed that a lot of you have your cameras off. I get it. Some of you are working, but for those that can turn your camera on because it gets me excited getting to see the smiles and feedback from you guys, body language and all. And so yes, you can’t clap, but this is what I call the virtual clap.

If you hear something that’s money. Or you’re like, man, that’s fire. That’s good. You can do a little bit of this. That gets me excited knowing that you love what you’re hearing. So with that being said, Kendall did a great job introducing me to y’all, but this is one area, the capital raising that I’m super, super excited to touch on. So I hope to bring some good nuggets today.

Kendall LeJuene: We are so excited to have you here, Dr. Hudson. The first question that we’d like to start with is what got you started in your multifamily commercial real estate journey?

Erin Hudson: Sure. Yep. So maybe some of you can relate. I can tell you this much. I was raised in a family where I was one of five kids and my parents did not talk about finances.

They did not talk about it. Duplicating your seed money. And they certainly were not preparing for their retirement at all. And I remember thinking they both worked nine-to-five jobs building somebody else’s dream and certainly not their own. Did anyone else grow up in a home like that? Raise your hand.

Am I an anomaly or are there others out there? Okay, good. Thank you for letting me know that I am not alone. So it started with that. And I remember at a very young age, just wanting to be my boss and not wanting to have somebody else that was going to boss me around and tell me what I was going to do and certainly control my schedule.

So I went on to become a doctor of chiropractic, had a couple of wellness centers, and had 30 headaches, i.e. Team members were awesome and they helped both my practices to be successful. But here’s the thing I was giving 50 cents of every dollar that I brought into the wellness center, I paid in taxes and it was burdensome.

And not fun when you’re working so hard, you want to be able to take your own money and do what you want. Certainly not to give it to Uncle Sam, especially since I have five kids. And so I remember working on a patient one day and him saying, laying on the table and saying. Something about mailbox money and my ears perked up and I went to mailbox money, tell me more.

And so lo and behold, he was referring to rental properties. And with that being said, he talked about how he got this money that would come to his mailbox every single month. And I just remember going home and I could not stop thinking about it. How in the world do I create mailbox money when I live in Southern California?

And it is super expensive and doesn’t make a whole lot of sense to even invest in California, right? So long story short, let’s just say that I don’t do things halfway. I’m an all-the-way or no-way kind of girl. And with that being said, I was researching the best areas to invest in and ran across Indianapolis, Indiana.

Why? Because you could get a tenant out right away if they didn’t pay rent. And property taxes were extremely low. And so with that being said, within two years, I acquired 26 rental properties and I certainly got a taste of that mailbox money. And that’s where real estate started for me.

And then furthermore, I went on to help other friends, family, and patients of mine. Get in the same position. I was not the expert, but people were coming to me and saying, Aaron, I hear you own these investment properties, these real estate investment properties. How do you do it? Can you help me? So with that being said, I had a turnkey company simply because I already had the property manager and I already had the construction guys if I needed to put lipstick on the pig.

And so with that being said, I would buy the property and then I would turn around, I’d put a tenant in there, get it all glammed up, and then I’d turn around and sell it. And so I did that over 115 times. And I did that not as a real estate agent. I did that literally without a website. I did that with five kids.

I did that by working a full-time job. Do you guys get it? If it’s important, you will find a way to get it done. And That was moving into that single-family space. It was awesome, but here’s the problem. We didn’t get that bonus depreciation, accelerated depreciation. None of that made sense in the single-family space.

And there was a whole lot of this. The month was good. The month was bad. The month was good. The month was bad. Can anyone relate to rental properties? Yeah, no. Okay, cool. You get it. So fast forward. It was all good. You guys, it was part of my story. It was the ladder that took me from where I was back then to where I am now.

And so fast forward, I got invited to go to this multi-family educational event. And I remember thinking when I got invited. Hell no, I cannot go. I do not qualify. I am not a billionaire, right? Because that’s all I had in my head. That a, that somebody that wanted to get into the multifamily space, he most certainly had to be a billionaire.

And I certainly didn’t cut it. Let me share it with you. I went to this event. I sit in the front row. I’ve got my arms crossed. What’s the pitch here? This is weird. Why am I here? And I kid you not, it was a zip. The Red Sea was parted. It was as if I had been playing the game of Monopoly and landing in Vermont every single time, i.e. The single-family houses collected 50 bucks. And I just found out that I’m capable of landing on the boardwalk every single time. e. the apartments. And so that’s it guys. I drew a line in the sand. And I said, man, I’ve got to jump now and get and have it hurt. Cause I’m going to leave her being a doctor in my practice.

And I’m going over to the other side. I’m going to where I can get the depreciation. I’m going to where I can pay maybe 10 cents on the dollar, if anything at all in taxes versus the 50 cents I was paying. And so that’s guys, how it got started. And when I look like, honestly, it was like packing up My car and being done with it.

I had come home from this event and I said to my husband, we have got to move to Texas. Let’s get out of California. Let’s move into this multifamily space. I’m ready to go all the way. And so I dove in and started with a whole mentorship program. So anyways, it gets better, but that was how I got to where I am today.

Kendall LeJuene: It’s so inspiring to hear you redefining your reality and breaking through those barriers of the stories that we tell ourselves. And so just to be able to hear someone say, you know what, there’s got to be a better way. I’ve got this pain that I’m getting from taxes.

I’ve got to just figure it out. And it sounds like you took massive action. And that is the key. To get started. One of the things that you mentioned was you went to a multifamily event and then you later signed up for some mentorship. Can you talk a little bit about how you learn? What was your mentorship like?

Did you have a coach? 

Erin Hudson: Sure. So again, there are people out there and maybe some of you are in that position. There are a lot of people that kind of want to dip their foot in and they want to read a book and they want to check things out and they want to ask their brother Scott to find out from their dog Pete Paul, if it’s just going to be the right fit or if it’s maybe the direction to go.

And when I said I’m that kind of girl that’s one foot in, or not one foot in one foot out and I dive all the way. It was exactly that. I knew that I certainly wasn’t capable or qualified, but I was going to find somebody that was qualified and capable. And so I started to vet out and look for different mentorship programs so that I could get coached and I could have the skill sets and get equipped.

If I was going to move in this direction, full throttle, a hundred percent. Furthermore, being in the single-family space, I didn’t have any partners. I used my own money. I got super creative. I would buy three properties and I would turn around and sell them for far more than that. Or I would buy four, sell three and keep one for free.

I love it. Being creative. But what I did know is if I was going to deal with other people’s money, I had to be deadly serious and get massively equipped the right way so that I could preserve, protect, and grow their money in the right fashion. So I did, I jumped in with RE Mentor. Some of you may know Dave Lindahl from Boston.

And that was the group that I learned to study under back in 2017, there are many out there and I’m sure there are other great ones as well that I’m familiar with, but yes, that was where I got my education, Kendall. It was a matter of getting coached and jumping on calls every week and taking that massive pay cut to jump into something that I knew was going to be exponential growth and a mighty way. And that pay cut was going to be well worth it.

Kendall LeJuene: That’s incredible. I love hearing about someone that leverages the knowledge and information of others and not trying to reinvent the wheel, right? So taking messy action to get started, but it sounds like once you decide, okay, I need to get deadly serious about raising other people’s money.

Then I need to invest in education. I need to invest in a mentor that can get me situated in the right way. Yep. That is exactly. That’s fantastic. How much money have you raised so far if you had to put a number on it? 

Erin Hudson: Yeah. So just roughly over 30 million so far, and just, I’d say under three years.

Kendall LeJuene: Wow. That’s incredible. Was it daunting to think about raising that much money, especially coming from a single family where you did all of the money, your own, you had, you got creative with finances, raising other that much money and it’s other people’s money?

Erin Hudson: Yeah, listen, I don’t even think that I thought that big at the time, because truthfully, I didn’t ask backward.

If you want to know the truth, I did it backward. And maybe some of you feel the same or have been in the same position. I, when I got started, tried to wear all the hats. Gotta find the deal. Gotta find the money. Gotta find… Is anybody else, has anybody else been there, done that, or still may be doing that? It’s overwhelming, y’all.

It is so hard to wear all those hats. Asset management, property management, betting, everything, finding the money, like that’s a lot of work. Let me tell you, I’ve had massive hiccups and call them failures along the way. But let me tell you, failure is a great way to learn where you will never go again.

And I’ll tell you this much. It’s exhausting. It’s an exhausting feeling like you have to wear all those hats in a single family. You could do all of that. And the multifamily, if you want to enjoy and have longevity, you absolutely should play to your strengths. So what do I mean by that? If you guys are all on here for probably capital raising I’m assuming hence, that’s the title of this group.

How liberating is it to wear the hat of raising the money and getting to stay in a lane where you most optimally function? I don’t know about you, but it is the freedom to the nth degree for me because this is the lane that I freaking love to be Chad Sutton, my head of acquisitions locked in a closet with no windows, running numbers and creating spreadsheets.

And I certainly don’t want to be my other partner, Kim Wendland, head of asset management, doing the numbers and putting up the variance reports. No, thank you. Do I know how to underwrite a deal? Hell yeah. Do I want to stay in that lane? Hell no. So as I’ve navigated through life, I feel like I’ve been in many places, but I feel like I, I don’t want to say deserve because that sounds bratty, but I feel like at this point in my life, I want to go with the least resistance where I flourish and want to stay in a place where I don’t feel like it’s work.

I don’t feel like it’s work. At all. Okay. It is, but not anywhere like that nine-to-five that you don’t want to go to. This is like a lane, that is, it comes easy to me. It’s my strength. I love people. I love seeing people win. And when your mindset is about helping other people win, what’s the overfall it’s overfill.

It’s natural. You win. 

Kendall LeJuene: That’s fantastic. That’s fantastic. So you mentioned that there were some hard knocks along the way. You didn’t start. And I think it’s difficult for anyone to start thinking about, I’m going to raise 30 million. So what was the, can you pinpoint that light bulb moment when you realized that maybe that’s something that was not even in your realm of reality. And now all of a sudden it’s possible for you.

Erin Hudson: Listen, I think along the way for all of us guys, when you’re first getting started, there’s like a level that you’re wanting to hit. Maybe you don’t hit it. Maybe you do. And then once you hit it, what happens to your confidence? It goes through the freaking roof.

And then guess what? Now you have a new barrier. And you, once you hit that, it’s man, I’m unstoppable. And so for me, it’s the same thing. Remember how I said, it’s all about people. If you truly operate in the mindset of helping other people, when you guys will be unstoppable and the success you will have will be mind-blowing.

What do I mean by that? Okay, let’s go back to my first raise in my first property year. It was my first property that I purchased, it was a 5. 2 million property. I raised 2 million for that. I ended up raising 2 million from that deal. That was my first deal. How did I do it? I went back to all of the people that I had come in and bought a single-family property form from me, right?

Now, if I got a good chunk of those people that bought single-family properties for me to join this first syndication, do you think that they would know me and trust me? Do you think that I did good sound business? That they didn’t feel bamboozled or manipulated. Think about it. So you guys can apply this to anything that you’re doing.

Y’all know people. I don’t know who you’ve done business with, maybe it’s not a single family, but what have you done out there where people know the value you bring, that you’re a good person, that you’re honest, that you’re loyal, that you’re full of integrity and you want them to win. That’s where the list should come from, listen, I know all of you people here have so many friends right down your list of people that trust you, believe in you, and know you’re going to do something great with your life.

Those are the people that are going to want to do and be around you and have what you have. So it starts from within so I didn’t have that scare. I just went to the lowest-hanging fruit. Of the people that I thought, shoot, I wonder if they’d be interested in hearing more. And sometimes it’s those people that are the closest to you that want nothing to do with it.

Not wanting anything to do with what you’re doing. I. e. my brothers and my sisters. There are four other brothers and sisters of mine, right? They thought I was kooky. Going from being a doctor, having success in my practices, and now all of a sudden I’m going into a whole other arena. Starting at ground zero.

They thought I was a freak. And guess what? So did my colleagues from chiropractic. They all thought I was crazy. They’re like, you have these flourishing practices. What is your problem? I wish I could have that kind of success. Why in the heck are you leaving? Because there’s something bigger out there, guys. Anyways, I’ll pause. Can you tell I’m a little bit passionate? 

Kendall LeJuene: I love it. I love creativity. I love how you thought out of the box and said, okay, how can I use my network? From day one to get this going. And so that sort of highlights what you did to start raising capital. How do you go about finding passive investors now? If you had to say, these are my top three ways of finding passive investors, how would you go about doing that now?

Erin Hudson: So for sure, social media, no matter what. And sometimes that takes time. Y’all. It’s not that you’re just gonna put a post up there and then everybody’s gonna be like, Oh, all right, let me go see if I can invest with her. No, think about it as humans. We are looking for people to fail our friends and our family.

I don’t know what it is. Humans are just dialed to look at people and failure. Are they still at it or have they dropped off the side? And so people are constantly watching. So you may think, Oh my gosh, all my friends from high school, my friends from college, they’re never going to join me.

They’ve seen that I’ve been doing this. You would be shocked how many people now, since 2017, when I started, are just now jumping on the wagon with me and want to passively invest in people coming out of the woodwork. Who would have thought, right? So I would start with that social media, LinkedIn, Instagram, and Facebook.

Hey, I’m not the best at it, but it’s okay. It’s a matter of getting out there and being consistent. Okay. And so from that, not only is it just posting, but it’s going back and responding to when people make comments on yours. And sometimes it’s not even just on yours. It’s going to theirs and saying something, a thing or two about them, but speaking from a place of not manipulation.

A place of love, a place of, pouring into them, making them feel special and important, not in a gross way, guys, do it from the heart because you reap what you sow. And so we all want that. So that was number one. Number two virtual has been awesome. I’m going in there because look, when you have these little breakout rooms, it gives you a chance to get to know somebody, and let’s be real with one another within the first three minutes of somebody speaking.

When you go into one, you’re like, man, I love their energy. I love their smiles. I love that they’re hungry for growth. I love that they feel like they’re unstoppable and then lastly, shoot, they just shared. I just checked them out and they’ve got a great team. It makes it easy. So y’all should be utilizing those virtual events.

that is going on. And then number three, I love to speak at conferences. And I’ve done a lot of that for multifamily, but guess what? There’s something that many people are missing out on and start plugging yourself into conferences that are not even multifamily at all. So what do I mean by that? I just went to a women’s party of 300 people.

No, I apologize. 200 people, women’s conference. I did not go there to be like, Hey, do you want to get in my deal? No, but when you start talking to people they truly know that you care and that you’re just a good-natured person. They inquire, they want to know more. And I walked away from that. I walked away from that thing raising 500, 000.

And I did not lead with that. I did not lead with that. So start putting yourself in different ponds where you are an anomaly and people are in awe of what you have. I don’t know. I heard my buddy, Mr. Thompson, he said 18. He said that he’s in eight, 18 passive deals right now. That guy’s everywhere.

That guy is all over the place, but if you know him, he’s a super great, good guy with a heart of gold. And so just put yourself in those places and different ponds. I’m telling you where it’s at. Oh, I know what I was going to say about it because think about it. If Mr. Thompson goes someplace, he puts himself in a new pond and somebody starts to inquire and ask about him and he shares what he does, if the person’s interested.

And they’re intrigued about this multifamily, you’re not going to sit there and bark all over them. You’re going to leave little hooks and see if they bite the hook. And if they don’t, you change the conversation, you make it about them. Because number one, if they bite the hook, they’re going to want to know more.

And if they want to know more and they find out Mr. Thompson owns 18 apartment buildings, he just became an anomaly because he’s in a space where there are probably no other people that own 18 apartment buildings. So people want to know more, right? If they don’t bite the hook, and they don’t act interested, it doesn’t mean you can’t still love the person and be kind and complimentative.

So just love them a little bit. Because guess what? You’re going to be an anomaly at that point too. Why? Because most people don’t give a flying fuck about other people to dig in, ask about their family, ask about their livelihood, what they do, what makes them tick. So anyways, I’m sorry. I didn’t need to go off, but other ponds guys, for sure. Put yourself in them. 

Kendall LeJuene: That is fantastic. So many great nuggets in that. I, the idea of coming from a place of love is something that resonates with me so much. Because that’s really at the heart of it. That’s what it’s all about, right? This is a people-based business, a people-based endeavor.

And people just want to be loved. And fantastic stuff there. You mentioned earlier that one of your pain points to get you into investing was taxes. And so can you talk a little bit about what the investor profile that you target now is and what are their pains and motivations to invest?

Erin Hudson: Hey, listen, guys. I’m still working on a lot of things and I’m going to tell you right now, I’m still working on that. I don’t have an avatar right now. I don’t have 30 to 40 doctors that are working 9 to 5. I don’t have that. So yes, I still got to work on my craft. But with that being said, I think for me, just in talking to other people, it’s not necessarily oh, you work a nine to five, let me help you with your taxes.

It’s really for me, so what is it that you’re doing to grow your empire, and sometimes people choke? When you ask them that, they’re like, they can already tell I’m high on life, guys. I don’t need a coffee to get me like this. I’m pretty fired up, just passionate about life in general.

But when you ask them thought-provoking questions, Sometimes it will intrigue them enough to say I’m not a whole lot right now. What are you doing? Or what do you recommend? And it opens up the conversation to start that. So I don’t have an avatar. I work with all walks. I will tell you, I do work with a lot of doctors, but it’s not because I’ve just been hunting down and everything that I send out is to catch the eye of the doctor.

And the right fit for the doctor. It’s truly all walks of life for me. So maybe not the best answer you want to hear. 

Kendall LeJuene: No, that’s fantastic because I think it highlights the fact that you don’t have to do everything one specific way, right? There are so many ways to go about doing things. And so I love that answer so much.

Can you talk a little bit about it? What is the best way for someone new to capital raising to be able to show that they’re credible when talking with potential passive investors? 

Erin Hudson: Okay. So I love that you asked this question. I will tell you one of the ways that I screwed up is when I got in the game back in 2017, I had cash in my hand.

And especially for all of you new, if there’s anybody new in here and you’re listening to this, take this and apply. So I had cash and I very well could have gone in with my buddy Jeff over here and gotten in a deal with him. Or gotten in a deal with Zane or gotten in a deal with Victor, whoever it may be.

I could have gotten in a nice, good, strong deal. I’m sure. But guess what? My ego was so jacked up that I thought, Oh no, I’m going to save all this money for my deal. When I take down my bill, guys, opportunity cost. I lost time. I lost a year and a half before I took down my first 104 units. So anybody that is on here and you are new in the space if you have got funds.

Go get a deal. If you don’t have funds. Go get a deal. What do I mean by that? Don’t get me started, but here’s the deal. There is money everywhere. And so it’s about getting creative and finding ways and not taking no for an answer. So what do I mean by that? I’m just going to share with you quickly because I’m sure there are some of you on here that have not gotten in your first deal and you need to get in your first deal.

Let me tell you why first again, remember about that confidence. You’re going to feel that much more confident. Being an investor in a deal, even if it’s passive, y’all guess what? When you go to have that conversation with the guy that you’re hoping gets in your deal, you get to say, Oh yeah, we just took down this 240 unit, or I own this property over here.

You’re not lying, but you appear like a big wig to the individual. So what does he want? If he’s hanging out with you and he likes you, he wants what you have, right? So get yourself in a deal with a great operator and get in the game. Now, if you don’t have the money, hear me loud and clear. I’m going to share it with you.

It’s pretty powerful. So remember how I told you I owned those 26 rental properties? They were all free and clear, but I was a fool because I, you don’t know what you don’t know. I did not leverage them. I did not take cash out of them at the time. Now, with that being said, what if there was a way I’ll just share with you what I did?

I went on, I, we were going to purchase this 36-unit apartment building, and my partners, Quattro, were not all Quattro at that time, but I wanted to try them on for size. And so we decided to take down a property ourselves and they said, Aaron, if you want to own 25% of the deal, you need to bring 300, 000 to the table.

And I remember thinking, Oh my gosh, where am I going to get the 300, 000? I was like I guess I’ll just refi out one or two of my properties and pull cash out. I’ve never done it. I go to bed that night, I wake up in the middle of the night with this brilliant idea. And I said Honey, wake up.

I got to share this with you. And he goes, it’s three in the morning. I’ll talk to you tomorrow. So I said, okay, wake up the next day. Listen to what I did. I go on social media. I type in there. How would you like to be the bank, make a great return and have it backed by real estate? And I kid you not 65 people commented, tell me more.

Yes, highly interested. So what did I do? I went down the list of 65 people. I found the lowest-hanging fruit of those that knew me, liked me, and trusted me. And let me tell you, within 48 hours, I locked up my 300, 000. Why did I do that? I could have taken out the money from the houses, but I was interested in this.

O. P. M. Other people’s money. So I want you to hear me. You cannot take their money and go have it backed against your apartment building. That’s not what I was doing. I had it backed separately against a rental property that I had. And listen, maybe you have family members or friends that trust you so much that you don’t even need a property.

Okay? To back it with. But what I’m getting at is this. This was my offer. I will pay you 7%. I’ve got a great opportunity. I will pay you 7%. Interest-only quarterly payouts, two-year minimum, three-year maximum. And I kid you not, I locked up that 300, 000. So what does that mean? It means I took the 300, 000.

I put it towards this apartment building. And now I just got 25% ownership of this beautiful Knoxville, Tennessee property. Without my own money. What happened to me? Yes, I won because now I own 25% of this apartment building, but I just stretched myself in a way that I never had before. So what happened to my confidence?

Yeah, let’s just say it did. It went out the roof, right? But now I knew what I was capable of. Come on, you guys. I don’t see any ads going like this, like a nice job, right? But good stuff, stretching yourself. So the reason I share that with you is this. If you want it badly enough, you will find a way. You will find a way to get in the game and go offer something up.

Think about it. Right now, if you get an apartment deal, it’s paying out 6%. Sometimes prep is fair to say that 6% services your debt with the individual anyways, in essence, right? So anyways, I wanted to share that because it is powerful. If you are deadly serious about getting into the game. 

Kendall LeJuene: Yeah, that’s just absolutely incredible.

One of the things that I’ve noticed in many of your approaches is how important relationships are in working with people that know and trust you. Can you talk a little bit about it? How you build and nurture those relationships. Do you do some type of newsletter or direct mail?

How do you go about nurturing and building those long-term relationships? 

Erin Hudson: Listen, I have nothing to brag about when it comes to this, guys. I told you I am flawed all over the place. I do not have a newsletter. I don’t have any special emails that go out like a lot of your other companies do. And I’m not bragging about that.

I’m still flawed and still a work in progress. But what I will tell you is, I love people. I love people, guys. And here’s the thing. What I will say is there’ll be a text message that might go out to one of my investors. How’s the family? How did Johnny do in a soccer game last week? Whatever it may be, not all the time, but I love to let people know.

Hey, just thinking about you. How are things going? What’s new? I don’t even have to ask them when I come in from that approach. Guess what? I get back a lot of times. Hey, I’m so glad you reached out. Has Quattro got anything in the works right now? No, not right now, but hang tight. We’re working on something.

Stay tuned guys. It’s a little drip. What does that make you? An anomaly. Let’s just talk about it for a moment. This is so important. Many people will reach out and try to shove a deal down people’s throats or hold on a second. They’ll send an email. If you guys are doing it this way, that’s fine. Whatever works for you.

I’m just sharing with you a lot of feedback that I get, but you’ll see emails come in. Oh, check out my deal. Check out my deal. You’re not going to want to miss this. But they’re missing the whole beginning portion, which is loving people and letting them know. I’ve already said that they’re special, that they’re important, right?

And so it doesn’t necessarily always have to be about the deal. Make it about them. Hey, what are you working on? How can I help you? Is there anything I can connect you with? And when you find out what’s going on in their life, offer up a connection. Hey, you mentioned that you’re looking for, whatever, a loan for the refi of your house.

I’d love to connect you with someone. Bob, I’ll send over a couple of names. Why? Because your value just went up on the totem pole for these people, right? So just think out of the box because you truly will become an anomaly when a lot of people in our space are just reaching out to people when they have a deal.

But that’s you’re a hoe like you’re just getting used. I can’t feel good. I don’t want to feel like that. Truthfully, think about it. 

Kendall LeJuene: Yeah that’s fantastic.

Erin Hudson: Thank you for smiling, Todd Lee. I see you there. Thanks for the thanks, Lionel. I see your smile too there, pal. 

Kendall LeJuene: One of the things that stuck out when you were talking about how you utilize social media is that it sounds like such a novel idea for people that use social media for business, but the fact that you use it to be social.

That’s the first thing you use the platform for what it was designed for. And the business is a byproduct of actually making authentic connections with people.

Erin Hudson: Yep. Absolutely. I’m not the greatest at it, but I try and chime in for a little bit during the day.

Kendall LeJuene: That’s fantastic. Can you talk a little bit about what are some of your favorite tools or resources at the moment? Do you have a favorite syndication software or something like that? 

Erin Hudson: Yep, currently using syndication pro listen, there’s a lot of them out there and I feel like they’re all just missing a thing or two. And so I’m in the middle of actually working we’re getting ready to move. I’m not going to give you the name yet because when we do it’s great.

Then y’all could reach out and ask, but man, this one has got all the bells and whistles for what we’ve been looking for. I feel like if you could take all of them out there and you can grab pieces from each of them, you could come up with something great, but I feel like we’ve got one that’s in the works right now, so super excited with that.

I love Calendly. HubSpot has been great for us. I know there’s a lot of different things out there. That’s just really what’s worked nicely for me. I love it, I know it sounds real, and I’m not super techy, but I know with HubSpot, if you have an iPhone, you can grab the little world and just give people your link when they’re reaching out to you.

And I do that all the time via text. Hey man, grab a spot on my calendar. I’d love to talk shop and find out how I can help you move your needle forward. Super simple. Why? Because I didn’t just say, Hey, grab a spot on my calendar. Let’s talk about the 240 units. You’re closing in the middle of October. I didn’t say that.

I said, grab a spot on my counter. I’d love to learn more about you. I’d love to find out how I can help you add value.

Kendall LeJuene: I love it.

Erin Hudson: Adding value, but doing it from a place of true intent, right? 

Kendall LeJuene: Absolutely. That’s fantastic. Those are some great nuggets. Thank you for that. Do you, do your investors prefer that you focus on one asset type or do they prefer to be diversified among several different asset types?

Erin Hudson: Pretty much this, B assets for us. I think that’s the comfortability. Look, when we started, we were definitely in the C assets, but you have one or two things, big things go awry, like a class main. Anyways, I don’t need to go there, but things happen. And so B is kind of the 1980s or newer is what we’re wanting.

And our investors are super, super happy with that. I think a lot of times. With the properties, it’s just inversely proportional, right? Most times lower return, unless you’re like some of the folk on here that have a diamond in the rough, that little unicorn a property and can make those numbers work. But I think between that 18 and 20 we’re golden for sure. 

Kendall LeJuene: That’s excellent. Excellent. So as you mentioned earlier, branching outside of your normal pool and dropping little hooks here and there, whenever you meet people, can you talk about how you go about asking for money? How, when it gets down to it, how do you ask for money?

Erin Hudson: Yeah. So here’s the thing I love to educate. So I don’t ever come out and say, Hey, come invest with my deal. Here’s what I do. Here’s a typical phone call with me. I want to make sure that this should be for all of you guys, and maybe you’re already doing it.

And I was just late to the party, but when people book on my calendar to connect. What I have been doing is and actually, I’m working on it so it’s automated, but it’s been getting pushed out by my assistant for, Hey, jump on and check out the Quattro way. com. I’d love for you to learn a little bit about my team.

Furthermore, once we do that, I like to come to a call. Where they are, they know about the team. They know about Quattro. They know what I do because it’s the last thing I want to do when I’m on a call with them. And I put in the message that I don’t want to get on the call and talk about myself. It’s not my party.

It’s their party. So I’ll say, Hey, make sure you dig in, learn a little bit about Quattro, the backgrounds. I can hardly wait to meet you and learn a little bit more about you and how I can best help. So that by the time we get on the call, they already know about Quattro. They’re not going to ask me about my 26 properties and what I did and where I came from.

Right? And then furthermore, I get to ask and learn about them, and if they are insinuating that they want to move forward and they want to do more, then I will say to them, hey listen, you know what I think might be a good idea for you? Feel free, and sometimes I’ll do this before our call, it just depends on how warm the lead is and how hungry they are.

If they’re hungry right away, then I’ll give them this, but if I’m on the call with them and it’s a new relationship, I’ll say, hey listen, I would love for you to go to our portal. Get registered. And I’d love for you to check out the last deal we did. And the last deal we did, if you watch the webinar on it, you’re going to not only learn about the team, but you’re going to learn how we structure our deals so that when the next one comes, you’re going to be ready, locked and loaded if it’s the right fit and you have a temperature for it.

Why? Cause I didn’t just try and sell them on anything. And then what I’ll say sometimes is first watch that guys, we’ve got a deal in flight. Hear me for a moment. There’s a deal here. They’re thinking they’re getting on the call to talk about the deal. And now all of a sudden this mama is like, Hey, we’ll check out this last deal we did.

Watch the webinar because we haven’t had the webinar. In essence, we haven’t had the new webinar, but hey, see if you like it. And then if you have a temperature for it, maybe you’ll be the right fit. Maybe this next property will be the right fit. So what I would love for you to do is homework, right?

We want to see how serious they are. Dig in, grab another spot on my calendar, and I’d love to answer any questions you have, maybe bring some more color or context. To what I just shared with you. So then they want to get on the next call or they just go straight to reservation. Forget me. They bypassed me.

They saw that they already saw the new opportunity. They’ve already reserved a spot. It’s already a done deal. So that’s what’s worked wonderfully for me because it’s about educating them. We don’t want everybody. We’re not looking for pitas. We’re not looking for pain in the asses that are calling you every five seconds.

And truthfully, I haven’t, I maybe have one or two because if you vet them properly, we’re not desperate for money. We want to grow the people’s empire. We want, we’re not looking for the Walmart worker. We’re looking for somebody that wants to go nonstop to the top in a rapid way. And we’re going to show them out.

Kendall LeJuene: Very cool. How do you make sure that the money is readily available when you have that deal that comes up? So that way you’re not out hustling all the time. 

Erin Hudson: Here’s the deal on this. I’m always raising. What do I mean by that? Last year, we closed 15 apartment buildings with Team Quattro.

So it was a revolving door. Of course, things have slowed down right now. And don’t fear. I hope none of you guys are afraid. I think the middle of 2023, guys. It’s going to be like the golden goose. There’s going to be people that need to sell and we’re going to be, it’s the right opportunity.

And so with that being said, ours, there’s a couple of things that we do that are helpful. Number one, it’s, I feel like we’re always just rolling from deal to deal anyways. We truly are, regardless of whether we’re 15 or not. Three really large ones this year. And so it’s just the timing of them.

Naturally. We’ve always just been in raise mode the whole time. What I will tell you though, is two things we have got people, maybe some of you can relate to this. You lock up a property, you do the due diligence, and all of a sudden you’re like waiting for the attorney. You’re like, attorney, are you going to get me the freaking PPM?

Like we got money to raise here. And y’all know that you cannot raise money without a PPM. So how did we get around that? What we did is with our attorney, we had him create an escrow account. And people would just send money to the escrow account. They’d sign our escrow document that says you can get your money back.

If you decide that you’re not interested in the property that we’re about to put out. But what I will tell you is this one’s going to fill fast. So it might be wise to put your money on a first come first serve is how we do it. We timestamp everything, right? So what did that do? It truly creates the urgency to get their funds over.

But it wasn’t a lie. It wasn’t a lie. Two deals. I don’t know, three, two, or three deals ago. We did, we’ve done this for every deal. We overfunded two and a half million dollars because a bunch of money came in within a three-day timeframe. So what do we tell our investors? Guys, we timestamp everything.

We want to honor every single one of you. And so we go by that timestamp that comes in. Our attorney escrow account, right? So I think that’s number one. And number two, we’re now getting our PPM docs much earlier because we’re noticing that they’re still very similar. And so our attorney is helping us with the timing of our PPM docs.

There are pros and cons guys. If you have the escrow account, Not that it’s an accounting nightmare, but it’s a lot more work, right? Versus just having the PPM docs ready in the bank account open. So anyhow, I think we’re always raising money, but there are just a few tricks and trades and secrets that you can do. That makes life much easier to keep that money coming in. 

Kendall LeJuene: That’s great. Always be raising. I think we need that on the shirt, right? Do you raise capital for your deals only or do you partner with other operators? 

Erin Hudson: Yeah, so that’s probably one thing that’s a little bit more unique about myself. I am strict with Quattro Capital. I’m one of the co-founders and we, the five of us together, are just constantly doing our deals.

Now, we will work with other people that bring a deal to us. And we’re certainly not in a desperate position for that whatsoever. For us. Let’s just talk about it quickly. The property is super important. We would consider a property, obviously location and property, but the property is the horse.

And the operators are the jockey. So always be betting on that jockey to make sure when you get into a deal. And so for us, we want to make sure that there’s alignment and ethics and so on when we’re working with other people. So we’re just very picky and choosy with making sure that we’re working with like-minded people, not in desperation for another deal or more money.

It’s always best for the investor. Make sure like trust and all of those other things, making sure that they’re vetted individuals. So no, I don’t raise for other people. 

Kendall LeJuene: Got it. How do you go about vetting those jockeys? You talked a little bit about not liking and trusting, but can you go a little bit deeper into that?

Erin Hudson: Yeah. So I can share with you for example, who we’ve worked with in the past, what that looks like is Listen, I love to work with people that are hungry for success. That wants to know, come high or hell water, how they can get in your circle and work with you. So there’s no better way than for people to come in and be like, what is it you’re looking for?

What are your criteria? How can I add value? They want to be a giver. Cause that’s who we are. We’re givers. I want to attract givers and people that aren’t just taking, or just because you have a great deal in a great market. It doesn’t mean that. We want to have that deal, right? Because the person is more important.

So with that being said, I love working with people that want to add and bring value. Man, I see you guys growing. Can I help on the asset management side, on lightening your load a little bit, or whatever it may be? But let’s just say that for those. Our people that were just like that, who have now since found two, two, four deals, like they literally have come in and linked arms with Quattro and come in and we call them alliance partners.

They’re an extension of Quattro. And so they’ll come in and bring the deal and we treat them like gold when they come in and they run the entire deal with us. So that’s pretty much what we’re doing on that. 

Kendall LeJuene: That’s incredible. I love seeing that you are walking the talk, so to speak, and working with people that are in alignment with your values.

That’s fantastic. If you’ve been through the last market crash, What were the challenges raising money during that time and how did you overcome them? 

Erin Hudson: Oh man, that’s a good one. Right before the pandemic happened with team Quadro, we were 10 days before close and our loan got pulled out from underneath us.

And at that point, we had 250, 000 hard on this deal. And I kid you not, it was the scariest time ever. I think I think we were all working 12 to 14 hours a day looking for a new lender to jump in and save this deal because we knew it was a good deal. The banks were just freaked out at the time.

And there were times when I was on the phone with my partner and I could hear a kid snoring in the background. It was 12: 30 at night and you want to work with people that are hungry and hardworking just like you. You don’t want any coattails. People come along, you want to have partners that are hungry for success and come hell or high water.

They’re going to figure out a way to overcome the obstacle. It was a scary time. I kid you not. We ended up coming out on top, but I will tell you at the time when all of that was going on, there were 10 days that we were calling bank after bank and having conference call after conference call.

And we said, guys. Let’s give it 12 more hours. This is the last day. And then we have to throw in the towel because it keeps getting worse. There were like 10% loans and all these just crazy loan numbers that were coming out and it was killing the deal. And of course. Our heart is for people and we’re not going to put our investors in a deal that doesn’t make sense and is going to hell in a handbag, but the more days that are going by those more predatory lenders than I ever could imagine.

And so it is amazing how you listen when you truly care about people winning. If you’re a believer or not, the Lord knows the desire of your heart. And we desired to see people not be in a shoddy position. And so we had to back down and say, look, we’re giving it 12 hours. And if we can’t find something, we’re just going to take the loss of 250, 000 because we submitted the way that we did.

And all five partners were on the same page. Number one, when you’re going through hard times and you can come out on top with your partners like that, you are evenly yoked number two, your partners are all for people wanting to win, and you don’t want to put anyone in a vulnerable position and number three, we ended up because of our hearts being turned the right way, we ended up with a loan.

That was crazy. It doesn’t matter. We can talk about it another time, but it’s alone where our terms were better than what we initially had. It was a developmental gosh, I can’t even think of the name right now. I apologize, but Mission driven. Anyways, it was a loan that we got that ended up being way better.

And we closed, we ended up closing this deal and walked out with massive success. We ended up holding it for 18 months. Some will say, what the heck? Why not walk out of the five-year business plan? Here’s the theme. Quattro is always vetting and looking at the stats. Is the rent that’s trending up? Is the income following?

And so we got to this place where the income was not following. And so we went back to the partners, the joint venture partners that we had in this deal, and we said, look, we can either stay in this and I think we’ll be okay, or we can jump out now because God forbid if it gets worse, we may have a lot of people that we have to evict down the road.

And so we ended up selling it and netted over a 30% return. Across from the properties that we had there in Knoxville, Tennessee. So it was a massive win and we could have gone either direction, but I’m glad we jumped and did what we did. Sorry, I didn’t mean to swirl on you, but all good stuff.

Kendall LeJuene: What a story. My goodness. Wow. Congratulations on that. That’s remarkable. That’s remarkable. Earlier you mentioned that you believe that mid-2023 is going to be a golden goose, so to speak. What is your plan for thriving in this upcoming market? How are you going to approach what we are coming into?

Erin Hudson: I will tell you this much, guys. The lane that we are in is the best lane that one could ever be in the multifamily space. I’m sure a lot of you guys are capital raisers that bring money to other people’s deals. You guys are the bargaining ship. You guys are the cog in that will, that sets the entire thing and sets it all up.

Right? There is so much. Freaking money out there, regardless of what type of times we’re in right now, there is so much money. And so I think that if you are properly positioning your people who, if you do it the right way, they are going to be locked and loaded and ready to go come mid-2023. And here’s the other thing.

People are always looking to work with good people. Money’s not the issue. There’s plenty of it. People are always looking to put their money with good people. Now, if you’re just getting started, maybe it’s only a hundred thousand dollars because they want to try you out for size, right? And as you perform and you exceed expectations and you underpromise and over deliver, the most beautiful part is you will have lifers.

Lifers, they’re never going to leave you. If you execute your business plan and you come out on top, do you think they want to go try somebody else out for size after five years and double their money? No, they want to reinvest it. So we had a lot of people that were coming in for a hundred thousand dollars when we first got started because they wanted to try out Quattro.

I’m like beyond blessed, grateful in awe. That people trust us as much as they do our second to last deal here, or no, our, just our recent last deal, our reinvestment rate was 53%.

That is huge. Why am I sharing that? Because guess what? These guys went from doing 100, 000 in our deal to half a million to 1. 5. Are you catching what I’m throwing down? There’s money everywhere and they want to believe and invest with you. If you can show them the ropes. And walk out and execute.

Kendall LeJuene: That’s powerful. That’s powerful. What would you say to someone whose big goal is to raise a hundred million dollars, but they don’t think that they can do it?

Erin Hudson: First of all, you got to get your mind pal. You got to stop. I’m sorry. I could just fly right now. Listen, the thing is, this isn’t about you.

Stop making it about you. It’s not about you. It’s about them. We have lives to change. People’s generations of wealth create legacies to build and plant the vision, but first start with yourself. First start with yourself because you’ve got issues inside, you’ve got to work out. And believe that you can do it.

It all starts from within. Listen, I don’t know, maybe you won’t like me after I say this. Like I just feel like I am so confident that I can have and do whatever the hell it is I set my eye on. I’m not, yeah. It’s a little scary, yeah, it’s a little scary, but you can have whatever you want. It just depends on how badly you want it and if you’re willing to step up and take action and do it.

And then I think the last thing is, Maybe, I don’t know, take note of this. I kid you not, I wake up at 5 am. For some of you that have heard me speak before, like this is what I do every morning. I wake up every morning. I get out my journal that sits on my desk and I write down my five thankfuls.

thankful for whatever it may be for my kids, for a clean house, for opportunities, for boldness, for being awesome, for being unstoppable, whatever that may look like. And some of you may be going, that’s such woo, whatever guys, what you put in your head is what you’re about to walk out. If you believe you’re unstoppable.

And then I write down some of the goals and things that I want to do. I, one of them, want to make a hundred thousand dollars a month. All right let’s go. Got to pony up and start working the magic and reverse engineer what that looks like to get there. And believe it or not, it’s not as hard as you think it is.

We make it harder than it is. We make it harder than it is. Just remember, it’s not about you. It’s the other people. You have lives to transform and show them goodness. I’m sure many people were just like me that didn’t even know what existed on the other side. I didn’t know that I could invest in apartment buildings being a little peon. And guess what? It’s done. 

Kendall LeJuene: Love it. Love it. What is your biggest goal or passion that you want to achieve at this point in your life? 

Erin Hudson: Yeah. So I already shared that one, that hundred thousand. Cause listen, the truth of the matter is helping change people’s lives and making great money does coexist. It does coexist.

And some people think it can’t, but it does. So there’s that. And then I want to build an empire so big and bring my kids along with me. I want my kids to all come and learn how to grow this passive income and get in the game so that we can pass on. That generational wealth, and they can continue to uphold that and do that because I want to change the trajectory of my family’s life forever.

I shared with you what I grew up, what I grew up with, and bless my mom. Sorry, she gets sad every time she hears me talk about it or reads it on the website. And I’m like, Mom, it just is what it is. It’s you only knew what you knew. And that is what was passed down to you. But guess what? I’m going to change that for our family forever.

Kendall LeJuene: Wow that’s amazing. Now, we know that your children own their own Airbnbs and one of your children has purchased their multifamily property already. So I know that you’re already passing on this information, but what would it be that you would teach yourself, your younger self if you could go back and talk to baby Dr. Hudson? What would you tell her?

Erin Hudson: No, that’s a great one. I wish I was in it earlier, but again, you don’t know what you don’t know. And so I think that’s what fuels my fire to get the younger generation up and going because literally, my kids’ lives will never be the same after knowing the goodness of being able to be a part of it.

But guess what? That’s why it leaves a spot on every deal that we do for four. Kids call them kids. I’m getting old, under 25. They can come in for as little as 25, 000. It’s to give them a hand up. Our minimum is 100, 000, but we leave those four spots on every deal for the younger generation to get in and give them a taste of the goodness of creating that.

That passive income. So for me, I think it was just, I wish I could have gotten started earlier, but I don’t stay there. I feel grateful for all that. I have an abundance everywhere and opportunities are all over my life because of where I put myself in places and who I surround myself with.

And let’s be real, proximity is power. And so I just want to go be around people that are doing big things and glean from them. I’m going to be the dumbest broad in the freaking room so that I can learn and get massively equipped because I am learning. 

Kendall LeJuene: You’ve talked so much about mindset. You’ve talked so much about the power of just the sort of that software that you run in your mind. Are there any last words of wisdom that you would like to leave with our viewers today? 

Erin Hudson: Now, I think I shouted it, but like literally guys, you need to go help other people when you don’t think about being a member, you’re not asking anybody for money, you’re sharing an opportunity, and opportunities to change lives.

And so don’t be scared of, Oh my gosh, how do I talk to him? What am I going to say? No, man, I’ve got this incredible opportunity. I’d love to share with you a little bit about it. If perhaps you might have some interest, that’s it. Guess what? They’re either going to say yes or they’re going to say no. If they say yes, you carry on.

And when I say carry on, you don’t barf all over them about the deal. Fantastic. Man, let’s have a coffee date in two days. I’d love to, let’s go over to whatever. Coffee shop at 9 a. m. Can you make it? Guess what they’re thinking. Shoot, man, I thought she was going to share with me about the deal right now.

No, man, it’s so good. We have to wait till we have some time together. It’s not a quickie that quick, right? Build up the anticipation, get the excitement. And the last thing is people are reading your face. Are you someone that’s like happy all the time or are you like, Oh gosh, man, another day, your energy and vibration, nobody wants a piece of it if you’re frowning, flip it upside down, pal, you’d be shocked how much people need happiness, goodness, and a smile in their life.

And on top of that, a compliment. So give them a nice genuine compliment, and you will be sure to attract the masses with hardly any effort. That’s what I have. 

Kendall LeJuene: That’s fantastic. Thank you so much, Dr. Hudson.

Hoa Nguyen: I think you have to think about long-term relationships and, in the beginning, we did attend so many and I think you have to get yourself. You have to get out there and you have to let people know what you’re doing. Tim is one of the most authentic and genuine people I’ve ever met.

Sincerely believe he’s coming from a position of giving and that means a lot. You’re going to make huge progress.

Tim Mai: Welcome everybody to today’s capital raising show. I’m your host Tim Mai. And today I have a very special guest speaker on. I’m so super excited to interview her today because number one, she’s the first woman that I’m interviewing out of all of these guys I’ve been interviewing.

And number two, she’s Vietnamese. And that’s, I’m also Vietnamese. I’m super excited about that. Dr. Hoang Nguyen is an entrepreneur, author, and co-host of the Financial Freedom Show. She’s an eye doctor and also a real estate investor and syndicator. She is the CEO and co-founder of Black Steel Investment Group.

She has over 460 million assets under management in real estate and has invested over 6, 500 units, both as general partners as well as limited partners. across 23 appointment communities. She owns two successful eye practices in the DFW area named Eyepieces for over 10 years and co-founded a black steel investment group to help families and busy professionals invest passively in apartment communities.

She’s a mother of an eight-year-old daughter, Athena, and her husband also a business partner, Dr. Jaime Gonzalez. And her passion is to travel the world and immerse herself in different cultures, empower youth, empower women, and contribute back to the community and many non-profit organizations. So with that, let’s give Dr. Nguyen a big welcome, y’all. Woohoo! 

Hoa Nguyen: Thank you so much, Tim. Hi, everyone. It’s nice to meet everyone. Yes. 

Tim Mai: All right. I am super excited about this. Just quickly, thank you so much for doing this interview with me today. It’s, yeah it’s an honor to get to meet you and now get to interview you.

Hoa Nguyen: It’s an honor to be the first woman here.

Tim Mai: Yes, we do need more women on this show though for sure, but it just so happens that this week and then next week we have another woman on, all right. That’s perfect. Dr. Nguyen, if we can start, you can share with everybody, how did you go about getting into the growth, the investing space, especially the multifamily space?

Hoa Nguyen: So real estate investing, where I was a doctor for 16 years, but when my daughter was born eight years ago, we wanted to figure out a way to have more time freedom, because our practices I was working about 7080 hours a week hustling. And we knew real estate was the vehicle, but we didn’t know exactly how to get our foot in the door.

And so we went to listen to a lot of podcasts, read a bunch of books and a bunch of boot camps, and anybody who was hosting an event for real estate, we would go and so we learned different avenues of real estate. And so the first couple of years, we were doing some single-family buying land and doing those different avenues of real estate.

Learning and then just investing. And then we had a patient who was telling us about multifamily and talking about syndication. And so that’s when we started going into those types of conferences and meetups and then joined groups and learned about that avenue. And that was close to about five years ago.

And that’s when we started our multifamily journey. 

Tim Mai: That’s awesome. And so did you start as a passive investor first? 

Hoa Nguyen: I did. We started as passive investors in eight different deals in different markets with different sponsorship teams. And so we knew that the end goal was to go active. So we were extremely passive.

But we wanted to look at the financials, ask questions, and go visit the property. And so we were doing all of that, but we wanted to make sure that we felt comfortable with that before we started syndicating ourselves.

Tim Mai: And so when you started to syndicate yourself and went on I guess in your journey did you join any coaching group or did you just all learn from the deals?

Hoa Nguyen: No, we joined a mentorship program. We visited three or four different ones where we did separate boot camps, but then we signed up with a mentorship program through Brad some rock. And that was, and that’s where we joined. And then we built an ecosystem so we invested, we invested in making partnerships in that group but then we also did outside of the group because we wanted to learn how other people were doing it outside of the group as well.

Tim Mai: Okay. And how much would you say, both your team collectively and you have raised since you started in this business? 

Hoa Nguyen: Yeah, so our team collectively has raised 138 million. And out of that 138 million, my husband and I personally raised about 33 million of that. 

Tim Mai: Wow, very impressive.

At 30, even, even 33 million is a lot of money to raise. At one point, did you ever have the thought of hey, that, this is a lot of money? Or did you come in because of your background, being a doctor, did you have that confidence? Oh, I’ll be able to raise money. No big deal.

Hoa Nguyen: You know what doctors are the hardest investors. Yeah. Although they’re high-income earners, they’re very skeptical. And I speak from my own experience because that was my mindset coming in when I was learning about this avenue of real estate. And so even though there’s money. You would think that would be an easy pitch per se, or no, it’s harder getting investors from doctors.

Although the bulk of mine have been doctors, it took time in building and educating. And it was a huge court and they watched my journey before they jumped in. Yeah, so doctors are not. As easy as you would think, I was nervous at the beginning. We were very active in building our database, even as passives.

We were educating, learning, and talking to people about what we were doing so that when we did get our first opportunity. We would feel comfortable saying, Hey, I think I can raise X, Y, and Z, but you never know when it’s your first deal and someone asks you, what do you think you can raise? Honestly, you don’t know how many of those people who you talk to will convert to actual investors, but you just.

Just keep talking and building that relationship and say, Hey, if I have a deal, would you be ready? And how much would you invest? And so I’d always keep that in the back of my mind. And that’s, so when I did have that first opportunity, I felt pretty okay saying, I think I can bring in that much and we did.

Tim Mai: Okay. So how much did you raise in your first deal? 

Hoa Nguyen: So my very first deal, I raised two and a half million. 

Tim Mai: Wow. That’s impressive for the first deal. Cause I hear stories about people barely raising 200, 000 for their first deal. So that’s super impressive. You did a really, you must’ve done a really good job preparing all of your contacts for that. 

Hoa Nguyen: I did. I was so diligent about Hey, if I have a deal are you ready? X, Y, and Z, this is our criteria. This is what we’re looking for. So I’d educate them and plant the seed and be like, Hey when it comes, are you in, 

Tim Mai: That’s awesome. And what would you say is the percentage of your and not just your first deal, but the overall percentage of. Of your passive investors, those are doctors versus non-doctors. 

Hoa Nguyen: I would say maybe 40%. 

Tim Mai: Oh, okay. I was expecting much bigger, but okay. And who, what’s the profile for the others?

Hoa Nguyen: All walks of life. I have business owners who own hair salons. I have people who own restaurants. I have CEOs of big companies. I have designers who are like watch designers and those types of things. So more in the business world kind of people, athletes and then the rest of her are mixed kinds of doctors.

Tim Mai: Gotcha. Okay. Now, yeah, if you can share with everybody. I have a lot of engineers. 

Hoa Nguyen: Okay. I have a lot in the IT space. 

Tim Mai: Okay, gotcha. If you have to give it a percentage, what would you say? 

Hoa Nguyen: Huh. And the text space is probably about 20, 25%. I have a good amount of text space. 

Tim Mai: Okay, that’s good. That’s good to get to know that.

But you know what, why don’t you do this and share it with everybody? What would be your top three? Tips when it comes to raising capital. 

Hoa Nguyen: Top three tips I would say is because we attend a lot of meetups and conferences. So what we always do is we intentionally select five to maybe max 10 people that we want to make a deeper connection to.

And then at that point, we make sure that we talk to them there. We follow up and follow through and continue those. And so because it can get overwhelming sometimes if you’re just passing out business cards. And so that’s not our strategy. We don’t try to hit as many people and talk to as many people.

We are just small, but 5 to 10 intentionally, if we know some of them. are going to be in advance. We know them online, but we know they’re going to be in an event. And those are the people we want to try to connect to in person. And if they’re new people, that’s okay too. But we try to focus on quality over quantity.

So that’s tip number one. And that’s worked out well for us because of the conversion rate that we’ve been able to get with that. Number two, what’s been beneficial for capital raising on a larger scale is being able to have a platform to speak, whether it’s on a live stage, whether it’s a virtual stage like this or whatnot, and just create value.

So nothing is sold, nothing is pitched at that point, it’s educating and then you give people a mobile code, and so that way they can connect with you, and it’s one too many. And so you’re able to connect with a lot more people and you’ll do the one-to-one after you get the one too many because if you can speak on stage, even if it’s 1520 minutes, give a code a mobile code out, and you can collect about 80 to 100 people.

Data and then go back and then, it’s streamlined. It’s automated mobile processes where they get them, then they get their website or your introduction and get to know who you are before you set up that one on one call with them. And so sometimes I’ll take that one-on-one call personally, or sometimes I’ll have my investor director.

The third tip I would say is a compilation book for credibility. And so if you can, if you have a book if you have your name on a book, and you get to know people, not only do they get to know that you’re part of a book, a compilation book you want to be in a book where there’s a lot of people. who are well known.

And so when they’re reading those people’s chapters, they’re also reading your chapter and you have your information and people get to know your story. And I think that there’s a personal side to that. And so people invest with people who they know, like in trust. And so having that is like I say, a book is today’s business card.

Because once somebody gets, even if it’s a short chapter that has been made tremendously, I give them away as marketing. And so if I speak at an event, or if I go somewhere, I can sign it, and give it to you as a gift. And that has been powerful as far as helping us raise capital. 

Tim Mai: That’s awesome. So I’m going to ask you some questions about these three tips, but the one regarding the compilation book, are there a lot of groups out there that kind of lead the compilation books?

Hoa Nguyen: Yeah, there are. I’ve done four compilation books now, and so they’re different. It depends on what kind of book and what kind of story resonates with you. And so there are different groups. I’ve done one with Kyle Wilson. He was Jim Jim Brown’s business partner for 18 years. Okay. So he does a lot of compilation books.

Every few months he does one and he has a lot of well-known people there. His is a little bit pricier to do a chapter. So it can range from doing a compilation book where it’s free. To up to 3, 500, the average being maybe about within the five to 800 range. So the more well-known people, if there are celebrities in the book and things like that, you’re going to pay higher for that compilation book.

If it’s not going to be quite as well known but it’s still good content and things like that. And it’s still a book. That’s going to be published and it’s on Amazon and all of them are going to be under the number one Amazon bestseller type thing. But you don’t have to spend a whole lot just to at least get your story and get your content out there and people can connect.

I have people connecting from overseas and I was like, how’d you get my contact information? They’re like, from your book. I’m like, which book has a wide reach that I didn’t get? 

Tim Mai: That is awesome. I like that. Okay. And then on your meetup page idea. Do you only, or do you mostly attend real estate-type meetups or also?

Hoa Nguyen: I’m glad you brought that up, Tim because I’m in a lot of other circles outside of real estate. Although I attend a tremendous amount of real estate conferences, there’s a lot like doctor conferences and business entrepreneurship. Conferences that I go to, and that is huge because they don’t know about the real estate syndication space.

And so that’s a whole nother avenue in a type of investor to be able to convert because and educate. Find that a lot of my investors also come from these outside masterminds or outside conferences that I attend and then once somebody, especially if you have an opportunity to be interviewed. Or speak, then it’ll open more doors to other professional groups where they’re like, Hey, can you come to speak to my group. I would love to learn more about real estate syndications because we don’t know what that entails.

Tim Mai: Okay what does your funnel process look like? For someone, especially who’s not in the real estate space. So how do you begin that education process from someone, let’s say they’re just a business owner in a business owner group that you went to? How do you take that person, what’s your process to where they are, what sends you the wire?

Hoa Nguyen: So the process, if it’s a cold lead and they just text it in, then my investor director, she goes through that process, sends them an introductory email and that introductory email will have our frequently asked questions, introduce who we are, our website, she’ll introduce who she is, and calendly link.

for them to schedule a call with her. Now, if they specifically want to speak to one of us because they met us at the event or by request, they would prefer to speak to us instead of her, then she will coordinate that so that we make sure that we get the personal call. Otherwise, it gets too many calls and we’re not going to be able to take all the calls.

And so she helps us filter through that process. There’s a questionnaire. Yeah. And then she sets up the call. And then at that point, we set up a 30-minute Zoom call. Sometimes she does the Zoom call. If they request us, we’ll do a 30-minute Zoom call, but that’s only touch point one. And so we like to do multiple touchpoints.

So it’s not okay, we made the one call. We’re good. So they get put into our database after we make our call, but. So we use MailChimp. And so once I’ve made, once Maria, or I, or Jaime has made the call with an investor, because most of ours are 506B, and then we put them into MailChimp.

And then from there, we have touch points via text message instead of email. We usually like to text message if we’re friends on Facebook, then I’ll do a Facebook message just to connect and see. Then let them know Hey, in our next webinar, we’re going to be talking about X, Y, and Z. And so their education content that we’ll do private webinars for people that we know want to learn more.

And then we’ll let them know the process. And then, Hey, if the next investment opportunity comes, if you’re a first-time investor and I know you’re new and I know you’re ready to go, I’ll put you on a VIP email list, which means that I’ll give you first dibs, usually a day before I send it out to the rest of my list.

Tim Mai: Gotcha. Okay. And then do you have a weekly or monthly newsletter type thing that you send to quarterly newsletters?

Hoa Nguyen: Okay, your quarterly newsletters and monthly kind of education content live Zoom. 

Tim Mai: Gotcha. Okay. And then regarding speaking on stages, your tip number two is there. Now you have your financial freedom show.

Do you get more investors from your show, or from you being a guest on someone else’s guest on someone else’s stage?

Hoa Nguyen: Absolutely. Especially because I started about a year and a half ago the first time I started speaking on stage. I have the biggest fear of public speaking, but I think that was the biggest.

That was the biggest growth for us. It was the biggest challenge to overcome and push comfort zones, but speaking on stage, there is a level of association with the other speakers. And automatically, people will come up to you after you finish getting off that stage. And most of the time, if I’m there, I may not even give my information.

Automatically, there will be a line of people who are like, want to get to know you more. So it’s like the mystery of wait, you just told me a little bit, but how do I know more? How do I connect, and so the conversion of live speaking events is so much better? 

Tim Mai: Okay, good.

Very good to know. All right. And in terms of, I know, you position yourself a lot around speaking around books. Any other ways that you position yourselves, such that you know it. Help gain their trust and that rapport process. 

Hoa Nguyen: Yeah. At the beginning of my journey, honestly, Tim, when I was solo like I didn’t have an investor director and all this, we were doing this solo.

We would meet people in person like it wasn’t a Zoom unless they weren’t local. If they were local, then we would invite them out for lunch or dinner. And if they were out of town, they were coming in for a conference, then we would be intentional about setting up where we can have a coffee together.

But that one on one time, I think is super important. Being in person is the best way to earn trust over time. Now for us. The other multiplier that I would say is our existing, we call them raving fans or raving investors. And so your investors who are already investing with you, and especially if they’re repeat investors are the best people to refer to, and the referral, it’s like they already trust them.

And so we have built a lot of people. Really by referral as well from our existing base because they’ve already invested in multiple deals with us. We already have a good rapport and trust with them. And so they’re now sending us their friends and family for us to educate and then have the investment opportunities.

And I think that’s something that we want to make sure we don’t forget is the low-lying fruit like don’t forget those who are already there instead of just creating new ones, focus on the existing ones too. 

Tim Mai: Do you have a process in place that asks for that referral? 

Hoa Nguyen: I don’t ask out loud for your referral. We do have an email that my, we sent out one email before that has if you have any family or friends to refer to or whatnot.

But I think I’ll just casually mention it if I’m meeting someone in person, or if I know someone who’s been investing with us. I think they naturally just say hey my mom wants to invest or my brother wants to invest when you talk to them. And so what we do a lot is group Zoom, and so we’ll have the existing.

The ones that we already have as investors and the people that they’re introducing will do a small group Zoom of maybe five or six people where we want them to be on with the new people with them. And so that’s been extremely effective. 

Tim Mai: Gotcha. Very good. Very good to know. So I know your deals or share them with everyone.

What type of deals do you go after, and do you do what class they are? 

Hoa Nguyen: So we predominantly do A and B classes. 150 units to about 360 units. So Texas, we’re heavy. We live in Dallas here, so DFW and Houston are the main markets that we look for, but we are also in San Antonio and the Carolinas, and Phoenix, and we’d like to get into the Florida market this year as well.

Tim Mai: I see. Okay. Now those deals, they’re what would you say is the average purchase price on these deals? 

Hoa Nguyen: So they range from 26 to 71 million. So I would say the average is going to be usually within more than 40 to 50 million range. 

Tim Mai: Okay. So yeah, so pretty, pretty sizable deal for each deal you’re raising a lot of money. I’m curious as to your take on why you choose to use 506 C, 506 B only, and not 506 C. 

Hoa Nguyen: Most of our teams have always just, personally, I like knowing who my investors are and then giving some of the opportunities to those who are not accredited to be able to invest. I like that, and I like pre-existing, where I know them already.

And someone’s referred to or, I just, most of my partners prefer doing a five Oh six B. I’m honestly not opposed to a five Oh six C. I’ve only done one five Oh six C in the past. And, some investors don’t like the accreditation process where they have to prove all the, and that is just one extra step.

Even though you have a third-party company doing that process, sometimes investors may not like it as much. But honestly, I’d be open to either one. It’s not like I’m, I was thinking in the future of doing a fund of funds. I’ve never done a fund of funds. And so maybe opening a 506 C to do something like that because sometimes we go and we have a lot of meetings and we go to events and people have money and they’re ready.

They’re like, here’s my money and I’m like, I don’t have a deal yet. And so we just got to wait and. And so I think having something where maybe having a 506c platform and creating a fund so that in the window of what we’re looking for, that might be an option for us. I say, Tim, if I may add a quick comment on that, I think one of the big advantages of creating a 506c B fund is once you hit 5 million, you can give 506 C deals to 506 B investors.

That’s a huge plus. Wait, say that again. If you do a 506 B fund and the fund hits 5 million in assets fund of funds. It hits 5 million in assets. You can even do five or six C deals. You can. Yeah. And expose them to five or six B investors. So I don’t want to break him. Tim will take me out of the room. Otherwise, no, I’m just, thanks.

Tim Mai: Yeah thank you for that. So have you had a deal with that? gone south that went bad. Yeah. Oh yeah. Share with us, what went wrong and how did you navigate through that? 

Hoa Nguyen: This was not this, it didn’t go across the finish line. This was in my earlier stages.

We were looking at a 24-unit deal here in Grand Prairie and I had a few of my partners go in. We were planning to do a JV on it. We weren’t going to syndicate the deal. And so I had three other people and we had all the terms like we had the broker, it was 24 units. We put hard money into the deal.

And we had lenders give us terms and everything for the property. And then we did our due diligence and everything was looking like, okay, this is going to be fine. And this was before I was like, okay, maybe we could just get our feet wet. The zero-to-one is hard. And so after a while, I was like, man, I just want to maybe get my hands and.

Just get in there to get my first deal. And I think a small JV would be a great way to break the barrier because it was so hard for us to break to be on the co-GP. And so when we did that deal, what wound up happening was none of the lenders would lend on it because they said that for the agent, it had to be a bank loan. After all, none of the nonrecourse loans, because they were on three different parcels so it was a really weird thing.

How the buildings were set on different parcels. And so they said they wouldn’t lend on it and so we didn’t want to do it. A bank recourse loan at that time. And so we wound up just my partners. Two of my partners didn’t want to go through with it. And so we decided, you know what, let’s just go back and focus on doing bigger deals and doing syndication.

So that was one that we just, we lost, they gave us half of it back. So we lost a small amount of earnest money on that, but that was, yeah, at the beginning of our journey, trying to break and getting our first deal.

Tim Mai: That’s good. So other than that deal like you have been able to successfully raise and fund all of the other deals. 

Hoa Nguyen: Yeah, all our other syndication deals have been fine. Those have gone smoothly. The only thing that I would say is not smooth, but it still ended up fine. We just had to do an extension.

It’s just more our last couple of deals because of the lender, the lenders retreading last minute. So we, it was a bad thing, but a good thing. Because we then had to go back to the seller to renegotiate the purchase price. And so in both of our last deals, we were able to get a 3 million discount from the seller because of the lender retreading at the last minute.

But it closed down, everything went smoothly, so it’s great, it was praised. So all of it was fine, but it was stressful at the time when all of this was happening with the lending situation.

Tim Mai: That’s awesome. What are some of your favorite tools that you use in your business? 

Hoa Nguyen: Favorite tools and what’s that like?

Tim Mai: It could be software tools, it could be any kind of resources that you use in your business. 

Hoa Nguyen: I think MailChimp has been easy. I know a lot of people use active campaigns. I’m not well-versed in that. I think MailChimp is very user-friendly for us and we’ve been able to do all our campaigns and newsletters and everything through that.

So we like that cashflow portal. We like that. For we’ve used all of the other ones to syndicate probe Juniper Square. But I think from both the GP and LP side, I find that the cash flow portal is not only less expensive. But they’re more user friendly and we know the co-founder Perry Zhang.

And so whenever we have any issues and because he has that background. So there’s there if there’s something that I find that’s hey. We don’t want our investors to have to start all over when there’s something wrong with the document. Can’t we just make an addendum and have an initial it? And so they did that within 24 hours because I’m like, yeah, I’m making my investors keep starting over. After all, I get frustrated when I have to keep doing that.

And so little things like that’s been a very good resource for us. And they also put it out in the marketplace so people can reach us. The third thing is, I think my biggest resource that I can’t share with anyone is our investor director like Maria adding someone to our team and taking so much off of our plate.

She coordinates everything like investor appreciation gifts right after, so for every deal, she sends out gifts to all our investors. She hosts dinners for our investors to do appreciation dinners. Then it gets people in and then helps us bring other people in. And so having one other person who’s strong on your team.

That’s been a big builder for us and a huge resource. I think the best reason for us so far.

Tim Mai: That’s awesome. So for those of us that want to hire someone like Maria, what’s her, what is her profile? Is she more? outgoing social butterfly type person, or, yeah, share with her, share with us some of the personality traits that make her so good at what she does.

Hoa Nguyen: Personality trait, like we’ve known her for over 25 years, she went to school with Jaime in college, but very outgoing, like she’s probably 10 times me. In the outgoing space. She’s very articulate. She’s very good at the camera and speaking. She’s very personal, very caring. And so she’s very organized, very detail-oriented, and tech-savvy.

But the best two things are that she connects well with people and her communication skills are excellent. I see everything else we could teach her. She didn’t know anything about real estate. We didn’t care. I was like, we can train that everything else like personality and just her level of care and follow up and follow through and detail orientation of what she does that is what has helped us a lot.

Processes like that are not my forte. I’m like, I’m not tech savvy. I hired everything that I didn’t want to do and I’m not as good as She’s good. 

Tim Mai: That’s good. Good to know. Where do you see the market going, especially for classes A and B, coming up with all this craziness with the interest rate heights and all of that?

Hoa Nguyen: Yeah, I think the debt structure and the underwriting key right now, making sure that is. Buffered in lending and the environment of what’s going on, we stay in prime markets just because that’s what’s worked well for us in the A and B space. And then I think the biggest thing is the underwriting and to be as conservative as you can with that and having extra cash reserves on hand and making sure that you have enough cash flow, given whatever circumstances and whatever market we’re in.

And so the debt structure normally, even if we get approved for 75% now, we’re taking about 60 to 62%. We really, and if it underwrites and it pencils out, and especially if we get a deal that the broker is bringing to us, and they want our team to be able to close that deal. And if the numbers work and we can get a debt coverage, that’s low, that kind of protects us a bit for any type of future market situations.

Then that’s a green light for us. And so we lose out on a lot of deals because we don’t quit, we can’t bring the price to what things are, but we’re okay. We’re patient and we’ll go through the process. 

Tim Mai: Okay. And are you doing any new development at all? 

Hoa Nguyen: I haven’t gone into the new development space, Tim, but that’s our next chapter of what we would like to get into.

Tim Mai: Okay, very cool. So what would you share with the people listening that maybe they’re starting new and they’re not confident in their ability to raise, a significant let’s say even a million dollars for their first deal, what would you advise them or share with them, 

Hoa Nguyen: I think you have to think long-term.

Thank you. Relationships and at the beginning, we did attend so many and I think you have to get yourself, you have to get out there, and you have to let people know what you’re doing in your immediate circle and when you’re going out to networking events. That first few minutes of engagement when you talk to someone.

You have to make it clear whether you want to, if your intention of talking to that person is to have a strategic partnership opportunity, then make that well known and what you bring to the table. If you’re looking for passive investors and investors are in the room, then that’s a conversation even if you’ve never raised it.

For and the biggest fear most people have is they’ve never raised money, and they don’t have experience yet right how to raise capital. And so I always say you are going to leverage the experience. of someone else. And so I always, and so when I passively invested, I had intentions to strategically partner with them as a co-GP one day.

And everyone that I have invested passively, at some point in my journey, I have co-GP’d with them because I intentionally made it and so I think you leverage them. And when you educate an interested investor, you’re going to say, it’s not just me, it’s my team. And then you leverage the experienced co-GP’s resume and their level of expertise and their track record and what potential history returns might have been.

Of course, it may not be, but those are things you want to educate people on what’s possible in that space. And in the returns, because most people have no idea. And don’t be afraid of just, and most people like me, when people tell me no, I’m not interested right now. I don’t consider that okay. I’m not going to talk to that person anymore.

I still keep going back to people and keep making that connection and relationship, because eventually a lot of those people might’ve waited a year or two on the sidelines, and then they finally came in and now they’re my investors, but it took time for them to feel comfortable enough to trust me to know that, Hey, she’s been now on the journey, but I make it very well known everywhere I go, what I do.

And so you have to let people know what you’re doing. 

Tim Mai: That’s awesome. I like that. I like thinking long-term, right? So it could be a few years. So yeah, I love that. Yeah. So what’s your big goal? 

Hoa Nguyen: My big goal It’s funny because I never thought that speaking would be one of the things that I would even enjoy doing.

And now it’s a thing I love to do. And if I want, I just want to create more international platforms. And, I did my first trip to Vietnam and a two-week mastermind around multifamily. The huge interest of international investors. And now I’ve got the attorneys over there.

I’ve got some big groups coming to Dallas to visit us. And I like it. I love traveling. And so it’s like I always said how do I incorporate my love of travels in different cultures, and then the real estate space like how do I do that and so now I’m, that’s my future big plan is to be able to travel to different countries and speak on it doesn’t have to just be real estate, it’s just living this living life on your terms.

Because real estate is a vehicle I say is like your freedom and impact. And so we do a lot of work too. And so that’s all in our wheelhouse. Now that we have more financial resources and time to do that, we can personally go and do those types of trips. 

Tim Mai: Love it. And what are you teaching your daughter that perhaps you’re not many parents out there teaching their kids, 

Hoa Nguyen: My daughter’s nickname is Ninja.

And she’s bigger than life and because we take her and, we teach her about. Just getting out there and not being fearful and she’s the one who taught me to not be so fearful because I’m always scared of everything. And so she was the one encouraging me more but she sees us.

She tours like she’s been to an apartment like she’s been on a lot of our apartment projects, and she goes to our practices. I mean she knows the entrepreneurial mindset she’s invested early on at a young age, her own money. And so she understands the concept of investing. She understands the concept of donations and volunteering and things like that and giving.

And so for me, I just want her to build confidence and get out there. And so she’s yeah, she’s a little Yeah, she’ll get out there and she’ll, she could probably pitch you a deal, Tim. 

Tim Mai: We should do that. Have her come on here and pitch a deal to all of us here. That’s awesome. I love that. I love that. Dr.

Nguyen, if the listeners want to reach out to you, connect with you, invest with you, or do deals with you, where would you like to send them? 

Hoa Nguyen: So they can go on our website. It’s passive wealth. The number 23.com or they can text the word passive to the number 26786. Awesome. It happens with that.

When I sent that text message, I was telling you about it. So you can create whatever you want to follow. And so we created a due diligence checklist. So for investors who want to passively invest, it’ll have a 50-point due diligence checklist on there. And then it’ll give us the website and things like that.

And then in the future, when we do like when we host webinars and things like that it’ll be streamlined where you get a link once you. Get to that. Once you text that, then you’re in the system. 

Tim Mai: Gotcha. So your short code is 2, 5, 7, 8, 6. 

Hoa Nguyen: Yeah, just text the word passive to that.

Tim Mai: Perfect. Perfect. Okay. All dr. Nguyen, thank you so much for doing this interview with me today. Yeah, I appreciate you. I enjoyed this interview a lot. So you share a ton of information. Thank you so much. 

Hoa Nguyen: Thank you and appreciate everyone. Awesome.

Tim Mai: Welcome to the Capital Raising Show. I’m your host, Tim Mai. Today, I have Gino Bovaro on the line with us. Gino is an amazing real estate investor, businessman, and entrepreneur. Not only has he built a portfolio of over 1,900 multifamily units and over 225 million assets under management. He has also taught thousands of other real estate investors.

You know about multifamily and his group of students have done well over 53, 000 units and over 4 billion in deal flow. Ideal volume. And, Gino and his partner Jake have, yeah, been real estate educators for a long time. Gina also has written three best-selling books, The Wheelbarrow Prophets, The Honeybee and Family, and Food and Fires.

And Gene, yes, Gene currently resides in St. Augustine, Florida, with his beautiful wife Julia, and there are six Children. That’s a lot. How do you do it?

Gino Barbaro: You marry up. You’re with the right partner. Just like when you guys are raising deals, you need to have the right partner. And she’s amazing.

My wife stays home, homeschools them, and just takes care of the family. And, to start family life and business life are pretty much the same thing. You need core values in business. You need core values in your family. And for me, it’s been an amazing journey. I love it. My kids are investing in the deals with me.

They’re in, they come to the events, and they see the life of an entrepreneur. So for me, it’s been invigorating. It’s been a great journey for me. So thanks for having me on Tim. I appreciate it. 

Tim Mai: That’s awesome. Thank you. I’m honored that yeah, you’re coming on the show with us. I know.

You have a ton of experience when it comes to raising capital. And so really really honored to have you on. So yeah we love to start with, if you can share with us, how did you get into this multifamily commercial real estate space? 

Gino Barbaro: Sure. I’ll give the 32nd overview. I got out of college a long time ago.

1992. I don’t know if he was older than me on the show, but 92 is when I graduated college. I went to work in a cubicle for a year, left that job, and got into the restaurant space. Believe it or not. My dad was a chef. He was an immigrant from Italy. And that’s how I got family food in the Friars. I ended up writing a cookbook about 10 years ago.

I was in the restaurant business for a good 15 years, 2008 came when I met Jake. I’m working harder, making less. I need to do something. I had already crapped out on a mobile home park deal. I had already crapped out on a mixed-use deal. I said, timeout, what do I need to do? And I saw one of your questions.

How did I get into multifamily? It was very easy. I had a job already. I didn’t want to fix and flip. So I said, multifamily is the natural progression. So I started my education in 08. Spent a ton of money. I look at it as investing a ton of money in mentors. Now met Jake in 2009, Jake moved down to Knoxville, Tennessee in 2011.

We partnered up in 2011. I’m the one who taught him everything. I still keep saying that. And it’s really funny because he didn’t know anything about the real estate space. He was a pharmaceutical rep, but he had the desire and he had the work ethic and we had values that aligned well.

And when you guys are raising capital, it is about values-based decision-making, whether it’s with your investors who are ultimately your partners. Or other sponsors or other syndicators or other people on your team. So for me and Jake, we aligned well. We wanted to have multifamily as the vehicle.

I didn’t want self-storage. I didn’t want land. We just focus on multifamily. We tried to become experts and I wouldn’t say that I’m going to, I’m an, I’m not an amazing investor. I’m not amazing in any facet of my life. I just work hard. I was endowed with. So not being that smart to be completely honest with these, but not being very intelligent.

I had to focus on working hard and educating myself and preparing myself. And that’s what I did for those two or three years before I met Jake. It took us 18 months to find that very first deal. And for us, it was. Not starting the syndication route. Because in 2013, there was very little money out there.

Consumer sentiments suck. There were tons of deals. There was just no money. So we started buying deals on our own. We started refinancing the deals, fast forward to today. We own about 1700 units. We only have one syndication left. The vast majority of them are our portfolio. We’ve been able to refi over 25 million from the portfolio and continue to scale up.

So our assets are around 225 million right now. And more importantly, it’s the Jake and Gino community. Am I an expert on raising capital? I don’t know, but the student base has raised well over 300 million. They’ve closed over 50, 000 units. And some of the things that we teach them about the brand, about the hook, about syndicating, right?

There are so many aspects to capital raising having a business plan, a buy right strategy, whatever that is, that all lead to capital raising. And for me, it’s exciting to be here because you have so many qualified guests here. There are so many people who have amazing resumes on here that have different backgrounds.

But I think the one thing that we can all agree on is when you’re raising capital. You need to provide value for that other person, right? You’re not asking them for money. You’re trying to offer them an opportunity. And if you can create your pitch or opportunity that way, I think that’s what we need to lead with Tim.

Tim Mai: I agree. And that’s one of the things I look forward to learning from you today is not only your own experience of capital raising, but The collective experience that you have seen what you know what works well out there with you know with your student base as well of how they’ve been able to raise all of this money.

And so yeah so when you first started did you hire a mentor, did you attend events or how did you learn this craft? 

Gino Barbaro: So for me in 2008, I ended up hiring a mentor, rich dad, poor dad coaching. I even had somebody out there. Some of you out there know Craig Haskell. I had Craig Haskell as a mentor.

He passed away a couple of years ago, at the value hound Academy. He was a very important part of my life because, on our third deal, I utilized all his steps, his credibility book, his underwriting templates, and all. And for me, having that coaching allowed me and Jake to get that third deal. And. I wouldn’t be where I am right now without coaching.

I ended up becoming a life coach as well. Because I think coaching and asking the right questions is so important and looking at the coaching and then also for scaling up companies, we did something called scaling up with Vern harnesses group. And we also use traction with E with Gina Whitman.

And it’s amazing. I coached them and ended up podcasting them and interviewing my mentors as well. So that’s been exciting to be able to utilize their programs because we’re not born as natural-born salespeople. We’re not born knowing how to scale a company or how to buy a multifamily. It’s just not something that we’re not learning.

We have to learn these skills. And for me, I’ve invested hundreds and hundreds of thousands of dollars in that education, but it’s also allowed me to learn the skill and ultimately now I’m teaching it as well. 

Tim Mai: I’m curious as to how you went into the teaching business. What made you decide to go that route?

Gino Barbaro: In October 2015, I decided to leave the restaurant during the week. So I’m like, my brother Mark was running the business. I’m like, I’m not working at the restaurant anymore. Monday through Friday. I’m going to do real estate and then Saturday, and Sunday, I’ll come to work at the restaurant in March of 2016.

I decided to leave full time when at the rail, I went to real estate full time and ended up moving to Florida and I moved to Jacksonville, Florida. And I remember in June of 2017, I moved to Florida and everyone’s telling me Jacksonville is hot. Grant Cardone has them on a podcast. No, one’s buying deals in Jacksonville.

And I listened to the people in the market who lived here. And unfortunately, I did that assets were 80 a door, 85 a door. Now assets in Jacksonville are 200 a door. So I didn’t buy any assets in the meantime. I said, Jake, I can’t help you with the property management because you’re up in Knoxville. What do we do?

So we ended up saying, let’s start the education company. It’s fun. Let’s start a podcast. Let’s start writing books. And it became a passion project for me. And from there, what I learned was when you do something in life, you learn it. And then you do it and then you ultimately teach it. And when you become a teacher, you learn so much because you’re forced to go to events.

I was at MFIN con this past weekend, learned a ton of stuff, met up with some amazing investors, and it pushes you to stay relevant. It pushes you to learn the content and it pushes you to make new connections. So for me, teaching was, has been, it’s been inspiring. And for me, it’s, when Tony Robbins talks about the six basic human needs, those first four fundamentals.

Number five and number six are growth and contribution. And I want it to leave an impact. I want to teach my children about legacy wealth and generational wealth, but also legacy skills. I want to teach my kids all about financial freedom. I want to teach them about money. And how do you do that?

By teaching others and being a role model to them. So for me, the whole education has been great. I’ve met so many new friends. And like I said, when I look back on my life, 10, 20, 30 years from now, I want to be able to say. Man, 300 people left their W2 jobs because of Jake and Gino. We raised 7 billion from this company, from this entity, or whatever.

That’s what I want to leave as a legacy. So that’s why I started pursuing it. And it’s just been a passion project for me for the last five years. 

Tim Mai: I love that. What would you say is the amount that you and Jake have raised for your deals? And then what would you say if you have to give a rough estimate of how much your students have raised?

Gino Barbaro: So for us, Jake and I have only done three syndications. We’ve only raised about 12 million. That’s all we’ve done. We’ve been able to refi and pull money up, but for our students, over 300 million, I’m creating a spreadsheet to document all of their raises. And one thing that I see is that.

When students become successful in raising money, they create a brand. I don’t know if you’re going to touch upon this right now, but creating a brand, whether it’s the Jake and Gino brand, on our very first syndication, we raised 3 million in 24 hours because we already had a live event. We already had the books out.

We had the podcast out and we were already an entity known in the space and we already had education students that were on our lists. We were able to podcast Alex Hormozy a couple of weeks ago. I don’t know how many of you out there by show of hands know Alex Hormozy. Talk about brand and the amazing thing that Alex Hormozy said on the podcast was he was depressed when he realized that Kylie Jenner became a billionaire.

And why was he depressed? He was always focusing on advertising and doing all these click funnels when he said the brand is the biggest ROI that you can have. And he wasn’t depressed that she hit it. He was depressed when he was 31 years old. She’s 20 or 21. He’s what the hell have I been doing these last?

I’m like, Alex, you’re 31, bro. You’re way ahead of the game. Don’t worry about it. But that brand for the long term is what is the biggest ROI. And I think when you’re raising capital, it’s really important to create your brand. As for me, I’m learning how to sing opera. So I want to become a multifamily maestro.

That’s what I want to do. And I want to get on stage. I want to rip a little opera. You want to create a feeling, a sensation for people out there because it’s not what you say to them. It’s how you make them feel. And your brand should have a feel. The Jake and Gino brand. I want it to have a family feel.

We want to have people in our community that are all about family, that have those values. And how do you do that? It’s by creating that brand. And when Alex said that to me, I’m like, wow. And he’s the kind of guy that is not going to knock Kylie down. What he’s going to do is what you guys are all doing on the show.

How did she do it? How do I figure that? So that’s what he’s working on. And I think that brand is so important and we can all cultivate it. This is not a brand of 20 and 30 years ago when you were seeing CoCoca-Cola And Pepsi. This is the Roger brand. This is the Dylan brand. We all have our brands and we can create our destinies by creating our brands.

Tim Mai: I love it. Let’s dive into that. However, I’d like to know what were some of the challenges that you went through on your very first capital raising. And then, how does branding play into solving those challenges, or what is the, how would you do it differently now with that? 

Gino Barbaro: For me, I would have all of my ducks in a row a lot sooner. We didn’t have a webinar done. The timeline moves so quickly on your first raise. And for us not having the investor scripts, not having the webinar done, not having the PPM in time. As I said, we were fortunate because we raised it so quickly and not thinking of it as an opportunity for me.

It’s Oh, should I let them invest? No this is a damn good deal. Let’s create some scarcity. Let’s create some desire. And the other part about it is. I didn’t look at it as a sales opportunity. What we were trying to do is we’re trying, we felt as if we were asking them for money. And what we do at Jake and Gino, we utilize something called same-side selling.

And it’s something that Ian Altman created. And it’s what he talks about with this acronym it’s called FIT. It’s finding impact together. And you need to find investors that are going to look at what you’re trying to do and see if it’s valuable for them. So I know in one of your questions, you had asked, what is your time horizon for your investors?

Right now, if, and when we’re going to start raising again for these larger deals, we want to have investors who have a long-term time horizon. So if an investor wants his money back in 24 months. It’s not going to be a really good fit for me or them. So when you’re looking at raising capital or creating a brand, make sure that the other person that you’re offering the opportunity to has an impact, you can find that impact together.

If somebody wants to join our community, Jake and Gino, they don’t have capital. They don’t have the right mindset. That’s not a good fit for both of us. So we’ll just say, Hey, you know what? Love you. Here are some resources. Do you know anybody who thinks this would be worth it? That’s one of the things I think about capital raising.

And I think the other thing was the deal was too small. We should have gone for a bigger deal to be honest with you. It was only a 6 million deal. It was only a two-and-a-half million dollar raise. So I wish we had, we wish we had gotten a bigger deal. And I think the last thing is having all your team members, just all lined up, making sure that you have the syndication attorney, the CPA.

I should have probably had a portal for investors. We didn’t have one at the time. We ended up getting crowded on the street, I think at the time. And now we’re a cashflow portal. Having that investor portal for us was important because you want it to look professional. This is your brand.

Once again, you don’t want to send that Google Docs, or Google Sheets. If this is going to be your long-term commitment, commit on the front end, what is it going to look like three or four years from now, your brand and start reverse engineering that and start doing that today? Because everything I’m somebody sees that name.

Seize your brand. They’re going to envision that and you want to start on a good foot in the beginning. Does that make sense? 

Tim Mai: It does. That makes a lot of sense. Now let’s talk about the different components of the brand. Obviously for you, then, you look at your brand, Jake and Gino, I noticed you use the word community a lot.

So the community is a big part of your brand. What are the other major components of your brand? 

Gino Barbaro: That’s a great question. When you think of the brand, we interviewed an expert on it and I remember what he said. It was Andrew Court on the podcast. If there’s one word that you want your brand to represent, this was an experience.

So when you go to his offices, you walk in, it’s just an experience for me. That one word is family. And I think the other thing that you need to do as a brand. On our podcast, we also podcasted who wrote the presentation Secrets of Steve Jobs. Gosh, what was his name? I don’t remember what his name is on that podcast.

It was enlightening. What he said to me, he says, take your company and rip it down to one or two sentences of what you do. Every company does this, whether it’s Google, whether it’s Apple, and it doesn’t matter how complex the problem you’re solving at Jake and Gino. It took me a little while.

And what our slogan is, or whatever you want to call it, is we create multi family entrepreneurs. That’s what we do at the company. And how do we do that? Different story. We teach people how to buy assets, but our USP, our unique selling proposition is we teach people how to manage assets. It’s sexy to buy the deal and it’s sexy to finance the deal, but nobody wants to teach you how to manage the deal.

And that’s what we do. And how do you do that by creating a multifamily entrepreneur, by creating them, and how to start a business? The cadence of accountability, the business plan, all the frames you need to set up. And that’s important. So when you’re out there creating your brand, what is it?

If you’re in, you’re a syndicator, maybe it’s very simple. I am a retired person. I love that because it tells you exactly what you do. You’re getting money and you’re investing money for other people. Now, you rip that down. But what is your brand? What do you want it to feel? What are the touchpoints?

And for me, we have these internal events. I want everyone to see my family there. We have four different podcasts weekly. I have a show with my wife. It’s called the Julian Geno show. We don’t talk about real estate. I wish we did. She hates real estate. I love real estate. And we’re there battling between husband and wife.

She brings in the family. I bring in the business, but that’s what I want. That’s what I want to fulfill for students. We’ve written children’s books. We have two children’s books out there. What does that have to do with multifamily? It has to do with the overall feel of the brand. We have a company called a hundred-year real estate investor, long term.

We also promote long-term in our brand. We’re selling whole life insurance to be able to take that money out of your cash value and put it into real estate assets. And also ultimately we have the Movers and Shakers podcast where we’re podcasting our students. And showing our students’ successes.

So the overall feel of the brand is the content that we put out as well as how to make it relevant and how to teach and help our students and have those resources that we can share with people who even aren’t in our community to bring them into the Jake and Gino community.

Tim Mai: That’s awesome. I know that’s quick but so powerful.

Gino Barbaro: It’s hard to jam it all in there. I try to put five pounds in a three-pound bag, but sometimes because brands are a lot of fun. We could talk about brands all day and when you turn something on, you are being bombarded every day by millions and millions of messages.

How do you cut through the noise? And it’s really hard because our attention spans have gotten a lot shorter. We’re doing 45 seconds, trying to do a 45-second video on interest rates. And it’s impossible, but it’s not what I want. It’s what the market wants. So if I want to be, reticent and say, I’m an old timer.

I can’t do it that way. Guess what? I’m not going to be relevant and I’m not gonna be able to share my message. So there are so many different mediums that we can utilize to do that. So figure out what you want your message to be, and then figure out how to, send that message out to the masses.

Tim Mai: That’s awesome. All right. So along with branding is the type of customers you want to attract. So who do, who is your ideal target that you go after? 

Gino Barbaro: So for us on the education side, real quick, it’s People who have the capital, who have the right mindset. It’s about a growth mindset. It’s about coachable people.

It’s about people who want to become entrepreneurs and who want to leave their W2 job. Now for investors, when we started, we didn’t have anybody who had a pulse, anyone who had 50 grand to throw in the deal, and after your first deal, you’re like it’s not a good criterion there, and when you have an investor call you up and in the same sentence, say, I’m going to sue you because the K ones are wrong.

And they go, Oh wait, the K ones are good. When’s your next deal coming out? That person maybe shouldn’t be in our next investment. And I’m sure that’s happened to a lot of people listening to this call. So for us, it’s really to have investors who align with our goals, align with our business plan, align with the assets that we’re going out there and investing, and who have that long-term mindset.

Because we don’t want to sell these deals. If we can buy these deals and refi these deals in three or four years, I don’t. Replacing and sending that capital back to the investor. I want to keep the deal. You know how hard it is to find a deal that has cash flows. I want to have an investor who knows that the wealth mindset is created by owning these assets, rich people sell assets, and wealthy people own and keep the assets.

And our first deal in 2013 rents were 350 bucks for one bedroom. That same deal today, which I still own, which has put two of my kids through college so far, rents are 995 plus rubs. So can you see what’s happened to that one little 25 unit deal, the wealth that’s been created from that, if I can tell my investors that long-term time horizon, if they have that, then we’re a great fit?

If not, it’s okay. No harm, no foul. Do you have anybody else who would like to invest in our deals? 

Tim Mai: That’s awesome. And so how, what channels of marketing do you use to find that long-term investor? 

Gino Barbaro: For us, it’s the podcast first and foremost. We’ve got over a hundred thousand downloads a month.

We started five years ago. I didn’t even know what a podcast was when I first started. I’m not gonna lie to you. Jake, let’s start a podcast. I’m like, okay, what’s a podcast? We started just like everybody else. It wasn’t as crowded as it is now, but the mistake that I made when we started the podcast was we were doing it for fun.

If you’re going to start a podcast nowadays, make it niche, understand what you’re trying to do. Are you trying to learn? Are you trying to teach? Are you trying to raise? Capital is this podcast for dentists or doctors or attorneys, whatever, whatever that’s for us, we just started for multifamily.

There weren’t that many multifamily podcasts when we started. So the podcast is a great way. And we’ve just been utilizing Instagram the last couple of months, these shorts, these short videos, just for them to get a taste of what’s going on. And then YouTube ultimately is just another amazing platform to go out there and shoot these sorts of short-form videos and share your story.

Do you think video is powerful? And I think Jake and myself having different dynamics and being on camera is powerful. And then ultimately, we’ve written books, we’ve written five or six books. We’ve written a couple with our coaches, getting constant contact with that content out there, putting it out there.

And you don’t have to do this all. What do you like to do best? Do you like to write articles? Do you like to be in front of a camera? Do you like to do audio? Just pick one when you’re starting and get good at it and just focus on that one. And then ultimately you can continue to scale the mediums that you’re using.

Tim Mai: Things like podcasts and podcasts are a little bit easier that you can do without having a lot of experience because you can do interviews like what I’m doing with you, right? Books require you to have, I guess you can interview books as well. But what are some of the other ways that you have found worked well to establish some of your trust and credibility in the marketplace? Thank you.

Gino Barbaro: The first thing I would say is everyone on this call if you haven’t done Toastmasters, you should all join up and do a Toastmasters to get rid of us and the arms to be able to think quickly on your feet to be able to structure a presentation. I think that’s important and overlooked and I’m constantly trying to work on that skill set.

When I was in college and after I graduated I thought communications was the biggest joke of a major but ultimately. It’s probably the most important thing to convey a message to somebody. I think we need to focus on that. And I even forgot what your message was. Cause I just dumped that Toastmasters just jumped into my mind, thinking about what’s so important to create that message and to craft that message.

And I think the other thing I’d like to mention about that is we did a podcast with Oren Klaff and when we’re. He wrote the book, and pitched anything. I don’t know how many of you out there read the book or listen to the book. We’ve done the podcast. Go listen to him. He talks about the brain and this is important when we’re pitching ideas.

He talks about the Croc brain, the midbrain. And the neocortex now, most of us, when we’re having a conversation, the first part of our brain that gets activated is our Croc brain. That brain is the primitive brain. It sees movement to see something interesting. I’m pitching to Tim. I’m pitching from my neocortex, which is the high part of my brain to Tim’s Croc brain.

So if I jump on Tim and I say, Tim, I got an 8% prep. 18 IRR. You’re going to make sure what Tim’s gonna be like, hold on a second. I don’t know what you’re talking about, but if I tell Tim, Hey, basic humans need food, clothing, apartments, and an awesome skill set, you’re going to save a ton of money on taxes. All of a sudden I’m hitting his croc brain and he’s allowing me to get into it, get into that pitch.

I think if you start doing that and. Creating the story. You need all to create stories for yourselves. You’re all amazing people. We have, everyone has something unique about themselves. And until you put that down on paper and you practice your stories, it’s really important. I’ve got six kids. I’m an amazing chef.

I can sing opera. I own 1500 units. These are all things that are unique to me. Find out what’s unique to yourself, create two stories, create your founder story, why you got into multifamily or why you got into whatever you’re doing, and then create your purpose story. For me, it was really simple. I hated the job.

It was a rat race for me every week. I’d go to work on Sunday. The restaurant would pay me next week. Some weeks I made money. Some weeks I didn’t make money. I had six kids. Everyone’s telling me how you’re going to pay for weddings. Are you going to pay for college? That pissed me off. So I needed an outlet.

I need to find something to make money. That’s my founder’s story. That’s the reason for my story. Everyone needs to have that and create a storyboard. Seven or eight or nine or 10 bullet points and have that story memorized. And every time you speak to somebody or you go on a podcast, it comes up to you.

It’s not scripted. It’s natural. So create the story. Do people want to know about you before they know about the deal? They don’t care about day prep. They care. Is Tim going to be a steward of my money? Does Tim care about me? Can I trust him? And is he worried about me? That’s what they’re worried about.

And if you can get over that barrier with the Croc brain, then you get to his midbrain and go, okay, this sounds okay. Let me hear a little bit more, but until you penetrate that primitive part of his brain, everything you’re saying to him is BS. Because we hear it every day. I was going for a walk the other day and looked down and a snake was right there.

So that’s how the primitive brain works. It looks for movement. It looks for something unique, something different out there. That’s why everyone needs a hook. You need to have a hook when you get on because people have a really short timeframe and your croc brain is trying to save yourself from wasting that energy.

So it’s saying what’s different with Tim, what’s different with Gino, what’s different with Sharia. That’s what they want to know. What’s different? Then when they find out what’s different, they start paying attention. And then ultimately we learn in stories, great. is all awesome.

You need to know the numbers. You need to know what is in the deal. But if you don’t get through that first part, everything is completely lost and completely wasted. We did that prezone Charlotte last week. And I had that epiphany. We have 12 slides. Each slide should have at least one or two stories.

And at the end of the appraisal. I shot out a little opera, sang a little bit, and got a great round of applause. You make them feel good. They’ll remember that. And then they’ll go back and they’ll remember what you said because they paid attention to it and are trying to make it relevant to you. And I think the last thing I’d say, Tim is when you’re doing all of this, try not to be the hero in the story.

Try to be the guide. Most of you, when you’re listening to a podcast and you hear somebody on a podcast and it’s their show, but all it is about them, but them, about them. And it’s not about the guest. We get turned off by that. Be the guide as an indicator. Be the guide as the operator and let the person you’re speaking to the hero, ask them questions, really be genuinely interested in what they have to say, and listen to them.

And then you’re there guiding them. People don’t care that I’ve closed 1500 units and that I have 225 million in assets on the manager. What they care about is how can you help me solve this problem. How can you get me out of my job? That’s what you need to do. That’s why you need to be the guide and listen to them.

And everyone you interact with, they’re the hero. They’re the person you should be emphasizing on. 

Tim Mai: I love it. That’s awesome. And then, yeah, I know you put out a ton of content, obviously with your podcast and everything. What are some other things that you do to stay in contact with and continue to maintain that relationship, especially the passive investors? 

Gino Barbaro: So behind me, I’ve got November 5th and 6th. We’re going to be in Orlando. It’s five. You need to go to events. I, we have six or seven internal boot camps for our community, but we go to a bunch of events as well. And I think if you’re a syndicator, my brother did this beautifully last month. He had about 120 people he had up in Jacksonville.

He had all his past investors come to an event. I think he might’ve spent 10 or 12 or 15 grand for the whole event entirely. It was great. It was at the country club, get people together because you’re trying to create a community of investors. If you can create a community of investors, they’re your advocates.

And we’ve done so many podcasts on this as far as Joey Coleman and all the other guys were talking about that customer experience. The gentleman who wrote the book for the Ritz Carlton, I forgot his name is Horst Schultz. He wrote another book on customer service and that’s what you’re trying to create.

As an indicator, you’re trying to create that customer experience. And how do you do that? Thinking about that and having three or four of your investors who are advocates, they’ll raise all the money in the world for you. That’s all you need. So try to think of your business as one where you’re trying to create that customer experience for your investors.

And that’s what I’m trying to do with the Jake and Gino community as well. But go to these events, go out to these events and these mastermind groups, what we’re doing right now. I think those are all important to stay top of mind. 

Tim Mai: Awesome. And I know that a lot of operators use newsletters and some even use direct mail newsletters. Have you found that to be very effective? 

Gino Barbaro: Newsletter is another thing where people get something in an inbox. For me, I, We have a private Facebook group. So I use the private Facebook group for our community to translate, to get information out. I also do weekly lessons on Mondays at 12 o’clock.

We have a bunch of students who are in our weekly lesson, doing different topics. What we were doing during the pandemic worked well with our syndication company. Every Friday from 12 to two, we’d have open hours, and call for two hours. We were tracking daily. Do you remember those two years ago when everyone was saying no one was going to pay rent?

So we had daily tracking of collections. We were trying to be as transparent as possible and open as possible because people were afraid. They didn’t know what was happening. So for us, we were doing that. And also we’re doing end-of-day huddles with our team as well. So trying to get out and have that open line of communication is important in this, honestly, this part of the cycle, but that’s just the way it is with employees and with investors now.

There’s a fine line between badgering them and letting them know that you’re there. And if you have any questions, and if something’s going wrong in a deal, let them know, don’t bury your head in the sand, get out in front of it. And they’ll have a lot of respect for you because listen, it’s been a tough environment for the last couple of years for a lot of multifamily operators.

If you’re out there telling them, Hey, there’s no prefs this quarter because of this. I think they’ll understand. They see the job numbers. They see inflation. They see the stuff that’s going on. So being open and honest, if that’s part of your brand, which it should be. That’s just something really easy. You can do that. 

Tim Mai: That’s awesome. And then I know you said that you started, you specifically wanted to niche into multifamily. Can you share with us how you went about making that decision?

Gino Barbaro: Oh, you mean leaving multi and going into multifamily full-time. 

Tim Mai: Correct. Specifically targeting multifamily assets.

Gino Barbaro: Oh, that’s a great question. For me, it was a little bit of ignorance. I failed at mobile home parks, not because of the mobile home park but because of me. I failed. Because I bought something in New York. It was a strip mall and it wasn’t because of the asset. It was just because of me. And then it dawned on me.

I had a fourplex. I’m like, there’s not a lot of work going into managing four units, every month, couple hours a month, whereas at the restaurant, I’m working 60 hours a week. And I’m like, I love the tax benefits here. I love the ability to provide affordable housing. I love that ability to be able to get in with the residents and solve those problems.

And I saw that as a vehicle for me where we could buy 25 units on our first deal, get a resident manager, and still work full-time. And then three months later, we bought a 36 unit. So we’ve got 60 units within the first three months of our first property. Six months later, we bought 136 units. So at the end of the year, we’ve got 200 units.

We’re like, Oh, wow. I love this because we can hire property management. We can start scaling up. And then the last six months we’ve been buying scattered sites. So we’ve been, she’s been putting them together with our other large properties. And it’s given us those economies of scale.

But for me early on, I didn’t understand the power. Of multifamily when it came to becoming an entrepreneur and being scalable. I just didn’t know that I didn’t understand the multiple streams of revenue. We wrote the honeybee because of that, because of the multiple streams of revenue, whether it’s our education company, our property management company, the whole life insurance, or the syndication company.

And now we’re doing development. We bought two large tracts of land. We’re going to start building, build to rent. So that’s all from a little 25-unit property that we’ve been able to scale out in the last 10 years. And that’s what multifamily has allowed me to do. Now, if I wanted single-family homes, would I be here?

Maybe not, but I see so many students in Jake and Gino that start having 20, 30, 40. We just got two gentlemen on. I call them the Bucky Boys. I got a Bucky shirt here. That’s their brand. They go around, they wear Bucky’s and I remember them, Andy and Scott, they have a hundred single-family homes.

God bless them. Amazing. And they’re working W2. They finally came to me and said, I can’t do this anymore. I’m like, you know what? You guys are amazing. You’ve done it. Let’s implement some systems and let’s start buying assets that are contiguous instead of buying a hundred homes. All around this market.

So for me, I saw that early on, but then I noticed that the power to build a business, how many assets can you invest in where you’re investing in the asset, but you’re also able to build a business alongside it. There’s, I don’t, there’s not that many. And for me, it was like, this is great.

And as I said, ultimately it is a basic human need. Do you need an office space? Not really. People are living at home, self-storage down in the Southeast. I think it’s much more prevalent down here. I live in Florida. I don’t have, I don’t have a basement and there are so many people moving here. That self-storage makes sense here.

Retail, I don’t think retail is going to be great. Mobile home parks. It’s great. It’s a smaller niche. They’re tearing them down. I don’t want to deal with that resident base. So for me, multifamily has so much potential going forward and there’s not enough of it. As you can see, cap rates are not going to go back up.

I don’t think for the foreseeable future. If people are telling you that, I don’t see that because where’s the flow of money going? Are you going to put money in crypto? Good luck with that. Bitcoin’s Nobody wants to talk about it when it was 60, 000. Now it’s 20, 000. Now everyone’s trying to jump.

It’s not an asset. It’s an, it’s a speculative play for me. So investing in decades, looking for that cash flow, looking for that principal pay down, being able to build a business through it, being able to scale. There are so many benefits to the asset class itself. 

Tim Mai: That’s awesome. And do you, and have you noticed, with your investors, if they prefer not just you, but not just your prop, your deals, but also your students’ deals?

Have you noticed whether or not you’re the investor, passive investors prefer that the operator is niche into one asset type or does it not matter.

Gino Barbaro: That’s a great question. For me. If you could be vertically integrated, like we are, it’s just easy, it’s the layout. We’re the property management company and we’re the asset management company.

So for us, it’s just one less hurdle to overcome. I think you have to be able to have some kind of expertise in space. And, when you’re raising capital and we’re a multifamily. I’d like to challenge everybody on this call. Even if you’re in self-storage, what are your buy-right criteria?

I think right now in this part of the cycle, we talk about the three pillars of real estate, but for us, being clear on what kind of assets we’re buying will give you confidence and will allow your investors to know that, hey, Jake and Gino, three hours in Knoxville, which We’re buying up to 200 units.

We’re buying in the 1980s and a newer median income of 50, 000. We’re buying two-bedroom townhomes. We love that washer-dryer hookups are crystal clear on what your criteria are. And that’s what’s allowed us to do when we find a deal. Boom, done. And I think every syndicator out there needs to have their business played and be able to convey that with their investors.

I think everyone here thinks about what your criteria are for buying a property. And I just mentioned a couple, you should look at the age of the asset. The location of the asset, the median income of the asset where it’s located, the unit mix, we love two-bedroom townhomes because they’re just larger and they’re so much easier to rent and you get more rent on those.

We like looking at properties that have amenities, washer and dryer hookups are great in the C space. There is another 50 bucks a month and revenue there. Look at some of that criteria and focus on it so when you bring a deal to a potential investor they know hey, this is good for me as well. 

Tim Mai: That’s awesome. And, Some of the things that you recommended were podcasts, you do books, you do Facebook groups, attending events that you teach for the audience listening to take the people that you meet and funnel them into when Okay, you’re raising money and preparing them to have the money ready for when you have your deal.

Gino Barbaro: Yeah, this is a shameless plug for Hunter Thompson. I don’t know if any of you out there know who Hunter Thompson is. He’s got a great program and he focuses on raising capital on email automation and funnels and all that. I think that’s a good avenue for you guys to look at. But for me, SimpleCRM, we use ActiveCampaign and we use Cashflow Portal.

Cashflow portal. I love Perry. Perry Zhang is great. He is a syndicator investor who created a prod product to solve his problem. So he understands that he’s been investing in these deals as well. And it’s so relatively inexpensive to utilize that we use an active campaign, a CRM on the Jake and Gino side for the education, but we also use that as our automation and stuff.

And we utilize that for. For the investor side, that portal system is important. That is something that we struggled with early on. We didn’t have one. Crap. Now you have these hello documents, hello, doc signs. This makes it so much easier. You have all your K ones in one place. You’re able to utilize them.

You’re able to put your deals up on the platform. That’s been a game-saver for us. And like I said to you, it’s about the brand. When you bring an investor over there and you’re sending them out Excel sheets, it just doesn’t exude a lot of confidence. So think, I think that’s something where. We leveled up and helped out our brand by utilizing that.

Tim Mai: Okay. So you try to get everyone to opt in then to you, yes.

Gino Barbaro: Oh, sorry. Absolutely. Yeah. That’s the thing. When you do a podcast, you always want to have what we call a call to action. And for us, the call to action, we don’t want to invent, we don’t need any more investors.

We have plenty of investors on our website, but have a call to action, to create a little ebook. What I’ve got here, I’ll hold this little booklet up, the Grant Cardone booklets that he made five or six years ago. I got the idea. I wrote a 30-page little booklet here, on how to share the benefits of multifamily investing.

We should all have something like this. This is a business card or if you had an event, give them your little booklet. It’s you’re giving them something physical, something they can take back with them. Something where you’re adding value and it’s about your brand. Have an ebook, and be able to have an opt-in with a website.

And I don’t think websites, in the beginning, need to be that complex. You just want to have a homepage about you to show your credibility. Possibly have a one-pager, one-pager about yourself, about what you do, and what your company does. My mentor, Craig Haskell, did something called the credibility book.

It’s a 20 to 25-page business. It’s your business plan about why you’re investing in a market, and what kind of deals you have, if you don’t have deals, do case studies, there are case studies of work and what deals you’re looking for. What does your business plan look like?

Why are you in the market? And if you do have deals. Put the deals there, put the credibility of what you’ve done out there, and have that book for investors, have that book for bankers, have that book for potential partners. It’s really important to show your credibility and to outline it to them. But eventually, as I said, if you’re just handing them this book, they’re not going to look at it.

Tell them what gets past that crock brain. So they look at the book and can consume that book. That’s great. 

Tim Mai: Thank you for that. And so now let’s switch to talk about the market a little bit, but where do you see the markets going and what challenges do you see when it comes to capital raising in this upcoming market?

Gino Barbaro: I don’t know if there’s gonna be that many challenges if we’re raising capital. I think the deals may be a little tight still. The pref rates, maybe eight, or nine some operators may not be able to hit those rates. And I think what we’ve seen over the last five or six years is people would buy deals.

Then after two years, they flip out. So now it’s going to be who’s operating these deals. And that’s the issue we’re going to see, you’re seeing bridge debt and self getting more expensive. So if you underwrite bridge debt, what’s going to happen in the next, 12 to 24 months, if you’ve got a refi out into higher debt, are you able to sustain that?

I think that’s going to be the challenge there. And as far as capital raises, building the brand, and getting your name out there, do people know who you are? We were in Ryan Sirhan’s office two weeks ago, and he’s right behind us. He’s going to be speaking at MM5 and to him. His brand is amazing. He sold over a billion and a half dollars of real estate last year.

It’s with the period. Yeah. When you talk to me, he’s amazing. When he talks about that, he’s you know what? Cause we have to buy right, manage right finance, and he’s you know what? Your fourth leg is brands, right? And that’s what you need to do. You need to start creating that brand and get yourself out there, get yourself known.

And I know it’s uncomfortable because if you go back to the list of our first podcast, maybe our first 20, we sucked. We were awful. And I don’t, I want to take them off. I don’t want anyone to listen to those things, but it’s humbling. And it’s also a good reminder that when you start something out, you’re not good at it and it’s okay.

And it’s funny. I went back and my kids listened to it last week and they’re like, Dad, you weren’t that good. Where are you? I’m like, Hey, am I better now? That’s the question. Am I getting better every day? That’s the question we should all be asking ourselves because if we’re not getting better, we’re getting worse.

Tim Mai: So let’s summarize, especially around branding. So if someone has a goal to make it big in this space and, let’s say. get to a billion-dollar asset under management. I’m just using it as a number here, but what are the few steps, if you can break it down in steps in terms of building this brand now to have that level of success?

Gino Barbaro: So if I had known this previously, I would have done this, but I did it later on for me. I didn’t even mention this, but when we said values-based decision-making, figure out what your values are. I think the next thing is to create the core values for your company. For us, it’s people first, make it happen, extreme ownership.

Unwavering ethics and growth mindset. That’s what our core values are. And that’s what we want to build our company around. Our mission statement is really important, to create communities that empower people to become the best version of themselves. That’s what we want. And when we’re hiring, when we’re firing, that’s what we’re basing it on all of those values.

That’s what your brand starts permeating from. And that’s what I think our brand and our company took off three or. About three years ago, we understood. And that’s why scaling up coaching was important. We understood that. And Jake came from a corporate background. He worked at Glaxo and he thought those core values were crap because there were somebody else’s core values.

But when he started his own, he wanted my core values. People first we’ll do anything we can for our community and our investors. And they’re not. Tenants, they’re residents and they’re not units, they’re apartment homes. So it’s really important to create what values you want for your company and to start living through those values.

And then ultimately, like you said, that brand, what type of investor, what’s that persona that you want investing alongside you? That’s, I think, the other important thing. And as far as branding goes to continue that branding, be consistent with the branding, pick one venue, pick one place. Cause we didn’t start with five podcasts.

We had one. And then we grew it to the next one. Then we grew it to the next one. And as you start scaling up and having those values, you start adding team members to help you with all of the other stuff. So we didn’t have a YouTube channel five years ago. We didn’t have LinkedIn five years ago, but it starts growing as you start adding more layers and more people to the team.

Tim Mai: That’s great. Thank you. And what are some, I know you mentioned cashflow portal, active campaign. What are some of your favorite tools and resources?

Gino Barbaro: For us, in the property management space, there are so many different companies out there, door loop, buildium, we use that folio. We, that was our biggest mistake, not having property management software.

We waited until we were 600 units. I call Jake, Mr. Cheapo sometimes, cause he’s looking at the bottom line and he’s not paying a dollar 50 a unit. I’m like, bro? And I think that was revolutionary for us. For us helping us out. Huge. We use a portal, a product called Kajabi. I’m looking at it right now.

Kajabi is something that we, it’s a learning management system. So if you’re a capital raiser out there, create a little micro-course, five or six videos, put it on a platform like Kajabi and send it out as a freemium. And you’re sending it out. You’re adding value to the person who you’re investing.

And that’s how we started. We started with these little micro-courses and we started creating larger-size products. So for us, Kajabi has been amazing. I had mentioned. Active campaign. And I’m going, to be honest with you. Google is great. Google Drive, Google Docs and Google Sheets have been life changing for us because it’s just open source.

We use Slack. We use Asana. We use a lot of those different other ones, but just keep it simple when you’re starting, but you need a CRM. You need a portal for investors. Important. 

Tim Mai: Thank you. That’s a great list for sure. So Gina, what are you teaching your kids right now? You have six of them. What are the ages?

Gino Barbaro: 23. 

Tim Mai: That’s a big range. What are you teaching them that perhaps is not being taught out there? 

Gino Barbaro: So for me, it’s really weird because my daughter is 23 years old. She’s a Catholic missionary right now and she’s teaching me service and it’s amazing.

What you learn from your children, if you’re, if you allow it to, to transpire, because we’re always taught that we need to tell our kids what to do. And I learned early on that if you let them grow and you’d let them make your own decisions when they become adults, they can make those decisions.

And for her, it’s really important to grow in her faith and to serve others. And that’s what we’re all doing here as syndicators. We’re out there serving others. So she’s always got that service mindset. What I want to teach my kids is a couple of things, personal responsibility. There’s no more responsibility in this world anymore.

And those who are successful are a hundred percent responsible. The junkie’s deal goes wrong. It’s not the economy’s fault, right? It’s our fault. We underwrote it wrong. So to become personally responsible, I want my children to become responsible. And I think the other thing is that instant gratification.

My son, when he invested in our first deal, was 15 years old. He had 5, 000 bucks in the bank. I said, Mike, he wanted to buy an amp for his guitar. I said you’re not spending 40% of your net worth on an amp. You don’t need that. He had 5, 000 bucks. He put it in one of our deals. The deal’s done phenomenally.

And he’s actually, what’s amazing about it. He’s talking about creative financing. Now he’s talking about owner draws. economic occupancy, physical occupancy. He’s done some amazing things with our property management team. And that 5, 000 is transitioned into a six-figure net worth that he’s got at age 20.

But more importantly, it’s the mindset that he’s created because now when he gets money, he’s not looking to buy something. He’s a producer. He’s not a consumer. He’s dad, when’s the next deal? And Dad, can I borrow money from you? I’m like, Mike, you’re not diluting me, bro. Yeah. You use your own money, but those questions most adults don’t understand.

So in allowing them to be alongside you to be part of the journey and not have that instant gratification and delay it, that’s something that we need to teach our children. Because I always say to people, financial intelligence can change the world for the better. And if we can teach our kids, personal finance and education and responsibility, you’re going to have an amazing relationship with your kids.

Tim Mai: I love this interview. You have some amazing wisdom to share with us. I have one last question for you. And that is, what is your biggest goal or passion that you want to achieve now at this time in your life?

Gino Barbaro: I’d love to have more kids, but that’s not only up to me. It’s up to the wife.

So that goal is pretty much kaput. But maybe adopting. I don’t know. I don’t, it’s a hard question to answer because I live every day. I feel as if I’m playing with house money right now. I don’t have any goals or aspirations. The only thing I’d say is one of my hag’s big hair.

They should use goals to have 10, 000 people leave their jobs by the year 2030 through Jake and Gino. That’s a really big goal for me. And Hey, we’re eight years out. We’ve got about 70 students who have left their W2, so I’ve got a lot of work to do. So if I’m able to do that, can you imagine the wealth that I’ve created and the community that I’ve created?

And Hey, by the way, some of those students may partner with us. You never know. So just creating that impact for others. And it’s so much fun, Tim, to get an email from somebody saying, Hey, I left my job or Hey. Hey. Hey. I just raised a million bucks with this deal or, Hey, you change my life. You change my mindset.

Even if they don’t do a deal for the next year, just changing a person’s mindset and the way they look at things in life is just inspiring to me. So I, once you’re playing with house money, you sometimes don’t think that far ahead, but maybe I should, but it’s been a great ride for the last few years. I have no complaints. 

Tim Mai: I love it. I love it. Yeah. Your goal of retiring people is amazing. The difference that you make out there. Yeah. And I love watching, all the things that you do and everyone who I have heard talk about you. Has taught wonderful stuff. I’ve never heard one single negative thing about you.

So it means a lot, right? The impact that you’re out there making is huge. And so thank you so much for all that you do and the difference that you make out there. 

Gino Barbaro: And thank you for doing this interview with us. I guess the only last thing I would say is I’m trying to. Elevate the education space because most of the people out there, when they hear gurus and you hear it’s negative, it’s not good.

And all of us need that at some point in our lives. But if you have the mindset of, Oh, this, he’s a guru and he’s out there just trying to sell education. I don’t want that. I want all the educators out there to be mindful of what we’re doing and what we’re putting out there because. People need this education.

People need camaraderie. They need the community. They need networking. And if they do, their first inclination is to say, these people are just out there trying to scam us. That’s not a good feeling. So having that means a lot to me, not having any negative reviews, and having a great community means a lot to me, that’s what I’m working and striving towards.

Tim Mai: That’s awesome. And you’re there.

Joe Fairless: As I was growing up, I told my dad a lie and he had me, I was in, I think, middle school and he had me stand up in front of this plaque and it was like a mirror and it had some inscription on it and said, be proud of who you are. And, that resonated with me then. And it stuck with me that I didn’t do it for the investors.

I did it for myself speaking candidly, I did it so that I could look at myself in the mirror and be proud of how I showed up at a challenging time. Tim is one of the most authentic and genuine people I’ve ever met. Sincerely believe he’s coming from a position of giving and that means a lot. You’re going to make huge progress.

Tim Mai: Welcome everybody to today’s Capital Raising Show, I’m your host Tim My. And today I have the honor and the privilege to interview one of the top syndicators in our industry and I’m super excited about this. I’ve known Joe for quite some time but, I think back when, like pretty early on in your podcast show and probably right before you get started into the multifamily space. And yeah. So Joe Phelous is the co-founder of Ashcroft Capital, which has over 2. 7 billion assets under management just in the last 10 years. Amazing. 55 apartment communities. And Joe has raised over 600 million to take down these deals.

In addition to his responsibilities at Ashcroft Capital, Joe created the podcast Best real estate investing advice ever show, which is the longest-running daily real estate podcast in the world and generates over 500, 000 monthly downloads. If you know the world podcast guys, that’s a huge number. That’s like the top 1% of the top 1% of the top 1%.

Tim Mai: Joe is also a proud member of Texas Tech. alumni advisor board for the College of Media and Communication, as well as being recognized as an outstanding alumni at Texas Tech University, where he is a former adjunct professor. Joe and his wife created Best Ever Causes, which has proudly supported 47 nonprofits over the last 40 months.

Wow. Let’s give Joe a big welcome y’all. Oh, awesome. Man, I am super pumped for this interview job you can share with everybody, you know a little bit about you and how and why you got started in this syndication space. 

Joe Fairless: Well, 1st off, I love this format. It’s new to me. I haven’t seen this type of interview format with everyone live, but then also introduced some people.

I’m glad to learn a little bit more about the individuals that introduce themselves. I’ve got professors and a New York tax lien. I think Victor said something about New York tax liens and Bill Bulgaria and props to everyone on this call. And I have a lot of respect for everyone on this call.

You’re investing your time, which is your most precious resource into learning and getting better. And improving the situation for yourself, for those you love, who you care about, and for those who are investing with you and me. I applaud you for that and I’ve, and I’m a huge personal development student.

And I can tell it’s just the proof here that you are as well. So I applaud everyone for being on this call and my goal is for you to come away with 1 or 2 things that you can take action on and help accomplish will help you accomplish your goals. And have that positive influence on other people that our industry certainly lends itself to the more we do as real estate investors to improve the communities who improve our investors’ lives.

The better that we’re all we’re all we all will be. You asked a little bit about me. Yeah, I’m from Texas, originally moved to New York City. I’ll give you the condensed version. Bought some while I was a W2 employee and my goal was to make a hundred thousand dollars as a monetary goal by the time I was 30.

I ended up being the youngest vice president of a New York City advertising agency around 29 or so. My base salary was 150, 000 dollars and then I realized that wasn’t fulfilled. I’m a huge Tony Robbins student and he talks about the 2 keys to fulfillment, growth, and contribution. And I didn’t really, I didn’t feel like I was growing.

I didn’t feel like I was contributing. I didn’t feel like what I was doing mattered. That’s when I started studying apartment communities and actually, I started studying how to invest in real estate. And from those studies, I ended up learning how to buy single-family homes and from single-family homes.

I realized that wasn’t cutting it. I was, it was easy to bring it via spreadsheet success, but in reality, it wasn’t the cash flow that wasn’t there when someone would move out. So I ended up doing apartment communities and bought my 1st place in Cincinnati. 

Tim Mai: Very cool. And that was 10 years ago, is that correct?

Joe Fairless: Yeah, it was actually, it was yeah, almost 10 years to the day. It was July 2013. And technically I didn’t purchase it. I guess I shouldn’t say I bought it. I entered into a master lease with the option to purchase. Oh, wow. And so I took control over it cuz, it was a 168-unit apartment community and it was much larger of a deal that I could have done without the creative financing.

So I ended up doing the creative financing and it did not work out in the end. I lost money on that deal. And I know you probably are familiar with the story, Tim, because I’ve told it multiple times, but I ended up losing money. I had 12 investors in that deal. I raised 843, 000 dollars among the 12 investors.

It totals 1. 2 million, but the difference there came from the brokers who put in their commissions for it to be part owners in the deal. And it lost money. We can talk about all the mistakes that I made and what I learned from them. But I ended up having 12 conversations with those investors and I said, you know what?

I don’t know how long it’s going to take, but I’ll pay you back and I’ll pay you a 14% annualized return out of my pocket. I’ll pay you every month, whatever I can pay you and then I don’t know how long it’s going to take and I’m going to commit to that and I did.

And I. I ended up paying back plus 14% return out of my pocket. It took me about 2. 5 or so years to do that. And I, one of the investors, have invested with us over 25 times, I believe, at least over 20 times for sure. Another investor wrote me a two-page handwritten letter thanking me for doing what I did.

Another gave me 200 worth of Ruth Chris gift cards. After I pay them back plus 14% return. Yeah, it was a big, big lesson that I learned from that. And we can talk about any aspect of that you’d like, but that’s my 1st deal. 

Tim Mai: That’s super, super interesting.

So let’s go into what made you decide to be personally responsible to pay them back. Not only pay back the principal, but 14% on top of that. 800, 000 is a huge amount. So what had you decided, yeah, to make that decision? 843, 000, but who’s counting, right?

Joe Fairless: It was Matthew McConaughey talking about don’t leave crumbs, you don’t want to look over your shoulder and think, Man, I hope I don’t run into that person later in life. 1, 1, 1 moment in my life that I. I remember very clearly as I was growing up, I told my dad a lie and he had me, I was in, I think, middle school and he had me stand up in front of this plaque and it was like a mirror and it had some inscription on it.

And said, to be proud of who you are when no one’s looking, and that resonated with me then and it stuck with me that I didn’t do it for the investors. I did it for myself, speaking candidly, I did it so that I could look at myself in the mirror and be proud of how I showed up at a challenging time.

I, I, it was hard to share that story, especially when I was going into it and that’s not hard now, but when I was going through the middle of it, it’ll certainly be really hard to share that story because you’re still in the middle of it all. But. It’s something that helped mold me for how I built the business because, yeah if we do things that leave scars, then they’re constant reminders of where we’ve been and what we came across and it’s a reminder not to do it again. And that certainly is something that left a scar and I’m proud of that scar because. It’s constantly reminding me, hey things can go wrong, but how are you, how am I going to show up and how do I proactively avoid them from going wrong?

It’s not just okay when things go wrong. Here I’ll show up. Let’s try to avoid this stuff from happening again. And 1 of the things I learned from that deal was that I’m good at certain areas of the business. And I lack the expertise in other areas of the business and I learned that I need to have a business partner who brings decades of experience because we’re swimming with sharks in commercial real estate.

We’re swimming with people who have got decades of experience, especially now when operations are so important and will be the difference between not only profitability. Transcribed And and really exceeding returns, but profitability and not giving the property back to the bank. And, unfortunately, some groups are.

Giving their properties back to the bank it’s likely because of the lack of focus on operations and that’s likely because they didn’t have the right team in place. And fortunately, I learned that on my very first deal. So I surrounded myself with a business partner who then he hired out as we grew, he hired out people underneath him, who he can oversee and execute the business plans.

Tim Mai: That’s good. Great lesson. By the time you know you exit this deal. How many complexes have you gotten into by that time? 

Joe Fairless: Probably two or three, definitely two, I’m going to say three, but two to three. 

Tim Mai: Okay, so then you have some success with the other deals where you felt confident that you were able to pay back the 843, 000 that were correct.

Joe Fairless: Yeah, I knew that the business plan was solid. It’s just how I executed the business plan was not a gotcha. This business is straightforward, but it’s easy to get overzealous on opportunities. And not get into the nuances of what truly makes it profitable or not. There’s the, what we’re doing real estate syndication.

That’s been around since at least the Empire State Building. So it’s a tried and true business. So it wasn’t about the business model. It’s just about the execution. 

Tim Mai: Gotcha. Okay. So before this 1st deal, did you do any capital raising before that before this deal? No. I bought 4 single-family homes with my own money and creative ways. And then I went. Straight from four single-family homes to 168-unit apartment communities, that’s a 1. 2 or 1. 3 million raise.

Tim Mai: Okay, yeah that’s a big jump. And did you know what was your experience in doing that first race? Was it challenging what you learned from, yeah, from the first race?

Joe Fairless: Yeah, very challenging. I 1st thought the deal was going to be, but I was told it would be 400, 000 dollars. Excuse me. I was initially seeking out a 1M dollar property and my raise is going to be 300, 000 dollars. That’s what my thought process was and it’s flawed on so many levels of operating budgets.

Mainly operating budget and then also what about your reserves. Many other line items that I wasn’t factoring in, but that was my simple process, a simple thought process. And I was looking at deals in Tulsa, Oklahoma, looking at deals in Tulsa, Oklahoma, did not find any, and toured a lot of them.

And then I came across a deal in Cincinnati, Ohio. And great, but the challenge is that it was. A 168-unit deal and a 6. 25. Acquisition price. But it was a creative financing, so I could get in at, I believe they told me initially 600, 000. I’m like, oh, okay, that’s going to double what I thought I could raise.

But, okay, I’m going to do it. I got to about 600, 000 in verbal commitments and then the deal structure changed and now it’s 1. 2, 1. 3 Million dollars. I had a thermometer, which still has a thermometer on my wall, a gold thermometer, where it’s just a whiteboard and you put, how much you’ve raised and where you’re going with your goal top and how much you’ve raised and you colored in.

And so I had that on my wall and I kept coloring it and then I kept having to make the thermometer longer and longer because the goal kept going higher and higher, but it was a very challenging experience. And it was, it showed me how far I can push myself and how resourceful I can be because, and when I say how resourceful I can be, investors, everyone in this call showed me how resourceful we can be because I’d have investors who said they were going to invest.

They didn’t invest. I had one investor back out a couple of weeks before we were supposed to close. And so I had to figure out how to make it happen. I called all my investors and 1 of them ended up going from 100, 000 to cover the difference of what the previous investor went out for. And so I realized that it’s, Okay.

It’s just a matter of resourcefulness. I know Tony Robbins talks about that. It’s not your resources. It’s how resourceful you are. But I think with our culture in general, we are entitled and we are looking for instant gratification. And going through an experience like this. Is beneficial for everyone because it shows, hey, we’ve got to really.

Keep going and going until we make it happen and we’re not going to be handed it. It’s going to be something that we’re going to have to scratch and claw and try and try and make it work. And I was able to close on the deal, so that worked, but then the deal didn’t work.

But then I was able to use that as a way to learn and grow. And then build something. The 1st deal we did at Ashcroft, we bought it for 14. 1 in Houston and refinance. It pays for 21. 6, 14 months later on a refi. So we’re off and running, but it took those experiences or that big experience for me.

To go through to realize how to structure things. 

Tim Mai: Gotcha. So with that first deal have you already had your podcast going before doing the race? For that first deal? 

Joe Fairless: No. I started after I certainly when we podcast.

Tim Mai: Gotcha. Okay. So was it then mostly like friends and family money that you went? 

Joe Fairless: Yeah, it was 12 people. I was on the board of the College of Media Communications at Texas Tech. One person from there. One person from my flag football team. One person who is my current roommate. One person from my roommate in college is my brother’s friend.

Two people who I worked for at an advertising agency previously. So yeah just a different bunch of different people.

Tim Mai: Gotcha. So share with us what made you decide to go into podcasts and dominated running it all of these years. 

Joe Fairless: The direct answer to that direct question is Trevor McGregor.

He asked me the question. Hey, have you ever heard of entrepreneurs on fire? Because I hired him as a coach through the Tony Robbins program. He’s. Now, branched off from that, and he’s still coaching, but not through the Robbins program. And I said, no, I haven’t heard her entrepreneur on fire. He says a daily podcast interviews entrepreneurs, check it out and see if you want to do that for real estate.

I’m like, oh, I’ll do it. I’ll check it out. I did. I listened to it and. I wasn’t sure about the daily thing. That’s quite a commitment. So I said, yeah I’ll start the podcast. Why? I started it. Interview people randomly sporadically, and I realized that I didn’t know if it was good use of my time or not.

And I didn’t know if it was effective or not. Because I just wasn’t doing it enough and so I committed. It was in October. I said I’m going to an interview. I’m going to interview once a day for the rest of the year. And then I’m going to take a step back and reassess. And so I did, and I was able to get a sponsor cozy.

co, which I don’t think exists where they got bought out twice by now, but they gave me 2000 dollars to sponsor my podcast for a month. And that was a major thing for me. As I was saying, wow, okay, so it’s possible that I could at least break even, and what is the beautiful thing about the podcast? I think it was Melvin who said he has a podcast.

I wrote if I wrote your name down correctly. The beautiful thing about the podcast is that even if no one’s listening, assuming it’s interview-based. You’re getting a lot of value from it because you’re learning from the interview guest and that’s like a master’s class for free. And oh, by the way, you’re giving value to the interview guests because you’re giving them exposure to your audience.

And I talk about 5050 goals. I got it from Tim Ferriss. 50% of the goals achieved. The other 50% is what you learn along the way that can benefit you regardless of if you achieve it or not. And it’s a beautiful way to think about goals. Because regardless of anyone’s listening, hey, there’s a whole lot of value that can be that can come from that 300.

so literally 3300 days in a row, 3300 days, 7 days a week. The podcast I’ve been going to. I don’t do those interviews primarily anymore, but the 1st. Say 2000 interviews, I did just imagine sitting down with 2000 real estate investors and interviewing them and how much you can learn from that. So it was. It was incredibly beneficial in ways that I didn’t anticipate that I would benefit from.

Tim Mai: That’s amazing. So has that been a good source of capital for you, the podcast? 

Joe Fairless: It all ties together. Because of the podcast, I have a conference and with the conference, the best conference saw you hang out with you this past March, in Salt Lake City at the conference.

We have a conference every year and I get to meet our investors, I get to see them in person and it’s wonderful. Yeah, it’s just, it’s a platform that allows me to continue to add value to people’s lives. And, that’s the goal. I have quotes that I live by and they’re all pretty similar themes, your service to many leads to greatness.

Open up people get what they want, you’ll get everything you want and secret living is giving, so basically give and make sure it’s valuable to others and the world’s going to take care of you. And the podcast allows me to do that.

Tim Mai: Gotcha. And what would you say? Has been like your top, maybe your top three ways or marketing channels that have a more direct, as you see, you can see the direct benefit of being able to raise capital from those channels.

Joe Fairless: One used to be not any more. It used to have bigger pockets. I still love bigger pockets. But they’ve grown their audience a lot and expanded it more worldwide. And it’s just not as it’s just not a source. That’s as beneficial as it has been. But the ones that are working 1 are in-person workshops.

We do have investor relations, team members. And they live in cities across the country. One in la, one in Phoenix, one in Dallas, one in Cincinnati, one in Charleston, and one in Orlando. So we have workshops for accredited investors in those markets. I find that more effective. Yes, I remember your question.

You asked for 3, but I’m still going to give you 1 because that’s been the most effective. The most effective has been meeting with investors in these. Markets and putting a face to a brand versus us digitally advertising and then sending them through a click funnel where educating investors on how to create passive income through real estate.

We’re feeding him, feeding him, having dinner and we’re getting to know them and we get where to get and know them with people who live in those markets so that they can create long-term relationships. With those individuals versus just talking to someone on the phone and not necessarily knowing who they are or having a relationship with them.

Tim Mai: So is it run like a monthly meetup or what’s the format of those? 

Joe Fairless: It’s how we do it, we send out a direct mail to accredited investors in that market, and then we’ll get a new group of accredited investors or prospective investors, and they’re all credited or intentions from all accredited.

For and then they’ll come and then they’ll have that 1 meeting and then we’ll have our, the person who’s presenting will have to follow up meetings. I see those individuals. 

Tim Mai: Gotcha. So direct mail invitation to dinner and then follow up meetings. That’s right. Okay, got it. That’s pretty cool.

And I noticed direct mail is one of your strategies. I get your news and your monthly newsletters. That’s, yeah, so how you know are the newsletters, primarily for. I guess people opted in and got interested. I mean I still haven’t invested in any of your deals but I’m still getting the newsletters for a while now.

Do you guys just keep up with the newsletter for a certain amount of time before dropping them off or what’s your strategy behind that they’re going to go digital?

Joe Fairless: The approach is the same regardless of it. Physical or digital copy and newspapers, in general, have been going out of business across.

But community newspapers have been thriving in certain markets. And the reason community newspapers are thriving in certain markets. This is because the community newspaper has the community members’ pictures and names in it. Yep. So the community wants to see that they want to see themselves with their friends and want to see what the friends are up to.

And so I thought how can I take that insight and apply it to what we do? And what I did is I can’t see my background the way my view is, but you might be able to see all the pictures on top. 

Joe Fairless: You can see it. Yep. All those pictures behind me are of previous magazines that we sent out and know we’ve been sending them out.

See what issue this is. 63, so we’ve sent out 63 issues. So 63 months worth. That’s the 1 I’ve got that I haven’t and what we do is we interview our investors and we just have them tell their story because. Yes. If they are telling their story, one, we’re building a relationship with those four or five individual investors we interview, but two it’s interesting to me because I’m also a passive investor.

I’m in 123 deals right currently as an LP. If I’d like to hear the story, I’d like to read about the story of other LP investors. How do they get to this point? How do they become accredited? What’s their journey? I find it interesting. And so we simply share those stories. 

Tim Mai: Gotcha. Very cool. So okay you have your podcast and you have your dinner.

You have your direct mail, would you say that those there are your, and your live events so would you say that those are your top ones? 

Joe Fairless: We’re not counting referrals. That would be a top one too but yeah I’d say those are the top ones. 

Tim Mai: Very cool. I love your strategy in terms of, gosh, 2.0 to 2.7 billion assets under management in 10 years is huge growth. Share with us how you have been able to grow so fast. So big.

Joe Fairless: We are, we were doing a strategy. We are doing a strategy at the right time in the in, in the economy, like the right economic time. Let’s call a spade here.

We were buying apartment communities. In a time when cap rates were compressing, and so we were buying them and selling them and it was working out and it still is, but it’s a different time. Now the focus is on the focus also needs to be on and I grow and I can tell you for. We’ve sold 2026 deals.

And those 26 deals average return of 25. 6%. Cash on cash return. And what I’m proud of is those 26 deals and growing that NOI tremendously. And so it’s a loaded question. How we had that growth, but it’s having the right systems in place during the right economy. 

Tim Mai: Yeah, thank you so much for doing this interview with me and our group here, even though you know you’re not like 100% so really appreciate you.

Joe Fairless: All good. No big deal. Yeah. Well, I’ll keep rock and roll, but my responses might get a little shorter cuz Yeah. I’m fading a little bit with my voice. Gotcha. 

Tim Mai: Yeah. Yeah so you have just one partner, is that correct? Okay. So what does he do and what do you like in the business?

Joe Fairless: Money. Yeah, money deals, execution, the three components. I focus primarily on the money and focus primarily on getting deals and executing. There’s overlap, we sign on months together and we make the big business decisions together as far as. Acquisitions and dispositions and refinances and stuff, but high level, that’s how we, that’s how we operate.

And I talk about real estate, how a lot of people jump into partnerships. And a lot of times when someone says, hey, this is my business partner there can be, it cannot sometimes a lot of times it doesn’t work. And the reason why it doesn’t work is we find partners who aren’t truly partners because we’re still having to teach them how to do what they’re supposed to be doing, what they’re responsible for.

And I can tell you that it’s a beautiful thing between myself and Frank, my business partner, because. We don’t teach each other what we’re focused on. We’re pretty darn good at what we’re focused on, and we can work autonomously to deliver what we need to deliver.

Rod Khleif: You happened to create that burning desire, but it’s never about the goals. It’s about who you become on your path to your goals, right? Happiness comes from progress and growth. Tim is one of the most authentic and genuine people I’ve ever met. Sincerely believe he’s coming from a position of giving and that means a lot. You’re going to make huge progress.

Tim Mai: Welcome to today’s capital raising show. I’m your host Tim Mai and today I have. An amazing guest, a good friend of mine that I’ve gotten to know for a long time. And yeah, he’s an extraordinary human being. I have his bio here in front of me. 

Rod Khleif: Oh, please God, don’t read that.

Tim Mai: I’m just gonna, I’m just gonna introduce him, from who I know of him. Amazing business owner, and one of the best and most amazing philanthropists. He has founded the tiny hands’ foundation benefit. Benefited more than 110, 000 Children in need. Amazing. And what’s not on his bio that Rod, you need to add this on your bio.

He’s a super husband. I’ve never seen a husband that is More expressive in praising his wife and like always, talks about how great she is and how blessed he is to have her. And I get so inspired, and it makes me want to be a better husband watching you. And so you need to add that to your bio.

Rod Khleif: Thank you. Thank you. It doesn’t help. It doesn’t hurt that she’s so freaking gorgeous, but yeah. And I’m a visual guy, so there is that, but no, she’s more beautiful on the inside than the outside. So Rod’s a lucky boy. 

Tim Mai: Yes. And yeah, Rod has accomplished so much on over 2, 000 properties.

And, he, Rod, talks a lot about mindset. I know this call was about capital raising and a lot of times when we interview others on this call we talk a lot about strategies and tactics. But we’re going to talk a lot about mindset today because Rod not only uses mindset to succeed but he uses mindset.

To recover from a massive 50 million loss in the 2008 market crash. And I have, yeah, I have bounced back and so much more since then. And so with that, let’s give Rod a big welcome y’all. Welcome Rod. 

Rod Khleif: Thank you, guys. Thank you. Thank you. Am I? I’m ready to present.

I’m ready to present. I didn’t know if we were going to do this like an interview or not, but why don’t I start by telling a little bit of my story? Yeah. You talked about it briefly. So I’m an immigrant guy. I was born in the Netherlands, Holland, with wooden shoes, and windmills. I immigrated when I was 6 years old with my brother, Albert, and my mother’s Vansha.

Ended up in Denver, Colorado, where I lived for 30 years and we didn’t have much when we got there. We struggled. We remember eating expired food and then we shopped at an expired food store. They had them back then and drank powdered milk with our cereal in the morning, because it was cheaper than real milk.

Trust me, it sounds better than it is. And, I wore clothes in the Goodwill and the Salvation Army through junior high school till I finally got disgusted and lied about my age at Burger King when I was 14 because I was tall so I could get a job flipping burgers and buy my clothes and ultimately buy a car.

And again, some of you on the call may have had it harder than I did. Many people have and maybe have it hard now is a lot of economic uncertainty right now. Call that a slash opportunity. Let me put that slash in there. Uncertainty slash opportunity. But I knew I wanted more back then.

And luckily, my mom had an incredible work ethic. So she babysat kids. So we’d have enough money to eat. We always had a house full of kids way more than we’re probably supposed to. I don’t even know if she was licensed to do it, but she was a great babysitter and loved these kids. And they still followed up with her until she died.

But, she was an entrepreneur with her babysitting money. She invested in the stock market. She invested in IPOs successfully without any formal education. And she also invested in real estate. And her 1st, real estate acquisition was the house right across the street from us. When I was about 14, she paid about 30 grand.

When I was 17, she told me she’d made 20, 000 in her sleep which had gone up to 50, 000. And I was like, what you made 20 grand. This is when 20 grand was a lot of money. Let me just preface that that house sold for 360 about 10 years ago, just to give you an idea. But anyway, I said, you made 20 grand.

You didn’t do anything. Screw college. I’m getting into real estate. So I got into real estate. I got my broker’s license, which you could do back then with education. You didn’t, I could have my own office. I was smart enough not to do that, but I was still living at home. And my first year in real estate, I made maybe eight, 10, 000.

My second year, maybe 000, but my third year I made over a hundred thousand dollars. And I’m going to tell you back in 1980, that was some serious change. So what happened between year two and year three that caused me to 10 X my income? What happened was I, the guy I worked for the broker I worked for, I was dating his daughter and he taught me about mindset and psychology.

Now, really 80 to 90% of your success in anything is just that it’s the mindset and the psychology. I know many of you think it’s technical knowledge and it’s not. Okay. I can tell you, you have to take action with what you learn. You have to push through fear. You have to push through limiting beliefs and so on.

And so he started that journey for me. And then I ended up spending 20 years following Tony Robbins around the planet and being the best in the world at it. it. And, fast forward to today, as Tim said, I’ve owned 2000 houses. I own thousands of apartment units today. And in 2006, my net worth went up 17 million while I slept.

And you might say, wow, cause I said, wow. And I thought I was a freaking real estate, God. I thought I could barely fit my head through a door. I thought I could do no wrong. And when that happens, God of the universe, whatever you believe it, gives you a nice little smack. That was 2008, like Tim said, I lost 50 million in 2008.

And if you listen to my podcast or you come to one of my boot camps you’ll realize I spend a lot of time on mindset because I talk about the mindset. It took that 50 million to lose in the first place, but then maybe as importantly or more importantly, the mindset it took to recover from losing that to the success that I’m blessed to have today.

So I’d love to drill down on that with you. If you guys will humor me for a little bit, talk about some success strategies as what I was thinking. And if you happen to come to 1 of my boot camps, and by the way, I’ll give you guys a great deal. If you want to come, I’ve got a virtual 1 coming up in January, but you’ll find out that the 1st hour and a half is goal-setting on steroids.

Because how the hell do you get anything? If you don’t know what it is, right? You’ve got to know what it is. You want to. With clarity, and then you’ve got to know why you want it. Here’s why. Because you’ve got to create that burning desire. Napoleon Hill talks about it in his book, Think and Grow Rich. You’ve got to create that burning desire so that you push through that fear.

You take action. You make it happen. Or you push through limiting beliefs that you may have. And we all have them. When I immigrated To this country. I didn’t speak English and I got thrown into school. I found out what bullies were for the first time and I got my butt kicked occasionally.

And then my mom proud Dutch woman that she has thought it’d be a great idea to send me to school and, wooden shoes and those leather shorts. The Germans wear it for Oktoberfest. So I got my ass kicked again. And then, the bullies would chase me home from school. Some of them lived on my street and my mom would chase them off with the flies to the water thinking she was helping me the next day, but kicked.

And I came up with this belief system that I wasn’t good enough. I used to ask myself, how can I show them? I’m good enough. And a lot of people have these limiting beliefs. I’m not good enough. I’m not strong enough. I’m not analytical enough. I don’t have enough time. I don’t have enough money.

And guys, the thing I want you to remember is there’s a reason the acronym for belief systems is BS because 99. 9% of them are BS, but we believe they’re real. And again, you have to have that burning desire. Through goal setting and planning and to push through that crap. Okay. And so that’s why that burning desire is so important.

And even if you, by the way, you’ll see my QR code in the corner there. If you click on that QR code, that’s my link tree. And at the bottom of that is my. This is my goal-setting workshop. I do it every year on New Year’s Day, and it’s professionally done. I am not going to try to sell you anything.

If you haven’t done your goals in 6 months or longer, get over there, even if you’re not coming to my boot camp, get over there and do your goals because now’s the perfect time. We’re at the end of the year and. And there’s a guide you can download that is professionally done with music. It’s really good. I’m proud of that.

And even, have your kids do it, have your spouse do it separately, but then see how aligned you are. Are you moving in the same direction? Do you want the same things in life? Very powerful. And so that’s on my link tree at the bottom. Okay. And you’ve got it. You’ve got to do the goals to get started, but then the next step.

Okay. If you have to make a decision. Okay. And I know that sounds simplistic, but when I say a decision, it’s freaking done. Okay. It’s not dipping your toe in the water. No, I’m going to try multifamily or I’m going to try this. No, it is like I’m doing it. Okay. And it’s not one foot in one foot out.

It is freaking done. And when you do that, you’re committed. And when you’re committed, you’re like a train on a track. Now, if you’re just interested in dipping your toe into the water, you’re going to get knocked off track. Okay. But when you’re committed. It’s no longer a dream. It’s an outcome. Okay. And, motivation gets you started, but it’s that commitment that’ll bring you home.

So very important. And with that 100% commitment, you’ll have clarity. You’ll have 100% ownership. You’ll be responsible for everything that happens to you. And so that’s, but it starts with that decision. And by the way, the Latin root for the word decision means to cut off.

If you’re going to attack the Island. You’re burning your ships because you’re taking their damn ships home. Okay. That’s a freaking decision. It’s done. There’s no turning back. That’s what I mean by that. All right. Then you’ve got to take the first step and you analytical ones on the call, you know who you are and you know how you have to check off every single freaking box before you take a step.

Okay. You can’t do that guys. Let me just preface what I, before I keep going, we are possibly in the greatest opportunity we will see in our lifetimes right now. Okay. I know a lot of people think that this thing’s going to bounce back quickly. I don’t, I’m a real bear. And I believe it’s going to be uglier than people think.

And you may not know there are 20 million families right now behind in their utility bills. Jamie Dimon says it’s the head of Bank of America. going to be much worse than people think. Elon Musk says it’s going to be much worse than people think. Of course, Trump has said the same thing, love him or hate him.

Of course, Kiyosaki has been talking about it forever. Eventually, you’ll get it right but he thinks it’s going to be bad, but I do believe we are headed for some significant pain in this country, but with crisis comes opportunity. And there will be everything going on sale guys.

The real estate’s already dropped in it. And there, I was reading a headline yesterday on Facebook Live that said that the single-family home price is dropping 20%. I think it’s going to be more than that. And who was it? The Fed in Wyoming said the recession is going to be severe.

That was his quote. That’s a quote. This is yesterday’s headlines. So again, I don’t want to scare you. I want you to get excited because I’m going to tell you if I hadn’t been hiding under a rock in 2008, nine, I’d be on the back of a 300-foot yacht right now because the greatest money is made in the environment that’s coming.

Okay. And even if it’s just, even if it’s not as bad as I think there’s still going to be an incredible opportunity, at least in pretty much all real estate sectors, I focus on multifamily. By the way, if you don’t listen to my podcast, I’m blessed to say it’s the largest in the world for commercial real estate.

We’re about to hit 15 million downloads and it’s also on that link tree. Check it out. I think you’ll like it. And I do, I’ll talk about that more in a minute. All right. But then you’ve got to take that first step guys. And sometimes that first step can be the hardest step of your life.

Dr. Martin Luther King said you take that first step in faith. And the next step will be revealed. Lao Tzu thousands of years ago said that a journey of 1000 miles begins with a single step, but you’ve got to take it. And here’s the thing. If you are that analytical person, just remember this analogy.

You can drive across the United States at night with your car only seeing 50 feet in front of you. Yes, you may hit some obstacles but, you can make it. It’s the same way with your goals, any of your goals, but you’ve got to take that 1st step. Guys. This life is not a dress rehearsal. Okay. Do not have any regrets.

Don’t be wishing that you take action, and I don’t care if it’s multifamily. Maybe you go buy businesses and what’s coming. Maybe you are a single family. Maybe you do some other real estate asset class, but for God’s sake, get up to speed as fast as you can because if we’re in the thick of it, it’s going to be too late.

So like you’re in the right place here with Tim’s group, but educate yourself as quickly as you can. So build those relationships as quickly as you can so that you can capitalize on what’s coming. Conserve cash right now. I love spoiling my wife, but I told her we’re not spending any big money.

Let me just turn my email off here. We’re not spending any big money right now. Much as I love, that’s my greatest, that’s my love language gifts and she never expects them. But I told her, Baby, we’re going to keep it low because we want to conserve cash right now. But listen, no regrets guys. There was this nurse in Australia, a hospice nurse.

Her name was Bronnie Ware. And so she took care of patients when they were about to die. And she asked him a question. And the question was, do you have any regrets? And she wrote a book about it called the five regrets of Dying. You know what my number one regret was not living the life I could have lived in someone else’s life.

Guys, I can’t think of anything worse than that. Okay. And so you gotta take that first step and I’m going to tell you action mitigates fear. So just take it massively. Reconnection. Yeah, you’ll make some mistakes and you’ll get your nose bloodied. And that’s okay. We learn from that. I call when I don’t call them failures.

I call them seminars. That was a 50-million-dollar seminar. It was a big freaking seminar, but that’s what it is. It’s only a failure. If you don’t get back up or you don’t get the lesson. All right. The next thing I want to talk about is to focus on the most successful people on the planet. Have the highest degree of focus.

Okay. And whenever you have incredible focus, you have incredible success. But here’s the thing. If you’re on this call right now, you’re a leader. And I’m going to tell you right now, the world needs leaders more than ever. We won’t get started on the crap that’s going on politically and all the crap on the news.

But as a leader, you’ve got to. Manager focus and you need to stand guard at the door to your mind and keep the crap out. Okay. Bring in the good stuff because whatever you focus on gets larger, both positive and negative. Okay. I’ll get people to call me and say, how do I get out of student loan debt?

I’m right. Wrong question. How do you make so much money? The debt’s irrelevant, right? They asked Mother Teresa. She was anti-war. She said, no, I’m pro-peace. Do you see what I’m saying? Okay. So it’s super critical that you manage your focus. I remember I built 27 businesses. I was shocked when I counted several tens of millions of dollars worth of spectacular flaming seminars, but we failed on our way to success.

I got to meet the billionaire owner of Spanx, Sarah Blakely, beautiful. The women’s stuff holds all the stuff together for the guys that may not know it started with 5, 000 and she was in Forbes. She’s a billionaire and she told me I met her at her mastermind and she told me that her dad used to ask her every week.

What have you failed at? And I thought, what a freaking awesome question to ask your kids so they don’t fear failure, right? Anyway, back when I was in Denver I had frozen yogurt shops. I had vending carts selling ice cream carts on the 16th street mall in downtown Denver.

I had a carpet cleaning business. I was buying houses and everything suffered because my focus was diluted. Okay. And this, by the way, ties into decision-making as well, managing how many decisions you make. I try to minimize my decisions, which is why you’ll almost always see me in one of these bone, ugly, black V-neck T-shirts, unless my wife puts her foot down and says, no, you’re wearing a real shirt tonight.

But otherwise, one of these things causes me to minimize my decisions, and here’s the problem, I don’t know about you guys, but very often I’ll be. Watch Netflix and I’ll be on my phone scrolling, freaking social media. And that’s what I do. And if it’s a boring part, here’s the problem with that.

Your brain is making those little micro decisions every split second, which kills your focus, your ability to focus. Okay. I get excited about my 15, 000, 000 downloads on my podcast, but I listen to 2 podcasts. 1 of them is Tim Ferris. And the reason I bring that up is I think it’s about 15, 000, 000 a week.

Okay. But 1 of them is Tim Ferris. And the other 1 is Joe Rogan. So I get both sides of the aisle and I try to balance myself politically, but Tim Ferris interviews the best of the best. In the world their particular walks of life, Ray Dalio, the billionaire, CEOs like Mark Zuckerberg and big seals, the biggest companies in the world athletes like Michael Phelps, NBA players, NFL players, actors like Arnold Schwarzenegger, Ed Norton, Jamie Fox, Hugh Jackman.

Just the best of the best in what they do. And I started to hear a pattern. They almost all meditate. What does meditation enhance? Focus, right? So the focus is super, super important guys. I just want to stress that. The next thing I want to mention is positive expectations. I’m going to do my power clip on positive expectations next week, but I do these clips on my podcast.

They’re five minutes, by the way, as it relates to focus and standing guard, your mind, keeping out the crap that’s on the news. Listen to my podcast. Even if you’re not into multifamily every week I do a clip called Own Your Power. It’s five minutes. It’s motivational. I play this music with it. You give me five minutes a week.

I’ll juice you. Okay. And there are some of them there, but I’m doing one on this particular topic, which is a positive expectation. As human beings, we connect through pain. If you came up to me and said, how are you doing? And I said oh my God, I’m freaking fantastic. Life is amazing.

Most people, you guys probably wouldn’t because you’re more evolved, but most people take a step back and say, okay, he’s off his freaking meds. But if you came up to me and said, how are you doing? I said, oh, dude, my back. Oh, shit. I lost 10 grand in the market. Hurt my back. You put your arm around me and say, I feel your brother.

We see we connect that way. Be cognizant of those guys, be very cognizant, but as it relates to positive expectations, expect to win. Yeah. Because if you expect to win or you expect to lose, you’re right. Okay. You’re going to get what you expect when you expect amazing things to happen when you decide what you want and you declare it to God or the universe, God or the universe will conspire to make it happen.

Okay. And so have positive expectations and remember this as well. You choose the meaning of what happens to you. When I lost 50 million, it could have very easily become my story. I use it to teach, but it’s not my identity. It’s not my story. Okay. You choose the meaning you place on something. And the meaning I put on that is I would have never met my extraordinarily beautiful wife if it hadn’t happened.

And so that’s my meaning. Okay. And also remember this. Anything you put and so anything negative that’s happened to you, you can rewrite the meaning you place on it. Okay. I know it sounds like just a mental, mental thing there. And that’s all it is truly. Okay. And again, this is stuff I learned from Tony, but you can choose to, he takes people that are suicidal and has them reconstruct the meaning they placed on what’s going on in their lives.

And so you could easily do it with something that’s happened to you as well. So just remember that also remember. Okay. Anything you put the words I am in front of is an identity statement, and there’s no greater force on the human psyche than the need to remain consistent with how we identify ourselves.

So let me give you an example of this. Okay. There are some signs on my wall. You can see I am successful. I am the best in the world at what I do. I’m a business genius. Now that’s not braggadocious. That’s what I’m aspiring to embody. And I have these in my exercise room. I have it here in my office, and I shout this stuff at the top of my lungs when I’m exercising.

I used to do it running down the street. That’s the question. My kids come to help me via my live events. And that’s the question they get most often just really do that shit. Oh, yeah, we grew up with that. But now I’ve got my exercise room. So nobody has to hear me anymore. But anyway, so again, you choose the meaning you place on stuff.

And if you’ve got some area of your life that you’re trying to improve. Do an I am statement, have it printed, and throw it on your wall. I am courageous. I am healthy and energetic. I am successful. I’m a business genius because again, people will die over their identity and I anything you put the words.

I am in front of us with an identity statement. Now, if you come to my boot camp, we will do 1 of these really powerful identity statements. It can be life-changing. Frankly, my favorite exercise by the way.

Tim Mai: Thank you. That identity statement. I love it. And I went home. Yeah. After attending your event, I went home and I did it with my team here.

Rod Khleif: Nice. Nice. Nice. I think I had your boy read him, didn’t I? Yes, you did. Yeah. I had your boy get up and read it in front of hundreds of people. Yeah. Love it. Love it. Anyway, the next thing I want to talk about as it relates, especially as it relates to multifamily because multifamily is a team sport that you play to your strengths.

Okay. Your strengths are your greatest assets. Don’t focus on building up your weaknesses. Yeah. You have to have some understanding if you’re like me and you can’t even spell the word math. You have to have some understanding of a P and L, but. Okay. But focus on your strengths.

Okay. You are going to hit success much faster if you work on your strengths and you hire a line or partner for your weaknesses. Okay. I will tell you some of the best partnerships I see in this business are an analytical person with an outgoing person. Okay. And, in this multifamily space, there are a lot of hats you can wear.

You can be the person that finds the deals. You can be the person that develops relationships with the brokers. Maybe you do direct-to-owner marketing and your mail and you make your cold call. You could be the person that loves spreadsheets that does the underwriting. You could be the person that does investor relations, raising money, which is why we’re here right here at this equity-raising conference.

By the way, guys, in what’s coming, finding the deals isn’t going to be as hard as finding the money. Just so you know, Tim’s a really smart guy. He got way ahead of this because I’m doing a course on raising money myself. After all, it is going to be the. Things are moving forward. It’s not going to be finding the deals.

It’s going to be not just the equity, the capital for the deal, but also the debt. The debt is also challenging right now. So it’s getting the money for your deals, but you could be the person that handles that. Maybe you’ve got construction experience or management experience or project management experience.

You could be the one involved in asset management. So there are a lot of different hats you can wear, Play to your freaking strengths. Okay. And if you’re not sure what they are, do a Myers Briggs profile or Tony Robbins has something called a disc profile. D I S C. If you search the word Anthony Robbins, D I S C profile, it’s free.

You can get the enhanced version, but the free one is incredibly accurate. Okay. To see what you’re made of. And you can ask your friends to tell you what your weaknesses are right out of the gate, but they can also tell you what your strengths are. Okay. But here’s the thing.

Don’t live someone else’s life. That’s what I’m trying to say here. When you are playing to your strengths, first of all, you love what you do, right? And you never work another day in your life because you’re doing what you love and when you are working to your strengths, you’re passionate. Can you feel a little passion coming from me?

I freaking love this. okay. I have plenty of other things I could be doing right now but trust me, I’m doing good. We have thousands of apartment units and I’m doing good but I love this. Okay. And I like, as I showed you back here, some of the hundreds of thank you cards for my students, my coaching students, my warriors are somewhere upwards of 110, 120, 000 doors that they own now. By the way, let me mention my boot camp while I’m on it here for a second.

Okay. Cause I’ll give you guys a hell of a deal. It’s 97. I don’t sell anything there. It’s virtual. It’s January 21st and the second. So 16 to 18 hours of training, nothing being sold for 97 bucks. And I’ll give you a code. This is from an event I spoke at yesterday, but I’ll give it to you the same deal.

I gave them where you get my deal evaluator software and my document library for that 97 bucks. So if you go to that link tree that QR code or you can go to multifamily boot camp. com, but that, that, it’s on the link tree there. It is at the top of my boot camp and if you use the code CFC, you’ll get the bonuses, the document library, and the deal evaluator software.

And I’m going to tell you, if you come and you don’t love the event, I’ll give you your money back afterward. I don’t mean like it. Freaking love it. Okay. So I’d love to see you there. And I don’t care if you learn from me, but if you’re not fully up to speed on this business yet, you need to get up to speed as fast as you possibly can.

Because again, you have to have the relationships built. You have to understand how to do this business before the soup hits the fan because then it’s going to be too late. You need to get up to speed as fast as you can. But anyway, back to passion. When you love what you do, you’re going to be passionate and influence people.

You have to be passionate, right? So if you’re going to raise money or buy deals when you’re loving what you do, that passion comes out and people want to be around you. Okay. And, success in this business requires the ability to influence. And so that’s why it’s so critical that you work on your strengths and what you love.

Okay. Thank you. And because that passion is the fuel. Okay. And don’t settle, don’t play small. Don’t live someone else’s life. Passion breeds creativity and innovation. Honestly, it minimizes or even eliminates fear, but that’s only if you’re working on what you love. Okay. So please take that to heart.

Yes, you need to have a basic understanding of everything. But you hone in on what you’re good at. When people come to my live events, I have a warrior event. Michael was at it. He actually, Mike Bailey got an award there. We had it, I don’t know, three or four weeks ago.

I had almost 300 of my students, my warriors, and my coaching students there. And we did speed networking. Like you, I think you’re going to do it here. And you’re going to randomly put people together in breakouts. And what I tell people to do is. Tell everybody what your superpower is. What are you great at?

Everybody’s great at something. And that’s 1 of the 1st things I tell you when you’re networking, make sure you let people know what you’re great at. And so you can align with people that supplement where you need to be supplemented. Does that make sense? Yep. The next thing I want to talk about is the peer group.

Now, you’ve got an awesome peer group here, obviously, but here’s the thing you’ve heard this said before: the total of the people you hang out with who you hang out with is who you become. I’m going to tell you, I tell the story of my warrior. I told us about my warrior event when I was losing everything in 2008 and 9, I had already joined Tony Robbins platinum partnership.

And in fact, can you give me the ability to share my screen or do I have it? Yeah. Yeah. Yeah. You have that ability. Thank you. I have been there with some of the dozens of boot camps and masterminds that I’ve attended over the years. Okay. I never went to college. So this is like my college education.

I wish I’d saved them all. It’s not even all of them. Okay. But the point is. And of course, I’m bragging I’m in front of my Bentley and 1 of my Mercedes, but the point is learners are earners. My friends. You never stop learning. I still do masterminds. I still attend masterminds and boot camps all the time because of that.

Anyway, stop sharing but let’s talk about peer groups. Back when everything was crashing, I joined Tony Robbins platinum partnership. Yeah. And back then it was about 120 grand all in. Okay. And everything was crashing and burning and I was around people that were thriving through the crash.

They were killing it. Okay. And they’re like, Oh, 50 million. You get up and go make something happen now. You think that’s important if the, what hits the fan and what’s coming to be around people like that. You better freaking believe it because I’m going to tell you so many of us default to peers that we went to school with or we grew or we work with or we grew up with and sometimes those people out of their fears or their limiting beliefs or their fear of losing you or their feeler fear feeling less than if you succeed or, we’ll hold you back.

And sometimes it’s family. So I’m going to tell you to love your family, but proactively choose your peers like this incredible group right here, because you want to be around people that lift you that are going to be encouraged by your success, not. feel bad about themselves. If you’re successful, be very careful who you share your dreams with.

Okay. Very important. And get around people that want more out of life like this group. This is why my warriors, my coaching students are so successful. Most of those 110, 120, 000 units were done between warriors. Okay. And because, if you go in that Facebook group, it’s extraordinary.

They’re all pumping each other up when they get a deal instead of feeling jealous, that’s who you want to be around. And I started my mastermind. We met a few weeks ago. Mike Bailey was supposed to come and he couldn’t make it. I don’t know if he’s still on the call here, but he had a hurricane come through and that kind of screwed things up.

But the point is, I started that mastermind for myself. Because I want to be around people that think what I think is hard is easy, right? And that turned into, the largest multifamily mastermind on the planet is about 16 billion in assets there. But it started here in my home.

I had 16 people come to about a billion in assets. I said, let’s just be a mastermind. I paid for the food and the drinks and stuff. I said, let’s see what happens. And it was extraordinary. And this was about, I don’t know, about 4 years ago and now turned into this big thing. All right. So be careful who you hang out with.

All right. Now, how much time do I have? You have much more time. Do I have one? We do. We do want to open up with Q and two.

Tim Mai: So how about 15 minutes? 

Rod Khleif: 15 minutes. Sounds good. All right. I can bring it home. I’ll land the plane. Okay. So let’s talk about habits for success. Okay.

One of the gifts, my love language, is gifts. I told you guys that my students get lots of books for me. And one of the books is this book called the slight edge. And it’s about those decisions you make every day. That doesn’t mean much that day, but if you do them over time, they will move your life up or down.

And the easiest example is health. If you’re going to go to McDonald’s every day, you know what direction you’re going, right? So you’ve got to have habits that help you achieve success. And so what’s important is that you consciously think about those, the things that you do every day, maybe, do you have a morning?

Show where you visualize or manifest. I’ll sit in that recliner behind me there. And you can see one of my vision boards right there on the floor next to it. Okay. And I’ll sit there and I’ll be grateful. I’ll say, thank you God for my amazing, beautiful wife, my kids, my coaching students, and my foundation.

And then I’ll be grateful for the things that I want if I already have them. I’ll sometimes even get emotional. Being grateful for things. I don’t even have one yet. And I know I lost some of you analytical ones on that, but ignore that at your peril. This is how I had 50 million to lose. Okay. And how I got it back by stupid shit like that, because it works.

Okay. Just trust me, you call it prayer. If you want, whatever you want, whatever works for you, but it freaking works. Okay. So trust me. That’s a, so that’s a success habit, right? That’s a habit. What I eat every morning. I have vegetable juice. And Kevin was talking about that.

I have vegetable juice every single day. My wife typically makes it. The only time I don’t is when I’m out of town and then I’ll do those athletic greens that Tim Ferriss talks about. But, I’ve been doing it for not exaggerating 30 years. So anyway, success habits, like taking massive action, being proactive on who you allow to associate with in your peer group, focusing on results, not busy work.

Success habit. How many times do you clear off your desk, right? Or I’ll get students, new students, new lawyers who are like, Hey, what do you think of this logo? And I’m like, how many properties do you own? None. How many brokers have you called? None. I don’t want to hear about your freaking logo. Get your ass on the phone and call brokers.

Start looking at deals and evaluating deals. That’s busy work. Okay. And again that’s a common thing. We all fall into that, but that’s what I’m talking about. Success habits, being relationship driven, team driven, staying healthy guys, Got it. To do this side hustle with a core job with kids with a family and you’re doing this on the side takes incredible energy.

Okay. And so it’s not even about health as much as it’s about energy. But, to get energy, you have to have health. So give that, the energy it deserves so that you can grind for a few years. Like most people won’t so you can live the rest of your life. Like most people can’t.

Okay. That’s, but it requires massive energy. All right. The next thing I want to talk about is tenacity and not giving up. Okay. I’ve had lots of business failures again. I call them seminars but tenacity is just staying power. Are you going to get your nose bloodied? Are you going to get your butt kicked?

Are you going to hit walls? Of course, you are. That’s life. That’s how it works. But it’s not giving up. That makes all the difference in the world. I’m going to tell you tenacity beats talent almost all the time. There’s this book called Three Feet from the Gold about a minor that gave up on a mind, literally three feet from a gold vein that made someone else filthy rich.

A true story, actually and so just remember that it’s courage, it’s resolve, it’s strength of character, it’s strength of will. It’s you know it’s deciding, taking action and never giving up. It’s doing what needs to be done. Even if it’s the last thing you feel like doing, it’s grit.

It’s staying focused on the goal. It’s realizing that every setback and failure is nothing but a seminar. It’s nothing but feedback. Okay. And honestly, if you’re not getting that kind of feedback. Respectfully, you’re not trying. Okay. And if you are honest with yourself and look in the mirror, it’s believing in your mission, it’s living with passion and it’s frankly seeking out that feedback.

If you come to my boot camp, you’ll see on Monday after the boot camp, you’ll get a survey from me right away. And 99. 99% of the feedback is super positive. The only complaint I ever get is that the breaks are too short because I’m trying to pack in so much. And I do 15-minute breaks and I promise you they’re harder on me than you.

But. But that’s the only but I’m looking for critical feedback because how do you get better if you don’t get it right? You need to know what’s not working and continue to make these little improvements. So super important. All right. I’m in the last piece here. And what’s funny is I just literally did this today.

I just recorded this today because it’s Thanksgiving weekend and I did my own, your power clip on gratitude guys. Gratitude is the most important emotion for you to embody consistently. Okay. It makes us stronger when we face adversity. Gratitude does. It strengthens our immune system, makes our hearts stronger, lowers our blood pressure, and brings us closer to our spirituality.

You cannot be angry and grateful at the same time. You can’t be fearful or stressed. The achiever’s word for fear is stress. You can’t be stressed. And grateful at the same time. Okay. Gratitude is what attracts everything you want into your life. So you must use it. It is the most important emotion for you to embody.

I remember and I try to journal as much as I can, but I did a gratitude journal really about my wife. I bought this beautiful leather journal. It was about a hundred pages and every day I would write what I loved about her and what I thought. She was what was amazing about her. And there were days I did not want to write that because we were fighting or arguing or something.

But can you imagine how I showed up to the relationship just by focusing on what was amazing about her? And I gave it to her for her birthday, when I filled it up, but so there’s a great exercise for you guys on the call, an incredibly powerful way to blow your woman away. But again, yeah.

And I’ll, like I said, do gratitude in that chair most mornings. I’ll sometimes do it in bed when I’m manifesting what I want. Okay, I’ll leave you with a story and then I’m happy to take questions about and they can be real estate as well. Guys are happy to talk about real estate too.

But honestly, this is so much more important guys. I just trust me on that. Okay. You got to move. You got to take action and make shit happen. Technical things will happen. Okay. But it’s the action that’s the important piece. And that’s why mindset and psychology are so critical, but I want to tell you a story.

When I lived in Denver, I knew I wanted to live on the beach and there’s no beach in Denver, but I would visualize the palm trees and the sand and the surf and the waves. And 20 years later, I built this incredible 20 this 10, 000 square foot mansion on the beach on one side.

And I had my boat lifts on the backside. It was called a Gulf to Bay. It was a slice through an island. And I’m going to tell you that was unthinkable when I was 18, but I made it happen. And so when you do your goals, take the lid off your brain, there’s nothing you cannot do or have nothing. Okay. But anyway, so 20 years later I built that and About 2 months after I moved in now, just let me describe the house.

You just get a visual picture. Okay. 10, 000 square feet wine cellar elevator, giant waterfall from the 2nd-floor balcony into the pool. You had to walk through the waterfall to get into the pool and magazines are spectacular. I had these trees that I bought that were bent out over the pool.

Just spectacular. On the 2nd, it was a giant spiral staircase up through the middle and on the 2nd floor. In the house, I had aquariums custom-made by the same guys, the same company that did Disney’s there was an aquarium thing. Anyway, they were 200 grand, almost 200 grand for these aquariums.

This gives you an idea of the house. Anyway, I’ll stop there, but, and I had, I had the Maserati back then and the Mercedes and the toys and the boats and all the stuff. I had all the stuff. And two months after I moved in, I’m floating in the pool at night and I’m looking up at this testament to my ego, which is really what it was.

I built this house to prove to the world I was good enough. Okay. And my family’s inside sleeping pools changed colors that had fiber optic lighting. It was this, again, this house is spectacular. And I got depressed and I don’t mean just a little depressed. I got depressed.

I’m like, what the hell? I’ve just achieved success like times 10, 000. I had everything people dream about. How could I be depressed? And that’s what I want to share with you. Several things were going on. The first thing is you should never achieve a big goal without having other goals lined up behind it.

The good book says. Without a vision, people perish, you need a vision for the future. And I didn’t know what I was going to do next. So that’s number one. Number two is it’s never about the goals. No, they say the happiest days of a boat owner’s life are the day they buy the boat and the day they sell the boat.

And it’s the same way with your goals. You got to have them, you got to have them to create that burning desire, but it’s never about the goals. It’s about who you become on your path to your goals, right? Happiness comes from progress and growth. And that’s why if you do my goal-setting workshop, as I said, if you click on that QR code at the bottom of that goal-setting workshop, at the end of that, I do my weekly planning process, which is very powerful by the way.

It’s how I managed. Two large companies at the same time, but one of the pieces of that weekly planning is to acknowledge any progress. You may celebrate it because happiness comes from progress and growth, no matter how small it is. And that way, if you have setbacks, so you get locked up on something if you’re still progressing and growing, you’re happy.

Okay. So again, another reason for you to do the goal setting. If you come to my boot camp, I do that as well. I do the planning process. Super powerful. But anyway, okay. So that was going on. But the big thing that was happening was I was focused on Rod. Rod, show the world I’m good enough, show the world I matter.

And that’s the year I met Tony Robbins. And I read, I, so I, what I did is I went out and bought a bunch of books. I’m like, I’m going to get this back. I’m not, I believe in counseling by the way. And therapists back then I didn’t, I wasn’t going to go lay on a couch. That’s how I equated it.

I’m going to read the books and I’m going to get it back. Because of masculine macho, I’m going to get it back myself. One of the books was Tony Robbins. And, I got Zig Ziglar back then and Tom Hopkins and some other sales kind of guys that you may or may not recognize. But I read Tony’s book.

I’m like, man, this is good stuff. I think I only got about halfway through and I went and saw him live in Fort Lauderdale. My brother flew in and joined me and I saw that he fed families for the holidays. And I thought, what is the concept of doing something for someone else? I’m embarrassed to say I had to be 40 to get that memo, but we came back home and I called my brother in Denver and I was going back for Thanksgiving, which is timely right now.

And I said, Hey, let’s feed five families. And so he called his church and found five families that needed help. And we bought toys for the kids. If they had kids, we bought frozen turkeys, roasting pans. We assume they didn’t even have a roasting pan. We, but all, had a lot of fun buying the food.

The third family changed my life. We get up to this row house. It was like a crappy one-bedroom because you go through the living room. Through the bedroom to get to the kitchen, which has the bathroom off. It’s not even a good one. The bedroom was crappy. One bedroom. There was this woman there with five kids, a Hispanic woman, and she comes out and she sees all the stuff on the porch and she just starts crying and her kids come out and two of the older ones start crying and then Rod starts crying and I’m hooked.

And Tim said 000 kids that we have now fed over the last 22 years. We’ve done tens of thousands of backpacks filled with school supplies. We just did 1700 backpacks this last August for local kids that don’t have basic supplies for school. Don’t get me started on living in the greatest country on earth.

They don’t even have school supplies. But I’ve done tens of thousands of teddy bears to local police departments for officers to put in their vehicles. If they encounter a child that’s been traumatized now, I’m not saying this to brag. I’m inviting you to do something. Okay. See, we’ve been taught and I know there’s some of you on this call that you’ve got blood dripping from your teeth.

You want this freaking success. You want the Lamborghini, you want all that stuff so bad, all the stuff that I’ve gotten and had, and trust me. I’ll show you something in a second. But I’m going to tell you that. See, I was successful, but I was unfulfilled, and see, we’ve been taught to believe that we have to succeed to be happy.

Okay. Or achieve happiness. Rather, we have to achieve to be happy, but I’m going to tell you if you incorporate giving back right now. You’ll be happily achieving. And I know it’s a simplistic play on words but I’m going to tell you it’s real. And Tony Robbins calls it the science of achievement versus the art of fulfillment achievements, a science.

Okay. If you want to learn multifamily, come to my freaking boot camp. It’d be drinking through a fire hose. I’m going to tell you, bring your game. The manual is about that thick. It’s not the teasing it’s everything, but that’s a science. I’ll give you the blueprint, the roadmap. You just got to go do it. Okay.

That’s it. That’s a science, but fulfillment is an art. Okay. You’ve got to figure out what juices you have. For me, it’s kids. For some of you, maybe it’s animals, the environment, the elderly, whatever it is, give back right now. Don’t say I’ll do it. When I have money, no, yo, you’ve got money. You can do it.

No. Do it even if it’s just your time, because then you’ll be happily achieving, then you’ll be fulfilled. I’ve interviewed. I will tell you, I’ve interviewed some of the most successful people on the planet in this space. 100, 000 units, 20, 000 units, billionaires. I had a billionaire speak to my mastermind 2 weeks ago as his jet.

A lot of these guys and women as well. And I can tell. If they’re like, I was back then I can see it because I recognize it. After all, it was me there. Yeah, they may be successful in some cases. Now, many of them have evolved, but some of them haven’t and I feel sad for them. Guys, I’m going to tell you when you give back success comes faster.

The money comes faster. Now, you don’t do it for that reason, but that’s the way God works. Whatever you believe, that’s the universe. I don’t care if you believe in God or not, but that’s how it works. Trust me. So I’ll leave you with that. My friends. I’m happy to take questions and take this thing anywhere.

Tim Mai: Yeah. Before we go to the question part. So I. we can wrap this up for the file podcast part of the interview. I do have a question, a quick question for you. So what’s these days, what are you most and I know you love kids, what are you most passionate about these days?

Rod Khleif: Besides my wife I, full disclosure, transparency, my daughter had a massive health scare. She had leukemia in 95% of her bone marrow, and she spent eight months inpatient at Moffitt Cancer Center. She is now in remission, thank God. But I’m very passionate about that.

She comes over almost every day. But I will tell you I’m shifting my focus with my foundation. I’ve been, Feeding I want to teach people how to feed themselves. And so I’m thinking about schools. I’m thinking about building schools, possibly in Latin America, but I’m looking at self-sustaining schools where we buy enough land to have an agricultural infrastructure, or we do some sort of an infrastructure where we spend more money upfront, but the school can actually self sustain because that’s that’s 1 of my dreams.

So I needed it and it’s been a dream for a while. It’s on a vision board back there. I need to make it a reality. In fact, on that note, let me show you something. So this is my planner. Okay. I’m a dinosaur. I use a paper planner. Yes, I know. But on the back of this thing are pictures that have been here for 20 years.

Okay. I am 22 years old. Okay. The 1st pictures are my gratitude pictures. Remember I said it starts from gratitude. My daughter’s 31. My son’s 27, but these are when they were young. They’re all nasty and I need to clean them. But what’s crazy, I lost that house on the beach. I was telling you about it, but this picture looks just like it did before I built it.

Okay. 10-foot high glass like that. 80 feet around at travertine floors. Just like that. It’s crazy. And I lost that and all the craziness. Now, in the bottom picture, I live in a compound. Now, you see the white walls in those pictures see the 2 white wall stone walls. I live in a compound now. I’ve got six buildings.

See the white wall behind me? That’s, this is my backyard. I’ve got six buildings. And because God’s got a sense of humor, the old house that I lost is right across the bay in my backyard. I see it every day. But anyway, but then, other things again, I, this is my visualization watch. I, this is still a vice.

I have a few hundred thousand dollars worth of watches. I still love that. But the Lamborghini before I ever bought it, Rolls Royce, the Bentley, all this stuff that I got because I had pictures. So guys, once you do your goals, Get pictures, put them around you. I’ve got pictures on the wall here of the things that matter to me now.

Okay. Your goals will evolve. If again, you’re offended by what I just said or turned off, replace it with what you want. Okay. This is, I thought this stuff was important to me at one time. It’s not, but I thought it wasn’t one time. So replace it with what you want, because this is how it works guys.

This is how I had 50 million to lose and how I got it back. By the goal of setting the visualization and putting these things in my peripheral. So I always saw their screensaver on my phone. Before I met my wife, I listed exactly what I was looking for in a woman. With exhaustive detail, I was a little bit like an escaped convict after my divorce dating a lot.

And the minute I met her, I knew it was her. Literally, like that because I had visualized it. Okay. 

Tim Mai: That’s awesome. There you go. Yeah. So regarding the self-sustaining score, I need to connect you with Frank McKinney. 

Rod Khleif: I know Frank very well. He wrote the Forward for my book. I went and visited him over in West Palm. Yeah, that’s awesome. Yeah. 

Tim Mai: So we’re building a hero village in Haiti.

Rod Khleif: Yeah. He goes, he’s done several though. He’s done several of those villages. Yeah. Yeah. 

Tim Mai: He has done several. Yeah. And then so for the people listening in audio. Where’s the best place for them to connect with? 

Rod Khleif: If you want, Oh, I forgot you were doing this as a podcast. So it’s out there now. That’s fine. If you text the word rod to 7, 2 and you’ll get me to my boot camp because you can’t see the link tree here that we’re talking about.

If you text Roger 72345, you’ll get the link to my boot camp, and then just use that code CFC to get those bonuses. And it’s 97 bucks. Like I said, I don’t sell anything and again, I don’t care if you learn from me, but if you drag your heels right now, or you don’t push forward because of fear, I promise you, you’re going to regret it.

I promise you. Awesome. And by the way, if you want to get my link tree, which has got a bunch of free resources as well, just text links. To 7, 5 links to 7, 2, 3, 4, 5, and that’s got a bunch of free resources and my boot camp site. I should have just used that and my podcast and the goal-setting workshop. So text links.

And 2, 3, 4, 5, and you’ll have tons of free stuff, a bunch of free books there. So on and so forth. 

Tim Mai: Perfect. Awesome. Rod, thank you so much for doing this podcast with me today. Of course.

Trevor Thompson: I moved from Canada to America and I was going to buy a place and do an Airbnb and Airbnb was just starting and, I said, man, 300, 000 for this place. I don’t know if I can afford it. The same place is worth 900, 000.

Tim is one of the most authentic and genuine people I’ve ever met. Sincerely believe he’s coming from a position of giving and that means a lot. 

Tim Mai: Welcome to the capital raising show. I’m your host. Tim Mai. Today I have Trevor Thompson on the line with us. Trevor has a very interesting story and he is known in the community.

He’s the only one probably that’s known in the community as a professional passive investor. He has invested in 16 deals and an LP, as a passive investor, and three deals as a GP, as an active syndicator. Yeah. He’s also Done. A lot of different types of deals, everything from multifamily to retail strip malls to townhouse to condo conversion to ground-up multifamily to medical office building land development.

Yeah, just a host of. Variety of different asset classes, and different stages of the class from ground up to already existing. So really looking forward to interviewing Trevor today to get behind his mindset and his experience on what he likes, what type of assets he likes, why he goes into so many different ways.

Yeah, asset types. And so yeah, super, super looking forward to this. A professional LP, professional passive investor. Welcome Trevor. 

Trevor Thompson: It makes me sound like I’m extra smart if I’m a professional, but I’ve definitely done a lot and I’ve definitely done a lot of research. And of course, been in such a variety of deals.

Tim Mai: Yeah, that’s, I love that about you for sure. So let’s why don’t we start out with, if you can share with everybody a little bit about your journey on how you got started in real estate investing? What got you even interested in this?

Trevor Thompson: Yeah. So just a quick, brief story. I’m originally from Canada.

I’ve been in the attraction entertainment business most of my life. My last career was with iFly Indoor Skydiving. I did 20 years with that company. I loved it. And, at the very first team meeting, the owner gave everybody a copy of Rich Dad Poor Dad. And I read the book and went, wow, this is amazing.

I got to think more about this. And then I did exactly what everyone else does. I got busy with my life and I just kept working my job and not paying any attention to becoming, somewhat having a second passive income doing different things. And then we got bought out by a private equity company, so I actually got a payday and I thought, okay, no excuse now.

But I hadn’t really done any homework. So I started doing the, I call them the weekend warrior guys, right? They come to town and you join their seminar and you pay 50, 000 and we’ll teach you how to buy an office building with a credit card with no money down. Something about this doesn’t sound right.

And I went to a few different ones and then I did find one and what I liked about them is they were based in Texas. They invested in Texas. They had monthly meetings so I could go meet the people I could connect with. So I joined that group. And my first few investments with that group and, clearly I learned a lot of doing it that way, but, their training was a little basic.

They were really good at single families and decided to get into the commercial space. Mostly just because they were, they had a lot of people in their program that wanted to invest their 401k money and their IRA money. And so they thought if we create these syndications it will be good.

But since then I’ve done a lot more self-education, and I’ve joined other mentoring programs just to fulfill my knowledge base. But I’m one of these people that I’m obsessive about. So once I started learning, I just, I love learning. I love going to meetups and I love connecting with people and doing things.

So I just kept learning and learning more about the space. 

Tim Mai: That’s awesome. Wow. And when was this that you started? 

Trevor Thompson: So I started five years ago, so 2000 I guess that would be, what is it, 2018. 

Tim Mai: That’s awesome. Okay. And so you started out investing into these deals that were in the group, correct?

Trevor Thompson: Yeah, that’s correct. Yeah. I did my first two investments with the group very quickly. To be honest, I was not educated. 

Tim Mai: Were they big deals? Small deals? Like what size deals? 

Trevor Thompson: One was small at 58 doors and the other one was a bit bigger at 176 doors. But I invested in both of them pretty quickly. And I’ll be honest, I read the PPM, but I didn’t really know what I was reading.

I, I, I didn’t know what I know now, of course, because I’ve invested in a lot of deals and learned different things. There were definitely in hindsight some things I should have noticed about the deals. So one of them, everybody knows if you’re going to buy anything in Texas, insurance and taxes are going to go up significantly.

So the one deal both things went up significantly and it just ate all the cash flow. And they managed to sell and we got our money back. It was one basically we got in, we got out, it was pretty quick. They got an offer that got everybody out with just their money back and we all considered we dodged a bullet.

And then the other one was a little bit different in that they just didn’t have enough money in their CapEx budget, they underestimated how hard it was to reposition a property. And that one I even volunteered as an asset manager for 10 months. I had some extra time on my schedule the way my work schedule was.

So I said, Hey, listen, I’m not learning anything. This is supposed to be a mentoring program, could I help out? And so they said, yeah, you could help us with this. And, you’ll learn a lot and do that. It was an interesting story. I did a whole other podcast on it. It started out. I was going to help an asset manager.

And then I found out all kinds of things because I’m due. I’m going to go there and do my due diligence. So I did a rent roll audit. I did a bunch of things and I found out what he was telling the owner. When we’re not the correct facts. There were people that had skipped apartments for three months and they were still showing them as occupied.

And, they were telling them we were 92% occupied, but our economy was actually 82%. And so I called the GPM and said, Hey, do you want the truth? And he might, of course, want the truth. And so I told him the truth. So two days later, I wasn’t helping an asset manager, he was gone. And then about six weeks later, they decided to fire the property manager.

So here I found myself Part-time still with a full-time job, managing a deep-value apartment in San Antonio. And then of course COVID came and it just became super challenging. We managed to stabilize the property. We had some disagreements about what we were going to do once we put it up for sale.

Then the sale didn’t happen. And then the decisions they made I think affected the business. And they, so basically wanted to build the occupancy up so They said to me, okay, two times income, and the only people you can deny are violent offenders and sex offenders. And of course, they accepted all the wrong people into the apartment complex.

Undid all of what we did turning it around. It didn’t sell. And then they ended up having to deal with those tenants for another eight months. And finally sold, everybody got their money back, but nobody made money. The GP claims he lost money, but it was just a mess.

Tim Mai: Gotcha. Gotcha. 

Trevor Thompson: But the biggest learning experience of my life.

I spent 10 months there. Learning what to do, what not to do, how to think, how to understand, and when I had a question, I’d have to go find the answer because there was no support mechanism to teach me the answer. So I would call other people. I did a lot of training on asset management. paid for courses when the APT Capital was with Kyle and Gary, when they were together, they did a training course and I signed up for their course.

I read their book and I went to every meetup that an asset manager spoke at, and just learned what I should really be doing here. I’ve never done it. So I learned a lot. So the education side of that was priceless. And then one of the things was I got let go that year with COVID from work.

And so I’ve managed to switch my status to professional real estate status. And so I got paid a severance. But because I’d switched my status, at least I got my taxes back. So in theory, I made some money doing it. And that was when I decided, okay, I’m going to now switch to active which isn’t as easy as they say it is.

But in between there, I’ve done a lot of passive investments. So I know we’re going to talk more about those and why I chose different asset classes and things. 

Tim Mai: Exactly. So I guess the good news on your first two passive investing deals is that you didn’t lose any money on them, right? You get your money back. So at least that’s good news. 

Trevor Thompson: My third deal is a non fold cycle, which was the apartment to condo conversion. Even though it did really well with the real estate prices increasing. You bought an underperforming asset, you were going to turn them into condos and sell them, and then COVID and the eviction moratorium came.

So you had an underperforming asset, you couldn’t evict the tenants, and then the tenants felt empowered because they were only month to month knowing they were going to get kicked anyway because they’d all been given notice, so they stopped paying. And luckily, I got my money out of that. I was in what’s called a preferred position, with no upside.

I got caught up. They didn’t pay any money for 18 months during COVID. But I got caught up, got my money back, made my 11% preferred return payment. I was happy. And, and then finally, it was all done. And, everyone else made some money and got paid out. And that one I just did. I wanted to learn about that to see what it was like, but I don’t think I got a good learning experience because I hope we don’t have another COVID ever again.

And all business conditions are thrown out the roof, right? Because you couldn’t evict the tenants. Then when you could evict the tenants, you couldn’t get a building permit because the city was still slowly opening. Then you couldn’t get supplies because the supply chain ran out.

Then you couldn’t get workers. Nothing normal happened. But I was good friends with the guy that was managing the project. And so I got a lot of inside scoops about how much more challenging and what normally should happen.

Tim Mai: Yeah. It’s COVID definitely. It’s an interesting time for sure.

So the deal, that deal made money itself and all of the investors also made money, correct? That’s correct. Yes. Okay. And I know that was just your third deal you’re sharing, but have you done more deals where you only got a prep and no upside? 

Trevor Thompson: Yeah, so I’ve only done one more like that. And it was in the medical center.

And the medical center was just a straight 10% return. No upside, just a prep payment. And so first of all, I thought, okay, medicine is very stable. I knew the people that were doing it and I thought it was a really good place to put my self directed IRA money, right? I’m okay in my hour IRA money to take what I’m going to call the safe path, right?

And so just the PREF equity and I had no idea in medical centers, but Not only does the doctor’s practice guarantee the least, they have to personally guarantee the least too. So it’s like a double guarantee. So if this fails, you can still go, in theory, take his assets. Very secure investment.

And again, COVID made me much more interested in the medical space and this is one of those offsites, with a little emergency room, a dentist, and some other things. And those things have thrived since Covid because. The big hospitals, they just couldn’t maintain the number of volumes of people.

So a lot of people went to satellite operations. So I think it’s going to be a great asset class and I plan to do more in it. Okay, good. And the interesting story is retail. I decided I wanted to do a little retail and have really good timing. We closed on March 20th, 2020. So not a good time to close out a retail store, but I’ll be honest, they’ve managed to pay 5% cash on cash, which is nothing to write home about, but considering we weathered the pandemic and I have a call later today for this quarter’s update to see what’s happening.

All things considered, I consider myself very lucky and I’m still quite interested in retail. And I don’t think it’s dead. I think shopping malls are dead, but I don’t think strip centers are dead right, people are still going to restaurants in their neighborhood, and tiff treats going to the karate place are going too, I think those ones are still going to do quite well, where the big box stores and shopping centers are.

They’re going to still struggle, I think, for quite a while, you can’t change everybody’s shopping habits to online and then change it back to going to a mall right when you got just used to pushing that Amazon button, right?

Tim Mai: Yep. Yeah, so that’s definitely good to hear about that. And So moving forward, in terms of the deals that you’re only getting a prep, you’re open to that.

Is that correct? So if the deal makes sense, you’d still be willing to passively invest just for the prep without the upside potential. Is that correct? 

Trevor Thompson: Not my preference. I’ve just done it under certain circumstances. My preferred investment is… Where, it’s a reasonable split, between the GP and the LP.

I don’t like deals where the first split is 60, 40. I think that’s too much. I’m okay. 70, 30 love 80, 20, obviously. I’m on one deal that’s 85, 15. I like that one even better. Much more LP-centric, but it’s in that range. And I also like to passively invest in deals that have a preferred pain.

And for the people that don’t know what that means, it basically means that the investors get paid first before there’s, and then if there’s enough cash flow to pay them the full 7%, then the general partners, the people running the deal, they also can get paid. So I think that really aligns with the interest, right?

Work really hard, and make sure I’m getting my minimum payment so that you can get paid. I like those kinds of deals and I also don’t mind when they hit a threshold. So they call that a waterfall. Like when we get too complicated and technical, I’m okay if they hit a certain waterfall that the split changes, right?

That, let’s keep them motivated to create, at least let’s say 16 IRR, which is what I look for and above. What’s most interesting to me is the internal rate of return that kind of balances out everything at the end of the day. It’s the normalizer of all investments.

Tim Mai: Okay. And so I’m curious about an operator syndicator offering an 80-20 split or an 85-15 split. That seems pretty. Aggressive in the sense that they’re not getting much for themselves. And so does that scare you at all in terms of like, why are they offering so much to the LPs to the passive investors? And, are they a newbie?

Trevor Thompson: Like there was a deal that was offering a 12 craft and I thought, man, the GP team’s never going to get paid. Cuz it was a deep value add, it was a reposition, they’re gonna lose interest. So I completely just lost interest at the very beginning of the deal.

But, to get a deal that kind of normalizes after the five years at about a seven to 10% cash on cash return and you’re getting a seven pre, I look for a deal that can normalize, right? I want it to be about 18 months. Then, the GPS will start making money.

I want them to be able to see the light at the end of the tunnel. I certainly don’t want to, I don’t want them to lose interest in the deal. Exactly. And that goes back again to trying to pick the right team, the right people to invest with, which is a whole other topic.

But, it’s very important for me to have the interest in line though, if I get paid first. I want once I get paid my reasonable 7% is reasonable, it’s not like a high is not like 10 or 12 like the other one, and then they can start making money. And then, once we get stabilized and we get closer, they’re starting to make money.

And then if they. Achieved. Again, I’m okay if they double their money. If it goes, I was on one deal and it was 80 20 and it went to 60 40, so the GPS would double their money if they hit a hurdle. And to be honest, I want them to hit the hurdle and double their money because of Gotcha.

That means I’ve met what they’ve said should be a normal return for the deal. I’ve exceeded what would be my normal return. 

Tim Mai: That’s good. Yeah, I like that. I like that. So let’s let’s. Let’s first dive into the numbers, you mentioned, you’d like at least a 16% IRR. For those of you that don’t know, can you quickly explain what that means?

Trevor Thompson: Yeah, so it’s a very complicated explanation of IRR. But I call it the present value of your money. In other words, how long has your money been out there? Have you made or lost your money? And at the end of this particular period of time, it assigns it a percentage, right? You can have these things called average rate of return.

You have cash on cash. All of those numbers are important and need to be looked at depending on where you are in your life and what you need out of your investments. When I was working, I could care less about cash. On cash. It was a nuisance to get the cash almost just, gimme some big money at the end and Right.

And I always do still like the multiplier of my money, but at the end of the day, that’s a false number. Because if you double my money in 10 years, That’s a very low internal rate of return. If you double my money in five years, that’s a much higher internal rate of return. So at the end of the day, to me, it’s the balancing number that kind of says, okay, how long have you had my money?

And over that period of time, how much have you paid me, including what payments I’ve made and what I made on the profit of the sale. It kind of averages out all of everything. It’s like an equalizer of all the… The different numbers and that’s why I look at it the most to me it’s the most important number to look at.

Tim Mai: Okay. Yes okay so I am the most important for you is the cash like I guess at this time in your life is cash on cash. 

Trevor Thompson: Also like a job before it wasn’t important. And that’s why I like to be in the seven-prep position. So if there is cash flow, at least I get my, my, my payment first.

So I will make some money. I’ll be honest. I’m in a lot of value add deals and just one of them finally hit a 7% payment. So listeners need to understand that a lot of value add deals and most syndicators are fairly honest in it, right? You know I’m presenting the deal soon and you know You’re really not going to catch up till about 18 months because it takes about that long to stabilize the value add property and then it starts to normalize And, but the thing I like about it is that if there is cash flow, I get my percentage of it first.

Tim Mai: Okay. And would you say that if someone’s goal is to make monthly cash flow, then they should invest in a more stable property? That’s correct. So again, 

Trevor Thompson: It’s a risk and a reward, right? So if you want a stable cash flow, normally there’s less risk, so there’s less reward, right? So again, my medical one, it’s a 10% prep.

I get the same amount of my money every quarter in my bank account all the time. Unless cash flow doesn’t permit. So far, cash flow is permitted, right? Again, if there’s not enough cash flow to pay the 10, it accumulates and I get caught up. But on that particular one, there’s been enough cash flow that it pays it all the time, right?

So again, if you put 100, 000 in the deal, you’re going to get just less than 1, 000 a month, which is, just less than 3, 000 a quarter. And hey, this money is pretty consistently coming to me. And that’s very important to need this money to live, right? A lot of investors though, do have jobs, so they don’t need the money to live.

And they should actually not be taking the money to live. They should actually be reinvesting, right? Because that’s how they’re going to really grow their wealth, right? The compound effect is like a massive on real estate investing when you keep letting it reinvest, right? But people do need cash flow to live. It’s sometimes so right. 

Tim Mai: You still gotta eat. Eating comes first.

Trevor Thompson: Yes. 

Tim Mai: Paying the bills. Yes. Okay, so you prefer at least 16% IRR and at least 7% prep plus whether it’s 70% or 80% on the back end. Okay. And then yeah and then cash on cash is there a percentage that your goal is. 

Trevor Thompson: I’m okay at seven, right? If it’s a deal with an upside, it’s a deal without an upside, then I think 10 is a fair number. Okay. So 10% is a fair number. If there’s no upside there are a few deals that offered 12, but they scare me, and they scare me because the general partners have almost no hope of making any cash flow rate just because the nature of these deals does not spin off a lot of cash, the nature of all these types of real estate investments is to improve the basic business.

Take the multiplier of selling it on the cap rate and there’s where the big return is, right? So a lot of these deals, the return is still made on the sale or on the refinance. In other words, you’ve refinanced it, you’ve taken some money out, so for example, my storage investment, they have a recourse loan, but once they get up business, they get it stabilized, they’re going to get a new loan and give us a percentage of what we invested back.

But we’ll still own, we don’t get deluded when we get our money. It’s something that’s very important for investors to understand. They give you back half of your money. Do you only own half of what you used to own? And that particular one, when they double my money goes to a 50-50 split.

And I’m like, double my money, baby, double my money, because I’m okay with double my money, right? Faster, the better. And for them, the faster the better, because now they’re, they get significantly rewarded. Yeah, I like that. Investors should never be afraid of a win, right? You want everybody to make money.

Tim Mai: So when you have an operator that offers you 12% and you’re like, Ooh, I don’t like the deal. You’re not gonna make any money. Do you let them know that? 

Trevor Thompson: Yes. If they, if I know them and they ask me, or if you send me a deal, I get some emails, 22% IRR. To be honest, I just hit the delete button.

My mom has said if it’s too good to be true, it probably is, and she’s been pretty good at giving me life advice. And I just, I don’t like, I like what I’m going to call realistic presentations, like the, don’t be really low. Don’t be really high. You make me nervous, right? Okay. Now, where do I get a dig to find out is how 22 IRR honesty? 

Tim Mai: Okay. So let’s look at that. So what is the high? On the low end, you want 16. What’s the high end that you’d be like, that’s comfortable? 

Trevor Thompson: So I’m okay if it just, and I was, I want them to say, Hey, we’re projecting, we’re going to get 16 IRR, but if we give you better than 16, we’re going to take a bigger split and let’s hope it’s 18, 19, 20.

I’m on a deal now. I don’t even know what the IRR will be, but it’d be insane. They’re tripling my money in three years. Okay, now that’s happening just because the world’s gone crazy, right? That’s not normal. People shouldn’t. I’m not going to inspect this for my next 15 investments, but I’ll take it.

And it happened just because it’s in an insane hot market in Tucson, Arizona. They bought it at a great price. They managed to stabilize it. They managed to get a buyer before the world went a little crazy. They have had one retrade. We’re actually supposed to be three and a half and it’s gone down to three because they’ve had to retrade because of valuations and staff have adjusted a 30 or 40 IR. But It wasn’t what was promised, two years to pay your money. 

Tim Mai: So like in terms of the emails that you’re seeing when they’re sending out in their marketing, at what number do you delete? Is it 20%? 

Trevor Thompson: First of all, I only pay attention to people I know, and trust. Okay, so once I get to know somebody, I look at their emails.

To be honest, I scan down to the bottom, always put your picture. If you’re going to send me a thing to invest, I look, do I know this person? And if I don’t, I hit delete immediately. I don’t know you. I got on your list somehow. But I don’t know you. And then if I know you and I’m interested in looking at deals, which I’m not right now, so I’m hitting delete way more.

And sometimes I attend webinars just for my own personal education, just to learn how they are presenting. Doing it. And plus I like to follow certain people which is something we’ll talk about in a little bit, but yeah, actually talk about it right now. I follow people before I invest in them.

I will go to your webinars. I listened to your podcast. I want to know, are you telling me? Are you only telling me the good stuff in your life like the, like you, you never have, you’ve never had a deal where you’re struggling and I don’t want to, I don’t want to invest with somebody that can’t be truthful to me.

I had a deal and it was a bear but this is how we got out. Investors got paid first. All of these things. I do like that honesty and it makes me much more willing to invest in that person. So there are a few. And then I also right now invest in the opportunity. So I want to get to know people.

So when there’s people that I’ve connected with and I want to get to know them, sometimes it’s really interesting. We have, so I invested in someone’s deal. Who’s a very well-known person in Texas. I also comment a lot on his Facebook posts and he always says, thank you, partner.

Didn’t, no idea the power that this person puts over me to say thank you, partner, right? I always joke that I own a doorknob in a new building. I probably own more than a doorknob, in perspective, right? This is the right, this 40, 50 million deal, and I’ve got $50,000 in it, right?

So maybe I own the kitchen or the bathroom more than the doorknob, but in reality, I don’t own a lot of the deal, but. But the relationship allows him to be able to say thank you, partner, and when I see him at events, he always updates me on the deal and that’s important.

And, that was my first new build, right? So it’s a new building in the Houston area, they’ll start leasing by the end of this year. And I think we’re going to do very well because they managed to buy most of the materials before the world went crazy. They got the land before the world went, and there were a lot of things.

Tim Mai: That’s good. Okay, so let’s assume that, they are someone that you already know maybe they’re not like, like a top operator where it doesn’t matter what kind of IR they promise, or they advertise you, you’ll be in because You just know who they are, but let’s say you know them enough to be willing to invest with them and they advertise, I, I’m trying to get to a number, so is it 20% or that you’re like, you know what, I, no, I have for 16.

Trevor Thompson: You can make an Excel spreadsheet that says we’re going to make anything. I don’t want to work hard to disprove you. I want you to give me like, we’ve got this deal. We’ve been, everybody says they’ve been conservative, whether they’re not, I love it when we’ve been conservative. Rents are going to go from 16, 600 to 1200. I don’t think that’s conservative, my friend, look at the income in the area and it’s 36, 000 and we’re going to go to 1, 200 rents. You’re nuts, right? So I look for things that make sense and reason, right?

So here’s the rent, here’s the comps. We’re going to come in a little less than the comps and be about here. And it’s going to, and some people say, Oh, we’re going to achieve this in six months. You can’t. You can’t turn that, the leases get away from them, so I want somebody who’s laid out a realistic plan, right?

Here’s our 18 months, and 18 months is a very realistic thing for a value add property, which most of my investments are, to get it up to where you can stabilize it, right? Because it takes time to fix the exteriors, take care of the deferred maintenance. Turn the tenant base, improve the tenant base, increase the rents, because you can increase the rents if you, I mean during the crazy couple of years people were increasing rents without doing anything, but this isn’t normal, right?

We need to consider the world going back to normal and want to make sure they have a good plan. 

Tim Mai: Okay, that’s great. So what else in terms of numbers-wise, because we are going to dive deeper into the operators, the people, and themselves.

Trevor Thompson: So numbers I look for realistic capex budgets.

So this is a deep value add and we have 4, 200 doors. You’re not going to do it. Yeah. Or do you have 8, 000 a door? Or do you have 12, 000 a door? Again, I like to look at the quality of property. Are they over-renovating, under renovating? Do they have realistic numbers, right?

I went to one webinar and they were like, they had 50, 000 in their exterior CapEx budget. And I’m like, you can’t fix anything for 50, 000 on a 100-unit building. You got no money. And so what happens when you have no money? You take it out of cash flow. Who does the cash flow belong to? Me as an investor, right?

So raise enough money to do the deal right. Have realistic numbers. So CapEx numbers. I went to a webinar and they said we were going to add preferred parking. This was a series of four-plexes with four parking spaces in front. How are you going to make I’m, how are you, it’s like there are only four spaces in front of a four-plex.

How are you going to charge somebody to park in the only four spaces next to their unit? So if you were going to say we were going to put covered parking, okay, that’s a whole different story. But, they literally said we’re going to have preferred parking. And I Googled the property and I’m like, this is fourplexes with four parking spaces.

So verifying things like that are correct. Verifying that rent bumps are correct, right? So just doing some simple math, right? What is the, you can find the income of the neighborhood very easily on a Google search. And, you don’t want it to be anywhere near, you want it to be, you want people to make three times that kind of deal.

You want to make sure you’ve got that metric in there, right? Hey, rents are 750 and we’re going to 1000, but the neighborhood could only afford 800. Nobody’s moving from the nicer neighborhood to the worse neighborhood to pay more rent at your place no matter what you do. So you’ve got, so I look for those things to be realistic, right?

And rent bumps to be realistic. And then, I love that, we’re in an inflation of 9% and their expenses are going up 2% per year. How in the world are you living in a 9% world? You’re putting your rent up 12%, but you’re only putting your expenses up 2%.

Tim Mai: Gotcha. 

Trevor Thompson: Yeah. A lot of deals like that because that’s what they got used to putting in there.

Then they got, oh, we got these big rents before we had inflation, right? Now we have inflation. And so maybe you could put five and say we’re really going to watch the money and be very careful and we think we can do a better job. Okay, I might buy that. But 2% just isn’t enough. So I look at is their whole plan realistic, right?

I’m not like an underwriter guru. I’m a gut-feel guy, are your explanations reasonable? And that was what I didn’t know when I first bought my first deal that made no money, right? They were a deep value ad. They told us it was a C-plus property. It was a D-plus property. And they had 4, 200 a door and CapEx, and they needed like 8, 200 a door in Texas.

And if I’d have known that now, I never would have invested. 

Tim Mai: Gotcha. Okay. And so now let’s talk about the people, how, you had mentioned some of it where you follow them you get on the podcast you want to see people who are authentic who actually shares this struggle and not all, all good.

So some of those things, what else do you look for, especially when you’ve never invested with them before? What else do you look for? 

Trevor Thompson: I look for people that know them and ask them, find the track, like they’ll tell you the people that are going to say nice things about them. So I try to find the people that aren’t going to say nice things about them, or at least going to say the truth about them.

You can usually dig around and find out. When people make comments like, Hey, did you invest in this deal? Would you mind taking some time just to talk with me? I’m thinking of investing with that person. So I’ve done a lot of that, right? So because people post, Hey, we just bought a property.

We just sold the property. We did amazing. I’d like to talk to the investors and just get it and get a little general idea. And then I asked other sponsors about them, especially when I see they were partners and now they’re not. It’s always fun. You can get them to actually talk to you because the reason they’re not partners now is there was some sort of non alignment of values Or, why didn’t you connect with that person?

And you, I’d love to see them do ten deals together, right? That makes me feel good. And, when partners struggle, a deal often struggles. 

Tim Mai: Gotcha. Okay, so if let’s say, somebody you talk to, they’ve lost money on a deal with that operator. However, let’s say it was five years ago, and that operator seems to be doing pretty well now, would you consider investing in that operator, current deals?

Trevor Thompson: So I would if the person I was talking to said, man, they communicated with us. They really tried, but we had some really serious issues. And they were honest with us through the whole thing and, instead of doing a cash call, they put their own money up and things like that, so I’ve heard stories of operators, one operator just that they were also in charge of the capex for the company they own. And they just kept spending money through the pandemic and then did a cash call. So I’d never invest with somebody that did something like that they made about 300, 000 and Construction management fees.

I see. And then you did a cash call now I’d be better to say, listen, man, I screwed up. I probably shouldn’t have kept investing. I’m not taking my payment till we close on the deal. So we don’t have to do a cash flow. That to me is acceptable, right? Okay. I’m misjudged. I thought COVID was going to last for three.

Who did, who thought COVID was going to last till now? I know. I got six people out with COVID right now that I’m talking to. And it’s so whoever would have thought right now, I misjudged this, right? And, so I’m going to personally take care of it. Then that’s a good story, even though maybe what they did wasn’t all that smart.

They understood it and they took the heat and made the correction. 

Tim Mai: That’s awesome. And can you, for those that don’t know, what is a cash call? 

Trevor Thompson: Cash call is when they say to the investors, we ran out of money and you need to put more money in. And if you don’t put more money in your share of ownership will be diluted.

And it’ll be all listed in the PPM what the rules are of a cash call, right? So it’s often listed, because again, if a project runs out of money, they go back to the investors and say, we ran out of money, we need more money. And you are obligated to pay that money. And if you can’t pay that money, your shares will be diluted.

Tim Mai: Gotcha. Okay. What else do you look for in an operator? Yeah, especially a new one that you’re considering investing in, 

Trevor Thompson: So again, Do they think the same things I think are the things that I think are important to them? Are we connected to the same groups of people?

I want to invest in people that I think my values are aligned with. I want to invest with people that I think they’re trying to work really well with their property management company, and they’re trying to be good business people. Versus always screaming and hollering at the property manager, putting unrealistic expectations, I’m involved with somebody that’s gone through five property managers in three years.

Wow. There’s a problem. There can’t be five bad property managers, right? That’s a bad owner. And it’s just what it is, right? And people that are difficult to deal with. In people, how they answer you, things to me are, I invested in the deal and I asked him what I thought was a very simple question.

How are we doing in year one compared to year one’s performance? And the answer was, you can look it up in the PPM. That’s not a good answer. You should be saying, here’s what we projected. Here’s where we are. Here’s the difference. Here’s why. That’s what a good operator tells you, even if it’s bad news. Here’s the why, and here’s where we misunderstood, and, I want, again, honesty.

Tim Mai: I see, that’s good. And do you prefer an operator who is vertically integrated, and so now they have in-house property management, in house construction? Do you prefer that at all, or depend? 

Trevor Thompson: Not necessarily, no. I think managing yourself. There, there are, there, there can be great things and there can be great inefficiencies, right?

And if things get, if every layer is you, then you’re only as good as you. Even if you hire great people, the people you hire are only as great as the person you hired them, right? Pushed them to the next level. So I like the mix of someone else coming in and some fresh ideas especially property management companies that manage thousands of doors.

They’ve got a wide range of experience and they may have a solution that they thought of, and again, if they’re a good property management company and they’re listening to their managers, some manager way over here could have come up with a solution. That’s perfect for the property that I never would have known because I don’t know this manager.

So I think there’s, I think, definitely, there are advantages in it. And I like that variety. It’s almost like a check and balance. 

Tim Mai: Okay. And then circling back again with the numbers, but, looking at the interest rate and projecting out three, five years from now what are some of the things you’re looking for to say, okay, this operator is conservative he’s considering, whether the interest rate is going to be in, three to five years or whenever they were planning to exit that.

Trevor Thompson: Right now, I feel very lost, right? How higher, right now we’re in this weird spot, right? Where you’re going to get a 5% loan and a cap rate of 6%. So I’ll be honest right now. My crystal ball is very fine. I’m still optimistic about the U. S. condition. Certainly very optimistic about Texas.

Other parts of America may really suffer. Texas in general, where I’m investing in doing things is on fire. And so even if there is some sort of downturn or adjustment will be sheltered from a lot of the impact of that just purely because of what’s happening, right? Texas is just, there’s just such a supply and demand imbalance that if a lot of bad things can happen, it will still be okay.

But I’m, I’m definitely nervous. Obviously, you want to see them, project the cap rate to be higher. You obviously want to see it. We’re at this percent loan and anybody who says three years from now, we’re going to be less than this percent. That worries me a lot, right?

Because we just don’t know, right? I hope we’re not going to be at seven, 8% loans. But we don’t know. So my crystal ball is really foggy. So I’m actually happy. I’m not looking at it. at deals right now as much because it’s just right.

Tim Mai: Yeah. So now let’s switch gears a little bit and talk about the, you know you’re transitioning into doing more active side, right?

You’re now a GP. And so what’s to share with us your experience? What made you decide to get onto the GP side and what are some of your experiences so far? Yeah, so 

Trevor Thompson: I decided to get on the GP side purely because I was always planning to and then losing my job accelerated it. And so I definitely was, it was something I planned to do.

It just got accelerated so it wasn’t quite ready for it. And I also came at it at a time when Texas was just so on fire. I couldn’t win a deal. So to be honest, that’s how I ended up in so many ways. I would sell some of my stocks. So I had hard money for a deal. And then I would be getting close to getting the deal and I’d be sitting on this cash.

And all of a sudden a good investment from a friend of mine would come in my inbox and I’ll be like, I’ll move that money over and I’ll get some more money when I get a deal. So that’s how I got in balance. And then, right now raising money is a little tough because people are nervous.

People are unsure, so their crystal balls are foggy just like mine is. So that’s making them less willing to just say, it’s taking a lot more handholding and, and I wouldn’t consider myself a professional razor yet by any scope of imagination. I’ve got a long way to go to get there.

I know I’ll get there because I’ve been super active and connecting with people. I just gotta, I gotta get that next link closed. But it’s definitely interesting. And the first two deals I got on, I joined somebody else’s deal. So it was really, they did all the work and I came in the end and I’m going to take a small asset management position because I’m closer to the asset, which is great because I’ll get to, I’ll get to learn, they own some assets already, so they’ve already got a business plan in place.

And so I’ll get to learn a lot in theory, assisting people that have done it more than I have. And then my most current one, I am an active part of it, so it was the first time I was doing due diligence for myself. I’ve done it for other people just to educate myself, but you pay a lot more attention when you’re going to end up being the owner than when you’re when somebody else is going to end up being the owner.

And then the paperwork, goodness gracious. Man alive and I hate paperwork. Man, there’s a lot of paperwork and, so a lot of people say, Oh, these GP, they got an easy man. It’s hard work.

Tim Mai: That’s great. Okay, so yeah gP is definitely not for everybody, right? 

Trevor Thompson: Yeah, and you got to love what you’re doing, right? And you have to be prepared to work. That’s one thing that does worry me a lot about these mentor programs, right? They teach you how easy it is. You do it, you hire a property manager, and you sit on the beach drinking drinks and retire.

It’s not that. It’s, it is, and that’s another thing, I’ll be honest, that I’ve learned. I will not now invest in a deal that doesn’t have an asset manager that’s fairly close. And it’s their full-time job. Because I want somebody when there’s something going on in the property that can give it 100% of their focus, right?

Not try to answer the phone and do the work on their lunch break, or ask for an afternoon off from work to go do something and meet a contractor. I want to invest in people that have somebody full-time in the market, right? dedicated to taking care of my investment. That was something I missed earlier and it was something I missed earlier in some of my investments.

I didn’t push forward hard, but sometimes I’m very aware that it is super important that this is somebody’s full-time job. It’s not, they’re not trying to do it and still do a 40-hour work week and do it on lunch break and weekends, lunch break and weekends. Gotcha. On the active side, right? On the asset management side, fundraisers or other, but the people that are actually managing the asset.

Tim Mai: I understand. And so as a GP, what type of properties are you looking for? Are you sourcing right now?

Trevor Thompson: Yeah. So I’ve decided, so I’ve been doing 48 doors and above and under a hundred. So 48 to stay out of a little guy’s way. And under a hundred just ahead of the big guy’s way. And it’s, I’m getting a little more activity in that niche, right?

And because I want to stay away from the guys that are looking for their first, 12 or 20 or 24 plus, and I’m trying to move on, but it’s, so I’ve tried to stay in that little niche and it’s been, I’ve been getting a lot closer on deals. And I think it’s, and it’s an okay niche cause it’s I’d still rather be a hundred and above but it’s, you just got to get a deal. You can still make it work. 

Tim Mai: Okay. So with all of your experience as an LP, it’s interesting to me that you are, you’re having challenges raising money. I figured by now you would know all of this. Objection handlers and like all the different ways you would be able to explain to a passive investor, why your deal makes sense.

And, especially you as a professional passive investor, if it makes sense for you, it should also make sense for the investors that you’re raising money from. So share with us. 

Trevor Thompson: I too am surprised. Now part of it was, I didn’t do it, I was building a network with people that are doing what I was doing.

And that was a big mistake. And when I left iFly, most of the people were living paycheck to paycheck. There were no executives. So anybody looking to make this switch or looking to move on, leverage your corporate connections before you leave. Leverage, build up your database with people that you know from work and you know from your other social things, so I went from this little strange isolated world, and then I networked and when I look at my database.

Everybody else on my database is also raising money fields, right? They’re not. And so I made the mistake of not correcting, not focusing on people that were passive investors and chasing them. I chased other people hoping to do a deal with them. So it was a huge mistake on my part. And I’m working really hard to correct that now.

And that’s why I’m on so many passive investor panels and trying to speak more about passive investing with people. And I know I’ll get it foundation, I just gotta make the connections a little better. That makes a lot of sense for sure. And better systems.

Just to give you an idea of how bad it was, the first time I raised money, I didn’t have an active campaign or anything. And I’m not very techie, so I cut and pasted 400 individual emails and sent them. I literally had a Word doc and I cut the copy over, I cut the subject line over, I copied the person’s address, and I wrote Dear Tim.

It was ridiculously inefficient, right? Because I just, I hadn’t set up a system. And now I’m building this system and now I’ve started to build a funnel to reach out to people in different realms, more in the passive investor realm, and then have them come and then get on my database. So that was a hard lesson to learn because I really thought, Oh, I know everybody.

I, this should be no problem. And I underestimated what I needed. The amount of work that it took to get there. 

Tim Mai: Right. Yeah. Can you share on average, how much you invested per deal?

Trevor Thompson: For several of the deals I actually went in for half of the minimum.

It was because I wanted to invest in the deal, but I didn’t have enough cash. Some of the deals I’m only in for 25, 000 instead of 50, 000, for example. Even though it sounds impressive, I’m not that wealthy. And they were, the reason I was able to easily say yes to me was because I am an accredited investor.

For those that don’t know, on a 506B, you’re only limited to 35 sophisticated. I didn’t mess up their numbers. And they all said to me, and again, I’ve had it where I’ve been raising money, and when unaccredited investors have done that, I’ve had to tell them, Hey, listen, if we hit the 35 number, we’re going to have to kick you out.

If somebody’s going to be able to invest the minimum. So I’ve been fortunate to do that on a couple of deals. And some of it was just, Hey, I only got 28, 000 in my IRA account. It’d take me a while to get to a 50, are you willing to take 25? And so that’s what happened a couple of times saying, Hey, I want to be in the deal, but this is all I have.

Gotcha. Then there are a couple of deals, I’ve got a hundred thousand in a couple of 75, the average is 50 though. Most of the deals are for me and I’m at the minimum of 50. 

Tim Mai: Gotcha. Okay. And then on the GP side, do you have a goal of how much money or how much asset on the management that you’re looking to acquire?

Trevor Thompson: Yes. So 5, 000 in five years. Okay. And, that’s my dream number, 5,000 in five years. And DOORS are a little bit foolish, because you can have a lot of Class C DOORS, and it’s not much money, and you can have a lot of Class A DOORS, and 5,000 on Class A is a lot of money.

So I don’t look at it, oh, I’m going to have 500 million or whatever. I just did it DOORS. 

Tim Mai: Gotcha. Okay. That’s great. And so for the listeners who are considering getting into passive investing, but haven’t yet done one and there’s still a little fight for a little, yeah, a little fearful what would have, what advice do you have for them?

Trevor Thompson: So if you’ve decided. That you want to do it. You need to just do it right. You’re going to be frozen with analysis paralysis. And I was a bit at the beginning and then I just did it. And, again, don’t go off on education or do whatever. But you’re going to just have to get out of this fear.

People somehow think when their money’s in the stock market, they have some sort of level of control over it. They don’t. When it’s in their 401k, they don’t have any control. At least with this, you have the control to invest with who you want to give it to, so it’s a person. It’s an asset.

So you can, I can research Tim and learn all there is to know about Tim. I can research his property, his market, and his city. If I live in Texas and you’re going to do a deal in Houston, I can drive there and look at it. I can look at your house. Can I go look at Apple or Amazon? The people don’t get that they’re actually, even though they’re not in control, they’ve got a lot more control because they decide who.

And then also external circumstances don’t normally affect it, right? All of a sudden, the stock market crashes by 10%. Those things are not necessarily happening in the real estate market, right? Real estate is appreciated over time. It’s steady. It’s a guess we’ve had some crashes where people have done Crazy things like the mortgage meltdown and stuff, but you put more actions in that so that people quite don’t get the satisfaction Of what they’re getting right.

Tim Mai: Okay, and Would you recommend that they? Focus on one asset class and get started.

Trevor Thompson: Definitely think you just need to pick one. I’ve picked multifamily too, just to be an example. So I’ve picked a multifamily. And the reason I picked multifamily is I know it, I understand it.

And people always need a place to live. People don’t always need a retail center. People don’t always need a hotel. People don’t always need a storage unit. And I picked that asset class too, because. It’s just such a high demand right now, right? There’s yeah, if you can’t find a mini storage in your neighborhood, you buy a shed and put your junk in your own shed, but if you gotta find a place to live and you’d like to find a place to live near where you work. And so it’s, it’s a very high demand thing. And it also comes with some of the best tax benefits. It comes with some of the best financing benefits. There are a lot of things that make multifamily, I’m going to call it the sweetheart of commercial investing.

There are just so many things about it that make it the best way. Now, I have done other asset classes and we didn’t talk too much about it. And the reason I did it was just for a little bit of diversification, right? So I’m very Texas-centric. I wanted to get at least a storage investment.

I wanted to get something in the Carolinas. It’s near Charlotte where my brother lives. So it’s now a business trip to visit my brother. There are lots of factors why so I wanted to get into storage. I want to, so all the stars align and so I decided to do it and How much I’ll learn about it.

And am I excited about storing people’s junk? No. Am I excited about making apartments better? And, my reason is to have people say come over to my home, not my apartment. If I could create a community where people said to come to my home, oh I’d dive and go to heaven, right? That’s awesome.

I want people to feel like their apartment is their home. I want the people to work there to feel empowered and that they can create that environment. And then when you do those two things, investors make money and they can go do their wise. I can’t say I want to have the best place for your job.

That’s my reason, right? It’s just not fulfilling why. But I understand that it makes money. I understand it’s a great business. I understand it’s very profitable, but it just doesn’t excite me that I’m making the world a better place, by buying an apartment and improving it. I did due diligence this week, and there are some people in there saying their air conditioner hasn’t been fixed in a few months.

And I hope to go there and fix their air conditioners and, give them a better place to live and care about where they live and, fix the deferred maintenance things that aren’t there and that, walking that property after I do that and having tenants feel like it’s their home, it’ll just be, there’s big rewards in that.

And I think even passive investors can feel like there’s, they’re helping in a crisis in America, which is housing. 

Tim Mai: So yeah, we’re going to be wrapping up this interview here. I do have two more questions for you. One is, one is if you can go back to your younger self, or if you can share words of wisdom with a teenage kid. What would you share? 

Trevor Thompson: Don’t wait to buy real estate and wait. If I just started this when I was in my 20s. Life would be so much different. When I look back, I moved from Canada to America and I was going to buy a place and do an Airbnb, and Airbnb was just starting out and, I said, man, 300, 000 for this place.

I don’t know if I can afford it. The same place is worth 900, 000. Wow. Oh, it’s but I didn’t write, this is 25 years ago. And I didn’t. And if I had, my life would be that much different, right? Because now I would in theory own probably three Airbnbs or five Airbnbs in the area. And be running this successful business and building wealth for my daughter who’s still in Canada.

Just buy real estate and wait, don’t wait to buy real estate. And so if you’re young, you can just get started. Try to find a single house or duplex and house-hack it, right? Go look at the burr method on bigger pockets and just start grinding in and out earlier, right? Rent rooms to your roommates, and then go from a single house to a duplex, to a quad, to a triplex, to a sixplex, to a tenplex.

Just keep jumping and you’ll be shocked. You’ll be like, 45 years old and financially independent. I’m 60-something years old and barely financially independent because I started late. And if I’d have started early, this life would read books like Darren Hardy’s The Compound Effect, right?

Yep, love that book. Keep reinvesting in amazing books. Keep reinvesting your money. It’s staggering what can happen when you get that compound effect of your money, right? And, Warren Buffett always says if you don’t have you don’t have a second way to make income you’ll work to the day you die.

I can’t, I should remember I said it a little better, but it’s a great quote. 

Tim Mai: That’s awesome. Love that. All right. So last but not least, if people want to reach out to you, connect with you, where should they go? Yeah. 

Trevor Thompson: So LinkedIn, I’m very active. So Kay Trevor Thompson, Facebook, is very active.

Kay Trevor Thompson, sometimes you gotta nudge me and say, you saw me on Tim’s podcast. Because I get a lot of friend invites and I’m careful because I get a lot of people trying to sell me stuff. And if you’ve got, if you’ve got Bitcoin anywhere in your thing, I’m not going to, cause I don’t want to, that’s a crazy world.

And then my website is Niagara cause I’m from Niagara Falls dash investments. com. And my email is my initials KTT at Niagara investments. com. And you’ll find them very approachable, reach out, and set up a time to talk. I love to talk to people about real estate. It’s a, I had no idea I’d be this passionate about it’s a great way to end my career in the world.

And, I didn’t think I’d find something, but I love it. 

Tim Mai: And, your loving real estate definitely shows. Your love of candidness and like just, raw to share your challenges on your deals and, your generosity to open up. I really appreciate you.

I think. Thank you so much for doing this interview with me. I’m sure that the listeners. going to get huge, great value out of this interview. And, I definitely encourage, yeah, definitely coach the listeners to reach out to you and best deal with you at a minimum, start building that relationship with you.

Trevor Thompson: So thank you so much. Real estate is a relationship with somebody. 

Tim Mai: Awesome. All right. Thank you.

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