Reed Goossens – Real Estate Syndicator, Entrepreneur, Investor, Co-Founder of Wildhorn Capital, Author, and Podcast Host of Invest in the U.S. talks to Neil Henderson and Brittany Henderson, the hosts of The Road to Family Freedom podcast. Reed Goossens, with his partner Andrew Campbell, own Wildhorn Capital can control over $175 million in multi-family properties. Reed has a new book called Invest in the US: The Ultimate Guide to US Real Estate. Originally hailing from Australia, Reed Goossens has been living and investing in the United States since 2011 and shares his journey in real estate.
Neil Henderson [0:18]
Greetings friends and families. I’m Neil and I’m Brittany. You’re listening to the road to family freedom podcast. Our guest today originally hails from Australia. He’s been living and investing in the United States here since 2011. He’s the co founder of wild horn capital where he and his partner Andrew Campbell, control over 170 $5 million in multifamily property. He is the host of the weekly podcast investing the US and he has a new book out called investing in the US the guide to real us real estate, and we’re going to talk to him about multifamily syndication. re Goossens Welcome to the road family freedom.
Reed Goossens [0:52]
How’s it going? Good, I guys, it’s it.
Neil Henderson [0:55]
It’s great to have you. Great to have you on so. So I want to go into a little bit of your story. And I’ve heard it before, so I want to cover it and then get into real estate. So you had quite the adventurous life before you got into real estate before you came to America. You backpack your way through Europe, met your eventual wife on that trip. You worked on a Russian billionaires yacht, which someday I would love to hear more of that story.
Reed Goossens [1:24]
Still ever be
Neil Henderson [1:29]
sailed across the Atlantic door knock your way into a job as a structural engineer in New York City helped build some infer some of the infrastructure for the 2012 London Olympic Games. And then somewhere in there, within six months of moving United States you had bought your first investment property that cover most of the highlights.
Reed Goossens [1:52]
That’s that’s that’s all.
Neil Henderson [1:59]
Thanks, Reed has been great.
Brittany Henderson [2:02]
Awesome. Well, it can you tell us a little bit about that first property that you invest? Yeah.
Reed Goossens [2:06]
So the real the little bit before the story was I picked up the book Rich Dad, Poor Dad, you know, nine. And so there’s a lot of self teaching along the way. But before I just bought my first property, it wasn’t just like, oh, he’s bought first property. It was 2009 educated myself in Australia, about, you know, my readers and all that sort of stuff. And I was he was going to do some flip or a lease option there, eventually moved to United States in early 2012, into their London, as well, within like, two weeks of being Fresh Off the Boat was like my first New York area. And I thought, jeez, you know, I thought I’d merge two and a half years ago since 2009, or 10, when I picked up that book richer for it. But I didn’t realize this, you know, New York’s on steroids when it comes to you know, fast talking Americans and our lingo in Australia was a lot different to hear. So, really, I spent the first sort of six months, I’ve had a good foundation in Australia that had to tweak my mind a little bit to understand that the American way of doing business, you know, what’s an LLC and how to open up a bank account and blah, blah, blah. But then I realized, geez, the barriers to entry here in the United States are so much lower than Australia, and I was living in New York City. So I couldn’t invest in New York City, but a four hour drive away in upstate New York and Syracuse, there was 30 40,000 old properties, and I couldn’t get financing. So I sort of had to, I had to buy all cash and and I had a bit of savings coming over from Australia. And I put it really, really all my savings into that first property. And the reason I couldn’t get financing was because I know credit. And again, I didn’t know what the hell Code School was when I first got here. So all these learning things, but you asked how it sort of touches within six months and rebuild me You did it, it was it was it was a longer tail to that. But it was got to the point where I was riding your bike, my nose in a book about real estate investing, and it’s kinda like reading a book about you like reading a book about going to the gym, you don’t get fit, just reading about it, you got to go do it. So it was really an opportunity to get my money working for me and really get my feet wet. And it was you know, I could go and pay a guru to just keep learning, learning learning or just go out and do it myself. So I really got to that point of like analysis paralysis and just had to go to pull the trigger. So yeah.
Neil Henderson [4:21]
And so that first property was a duplex
Reed Goossens [4:25]
and she was attracted to triplex for 38,000 bucks It was $38,000 Yeah. $30,000 It was like a mother daughter so bottom of the top of one side of property and then I guess the technique is single family houses a separate dwelling all on the one lights it was triplex, I say, but it was really good lesson in section eight and and on paper works. Right, right, like these 11 caps. So you know, wow. But you know, when you think all your savings into that first property, you hope it works. And it didn’t work out as planned, we had a drive by shooting the first six months of the great and then I shoot it was an actual drive by shooting an actual drive by shooting because the tenants suddenly one of the tenants sons was part of the local game. Anyway, it just got fired, I think one shot by the police record and like this neighborhood, it is all of the street that we bought the property on, I bought property on was, you know, other long term residence there. So it’s sort of just like, well, we’re going to keep this lady Yeah, but it’s a really was a good introduction into and hindsight looking back on it, you know, when you’re, when you bought over $30,000, we put I put about 10 grand into it and probably all in safety. When the individual units only renting for like 650 $700 a month, you’re not really attracting the best type of tenant and then also coupled with a property manager, you only got three little units, even if they’re making seven 8% it’s not a lot of money on a gross check 13 1500 bucks. So you know, we’re getting a little bit I was getting a lot of attention from my property manager. And it was just a really good wake up call about you know, understanding the lessons of scale and maybe entering the market a little bit higher purchase price to not have to deal with you know, the riffraff of potential objection. A lot of people are doing really well. It’s actually it’s when you’re out of state or when I was outside investing those four hours away wasn’t really, I wasn’t hands on management. That probably should have been but you know, lesson learned I was able to leverage into the second deal and try play a little duplex before that thousand bucks $45,000 and then was able to get into my first flip my first time in Philadelphia or and this is all was living in New York City. So yeah, got started. Got got my feet wet. Right? Yeah.
Neil Henderson [6:48]
Would you? Would you so would you buy that triplex again, knowing what you know now?
Reed Goossens [6:55]
No, no, I wouldn’t, I wouldn’t say the big thing is, what I’ve learned really quickly is that even though I was able to put set of 10 grand into it, and it was, you know, whatever that was per unit, so $3,330, which, you know, it wasn’t exactly the middle, but I was able to increase rents, you know, by 100 bucks or 120 bucks. So I’ve got it up to like 650 or $700. But this the scales, and there’s three units, and I thought that was great on paper, because it means more cash flow to me, but the value of the asset wasn’t going up because it wasn’t dictated to, you know, use a sort of resin. So you do have gross, gross rent multiplier, which we can talk a little bit about all right in around cafe. Sorry about the song behind No, but it says as soon as you edit that out, but sorry, it’s but it just got me started, but I didn’t understand it. And I was okay, too. And this is not for everyone. But I was okay to lose at 30 or 40,000 bucks and put into that property because I need to get started and it wasn’t as tell your dad to sit about investment because on paper was great. Like it all worked out. 1200 dollars a month, my mortgage was $300 a month expenses, maybe 500 bucks a month, you know, I was cash flowing in the first six months I was cash flowing seven $800 a month, which is really good. You know, and then it just when you combined section at the top of tenants, it just does you make money when you buy you lose money through property management. That’s why you motto So looking back on it I probably I wouldn’t bought today but it was the best start I could have possibly had.
Neil Henderson [8:32]
Yeah, I often hear experienced investors talk about that sweet spot between about 911 hundred dollars a month rent, you know, you’re attracting the kind of tenant, you know, it’s not a class, it’s not D class. It’s so work this workforce housing, you know, they’re there. They’re not wealthy people, but they’re, you know, they’re good, hard working people who know how to manage your money. And that’s often the issue that you run into with section eight housing is the people are just terrible, managing their money
Reed Goossens [9:02]
and look back in back in 2011 2012. There’s a lot of Ozzy’s you know, international folks buying turnkey properties in these types of areas. I didn’t buy your property myself, but I could see the attractiveness of it, you know, maybe a single family. And now looking back any advice, my advice to anyone who’s looking at the turnkey spaces, have the dollars to go and buy not just one, like for 80 grand like $900, to buy four or five. So it’s a little bit of a more, more of a pool, your property manager probably how to manage it a lot easier, and you’ll get their attention. And if they’re single family, you don’t have necessarily issues of that, living in close quarters, which is probably one of the issues that I had. But on that second duplex that I bought for 45,000 bucks, it was immigrant family paid on time, it was an ATM, complete ATM. And it was it was great. But I couldn’t scale. And I got to the end of my tether pretty quickly in terms of what I borrowed with my job and credit, lack of credit and all that sort of stuff. So I had to take it to the next level.
Neil Henderson [10:06]
So was there any financing was no finance on that first deal? Yeah. So you were able to do a little bit of financing on that on some of the next deals.
Reed Goossens [10:14]
Yeah, so what how I went about doing it was, it wasn’t credit or credit, whatever was I went and approached a local bank in Syracuse, knowing that I needed a mano a mano relationship with a bank manager. And so I went in credit, as you know, if it was called first neighbor banks, a very local learning, like upstate New York. And so when I was depositing rental checks every month, you know, I could show a period of six months of rental checks and say, Hey, can I get a line of credit or something is places only probably worth 50 grand, can you give me a line of credit like 25 or $30,000 in order so I can buy the house number two, and they did that so it’s essentially putting it down to collateral. And I had saved a little bit more money for my job, you know, to then go by using a Steadicam as a line of credit with another my own cash to buy a house number two, but then again, I was cash flowing a little bit, probably maybe 1000, but over 1000 bucks, probably 1200 bucks a month between the two assets, which was great. But I had used all my savings in these two properties and yeah, it was it was it What did make me nervous because again, I was okay, the worst case scenario for me was that like I was already getting paid really well as an engineer so keep doing that. You know, so what did the value of the option be? Wasn’t that that
Brittany Henderson [11:36]
you had a pretty good safety net? Yeah. Not be nervous about did so did you end up selling those two then go to that next step?
Reed Goossens [11:44]
You so I sold the sold them after I probably own the first triplex for about a bit over 18 months. And I made my money that I made a little bit more, they made four grand more than what I put it all put into it. And then there was cash flow over the period of the you know, call it 12 months out of the 18 months because of the issues with tenants. So yeah, maybe the managerialism shirt, fantastic, and then held the other one for a little bit over two and a half years and then got got rid of it to just be more liquid when I was developing my business, so so yeah.
Brittany Henderson [12:26]
All right. Um, so were there any, like big failures during that time period? But I mean, besides drive by shootings,
Reed Goossens [12:37]
everything I said before, you know, like, the understanding of scale, right, and when you’re trying to win numbers on paper in this dirt cheap and you know, Slumdog Millionaire type of stuff, it looks great on paper, but it might be reality, you need that I need to $150,000 property to attract that 900 to 1300 went on see your family to get a better quality tenant again, not class aid and not what color but the blue collar the hard work and they just want family want the roof over the head at a reasonable price. And so it was just a little bit about understanding the game of property management and how it can make or break your deal. So call it failure call it your lesson learn whatever but it’s just it is something I look back on and go Yeah, completely correct. And again, I know plenty of people who have been so successful in that turnkey single family triplex $40,000 area, but their their boots on the ground, they got the cruise going, and that is they run, not the slums, but they run the bad part of the tracks, and they do the investors make really a lot of money. But there’s also high risk in terms of things can go wrong drive by shootings, people don’t pay got to evict more, you that’s why the cap rate is so high because with cap rate for you listeners out there know the highlights half right, the more risky the deal is, though, if you see a deal it says 11 cap, then you know, like understand height 11 cap compared to somebody might be owning five cap. So you really need to understand the differences between the two. And that was maybe something I didn’t know or understand at the time, because I was just looking for cash flow, thinking that was what I wanted. But really also want to cash flow and appreciation which ultimately got into syndication and multi larger multifamily.
Neil Henderson [14:26]
Yeah. Well, that’s that’s a nice transition. What led you to shift gears from residential into commercial?
Reed Goossens [14:34]
Yeah, so the whole mindset around like, you know, I got these two properties upstate New York, or, you know, I had, I was flipping a house in Philadelphia, that was with a partner. And I remember my buddy from Canada came down, and we studied, we were in the same college a few years apart in Australia, and he came down to New York City for coming, what four in 2013. And we went for BR and, I mean, it’s not so you’re gonna flip them back to start killing it, but I’m still like, working my day job. And he was like, oh, man, that’s awesome. I just closed on the 17 units. And it was like, 70, like, seven? Zero, he’s like, yeah, 17 on how the hell did you do that. And it’s like, well, or as a manager, my mom and dad and my two buddies who came in bought involved, and we got the seller to do the seller, financing all that low, and I heard all these things, but I hadn’t seen it executed on such a large scale. And, you know, he really had, you know, smart guy and, and sort of dealt with the other the second aha moment in my life, where he was like, we can force that in our lives, we’re going to spend 5000 bucks on the unit increase by hundred dollars. Now that has a massive, massive value in creation. And I know about that, but just on my single on the lesson for unit and the ready side with the triplex and the duplex, I couldn’t go in force that cap by force that appreciation, but on the scale side with a 17 minutes commercial, he caught him he you know, he essentially explained it to me like that. And he had to learn all this and that I had got a mentor. And so I knew that I was coming to that stage in my already because I needed that next kick in the butt, so to speak. And, you know, I got to the end of my tether on the lending, I couldn’t lend in a can borrow anymore. I was you know, doing credit cards to pay, you know, for the materials for the flip and Philadelphia. So it was just a needed that next up my game. And that’s where a mentor came in and went back to the counter mentor. And then from there developed my brand about investing in us because it goes through all these trials and tribulations as a foreigner. And so the podcast and now, you know, for you for five years later, here we are so yes.
Brittany Henderson [16:49]
So when you began raising capital for these large multifamily syndications, how did you go from changing people’s perceptions, you know, of you as reducing, you know, structural engineer to read multifamily syndicators?
Reed Goossens [17:05]
Yeah, good question. Very difficult to do that takes a period of time. I, you know, with you guys, this is a new podcast. And it’s a leap of faith that you got to put yourself out there, put your message out there. And again, I was a struggling you have no idea about branding, or you know, how to be a key person of influence in my sphere, blah, blah, blah. And I just really wasn’t screw it back yourself, man, you already moved halfway across the world, like, just give it a go. And probably my dad and my mom was first talking. But I had something to say. And I think I had a valuable education piece because so many people were wanting to invest in the United States and still do to this day. And there was no one in the in the podcasting space that had that angle, right. Here’s a guy who’s actually come from abroad. He’s now here living here, and he’s gone through all these issues. Well, that’s what I choreograph the first 20 or 25 episodes of my podcast around learning the steps to get me to, you know, set up successfully investing in some of the, you know, the failures, like we just we just spoke about it, but it takes a long time, right? It takes it takes concerted effort and consistency, to tell people and remind people that you are shifting from in my case of structural engineer into raising capital. And it took many years of me still doing the two things, right working job, trying to find deals, trying to raise capital, it was just like, sort of spinning all the plates in the air, and it was a lot of work. But consistency does breed, change and that change people then start to understand what you’re doing. And, you know, my role is this indicator as a capital raises to educate others about the opportunities that I’m saying. And the podcasts are just one platform that I used to the microphone to to tell to get my message out there. So yeah.
Neil Henderson [18:43]
Now you when you started off, did you go straight into being a part of the entire syndication team did were you doing all of your underwriting deals? Finding capital, talking to owners talking to break occurs? Where you’re doing it? Do it all? Or just focus on one side?
Reed Goossens [19:03]
New? Good question. The plan was to just focus on the one side, but when I moved to LA in 2000, and late 2013 2014, metal gentleman, who was he actively asset managing used to working full time, he taught me a little bit more more sophisticated about underwriting. And then that helps for introduction to my mental and those and he had a really good deal in Houston. And really, I just played matchmaking, Cupid and introduced it to them, because I knew my mentor could raise some money. A huge other gentleman had a bloody great deal. And it just was just a hint, you know, Hey, guys, you need to know one person can help the other and initially, the mentor was like not I want to do it. And then I had to go back to him because I knew nothing to do it. I know this I want to break out of my day job as well like you like how do we help each other and it was just sort of this whole Kismet you know scenario and I think I raised a little bit of money on that first year, not a lot. Without that introduction. And those those guys have gone off to do some some incredible things. And I was involved in their syndication some of the other Co Op syndications after that first deal, and then eventually started doing my deals. And that was, you know, a long time coming and processes and all that sort of stuff. But that first big major corporate syndication was really just getting getting corporate partners or people in the boat that can all roll in the same direction and maybe take up take part of the responsibilities of that other person who might have found a deal that that person might be really good at capital raising. And the person is good Capra is not good at finding the deal. So there was that we all had a role to play. And it was a beautiful thing to watch.
Neil Henderson [20:48]
So, so partnerships can be a double edged sword, they’re not always the most beautiful thing. Can you talk a little about how you found your partner and maybe some thing’s gonna leave some tips for somebody if they’re out looking for a partner because it is syndications a big nut to crack. Right. It is not a I don’t know many syndicators are doing it all by themselves. They’re almost all have some sort of partner team. There’s a lot of moving parts. How did you find your partner? And?
Reed Goossens [21:20]
Yeah, well, the what had happened is after raising a bit of money, standard podcast, other branding stuff, had raising the money, some small deal and lots more deals that other people’s deals, started to then say, Okay, I need to do this by myself, the gentleman who was an inch who had brought that first deal, and, you know, to the scenario where I introduced a mentor, he was sort of sending me these little little deals, you know, like he was doing 250 units, and he was sending me deals in Dallas for like 50 units. And I knew that I was still working full time, I had sort of my underwriting systems somewhat set up, and I went and hired two analysts from USC, just 15 bucks an hour undergrads, and now on underwriting deals, and I was, you know, putting offers in properties, you know, 50 to 70 units, getting the best and final. So clearly underwriting correctly, but not having that little bit of edge to get over the finish line. And through all this networking that I was doing a gentleman that you had on your podcast before Dave Thompson introduced me to my now business partner, Andrew Campbell, and it was just more that Andrew had a skill set that I didn’t have, which was that he was boots on the ground in Texas. And I had the skills have been here now, which was come from an engineering background, understanding the details, had a better system better had a better mousetrap for for underwriting and how to underwrite. And it was just sort of like, well, he could hustle as hard as I can hustle was sort of roughly the same age or a couple years of poverty into me, me early to mid days. And it was just really that is that opportunity that I needed. Someone you know, apartment guys on flips in Philadelphia apartment, you know, raise money for other people, partner without Koji paying all this sort of stuff. It just I needed to get into bed, you know, some dating all these people get into bed with someone because it was just again, syndication is, as you said, a tough nut to crack. If you don’t understand all the roles and responsibilities, you can’t, you can’t literally wear all the hats, you can’t raise the money, find the deal, you know, do the due diligence, obviously, the property management, like you just need something to relieve the pressure. And that’s what a product can do. And so when you’re looking for a partner, I always recommend you need to find someone who can use a complementary skill set to you as a person. Because there’s no point in having two same chefs, sous chefs who can cook the same thing in the kitchen. But you need someone who can do Mexican, you need someone who can do a talent, because it’s just it’s different cuisines you need to understand what you’re good at and let go find someone else who can be that other part that you’re not very good at in terms you still sir. So yeah.
Brittany Henderson [23:48]
So multifamily, it’s becoming much more popular. It’s kind of the hot, hot thing in the real estate world there. Have there been any changes that you’re having to adjust to and sort of this market? That’s exploding a little bit?
Reed Goossens [24:06]
Yeah. So obviously, in the last five years, PC pretty much since 2011, when things will get back on track with it off the recession. A lot of people have made a lot of money in the last five to seven years. And that’s great. But what’s happening now is that we’re seeing with the influx of so much capital coming from outside, particularly internationally, we’re seeing the returns, we’re juicing. And so when returns reduce, investors are saying, well hang on, I don’t I expected this return from, you know, the glory days. And it’s like, well, that’s not one of the glory days anymore, and there’s always going to be a plateau, they keep coming up and 45 degree angle. And so it’s now the big the big shift is changing people’s expectations of returns. And where I come from in Australia, doubling your money in 10 years is a really good return. And so when people are doubling their money in three is and then that is shocked to see what I can’t double money in more than three years, take seven years, like, Okay, what is back to normal. Get, it’s still a really good return. Like you’re literally not lifting a finger, show me something in the stock market that is backed by physical asset has all the tax advantages, it does exactly the same returns, you won’t be able to show me. So it’s about my perspective, my perspective of being International, coupled with the fact that we are coming into it more of a plateau in the multifamily housing market. I don’t think in terms of the pendulum swing of, you know, you look back I’m in that first year, I helped with those two gentlemen, I mentioned early in the show, it was a seven and a half cap for 2000, built 250 units to Houston. Now in 2013 2014. There’s blood on the streets of Houston. And looking back at that, that’s fantastic. Now things are trading for Houston at five, five and a half cap will weave pendulum swing back the other way, a little bit. But we’re not going to pendulum swing all the way back to seven and a half cups, I think we’re going to pendulum swing back to maybe a six, six and a quarter cap. So really understanding your financing and understanding what you’re buying these days. And it’s very frothy, the market is super frothy. But it’s understanding Okay, what are you going in at? What’s the stabilized cap rate going to be ahead of that compared to his historical cap rates? And then how do you expand that when you’re on an exit to make an exit assumption? And is that the mind with how the market is going to change? And again, when you’re underwriting deal, we don’t have a crystal ball, we have a we make an assumption on an exit point at some point in the future. And, you know, we if we if we did, first of all, we’d be a different business. But But yeah, back to the original question is like, what are we saying changing cap rates or was going to compress, you know, hugely, but also the returns to investors have started to change as well. And I think as we approach the long tail of the you know, where we are in the recovery, is my thesis is that I’m doubling down and true growth markets like Austin, Texas, where supply and demand, the demand outstrips supply. And you know, a market like Austin has transitioned into a very large coastal city like LA or New York, it’s very much on the world map. And that’s why we are doubling down. But that also means lower risk, and hence lower returns. So but we we also then lower your risk of the potential to the deal to blow up there’s a lot law because the demand is still there. Yeah,
Brittany Henderson [27:28]
theoretically, I would assume people can maybe put more in just money wise, they can invest in more spots, because it’s not as risky to have it, you know,
Neil Henderson [27:39]
and RU is while one capital only in the Texas market right now,
Reed Goossens [27:43]
or the Texas market right now we’re definitely seeing, we want to build out plus thousand units and at MSA, so we’ve got nearly 1000 units in San Antonio, we’re trying to build 1000 units, and Austin will probably try and build 1000 years in Houston. But the reason we’re doing that is because we didn’t get efficient efficiencies of scale. Economies of scale, I should say. And, you know, guys that are very scatterbrained like auger, you got to Denver deal and I got an Alabama deal and I got North Carolina, you don’t get the true economies of scale with a massive portfolio. And that comes from not only from an operation point of view, but from an exit point of view. You know, we’ve got 1000 units in San Antonio, you know, 2000 units in San Antonio Austin, it’s so much more attractive to a private equity firm to come and scoop them all up once we’ve done all the hard work. And that’s what I’m definitely I’m steering the ship towards, rather than, like I was having over, you know, three different states thing. It’s not as attractive to a private equity firm. So all we can sell them individually. But I’m allowing myself to multiple exit opportunity by making sure I have more than 1000 units and HTC planet side. So yeah,
Neil Henderson [28:48]
so for, you know, for the average investor that’s maybe come into this listen to this podcast, and they their only experiences with residential real estate, can you give sort of explain how palace indicator makes money?
Reed Goossens [29:02]
Yeah. So as any kind of makes money, it’s really the make money on front end and the back end, syndicators makes a fee, to to pull the deal together to allow investors to invest alongside them. And really, it is a fee for going out. And you know, for every one deal that you get presented by syndicated, there’s probably 60, other deals that have to chase underwriting hours and hours of work. And so it’s typically a 2% fee of the purchase price that goes to the syndication team, how they run in the gap, and then you is usually a asset management fee that comes along with it throughout the whole. And then on the back end, you know, there’s obviously depends on how you structure the deal within our deals, it’s typically 7030 split. So any upside, that the property produces 70% goes to the investors and then 30% goes to the GP. So again, we’re really the custodians of people’s money and making sure that it’s in a good deal. And and we are we can keep the lights on and our own business to support that deal. And make sure the deals doing what it’s supposed to be doing. But then that’s, you know, when when we come to an exit, that’s when really really make our nuts. And, and you know what I was looking Think of it like planning a big oak tree. And you know, we’re just planning a bunch of oak trees and taking five to seven years time, you know, my business partners, and I will, will will profit, I’ve told them, we’re just making sure we’re identifying the right deals or asset managing correctly, and we’re making sure that the deal is getting as close to perform as possible. You know, obviously, again, it goes back to the crystal ball analogy. Things can happen in the market that you have no control over. And that is part of our responsibility as as as managers as syndicators to make sure that we’re keeping investors in tune with what’s happening in the market, and and reacting to two issues, if something does arise. And you know, that’s okay, if it does. But just make sure you, you’ve gone in with enough conservatism to understand that you can pivot or you can do something to avoid whatever might be coming down the road.
Neil Henderson [31:00]
Yeah, well, I mean, you’re talking a lot about capital preservation and alignment of interest, which is one of the reasons I love so much about syndication, a good indicator is really good about making sure there’s a good alignment of interest between themselves and the investor. And I think, at the end of the deal is that that’s really where it happens. That’s where, you know, you’re going to make some money on, you know, on the purchase, and you’re going to make a little bit of money on the asset management fee, but it’s really the where, where you’re really getting paid is if you’re performing if you actually are able to do it. And then the rest of the way, it’s just a matter of making sure you don’t lose their money. Exactly. You know,
Brittany Henderson [31:44]
you want them to invest again. Yes,
Reed Goossens [31:47]
that’s what’s that’s the, that’s the old Sorry about that. The that is, that’s the whole purpose of the game, right? You want to make sure you’ve been successful. So that word of mouth is getting out that we did this team is really awesome, that you can tend to you want any profits that you make with those original investors into deals. 45678 910. So
Brittany Henderson [32:08]
you talked a little while ago about perspective, like your perspectives, on return turn rates for when, like people in Australia, do you have any other perspectives as a immigrant that you feel like you should know about, you know, make a difference?
Reed Goossens [32:25]
Well, yeah, so let’s talk about this topic. And this particularly in and around the United States. So the United States is is the, you know, biggest your market GDP in the world. It is also the such a, such an interesting landscape, and both metaphorically and physically speaking. So compared to any other Western world, any other western country in the world does not have the same concoction of stuff that’s going on like knighted states, as I think of the United States, as a mini Europe, every state is different. And from just a macro point of view, you know, comparing to Australia, that’s what I can compare to, we have 25 million people, so not even one 10th of what your population is, but with the same landmass excluding Alaska is mainland America. In Australia, we can only occupy about 18 to 20% of our land. So we’re landlocked was the most countries desert. However, in America, you have, you can have it north to south, east or west, and you have that population where you get stems, these tech, tertiary and secondary markets, you also have the combination of individual states acting like individual countries, so different laws, and most states from tax purposes, to doing business and all that sort of stuff, really makes it look like a mini Europe. You know, and I Oh, I always joke that up, the only time everyone in America is on the same team is when it comes to happen to decide that it’s a, it’s every every site has, its different, you know, different issues from lending to business, you know, even to just, you know, landlord, landlord, landlord rules. So that that’s one aspect of it. The second aspect of it is that, so that’s called the sort of secondary markets in Australia, we have secondary markets, but then you know, cash flow, and all like, there’s no cash flowing going on. The also, the other thing is, we don’t have garden soil, we don’t have multifamily full stop, you might be able to buy a six unit complex, but to go out and buy a 250 or 300 unit garden, so apartment does not exist at all in Australia. And there’s two reasons for that. One reason is that the government, it’s all condominiums, so very much a condominium market where the government makes more money on the sum of the parts, then the entire piece of as a whole. The second thing. So the second thing is the lending, we’ve only got four major banks in Australia, combined to maybe have 20 or 30, different lending arms that you could go in and find out commercial side of even less. So when an a bank doesn’t have the lending. Not necessarily knowledge. But when they’re saying okay, well hang on, we’re not going to lend on if you’re going to go build a multifamily deal, we’re not going to lend on the end product. And so it’s going to be worth this because you’re gonna your cap rate of x, and you can have it enter YY, and you’re going to get a valuation of this. And so we’re going to learn 65% of that, and off you go. They say, well, hang on know, the government makes money through strata, let’s try the title, which is condominiums and taxation of that. So you need to go pre sell X amount of units before we will give you the construction. So you don’t have agency debt like you do you know, agency debt mean, Freddie and Fannie in Australia, you don’t have these non non recourse but it’s definitely not as, as rosy as it is here. Like you couldn’t get a non recourse debt at 4% fixed 15 years, how lucky couldn’t Australia and more leverage up to you know, 75%, that just doesn’t happen. So you might get a five year or interest only, you know, interest only invited in Australia, you might get a seven year term. With first two years, you’re going to be recourse that wants to stabilizes, it might be going non recourse after but you’re looking at like you have a high interest rate, typically four or five to five and a half 6%. So, but then you also have the other side in Australia, we have more of a capital appreciation market where, you know, I say to everyone think of the Ozzy market, as La New York, San Francisco, like there’s not as if there’s no Dallas’s or, you know, North Charlotte, North Carolina’s of the world where the cap rates are six, or historically, six 7%. So there’s all these different things that the population obviously drives where people live, affordability. The the couple that with the lending couple that where you can have it your Thailand coupled that with the way in which people are they land. And so there’s, you know, there’s so many different facets going on. And you can compare that to Europe, or England, or stuff like that, again, it’s I lived in England, us there’s not just garden style multifamily apartments that are air in England, they just don’t exist in the same with Europe. So you know, historically, these gardens done multifamily apartments were billed as workforce housing, which what it is, and now with the frosting in the secondary markets, where you can go get moderate cap rates, where I can I consider a five cap, and you can pick interest rates up at a forecast, that’s there’s still a Delta there. So I can still make cash flow. And I can still get a you know, to grow market in terms of rental. So I can have that pop on the backend with appreciation about seven to 10 years. So all those things are very attractive to international buyers, when you compare where we come from in Australia, where cap rates at some 3%. So your interest rates are already inverted, you’re not going to get cash flow, you might get, you know, appreciation over over 10 years, but you’re not going to get any cash flow along the way. So a lot of different things going on, in that comparison in what makes the United States very, very unique from a lending investing and boring point of view.
Neil Henderson [38:07]
Brittany Henderson [38:08]
Oh, yeah. What you’re saying I was like, aha, yeah. I got it. No, like, Okay. I get it has a lot of opportunity,
Reed Goossens [38:22]
just sitting on the fence, get off the fence. Right.
Neil Henderson [38:26]
Well, and are there any advantages that foreigners have with investing in United States real estate, maybe maybe the
Reed Goossens [38:36]
episodes, just the facade just perspective, that’s, that’s really it, we’ve got a, you know, we start behind, we don’t have credit, you know, when I moved here, I didn’t know anyone, I literally knew my wife and what she had family in LA, we were in New York, I have no idea where to go. And I said to figure it out. So no international investors don’t have you know, from a taxation point of view, the IRS will tax us any income from your property, even if you’re foreign, foreign or not, is still taxed at all the same rates are you appreciate that, which is great. If anything, America has a lot more adventure advantages to investing here, like 1031 exchange money, which is really, really quite popular. Now, how that affects people in their individual Homes is attainable, hundred individual countries. That, you know, I advise part of my businesses that are help advise international investors about the benefits of investing in but the question always comes up, what about, you know, what about my, you know, tax, you know, liabilities in Australia or New Zealand or France, I’ve got no idea I can only help you with what’s happening here. So definitely a bit of people listening to the show, they do have a new foreign, you have to take into consideration all the other benefits, all the other issues that might come along with it in terms of having us income in your home country. So
Neil Henderson [39:55]
I was there. As I recall, I’ve heard somewhere that the SEC does not come into play. On the on the investor side with a foreign investor. They don’t know they don’t have to be accredited.
Reed Goossens [40:09]
Well, so two things. So if you’re doing a regulation, David David, that’s that’s the normal reg. Yep, that is do you have to be accredited? There is a regulation F for Sam, which is an only international invest in so if you take an even one for domestic investor, it has to be ready. So to your to your question, yes, the SEC set up to protect Americans are not set up to sit to predict the rest of the world. So from fraudulent lending or fraudulent investing opportunities, but I’ve never actually executed on it and regulation. So I have international investors in my deals, they have to go through all the same setup processes Is anyone here in the United States to set up an LLC to get an item number, blah, blah, blah, banking Council, so stuff, because we majority of our investors, welcome bus. So we have to go down with the regulation. Gotcha.
Brittany Henderson [41:06]
Okay. Um, so when you started out in multifamily syndication, were there any skills that you had to sort of develop that you feel like are, were essential for your success
Neil Henderson [41:19]
that you didn’t have before you started?
Reed Goossens [41:23]
This is a good one, I wrote an article or a little evil could you know the art and science of raising capital, like a pro one in a court appointed 60 rule. The first is professionalism. And everyone thinks that you need no music born with 15 years worth of experience in real estate, that just not possible even if you bought into a real estate family, but everyone who come who has a story and has a background in whatever their former life was engineer, you know, trading account, whatever it was, you have skills in that field that you can bring into real estate, it’s just another form of business. So I was very fortunate that being a structural engineer, I was surrounded on a daily basis by big construction, understanding how to deal with subcontractors, understanding, we just had to build stuff, you know, like I can tell you how to build, you know, a sheer frame 40 story building, you know, like, I just know that I just know that some stuff, that can be a little bit of advantage, but it also, but there’s other things I speak about, like just being punctual and being if you’re going to say what you’re going to say going to do something and solitary, being able to host meetings correctly, having you know, presenting yourself in a professional, transparent way, all these things you that’s not real estate centric, that’s just being a good person. And you can pull those skills that’s from any walk of life that you’ve come from in the past. And I always encourage people, when they do come down, this road syndication and getting involved in real estate is to sit down and look at what what skill sets you think you’re really good at right now, and list them out. And you’ll be surprised that there’s so much that overlaps is besides like, maybe a little bit of the construction, the rest of it, you can learn, you can get a lawyer, as long as you ask intelligent questions, and there’s no such thing as a bad question. You’ll be able to surround yourself and get the answer to whatever it might be. And, yeah, so back to the question that skill set, look at look inwards of yourself to see what skills you currently have, because that’s also going to be able to shed light on what skill sets you’re not good at. And that will help you go and find your partner, you know, good part that we just spoke about before, you know, complementary skill sets. So yeah, so many different facets skills can be bought from other other facet, other walks of life into real estate investing. And I know, don’t be afraid of it. You know, what? Real Estate like? These top five things, and I don’t have them, I’m not going to be good at it. So no, that’s not true. Yeah.
Brittany Henderson [43:48]
So what skill sets have I taken from being an animal trainer and a nutritionist to the real estate world? You just you mentioned I thought was funny cuz you’re like accountant and all these things. I’m like, I don’t have any of that kind of back.
Reed Goossens [44:05]
Right. But that’s, you know, and I think where you’re going with it is like, and I probably should have said some other things. But, you know, if you’re not, you know, not everyone’s comfortable on Excel, right? It’s one skill that to be a real estate investing, you don’t have to understand numbers. If you don’t understand the numbers, find that your partner or business partner that can help you. Because you have to at least understand where to poke holes. If someone presented a deal you need to be you know, have it have enough numbers, be knowledgeable enough on numbers poke holes in the deal, so you can feel good that I had this deal is worth its weight in gold?
Neil Henderson [44:42]
Yeah. And the wonderful thing about real estate is really the math is not really that hard. No, honey, it’s not trigonometry. Know, the math that you have to do in structural engineering is way harder.
Reed Goossens [44:56]
integration, integration back in the day, you know,
Neil Henderson [44:59]
what, what’s it integration
Reed Goossens [45:00]
integration being like? two x squared plus one x plus c plus three is, you know, the shape of the graph. And so you can then integrate or derivative of that you can, you know, there’s
Neil Henderson [45:19]
no, I, I loved math. This is going way back, I loved math, up until it stopped being numbers. And once it started being XS once I started asking through some some alphabets in there, oh, man, my poor dad, who is a is a retired fighter pilot, you know, aeronautical engineer, you know, he was really good at math. And I really struggled once we hit algebra and heat, that poor man just beat his head up against the wall trying to get hold me through algebra. Anyway, that’s cool.
Reed Goossens [45:53]
Neil Henderson [45:54]
So what, what are the things I love about syndication? Especially raising capital, the really fun part of it for me, is it’s not it’s not really, it’s not sales, it’s education. And that’s mostly what you know you’re doing is there are so many people who have no idea this world exists. They sort of like their their knowledge of real estate, you know, begins and ends with HGTV, and, you know, buying a single family home has their own property. And even then most of them are thinking, well, if I, if I, if the rent is more more than the mortgage, then hey, I’m making money. You know, but so much of it is just education. It’s just explaining to people how it works and, and why and why it’s a good opportunity and things like that. So that’s really and I’m not sure there’s a question there.
Reed Goossens [46:47]
bring up a good point. And that’s to be an effective indicator is the role of the syndicated to educate those around them the about the benefits? And so I had a question one time, and I’ll speak on stuff about or what if your investor doesn’t know x, y, and z was like, well, that’s your fault. Because you didn’t explain it well enough. And you need to, you know, and even if you don’t know the answer, it’s okay to say, Hey, I’m gonna go find out what the answer is of that particular question. And even today, like I’m this morning, I had a question from an investor I had to go back to my accountant on I want to invest is picked up a typo in the ppm and had to go redo that, you know, like, so there’s always little things that we’re always trying to, you know, make better and people in it the beauty of having investors in your deals that is multiple eyes on across all your legal documents across all your numbers. Do you know if any of you is any mistakes, people going to pick them up? Right? So that’s another benefit of syndication? You have so many people just looking at the deal?
Brittany Henderson [47:47]
Yeah. While we’re on the topic of like knowledge and education, you mentioned that you did you read Rich Dad, Poor Dad, are there any other books that you really feel are super important for people to read? For real estate in general, or maybe multi? multi family syndication specifically?
Neil Henderson [48:05]
Well, aside from your own
Reed Goossens [48:09]
right chatroom on one of the biggest things that I’ve learned, personally is united states and talk a little bit about I’ve been to the equivalent of a real estate investor Association, meetup groups in Australia. I remember like the pitch and OZ like six 710 grand for guru. And when I first came to New York, we’re in here in the States, I just remember how much awesome content there was, and how easily accessible like 30 bucks or 20 bucks at the door so these great speakers telling me stuff that I was like, Wow, what a guru in Australia for. But like, just the sheer basics of understanding real estate, there was a book called flip FL IP, the Green Book, I think I always forget the name of it, it’s he’s actually out myself. I just, it helps understand, like, how you go and look at you know, the southern This is done in single families, it’s not talking about multifamily specifically, but it’s, it’s a great way to it’s a book that just helps you get your mind wrapped around just the real estate world how, you know, the ugly house on the on the nicest block and all that sort of stuff. And there are a lot of syndication books out there. I I’ve written one myself, so I’m not I’m not gonna I’m not gonna toot my own horn. But then on the other side, I’ve got to a point in my career where I’m not necessarily learning it myself, because I’ve done it. And so I, I look, I look at books like, you know, for inspiration, like the four hour workweek, you know, understanding the systems. There’s a great book if people want to book about their personal brand and, quote, key person of influence by by Dan Presley. I’m reading the book right now, principles were on the right Ray Dalio down to dollar Delta. And so just these sort of systems more sense, building a business, building a brand building culture, building a mission statement, which is something that again, doesn’t end your question of how to, because one of the one of the big things about, you know, Rich Dad, Poor Dad was it was so great at giving you the big picture, but didn’t actually give you the tools about how to come to need to get from this question that code. Great.
Neil Henderson [50:21]
Reed Goossens [50:22]
Appreciate it. Exactly. So I don’t read much of Robin stuff anymore. Again, because I’m now into the you know, more the nuts and bolts of building businesses, lots of stuff, but right, like the Rich Dad, Poor Dad, and the flip book, just sort of really basic stuff. There’s a book, I think, you know, how to make money in cash flowing deals, or multi families, it’s a kind of, again, all these little books that you find on Amazon over the years and pick up and that’s a good little, you know, on a reading on the train on the subway, and, and then all you forget, though the building blocks, but to anyone listening out there, I always challenge people to go and a simple thing is get to two or three networking events a month. And through those networking event, you’re going to meet other people, they’re going to tell you things, you’re going to information overload, and you’re going to take it on board and be able to you know, dissect it and digest it and then spit it out in terms of how you’re going to go out and execute your goals and vision. And through that they’re going to be great books to pick up and read. But like myself, I got to a point where I was sick of my nose in a book and I couldn’t go to stop reading about real estate investing is go and do it. So yeah, and also podcasts, right? These these things this what we’re doing right now. It’s it is there’s so much free information out there, that being ignorant isn’t an excuse anymore. And so I do love that, that we live in that world where it’s all that? I think it is.
Neil Henderson [51:40]
Yeah, well, most of the problem, I would say most real estate investors problem, you know, myself included is, is we’re all savant about real estate and not so great about action. Yeah, hundred percent. Yeah. And a lot of it comes from from a lot of different ways, you know, fear. You know, just procrastination, whatever.
Reed Goossens [52:02]
Yep. accountability, lack of accountability. That and that’s why, you know, part of my story is that I didn’t burn all the ships back Australia, like, I quit my job, I moved here, I was like, I had one shot. And it was a and the thing that the resolve that knocking on doors and trying to find that first job is that and I know, I think Tony Robbins has been one of those No, one yes changes your life. And you get no, no, no, no, no, no, no, yes. And that changes your life. And so that, to me, was really the stepping stone and the snowball that really started at all, and then the other the belief in yourself to back yourself, if that makes sense. Because if you go, if you can’t back yourself, and who the hell are you going to back in life, and so having the vision and the inner self belief that you can do it, and that’s, it seems as cheesy as it sounds, it’s like, it’s sort of, you have to back itself, because it You always just going to procrastinate and not do anything and sit on the fence. And I’m just gonna, you know, sit on the couch and not do what I’m supposed to be doing. And so having that accountability partner, having the belief that you can push yourself, and that we are put on, you know, on this earth to be better than and be more and, and grow. Because that’s the whole point, if you stop, if you stop growing, we stop learning you stop growing. And I’m a huge believer of that.
Neil Henderson [53:26]
So, with that in mind, you know, would you knowing what you know, now? Would you go back and still buy those duplexes? Or would you just go straight into large multifamily?
Reed Goossens [53:43]
No, I, I get this question a lot. I have been interviewed on a lot of podcasts and like, would you do anything differently? And I don’t mean to be a dick when I say this, but the answer is no. Because I I wouldn’t be sitting here talking to you if I didn’t make those mistakes. If I didn’t, grades my knees if I didn’t back myself and have a dream that I wanted to come to United States and living in New York. And that was the only dream right? It was just and then when I’m finished going around the world, I picked up the book rich dad poor dad and his knew that I didn’t want to live in my in cubicles next 40 years of my life. I didn’t know the answers to all that stuff. But you know, but my total brain was like, I don’t want to be here. And I want to be somewhere else. And I just need to figure out how to get from A to B, and goes back to that resilience and backing yourself. So I know I don’t have any regrets in my life. And I’m definitely all those people that I don’t want any regrets. Because one of the biggest thing is fear of regret itself. And I don’t want to wake up when I’m 70 years of age and going, gosh, I wish I’d had that. Because that is you know that that gives me goosebumps, like I don’t want that. And so I can look, I can happily look back on on the journey. And it’s only only just beginning, I’m going to 33 and be really proud of what I’ve achieved. And it’s so much more I’m not that I haven’t arrived. I don’t ever think I know it all. But I just I wouldn’t do anything over regardless of those mistakes that I made in the beginning. And and what we all make mistakes in the future. And and that’s okay. So, yeah,
Brittany Henderson [55:13]
it’s a good reminder to people that no one gets where they are without this past that is probably riddled with mistakes or lessons learned and all these things. Because it it’s, you know, the reason you get the question so much is that it’s interesting, like, what would you do now, but it’s hard to you have to get that knowledge to do what you’re doing now. And so
Reed Goossens [55:38]
you have to you have to be hit the bottom of the barrel scraping the, you know, and we’re all our stories are all unique to ourselves, it makes us who we are, right? It makes you the animal lover, you know, the nutritionist, it’s who you are, right? And that that’s your DNA. And that’s what you built in. That’s what makes you the moral and ethically and all that sort of stuff that brings up the juices inside of you that helps you get out of bed, I’m going to go tackle the world. But it’s a different story to me. And that’s different is okay. And you don’t have to be any light yourself on anyone. Oh, gosh, I wish I knew that I wish I did. The path of the Joe Blow over there did because we live in that world of social media and always comparing ourselves to everyone. And I think there needs to be a little bit less of that and more dislike being okay with the past that you’ve come from in order to build your future. And you know, you know, you talked about Gary Vee the other day, and I was listening to one of his videos, he’s like, no, so many people in their mid 50s. And I’m like, come on one and down in life. And you know, he swears like a siloed. But it was talking about like your mid 50, you’ve got at least 30 years left, like you just get warmed up like don’t, you know, like, it’s, there’s part of that which can is a bad messaging. And which also means you constantly push yourself, you’re always going to be comparing and pushing and pushing and pushing that has some issues in itself. But it’s also on the same side, it’s an outside the corner. Dogs never too late, you can always teach an old dog new tricks. And you know that you never, you’re never too old to start, whatever you want to start and back to your fear. You know, as you get older, we tend to fear things more and all we’ve got a family and I need to be in a day job because I need to do XYZ. And I can’t go out and do this entrepreneurial thing and, and don’t get me wrong, I’m not telling you what to go be an entrepreneur. But if you have that drive and that passion and you want to figure it out, and you want more from life and go out and do it, man,
Brittany Henderson [57:35]
there’s a way there’s a way to figure out how to do it, you can always, you know, go off on a different path in a way that makes sense for you. When I
Neil Henderson [57:42]
think really, I’m sorry to interrupt. You know, I think that one of the key things that I’ve seen from people who sort of get past that fear is one, they either get so comfortable with the knowledge that they don’t they sort of understand what’s going to happen, or they find someone to hold their hand on that first deal. And, you know, that could be either buying a turnkey, you know, which I actually I don’t I don’t personally recommend but you know, it’s I think it’s a not a bad way to kind of have that, you know, hand holding first deal. Or they invest, they hire an expert, they invest, invest in syndication, there is ways to invest in real estate truly passively. And you know, that’s what you do. And
Reed Goossens [58:33]
that’s what you guys are teaching about. Right. And so it’s really honorable, like well done.
Neil Henderson [58:37]
And lastly, I just want to go back. You know, I don’t think you’re being a dick when you answer the question that way. Because I get I sort of bristle when I hear people who’ve made it, you know, especially I heard from a lot of multifamily syndicators, and I hear it from Self Storage syndicators and like, Oh, God, you know, I would have skipped everything that I did and gone straight to here. I would have skipped it all I’m like, Well, yeah, but you’re, you’re operating from the hindsight and all those bumps and bruises and, you know, somebody you know, somebody trying to move that boulder of a big multifamily deal. It’s, it’s daunting, you know, I realized that they had a lot of momentum, once they started trying to push that Boulder.
Reed Goossens [59:22]
Yeah, like this so many people’s on your block, you know, the reason so successful is because you got started in the last downturn, okay. The old Chinese proverb of you should have best on and Planetary was 20 years ago, the next six times right now. So it coupled with I think, you know, me personally, and I’ve struggled with this in throughout my entire entrepreneurial life is like, you think you’re going to hit financial freedom sooner than what I did. And it took me a lot longer. And I combined it go back to the fitness analogy of like, people quit losing weight, or whatever, because their mindset on the front end isn’t good. Like, I’m losing 30 days in 30 years, like, I didn’t lose it. I’m quitting, you know, like, and it goes back to financial freedom. It’s a long journey, and I’m sitting in today, I’m not going to tell you going to do it in a year or two years, you might go on if you do and, you know, but the average person, and I’m the average person, it took me, I picked up Richard put out in 2009. And now 10 years later, I finally you know, being financially free for over 18 months, you know, in my business working for over two years. It took that long, it literally took days and nights and moving across the world to figure it out. So if I can do it, so can you and and my message to people is like, if you if you have the right mindset on the front end, you’re going to be successful, but don’t think it’s going to happen overnight. it’s it’s a it’s a marathon, not a sprint and give yourself the time because other factors like kids and having a house and job and all that sort of stuff that adds time to your journey and that’s okay. And it’s okay that we can enjoy the journey along the way. And I guess there’s this whole mindset in America and really the Western world and in human nature of like, we rush through school we get through school and now into university rush through university to run rush through life to get to 65 to hopefully retire and then start enjoying your life only at 65 Yeah, well I tell you why I’m definitely on my hands a screw that I’m enjoying my life now because it is it is you know, you don’t enjoy a song to listen to right the end of the song because that’s the best fit you listen to the entire thing because that is what makes a song enjoyable. That’s what makes the journey enjoyable. I think having that mindset about that, that yes, you want to achieve financial freedom, we want to start investing in real estate but it does take time. It does take the right type of mindset and it’s okay to run your own race and your background where you’ve come from is yours and truly makes you the person you are today and that’s okay, as well.
Brittany Henderson [1:01:52]
Alright, alright, so what does a day in the life of read look like as a multi family family syndicators?
Reed Goossens [1:02:00]
What is the daily life so I am a morning type of guy, I definitely like to get up and I’m usually up by no later than 630 every morning. Definitely, as I transitioned out of working full time and trying to do my business, I that six 630 was originally 530 because I’d get up an extra hour before to go the gym or whatever, to then go to a day job it now you know, if I sleep in till 730 after sleeping too many. The day I’m I go don’t have an office now. Because I couldn’t work in my home anymore. I needed a place to go. But the day I get up, I usually walk the dog, I have my juice in the morning, or coffee, I try not turn my phone on before 7:30am I’m hugely about writing down my to do list for the week on a Sunday night. So I know I plan the week out. And usually Monday, Tuesday, Wednesday, pretty busy Thursday, Friday, a pretty relaxed and and then you know, just before coming on this podcast, I had a bit of work to do. Students would kind of deal but I’m always I’m always kind of working. But I’m also I’m in control my own time. And that’s what I love most about it. And that this this this world is that I can like I’m off to you know, at the end, the month we’re doing an apartment swap with a couple of New York, they’re coming to have an apartment, we’re going over there to have their apartments. The fact is that my wife and I work for ourselves like why not I Love New York, let’s just go. It’s free rent. And I get to as long as I’ve got internet. I’m also doing a lot more traveling, I traveled Texas nearly every every month. And I’m probably talking my business partner at least four or five times a day and checking in on the team. So yeah, gotcha.
Brittany Henderson [1:03:42]
So you will be very prepared for if you have children, if you decide to have children get a being an early starter, because you don’t get to choose that after they are born. That’s just what I
Reed Goossens [1:03:55]
tell my watch.
Neil Henderson [1:04:00]
So you What do you see now as your most high value task on a daily basis? Like what is the one thing it’s like, you wake up every day, what’s the one thing that’s like, you know, I’ve got to get that done. Nobody else could do it.
Reed Goossens [1:04:19]
Well, so I this is interesting in a my digress a little bit, but they’ll come back to that is that when I was working full time, 40 hours in a week, I was so busy with work and I was working in the ground construction for development in Long Beach like that I had a pretty stressful job, then also trying to do deals inside which we were doing. And I was so bloody busy, I didn’t have time to scratch or think I was also putting a lot of fires. And so now in and around the mission of life by design, I want to live my life how I want to live it, I’m really about today cultivating systems in my business. So I can this identify myself, I have I want to it won’t happen overnight, but it will happen over the next 345 years. And so you know, really much being in the what I call black time. So you know, I break my time up in the day to black, blue and red, black being this sort of stuff podcasting, talking to investors. Speaking on stage, thinking about the next episode of my podcast, I want to do maybe some thought leadership stuff in around the next book I want to write the blue stuff is is more the think of like the manufacturing line. So the look of deals going to have deal flow that I get them under written, gotta keep go good got to get up to date on my properties and how they’re performing and check in with the onsite managers and do the asset management stuff. And, and really, I want to spend probably 50, probably 60% of my time in black and 40% of my time and blue. And then read all the administration stuff that I see every now and then I do a bit of admin like I was doing a little bit of admin stuff before here. But we’ve but I don’t have to do much of it. And we’ve started a high that out so and as we grow, my first year, my next employee will be a full time asset manager so I can start bringing myself out of that day to day minutia. I don’t want to completely be, you know, unrelated to it, because I’m definitely a guy that is I can roll up the sleeves and get dirty, I’ll never asked an employee of mine to do a task that I couldn’t do myself or they’re not comfortable doing myself. And I’ve been you know, when being a solo entrepreneur, you learn everything you learn the accounting, you learn the underwriting, you learn how to negotiate deals and or negotiate contracts with general contractors, because it’s only you and and when you start building the systems and building the team, you can start to step back a little bit and make sure you’re the puppeteer, making sure everything’s going correctly. And, and being effective at that. And so that is why I’m very steering the ship towards Well, how do I be an effective leader in my business to inspire people to do a job as good or better than I cannot get out of the room and let them do that. And so it’s a learning coach for me right now. I don’t know. I don’t know everything. And I don’t know everything about that. But it’s really interesting to me, because that’s how I’m going to be effective as a leader as a CEO of my company as I continue to grow over the next 510 1520 years. So does that answer your question?
Neil Henderson [1:07:16]
Oh, yeah, yeah, that’s what a bunch of
Brittany Henderson [1:07:18]
them Yeah. Like, all the one in that sort of vein of questioning. It’s awesome. It’s perfect. Alright, so I think we’ve kind of probably already answered this but so you you live in LA, you invest in Texas, mostly, and probably plan to continue to invest in those types of markets. And you said you you visit Texas once a month? If you do you travel? Do you feel like you could do that? If you didn’t have to visit those once a month? Do you feel like you could travel a
Reed Goossens [1:07:56]
lot? I’m off to Japan to the Rugby World Cup in October I’m going to New York back to Australia for Christmas. No, I’m anywhere I have a computer I’m working so and my business partner and I are completely aligned like that. Like Andrew just went spent two weeks in Colorado. He’s he’s got kids so he’s a little bit more set in stone me and my wife is particularly this year have really linked lent into Well, we work for ourselves, why don’t we, you know, jump off to Mexico as long as we’re on the segregated same time zone, we can make it work and even in Australia hapa across the world I at 6am in the morning, I can get up and I can afford our overlap with Andrew and Texas and my team is it’s like three o’clock in the afternoon, the day from the day behind. So like anywhere in the world that I am, I’m very intentional about making sure that I’m always checking in always making sure that I’m doing my job and not i’m not just off on a beach somewhere. But you know, I do try to get away like once a quarter for for a couple of weeks. And And again, it’s being intentional about my life. It’s not waiting till I’m 65 to do that thing that I really wanted to do on the we want to go to Japan to the Rugby World Cup. Do it live once you know, so I’m going and we’ll you know, the thing is when you do that sort of stuff, only real fires boil to the top and it goes back to being really intentional about your time and the black, blue and red time and when you know particularly number why I know Andrew can only call a certain time. So I’m only going to hear about the real burning issues when I do have the two or three hours or four hours overlap and yeah, right. Okay, perfect. Got it got the update. And, and honestly, in the business that I’m in, when we do third party property manager, we do third party general contracting, it is about that tweaking the knob, not necessarily about you know, we got a call from our property manager the day and incident happen on site. And we’re like, well, thank you for letting us know regional manager. And and I was like not the property management business hang up. Right.
Neil Henderson [1:09:58]
Yeah, I think it’s Tim Ferriss. I think in the four hour workweek he talked about that the power of sort of letting go letting go. That and that his business that you don’t want to be the the choke point in your business?
Reed Goossens [1:10:13]
Nope. No work on your business, not in your business
Neil Henderson [1:10:16]
now say all the time and
Reed Goossens [1:10:18]
I’m learning that you know, being a trust me guys, I if I could good you’re all frickin I’m an engineer, I want to take apart a little back together again, all we got to control everything because I do think business systems. So big business ecosystems are the fundamental way in which we create true long term wealth, so I invest in multifamily. Yes, I could get to a point where and I definitely feel the shift towards where we get to three 4000 units and I’ll bring copy management in house now I will not run it myself, I have to hire the right person to run it. Send the general contracting. The question you I I constantly ask myself is do I want to go and take over that part of the business in order to skinny down the costs and you know, order, leave some profits on the table and can get away to Japan for two weeks we can go away to Australia for Christmas where I’m not having to run you know teams and an Andrew and I constantly joke about if we ever get to a point where need an HR manager we’re done growing so so again, back to the Tim Ferriss thing, it’s gotta you gotta work on your business, not in your business, and really understanding and even through my podcast, I’ve interviewed so many people who tried that I need to be the GC, I need to be this I need to be all the things and realizing that is working 100 hours a week and a family life sucks. And I just realized that I don’t I can leave some profits on the table. I’m still making a lot of money over here. I don’t control every facet of it. Even though I think, you know, having business ecosystems are really great. I think it’s just about hiring the right people to fill in those positions.
Brittany Henderson [1:11:49]
So what advice would you have for someone to get started in real estate?
Reed Goossens [1:11:55]
The biggest thing is education. Obviously, the number one piece of advice is, again, go back to the thing I said before it’s mindset what what do you really want out of real estate 99.9% of people it’s a vehicle to wealth, or it’s a vehicle to financial freedom. You need to figure out the why you’re doing it. Why is it for you, your family? Is it for free up time you’re sick your day job, what is it, and then when you understand what your why is you can then start going and understanding what the best investment opportunities to invest into it make me help me achieve that Why? And then back to the mindset of like it will take five, seven, maybe in 10 years, that’s okay. It’s a marathon, not a sprint. And they’re having all those things in place. And it’s constantly putting one step in front of the other. And going to start off with those three networking events that I spoke about, started listening to three podcasts a week on real estate investing, pick up that book and read it, they’re all very simple things that you can do. And being an entrepreneur and changing your mind shift means that you’re going to have to stop living and breathing it. I talked a lot about the Fitness, Fitness is part of my life won’t do it, I get so crazy. Being an entrepreneur as part of who I am is my DNA now to develop that over time. And it will mean working a few extra hours if you do have a day job. But that’s okay. Because you’re putting your reinvesting into you yourself into education or about you know, a new thing that you didn’t have any clue about and you know, real estate investing to me, I’m self taught you guys are probably self taught as well, you didn’t go to university for it. And that’s okay. That’s a lot of people make money doing that. And so it’s just about having the resolve to pick up the book and just start reading, start listening to podcast, go on those networking events, putting yourself out there in order for you to learn more and be a sponge and absorb it all. So yeah.
Neil Henderson [1:13:45]
Well read. Thank you so much for sharing this with us today. You’ve got the book, which is available on Amazon. com. We’ll put that in the notes as well. There it is investing in the US. By reduces pick it up. Yep. If any of our guests want to find you what would be the best way they can reach out to you.
Reed Goossens [1:14:03]
Yeah, look, jump onto my website. It’s reduces calm. It’s really spelled with REDGOSS is two s’s in the ems.com. You can check out the book EJ got a podcast you reach out to me if anyone is coming through la I’m, I’m pretty accessible to do a meetup for a beer or coffee or lunch and just talk shop more than happy to do it. Also, one other thing, all the proceeds from my book are going to charity, a cancer charity back in Australia, it’s very dear and near and dear to my heart. And if you pick up the book, you’ll understand why because in the first I didn’t like it in memory, my mom who recently passed away so it’s not that it’s not a sob story, but it’s just more that it is a mission behind it more than just floating books. It’s about it’s about my story. And and yeah, just jump on the website. And as I said, if anyone is in LA, please hit me up.
Neil Henderson [1:14:54]
I will probably do that we’re right down the road in Las Vegas.
Brittany Henderson [1:14:57]
Yes, yes. We have other friends there. So where we come? Not often, but when we can.
Reed Goossens [1:15:04]
awesome. It was great talking to you. You too.
Reed Goossens [1:15:07]
Brittany Henderson [1:15:09]
Neil Henderson [1:15:12]
Okay, it was read Goossens from wild horn capital also host of the fabulous investing in the US check that out on iTunes. So what do you think was the biggest lesson learned for you on this one?
Brittany Henderson [1:15:25]
Um, well, I don’t know if any of these are always like the biggest lesson I’ve learned. But the most interesting for me, or the most important thing that I pulled from it was just the reminder that your past is sort of the path to where you are now. What’s mine.
Neil Henderson [1:15:46]
Gone? I’m sorry, I interrupted you.
Brittany Henderson [1:15:48]
Sorry, I should have gone first. But yeah, you know, the the where you are now has been paved, basically, by your mistakes and your lessons and you know, things that you’ve done in the past. And it’s really important to remember that and not, you know, think back and go, Well, I shouldn’t have done all those things, or, you know, I should have gone straight to this one thing, when really, you probably wouldn’t have been able to go straight into this this, you know, other place, because you wouldn’t have had the knowledge really, I mean, like, yes, if you magically had the knowledge you had now back then then sure, you could probably but like, no one has that. So so it’s it’s just a good reminder, because I think people get into that place of like, well, if I’d known this, or if I were in this other place, you know, and it’s easy to get there. You know, he talks about this a lot in different ways. It’s easy to sort of feel like, well, I should be here or I wanted to be here and I’m not or you know, that person did this. And it just it takes time, and you have to make mistakes, you have to learn things, and you have to do things in order to get somewhere and it’s okay to have all those things happen.
Neil Henderson [1:17:00]
Yeah. Well, you know, that’s the whole idea of fail faster, fail faster and learn from it. We, you know, we we so often forget all the things that we learned from failure, most people learn more from failure than they do from success. And it’s those, it’s those bumps and bruises that really allowed you to get where you are. So for me, since I’m having to think on the fly, because you stole mine. I would say the idea of scale, you know, read talked about those first properties that he bought, you know, as all three years old triplex aside from the fact that he was probably in a lower rent market than you want to be. Because you just got much more challenging tenants. It was also the idea that, you know, especially being a triplex with low rent, that makes it you know, you’re not going to be real high priority for a property manager. Yeah. And especially, especially if it’s in a rough neighborhood, because the property manager is not getting paid enough to buy a bulletproof vest. Or just deal with all the issues that can come up when you’re dealing with
Brittany Henderson [1:18:11]
Yeah, if you’re doing a percentage based payment, we’re just not
Neil Henderson [1:18:16]
there, how much you know, how hard are they going to work to go across the street to pick up a dime, you know, and, you know, and he talked about it, we didn’t Delve on too long, but he talked about, if you’re going to buy single family homes, try and buy, don’t just buy one, you know, buy for in the same area, so that you know, and have the same property manager so that now you’ve got the property managers attention. Yeah, you’re not just one house that he’s making 80 bucks a month on, on $1,000
Brittany Henderson [1:18:46]
we’re consolidating the business into one person, and that gives them more reason to actually do their job. Cool. Alright, so I don’t even feel like we really have to go over this because we’ve talked about it so much, but like, how did he get his knowledge? And how long did it take him? Um,
Neil Henderson [1:19:11]
he, he read, he just read a lot of books.
Brittany Henderson [1:19:15]
Well, no, he also went to networking. He went to know when he read, he read books, but he he really was. I think he didn’t say it like super outright more than a couple of times. But he he definitely at the end when he was saying like, the advice that he would give he said, you know, read a book, go to networking things week, you know, moms do, you know, do these things where you’re, you’re doing all the things sort of to get that education and then do the thing, but and, yeah, so and they said he probably did that for about six months before he bought his first property.
Neil Henderson [1:19:54]
Well, he was also student of real estate he had first read Robert Kiyosaki spoke back in oh nine, but I would say probably, it sounded to me like you’re really an earnest once he came to the United States and started reading and going to revise and things like that. So yeah, six months. And what was the the key piece of was the key piece of knowledge that he really needed to learn? To sort of execute on the indicator?
penis indicator? Yeah, I have no idea.
Neil Henderson [1:20:29]
When they have to cut this out, I’m trying to remember
Reed Goossens [1:20:32]
what it was
Neil Henderson [1:20:37]
shocking came out. I know, I had something in my head. And then I went away. So editor, I apologize. Cut this part out. So how much money did it take him to get started?
Brittany Henderson [1:20:54]
He said that the first property, he bought it for about 38,000 people about 10,000 in it. So 50 K, about I have no idea how much it was to do his first syndication, we didn’t really get into the numbers there.
Neil Henderson [1:21:12]
You know, the weird thing about syndication is that it’s the ultimate other people’s money. You really, it’s not like a zero money down. But it’s really, it’s more about the knowledge and putting the deal together and most of any of the money that you put into it, as we talked about with Joe fair, listen, some or one of our previous ones, gets paid back by the syndication when you close the deal. So it really it’s almost no money down. But definitely, his first deal was You’re right, it was about $48,000. All In, he was complicated by the fact that he didn’t have he wasn’t a US citizen didn’t have credit. So he couldn’t get here to come in with cash.
Brittany Henderson [1:21:57]
couldn’t get any loans or anything. So how much time does he spend on his business?
Neil Henderson [1:22:05]
It’s a full time job. I mean, we and we’ve talked to syndicators in the past that it’s it’s a full time job you are, you’re an active real estate investor, who is supporting passive investors. Yeah, taking care of the money.
But when what’s nice, and I think,
Brittany Henderson [1:22:24]
I think I made this mistake early on, when you started getting into real estate and thinking about it, in my mind, it was like, we’ll buy some stuff, and then like, we won’t do anything else. And that’s, you know, I won’t have to do anything. And then we’ll have this like freedom of, like, time and location and that kind of thing. And that’s not really how it is. And that was sort of naive thinking. But it’s, you get to a place where you have the flexibility, like you said, they’re going to Japan for the World Cup, because they want to and they’ve managed to set up the systems and and, you know, have the people in place to be able to make that happen and not have it affect the business. So you know, it’s it’s something that he continues to work on, because as long as he is internet, he can, but it’s a flexible sort of situation where he can do it on his time. Timeline. And as long as he gets certain things done, like he’s,
Neil Henderson [1:23:26]
what’s a really powerful thing, once you control your time mean, he still wants to do work. But he control he controls his time. And that’s a big, you know, that’s a big deal for people. The only really, truly passive real estate investors are the people that invest in syndications. You know, you’re you’re putting in, you’re giving up control in exchange for diversification, because you can you can move your money around to multiple operators and asset classes and geographies. And you’re also you’re getting time back. Yeah. So yeah, getting paid a paid a return. And, and, and somebody asked for it.
Brittany Henderson [1:24:06]
So yeah, well, and I mean, those people may not be actively investing in real estate, but they still have jobs that bring them that money. There’s there’s no, no, there’s very few people that are really probably working. Not we’re not doing anything that haven’t like been fully retired and are living off of, you know, some kind of savings. pay out. So anyway, interesting. And then when we talked about this, is it location dependent? Absolutely. Is it location independent? Yes.
Reed Goossens [1:24:47]
Neil Henderson [1:24:48]
Uh, you know, he said he can pretty much do it anywhere. He’s got internet access and access to a phone. Now we talked, remember, we chatted with Dickerson from good egg investments back a while back, and she’s a, she raises capital for syndications. And she actually said, Yes, but the challenge for her is time zones. And Joe, Joe Farah was talking about that as well, time zones can be a problem. And then having kids around with you’re traveling somewhere and you’ve got your kids with you. The kids are probably not in school. So they’re going to be underfoot, you know. And but the answer, you know, with with read read travels to Australia a lot, actually. He said it actually works out pretty well, because he’s got some good overlap with he and his partner. The time zones works. Yeah, yeah. So that’s a yes, it is possible. Its location. And and
Brittany Henderson [1:25:43]
Yeah, well, I think, you know, this is sort of in the nitty gritty, and most people probably don’t need to know that this information now. But if you’re traveling a lot, and that’s super important to you, and you do have kids, there are ways to make that work and not have it be too big of the deal. There’s always people you can hire. There are systems you can put in place to make your life easier, even when it comes to your children.
Neil Henderson [1:26:10]
All right, well, this has been I think this has been our longest episode ever. So if you’ve stuck with this until now,
Brittany Henderson [1:26:17]
I think they probably have because I had a lot of fun talking to read and I found it to be really interesting and inspirational and educational. And so hopefully you guys got that out of it as well. So,
Neil Henderson [1:26:34]
so until next time, let’s hit the road.
Thank you for saying
Brittany Henderson [1:26:39]
- Key Lessons Learned: Where you are now is paved by the bumps and bruises you acquired on your path to where you are now. Keep your eye on the idea of scale. A lot of things in real estate get easier when you operate at scale.
- How did they acquire their knowledge or what knowledge did they need to acquire? Reed read a lot of books and attended a lot of real estate networking events.
- How much money did it take to get started? His first property cost $38,000 and he put $10,000 into it.
- How much time does it take now? It is a full-time job, but he controls his time.
- Could they do this strategy from anywhere in the world? It is location-independent from anywhere with internet access and from his phone.
What you’ll learn about in this episode
- Reed Goossens discusses purchasing his first property for $38,000.
- Was he able to finance deals after his first cash purchase?
- Did Reed sell his properties to move to the next step?
- Were there any big failures in the early days?
- What led Reed to shift from residential to commercial?
- Did he go straight into the syndication team when he started?
- How did he find his partner and what advice does he have for syndicators?
- Have there been any changes he has had to adjust to for multi-family dwellings?
- How does a syndicator make money?
- What is his perspective on being an immigrant investor?
- Are there any advantages that foreigners have as investors?
- What skills does Reed Goossens recommend having?
- Are there any books that Reed found value in?
- Don’t just learn. Take action.
- One ‘yes’ can change your life.
- If you can’t back yourself then who can you back in life?
- Would he do anything over differently?
- What does he love about real estate?
- What is his most high-valued task?
- Can Reed work remotely?
- What advice would he have for someone getting started in real estate?
Help Us Out!
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- Investing in the U.S.: “The Ultimate Guide to U.S. Real Estate” by Reed Goossens
- The 4-Hour Work Week by Tim Ferriss
- Key Person of Influence by Daniel Priestley
- Principles: Life and Work by Ray Dalio
Connect with Reed:
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