How to Scale from 4 Single Family Rentals to $570M in Apartments with Joe Fairless

Brittany Henderson: 00:00

I'm Neil and I'm Brittany.

Neil Henderson: 00:01

We're a family on a journey towards financial and location independence. Each week, we interview successful real estate entrepreneurs about their chosen investment strategy, and rated based on how much money it took to get started, how long it took to educate themselves, how passive it is, and whether or not they could do it from anywhere in the world.

Brittany Henderson: 00:19

Welcome to the road to family freedom. If you like our show, the easiest way for you to give back is to leave us a rating and review on iTunes, head on over to road to family freedom comm slash review for links and instructions on how to do that we would be so grateful. All right, and that that of us Let's hit the road to family freedom.

Neil Henderson: 00:47

Greetings, friends and families on Neil and I'm Brittany, you're listening to the road to family freedom podcast. Joining us today is Mr. Joe fairness, the only man who wears red besides Santa Claus, I will talk to Joe really great having you here today. How are you?

Joe Fairless: 01:00

Hey, I'm, I'm looking forward to that. And thank you for the introduction that I've never heard before about it, it's already already off to a great start.

Neil Henderson: 01:10

Yeah, just want to just special Just for you. So a little bit about Joe. In 2012, Joe left his job in New York City as an advertising executive he owned for single family homes that produce monthly income. Six months later, he raised $1 million from private investors to purchase 168 unit apartment community. As of today, he controls more than 570 $2 million with a real estate. He's written three books on real estate investing, he is the host of the world's longest running daily real estate investing podcast, the best real estate investing advice ever show where they don't talk about any of that fluffy stuff. And that's just a little slice of Joe. So Joe, you want to give our friends and families a little bit more about you and what you're up to now.

Joe Fairless: 01:50

Yeah, sure. So a little bit about me, I mean, I'm focused on contribution. I'm a huge Tony Robbins, student and follower and he talks about what, what, what drives you and and it wasn't always contribution, it was significance and contribution, and then I realize it's a lot more fulfilling to be contributing in a meaningful way, then, you know, having significance at the forefront or and higher up. So, you know, my my old thing is when when I die, I want people to say you know what i would i was better off having that come across Joe, my life's better. And so that's my focus. You know what I do from a business standpoint, I buy apartment communities, or work with high net worth investors who invest passively in our deals, and got a podcast, as you said, don't like that fluffy stuff, our time is valuable. So we get into the meat of the conversation and and learn about what works and what doesn't work in real estate investing. I've interviewed more real estate investors than anyone else entire world. I've interviewed over 1500 real estate investors. And I've, you know, I've picked up on some things and you know, we now have over $600 million worth of apartment communities. Ashcroft capital is the company I co founded with my partner, Frank.

Neil Henderson: 03:18

So do you recall a moment when you had the realization that buying and holding single family homes was not going to get you to your destination?

Joe Fairless: 03:26

Yeah, it was when I was cash flowing really well. And by really well, 200, 250 bucks a month. And then one of my tenants moved out of my homes, and I got a bill for $5,000. And I was like, Wait a second, $250 a month, and then times out by 12. And then I just got this bill for $5,000 that math doesn't work. And you know, he so basically making $3,000 in profit, but you're spending 5000 throughout $2,000 when someone moves. So the name of the game is to keep your your residents in the property. And if they leave, then you got some some costs. And you know, sure some of them go back to the tenant if they torn place up. But then there's also just general wear and tear or improvements to the house and other things. So I knew it will in addition to that, I was having to keep track of you know, paperwork with you know, I only had four homes by the way, it's not like I had a tiny, you know, Kingdom of homes, I had four homes. And I was just having to keep track of Okay, the insurance is due on this date every year. And, you know, property taxes because I paid all cash for one house, I got to make sure I pay him on this date and mailing the check for this deal is just just too much logistical stuff for not any return at all. So I knew I I knew I needed to scale. And there are ways to scale single family homes and you know, have a portfolio of 100 single family homes and make a lot of money. I just didn't want to do that. I want to buy multiple homes, quote unquote, in one transaction, so an apartment community and then let the economies of scale work its way up.

Brittany Henderson: 05:24

Well, when you kind of moved into the apartment sphere, how did you go about getting yourself educated?

Joe Fairless: 05:32

I read a lot of books. I and I hired a consultant and I attended meetings I went to Rich Dad Poor Dad seminar, I went to the introductory seminar like two or three times just to pick up you know, just some miscellaneous things. Even though I knew what was what I was about to get myself into. I paid for one of the Rich Dad Poor Dad seminars like the one that's like $300, not the not the bigger ticket, right? One. And I got a lot of value from that. So it was just reading and then also attending those meetups and and then hiring consultants.

Brittany Henderson: 06:11

How long did it take you to go from single family homes to raising capital and purchasing that first 168 unit apartment community,

Joe Fairless: 06:20

I bought my first house in 2009, October of 2009, I was ready to buy my first house in January of 2009. But then I it took me 10 months to finally find or purchase my first house. And I bought my first apartment community in July of 2013 910 months or so about four years. Hey,

Neil Henderson: 06:44

so can you very briefly talk a little bit about you often people talk about that it's really just as hard to buy a single family home as it is to buy a much larger asset like an apartment community. Is that relatively true?

Joe Fairless: 06:59

Yeah, it's it, thank you for saying relatively true because it's harder to buy an apartment community. But the rewards are disproportionately larger, but so are the consequences if you mess it up. So you gotta, you gotta approach it the right way that you know, with with, with single family homes, there's, you know, they're a dime a dozen, you can probably if you really, if you really are dedicated over a two week period of time, and you have your funding available, you can find a single family home and not the case for you know, hundred plus unit apartment community gotcha. Yeah, maybe in two weeks, but it's going to take a little bit longer. And you have to have the right you know, you have the right right stuff in place, like you got to have your money in place, you got to have your, your experiences important, you've got to have your network liquidity, you got to have the right team to execute the deal, because single family home, you might be able to wing it and manage it yourself. Hopefully don't buy it violate any any local laws, when you're leasing the property or when you're managing it, I don't recommend that you manage it by yourself. And I recommend that you manage manage a property management company. But with the multifamily property, you tried to do that mean, you might as well you know, go to Caesars and put it all on black. And you know, Hope it hope it turns out. And you probably know what the outcome will be anywhere, it's not even putting on black, it's putting on your favorite number. That would be the odds of success. If you were to self manage 100 unit property right out the gate. So there's there's a lot more involved when you are buying a commercial property or apartment community. But you know, it just takes some education and, and being attractive enough to attract the right people. And when you attract the right people to your team, then then you can put the pieces in place and and have a successful business plan. Neil Henderson 9:06 Well, and it's about leveraging the expertise of those team members, correct?

Joe Fairless 09:11 Yeah. Oh, yeah, absolutely. Gotcha.

Neil Henderson: 09:14

So on that first apartment deal, were there any challenges that held you back? from doing that first deal? And can you talk to us about how you overcame them?

Joe Fairless: 09:24

Oh, sure. Yeah, I mean, the challenges that people come across, when you are starting a new venture, I mean, you have to get experience people on the team, you've got to have the funding to proceed with the venture, and you got to know what you're doing along the way. And so, you know, with the the money part, the best way for people starting out, is to write down. Well, first off before you before you even think of raising money, you should look yourself in the mirror, and the if you are qualified to do so. And if you have, you know, the right people on your team already to help you navigate the tricky process, that is apartments and vacation. And if you don't, then doesn't mean you shouldn't do it ever just means you should stop, pause, and then go find the right people on your team so that you're going about it the right way, and you're mitigating risk for yourself, and most importantly, your investors. And once you do that, then there's three components to a deal, there is money, you gotta have the money to do the deal, there's the actual deal itself, you got to have the property, and then you got to execute the execution. So money deal and execution. And so starting out, well, I didn't have the money. And I came across a deal after looking at many properties, and I did not execute so I had there I had to find the right team member. So you know, there's there's a lot of challenges. The, the suggestion I have for people starting out to solve the money challenge is to get a spreadsheet, write down in the spreadsheet certain these the following columns in the spreadsheet, first name, last name, how you met them, and projected amount. And then with those columns, you simply fill in first name of investor last name and investor, how you met the investor and projected amount that they're going to be investing. And the key here is to put in under people, regardless of the Thank you 10 foot 100 people find 100 people put them in there every no lead you closer to Yes. So if they're not that qualified, you think they're gonna invest doesn't matter, put them in there. And then identify how you met each of the people by you know, you can sort it based, you know, using Excel, just sort it and then group them for the different groups of people for how, where your connections are coming from. And then you can be more secure. Think about how you have the conversations with people. So identify the most influential person or the person you have the best relationship with within that group. Say, for example, in my case, that first deal, it was the Texas Tech alumni advisory board, and also my advertising professionals. So you know, co workers I used to work with in my advertising agencies. And, you know, one of the people who was very influential at the advertising agency, I spoke to him and I had a really good relationship with Him. And then he spoke to some other people within our circle. And then by the time I spoke to those other people, they told me, they're like, Oh, well, as Brandon is in the deal, then yeah, I'll absolutely take a look at it, because I know he's physically responsible. And so that's a way that helps you helps other people do the work for you. And, and, and, you know, the warm lead, so to speak. But it's more than that, you know, word of mouth referrals are the greatest influence or purchase intent. So when someone is referring you to someone else, then that will increase the purchase intent over any other type of way that they find you. So, you know, that was one challenge in terms of the deal. I found that through a broker who I had a relationship with who I built through, just by talking to people, and then the execution part, I hired a third party property management company.

Brittany Henderson: 13:27

So you clearly have the benefit of a nice network from your advertising job. What other skills Did you take from there that you maybe have applied to real estate,

Joe Fairless: 13:36

I'd say, knowing die in advertising, I was a client services, and primarily Client Services. And so I was working with clients on developing strategy for advertising campaigns. And, in those conversations, help me with my conversations. When I speak to my high net worth investors, one thing I realized is, it's, it's very important to be myself, and not, you know, not pretend I'm someone else who are not. So I'll give you a specific example. Whenever I left advertising, and I was starting to do this full time I hired a photographer, do a photoshoot. And it was, you know, photographers said, okay, you know, come come to photo shoot, you know, make sure you bring nice outfits, want them get some good professional headshots. And so I did and I went and dusted off my slacks and found the tie had to Google how to tie a tie stuff to Google how to tie a tie whenever I wear one. And I went to the photoshoot and, you know, we did a photo shoot. And then I, I shared it on social media and the founder of our advertising agency who happened to be or who in two very shortly thereafter, and being my largest investor and a deal, but the founder of advertising agency, sent me a message. And he's like, wow, I don't even recognize you Who is that guy. And he was saying it playfully. But it struck a chord with me, because that's not who I am. I'm not a guy who wears a suit and tie when we were working in advertising, you know, we would go to Microsoft headquarters in Bellevue, or we go well, that's where being an MSN are. their social media teams are headquartered. And we would, I'd wear jeans and you know, a button down untucked shirt and some tennis shoes, nicer tennis shoes, and still tennis shoes, because that's who I am I that's how I dress that that's how I feel comfortable. And that I and I, when I started the business, when I did that photoshoot with those professional headshots, I was trying to be someone who I was and I was getting that getting away from work got me to that place where Yeah, cheap, relatively cheap, successful relatively quickly, I became the youngest vice president of the New York City advertising agency. And, you know, I, I remember, I wrote, it was a reminder that you know, what, stay true to who I am. And things are a lot easier that way too. And in fact, you know, my brand, the I've got the world's longest running very real estate investing podcast, and that is who I am. And, you know, it's, it's wonderful, because investors will reach out to me after listening to the podcast, and they say, I feel like I already know you. And they do. They do already know me. Because I'm being who I am. I'm not trying to pretend to be someone who I'm not.

Brittany Henderson: 16:45

Yeah, I think that's really important. Because there's, you know, in the business world, I think there is some pressure to really dress up as pretty, we're talking about money, like to project this energy or, you know, this this facade like, yeah, persona, that that somehow is going to make other people think that you're more important or no more than once you you necessarily know. And typically, you know, especially you're working one on one with a lot of people and you're looking for investors, that one on one piece, they can see right through that suit, they're going to see right through that and see who you really are. So you might as well put that up front. You know, exactly. That's, I think that's important. And, and something that Neil and I have to you know, remember going forward, I have very pink hair, and I will go into, you know, a meeting with it. If I'm if I'm required, and I don't plan to change it. And I think that's okay.

Joe Fairless: 17:42

Yes. Yeah, absolutely. That's what makes us special. Yeah. You know, the unique, unique aspects of us. And, you know, we, when we get away from that, then we aren't as special because, you know, we're not I mean, by definition, I think we're not as so when we when we when we try to pretend we're someone that we're not, and we try to act like someone who people think we we think people want us to be Yeah, and whereas you know, we're just comfortable in our own skin, and we just rock and roll,

Brittany Henderson

18:12 you also kind of miss out on those, like, touch points where you connect with someone on a deeper level than that, like, surface business level. Yeah. And that's really, I would guess that that's so important. When you are asking someone to invest thousands of dollars, or you know, more hundreds of thousands of dollars into a deal, you know, they might be more interested in connecting with you based on where you went to school, or, you know, a tattoo that you have, or whatever it is. And so if you don't show that you kind of miss out on an opportunity to really connect with that person, and you may miss out on the money.

Joe Fairless: 18:52

Yep. Yep, I agree.

Neil Henderson: 18:54

So let's talk about money. on that first deal. As we mentioned, you ended up raising a million dollars for that first 168 unit apartment community, how much of your own capital did you end up putting in that deal? Or did you need to get that deal off the ground?

Joe Fairless: 19:12

I didn't put any of my own money into the deal initially, but then after that, I put money into the deal. So initially, it was zero, and then afterwards, that more

Neil Henderson: 19:24

gotcha. And obviously, there's some there are costs associated with putting together with with closing on a large part community and creating and syndication, how did you end up handling those costs?

Joe Fairless: 19:38

So it's just how it's always handled it just reimbursed? So you know, there's there's costs associated to getting the attorneys put together a legal document, the traveling to the property, and and, you know, overseeing things, and just reimbursed from the property.

Neil Henderson: 19:58

Gotcha, gotcha. So, on the deals now, I'm over talking larger deals than a million dollar down. Can you talk a little bit about syndicating with these large syndications? I mean, you're talking, you know, apartment communities that are probably worth about 20 to $30 million, correct. 40 to 70,000,020 to 70 million. Okay. So we know, that's a substantial, you're not going down to the local bank and, and getting alone You're, you're a you're having to pull money from investors in syndication, but you're also having to get the deal finance, can you talk a little bit about the differences between financing a small, single family home or a small multifamily versus getting the financing for a large commercial property like that?

Joe Fairless: 20:53

Sure. And, you know, whenever I was in advertising, my salary at the peak, I started out as $30,000, when I started, but then at the peak, it was $150,000. And I was able to get approved for a single family home investment, because I had a W two job. And, you know, it was it was it was great. Well, once I left that, and by the way, I could not as a W two employee, and with $100,000 income, you know, there's no way I could have been approved for a $20 million property or $10 million property, I would have had to bring on the right team members. But when I left, I could no longer get approved for a single family home, because I didn't have a W two income. But I could buy a $6 million apartment community. As long as I brought in the right team members, I mean, it just it that's just how it is. And so the other differences with a apartment community, your experience, and your team, let's I should say that your team, your team's experience, liquidity net worth comes into play much more than a single family. So specifically didn't it depends on the type of loan you're getting for apartment sanity, but usually you want to, you'll need to have 100% net worth of whatever the loan you're taking out is. So let's say you're you're getting a $10 million loan, then you need $10 million net worth in order to be approved for that loan. In addition, you need 10% liquidity of whatever the loan balances. So again, $10 million example, you're going to need a million dollars liquid at closing and maintain that throughout the project. And they can they can ask to see your bank statements at any point in time. And you have to go have that liquidity in net worth. In terms of experience, well, you've got to have a team who has already done what you're doing, and the lender needs to be comfortable with them. So starting out, you won't have that. So you have to attract people who will be on your team, they'll get ownership in the deal and exchange for signing on the loan. Because if someone like me starting out, when I didn't when I had for single family homes, but I didn't have much of a savings and I didn't have any experience on the you know, buying apartment communities at that time, I didn't really mean much to the lender that I gay, okay, move aside who else you got this coming on board with you. And so really, it's finding the right team members and attracting them to your team and compensating them for it. The properties alone itself, it's you'll want to get a non recourse loan means that the bank can't come after you personally, should the project fail unless you break a couple loan covenants. And, you know, they're they call them bad boy call about you can't commit gross neglect, you can't commit fraud, you know, things that if you do commit, you deserve to get, you know, user user to be gone after by the loan or by the lender. And and then you know, they're there, the lender is going to underwrite the property based on the cash flow in the business plan. Whereas with single family homes and right the property based on the person who is signing on the loan more so you know, the person signing on loan still important in the commercial deal, as I've mentioned, what were some of the requirements, but they they look more at the asset in commercial than they do when you're you're buying a residential property because, you know, things go sour, they want to make sure that you haven't got a $5 million property a $10 million property that is actually an asset and they'll still be okay. versus a single family home. If things go sour. Well, you know, you've got the borrower on the hook, but you want to they it's not really a cash flowing property usually. Or it's not cash flowing substantially where it makes financial sense for the lender to really keep it on the books.

Brittany Henderson: 25:20

You You keep talking about team and for those of us who don't really know very much about apartment syndications, what does your team look like is that the investors are these other people?

Joe Fairless: 25:32

Oh, I I consider I think we're all on all on a team. I think everyone in the world on the team today and I just I just I just wanted to love it, Texas. I was there a couple days ago, and I was speaking to the they call them the deans, student ambassadors. So the dean has handpicked a group of about 30 students and the students are are ambassadors of the College of media and communication. And they interviewed to be ambassadors, and, you know, they they help with tours and other things. And one of the benefits they get is the dean brings in flies in speakers who are Texas Tech graduates. And, you know, they speak to the students occasionally, and I was invited to speak to them. So I went there this past week, and it was on leadership. And I had seven laws of leadership that I put together, and one of them was we're on the same team together. You know, whenever I call Verizon Wireless, I, I believe we're on the same team together, we have a mutual purpose. And, you know, we all got challenges personally, professionally. I mean, and a lot of time, we don't know what the challenges are for the person we're speaking to. But I think it's just important to acknowledge that, hey, we're all in this together. So, you know, whenever I whenever I say Team rematching macro level, that's what I mean. But that's not really what you're asking, I get that. So I'll be more specific. I mean, specifically real estate team, you know, we've got a director, well, I let's let's look at a high level, money deal and execution. And that's how I broke it out in my book, my apartment syndication book, money deal and execution. So money, you know, we partner up with high net worth investors, we also put our own money in each of our deals, we invest alongside investors. One because I want to, I want to grow my money to that I'm making them to it shows alignment of interest. In terms of the deal, we partner up with brokers, sometimes we partner up directly with owners, we have a director Ashcroft capital, my company, I co founded with Frank, my business partner, we have a director of acquisitions. So he, Scott is his name. He's respond primarily for finding the deals and working with brokers. And then you know, and on the execution, we have a director of asset management has named Alec. And he's focused on that. And he partners up with a property management company. So we've got a property management company, third party management company in Dallas Fort Worth, where most of our portfolio is, and we have a property management company, that's third party in Tampa, or we are we're property as well. And I will one more clarity, or one more thing to elaborate on that. It wasn't it didn't used to be that clean cut in terms of team when I was starting out, even when you know, Frank and I were buying our first handful of properties, we had to have help signing on the loan, because we did not have the liquidity or net worth to sign on a $50 million loan. Now we do, but we didn't. And so we would partner up with people and they would get in get in on the deal sign on loan what. And same with, you know, property management companies. Initially, we had a couple deals where we partner with a property management company, and they got equity into the in the deal. In exchange, we got their credibility, because they had more experienced than us and we're able to have a, you know, a good partnership. So you know, now as we've grown, we don't need to have those types of partnerships, because we can stand on our own two feet. But you know, you do need to do when you when you go in and you partner with people, and then you just evolve. Gotcha.

Neil Henderson: 29:33

So let's, let's talk about time, what does the day in the life of a full time real estate apartments indicator look like? I mean, how many hours a day are you typically putting in?

Joe Fairless: 29:45

I mean, today is Saturday, and it's 1:38pm. And I'm having conversation about real? Well, what's that say? Yeah, I mean, it I'm all I'm always working, but my company with Frank, and I doing what I love. And so, I don't, I mean, I'm definitely working from 8am to 8pm. But you know, there's, there's, there's, there's times within that, that I'm doing family stuff or doing other things, but my, my inbox has three emails in it right now. That's it the unread emails, and we've been on in and two of them are emails to me that I sent myself as a reminder of something. So I, I am always on top of emails and things that need to be addressed. And that's important to me, I mean, communication and lightning quick response time to my investors and my consulting clients is very important to me, because, you know, we work in a remote business investors live in California, or Texas or somewhere else. And we may or may not have met in person. So it's important when they have a question that I immediately address it and they can get ahold of me and get in touch with me because I want the same thing. I invest in deals I I have business and, you know, with with people and I, whenever I have a question, I'd like it addressed as quickly as reasonably possible. So I'm working a lot, but I'm doing stuff I like to do.

Brittany Henderson: 31:34

When you do what you love, you won't work a single day. Life for some,

Joe Fairless: 31:38

there you go,

Brittany Henderson: 31:40

like completely mangled that quote, but

Neil Henderson: 31:43

get the job.

Joe Fairless: 31:45

Yeah, I get the desk.

Brittany Henderson: 31:46

Yeah, well, I'm like, one of the things I think a lot of us are one of the reasons A lot of us get into this line of work are working towards how we make money is is because it gives us a little bit more fun ability to be able to you know, you're working for yourself, so you can stop and spend time with your beautiful wife and child. And give them that time. And then you know, do what you need to do. Yep. So you clearly have kind of a system down, do you have any, you know, systems that you feel like really work for you. Whether that's like an electronic system, or just a philosophy to keep yourself on track.

Joe Fairless: 32:30

I've got a calendar that I go by. And then I have a notebook, if there are some things that I need, do I always write it in the notebook? And then when it's done, I highlight it. So it's done. So if it's not highlighted, I need to do

Brittany Henderson: 32:47

is basic?

Neil Henderson: 32:50

Yes, you know, there's no, there's no, there's no, there's no man behind the curtain? there. There's no like, ai helping you out?

Joe Fairless: 33:00

Well, I mean, I have a calendar link that I give people so they can schedule directly. Yeah, their clients of mine, and then their investors, then I have an executive assistant who works with them the scheduled times.

Neil Henderson: 33:13

Gotcha, gotcha. That's kind of what we're reaching for. So in the interest of moving forward on time, we want to be respectful of your time and listeners time. So you, you obviously invest long distance correct? You don't most of your properties are not in the area yet. Correct? Yeah. How often do you need or want to visit those properties that are already in your portfolio,

Joe Fairless: 33:39

as someone on our team is that is visiting the properties once a month? That's usually not me, because my primary responsibility is not asset management. But I oversee some of that, and it overlaps. But, you know, if if there's a group had is at the scale that we're at, and then one person trying to do asset management, trying to find the deals and then trying to bring the capital, then that's a recipe for absolute disaster. So we all on our team we all know really good at and we focus on that. And then there's overlap, certainly, because all the parts tied together. But we've got a director of asset management and physical properties, and then oversees the properties with our property management team. How often are you looking at? So if you've got like a perspective deal? Are you going to look at that? Or is that another member of your team? I always look at it before we purchase it. But I'm not the first one to go look at it. I'm one of the last people to go look at it before you make a decision to move forward. Gotcha. So, you know,

Brittany Henderson: 34:46

obviously, you need to be in the states to do this at least part time. But could you run your business from anywhere in the world for any significant amount of time?

Joe Fairless: 34:57

I could? Yeah, time zones be tricky, depending on what time zone I'm in with investor conversations. But yeah, I could. Alright,

Neil Henderson: 35:07

so let's, let's finish up talking a little bit about the state of the market. And multifamily. multifamily is obviously been one of the hottest asset classes in real estate for the past several years. What would you say to people who say, you know, Joe, there are just no deals to be had anymore. It's time to just sit tight, and wait for the market to correct whether then they'll be some deals,

Joe Fairless: 35:30

I'd say keep with that mindset and everyone else about a deal. Competition. The those will be the same people who make excuses for not doing other things in their life. whenever it's more challenging. I mean, you know, yeah, the market. Yeah, it's, it's historically good for multifamily right now. But you know, we're not buying cryptocurrency. And we're buying properties that are cash flowing, and tangible assets that are pretty and over a long period of time. So if you buy it the right way, and I've written down, I talked about the three immutable laws of real estate investing, and you just start three immutable laws of real estate investing job eligible, you'll be able to read through those, as long as you adhere to the three fundamental laws are immutable as real estate investing, then, you know, you'll be fine. So I don't have a crystal ball. I don't try to time thing we just buy fundamentally right? And right now, it's a great time designing. And you know, when the correction takes place, will scale back on renovating our properties or even discontinue the renovations will sit tight and cash flow? Won't cash flow as much as we would have if you know, it didn't happen. But as long as we buy, right, we're not forced to sell meaning we have the right financing in place will be good.

Brittany Henderson: 36:47

All right. So to finish up, Joe, what advice would you have for someone that's looking to get into apartment syndication who has a full job, full time job and a family much like us?

Joe Fairless: 37:00

I wrote an article six ways to break in the apartment syndication and ultimately, is about identifying what you're good at. And then how can you use those skills to add value to other people's lives. And specifically people's do so if you search 66 creative ways to break into multifamily syndication, they'll come across the article one is find off market deals, that's really good at finding deals, and you'll find something matched up with someone who has the ability to close, get a see or get it on the GP side or just build goodwill with them to is conservatively underwrite deals. Um, so you know, if you're really good at the numbers, then that's the way you can go and add add your services to someone, three, negotiate terms and get legal documents in order, if you're have a legal background, then great, that's something you could do for free and then exchange add some value to someone for brain capital, with someone who's going to partner with you on that deal. So you cannot raise money just to raise money unless you're a registered broker dealer. But if you partner up with someone, and you're on the general partnership side, and you have more of a role than just bringing the capital, then you could do that by you could if you're you know, you could secure debt financing if you have relationship with certain people, you know, lenders or mortgage brokers, and I don't know how valuable that would be, but you know that that's a way that you could do it or six help with property management or even Asset Management if you're local. So there's tons of different creative ways you can you can go about it. Those are six, but I think I even have some bonus stuff in there too. And that article. Awesome.

Brittany Henderson: 38:38

All right. Well, Joe, thank you so much for joining us today. If any of our listeners want to reach out to you what's the best way they can find you?

Joe Fairless: 38:46

If you're a high net worth investor looking to passively invest you can go to invest with Joe calm if you're just looking to learn more about apartment syndication and go to think communication com. What's up a check? Yeah, I got apartment syndication. com I do. Yeah. So you just go there and read more about apartments vacation. If you want to check out my podcast and get your daily dose of real estate investing advice. You can do that too. And in iTunes. All right. You too. Yep. Always good catching up.

Brittany Henderson: 39:21

Awesome. Well, that was Joe fearless with the best real estate investing advice ever podcast and Ashcroft capital. I really enjoyed speaking with him, and I got a lot out of it. What do you feel like was your key lesson learned?

Neil Henderson: 39:33

I would say invest fundamentally. And Joe mentioned his three immutable laws of real estate investing. He didn't specifically say them, but I know them, which is one invest, buy for cash flow to secure long term debt, that allows you that gives you the time to execute your business plan. And then three, have adequate cash reserves don't go in, under capitalist,

Brittany Henderson: 39:58

awesome. Well, I have keyed in on something that's completely in more of like the philosophy, philosophical, excuse me graphical realm, which typically is what I pull out of a lot of these, but I really like talking to Joe about your identity and how you present yourself. And you know that that if you aren't really being true to yourself, that you just you just don't come across as you and we talked about how then you don't make connection points with people, you're not able to, you know, connect on a level other than, like, I want your money, give me your money. And I will give you more money, which, you know, everybody can kind of give that kind of relationship in some way, probably here are goods or services or vice versa. But where you really create a lasting relationship, on a deeper level is by being true to yourself and showing those little bits that we can all connect with. So, you know, for, for Joe, early on that was in the advertising world with people that he knew there that he was networking with. And then also Texas Tech, right? I'm sure there were plenty of alumni didn't know who he was, but he's connecting with them on that level. And that's really important.

Neil Henderson: 41:16

Well, and it really ultimately comes down to trust. I mean, when someone is giving you their capital to invest in a deal, they want to be able to trust you. And if you're not being yourself, people have people are amazing bs detectors. And one of the reasons that so many of us really don't like sales people is because so many sales people are not really being themselves there. They have a shtick that they're almost a script that they're working through that just makes you not trust them.

Brittany Henderson: 41:50

Yeah, completely. And that's, and that's, I think that's kind of what part of connecting with someone is, you can't connect with them. If you're not, if you're not really sure that truthfulness piece and you can't, you're not going to connect if that trust isn't there. So I thought that was really important. And, you know, a lot of what we talked about, you can find in Joe's books, and you know, through his podcast, but these little bits and pieces are really where I think you get like the best advice and you know, the little golden nuggets that you're not going to get from reading someone's book.

Neil Henderson: 42:29

So how did he go about acquiring his knowledge.

Brittany Henderson: 42:32

And he he read some books, he got a mentor or consultant, as he called it. And he, you know, went to seminars, things like that. So kind of the usual way, he didn't talk about meetups or networking groups, which was interesting, because that has been a big one for many of our guests. But yeah, he he really spent the time and spent some money on on really educating himself. Yeah, and I think that's something that, eventually you do have to do is spend a little money, yeah,

Neil Henderson: 43:12

you can do one or two things, you can either spend the money to hire a mentor, who's going to lower your risk quite a bit. Or you can, you know, offer up if you have time, that offer up your time to an experienced investor, if you have money, then you're going to be offering up money, but don't go to someone and just say, Hey, will you be my mentor? Because these are busy people? Yeah. And you have to offer something of value to them, before you can expect them to give you?

Brittany Henderson: 43:44

Well, and I think it's, um, it's a, you can do money, your time. And this is where you know, you and I have these conversations a lot. Because we don't have a lot of time. So for us spending the money to help us get farther along is really where we have had to make some of those investments. Because we can't invest the time. And that's, you know, and that's where, you know, some people aren't going to be going to meetups or things like that, because they just don't have the time. I know, it's hard for you to do those sort of things. So for our listeners who are, who have families and who, you know, are like us, and just, you know, they want to be spending the time with their kids or, you know, significant others that you're going to need to spend money if you want to get educated or invest passively.

Neil Henderson: 44:37

Yes, yeah. So how long did it take him? Did you catch that?

Brittany Henderson: 44:43

Well, from the first time that he bought a single family home to that first deal, where he got a million dollars worth of investments? It was 2009 to 2013. So about four years. I don't know when he started did sort of looking into apartments syndication. Yeah. I didn't really follow up there. Yes, we went on some other tangent.

Neil Henderson: 45:08

But um, well, he, you know, he had four years of educating a real world experience investing in real estate, which was buying single family homes and some point in their he discovered, you know, some of the challenges of scaling, single family homes. So I would say, and having talked to Joe, I think it's about a year to two years, from the time that he really started digging into multifamily.

Brittany Henderson: 45:36

That makes sense. So how much money are we talking about for someone to get started, and apartment syndication?

Neil Henderson: 45:44

Well, um, it actually, the funny thing is, it's, it's actually it's less about money, than it is about your own experience, your network, and your team members. And as Joe talked about you, you know, the three aspects of the multifamily deal is the money, the deal and the execution, he didn't have the money, he had to go out and raise the capital. And that came down to his network, yeah, he did have the deal. He, he worked with a broker to get a deal, and that the broker is paid out of the deal, after it's closed, you didn't have to pay any money up front. And then as far as the execution, that's after, you know. So I know that it can cost anywhere from, you know, 15, to $20,000, to sort of get one of these deals off the ground. However, as he mentioned, it gets paid back in as part of the deal. So a lot of times, you can sort of roll that into the money that you're, you know, yeah, yeah, investors are putting in.

Brittany Henderson: 46:53

Yeah, and if you've got a partner that you're working with, they might be able to put up that capital. So now that he's in it with you didn't really talk about specifics on how much money he's putting in, but he does put money into his own,

Neil Henderson: 47:07

he does. And typically, what I do the I never asked my investors for more money than I'm willing to invest myself. So if the minimum investment is, let's say, $50,000, then I'm going to be willing to put in $50,000 of my own money. Now, there are times where sometimes I'm not able to put money into a deal. And it's not because I don't believe in a deal, but it's sometimes it could be there, there's no room on the deal. For me, because we are just full up on investors. Or it could be that, you know, my capitalists just tied up in in other deals and things like that. I know, in speaking with Joe in the past that that's very much how, how Joe works. Well, it this is a full time job, probably more than a full time job. He mentioned working from 8am to 8am.

Brittany Henderson: 47:58

It is here's my one caveat, Joe coaches and he's big on contribution. It was the very first thing he said so and and we should all be giving back. And that is important, you know, when you're looking at your life goals and, and how you're moving forward. And it is important to have that contribution piece. And he also part of his business is contributing by doing real estate coaching and, and hosting conferences, and you know, doing things like that. So he probably has more than your typical person who might just be doing apartment syndication, and you know, and he's got his podcast as well. So a lot of these people are doing some of these things. But I would say like, other people in this space are probably not doing all of these things. So when you think about the time that he's spending, just know that some of that is by choice, and it's not necessarily something you have to do to be successful in this arena. So yes, he probably works from eight to eight with breaks in between as he wants to for family and other obligations. And that's really a choice for him because he enjoys it, and not necessarily that he needs to or has to do that all the time. I'm sure there are days where he does. But

Neil Henderson: 49:14

yeah, I would still say we're talking at least 40 hours a week.

Brittany Henderson: 49:18

Oh, yeah, yeah. But, uh, you know, like, I don't want to scare people, because he basically said he works 12 hour days ish. Yeah. And I think we ought when we're very passionate about things like we can do that. Joe, up until fairly recently, though, was either single or just married. And that makes a difference, you know, then having he has a child now. And and I'm curious to see what happens, you know, does he adjust his schedule to account for the fact that tiny people are demanding? And, yeah, well, and like, they get their differently demanding, you know, he's still in infant life. And, and that demand is, tends to be more on mom. And a lot more ways, especially if we're breastfeeding, I'm going to go off on a tangent here to the mom world. So if you're a man listening, just know that, you know, just because my child needs to be sustained off of me that that? Yeah, yes, a lot of it is on me, but you should have some some work to know. But Neil is a great co parent, I know that Joe is as well. And as they get older, they can sometimes be more of a time suck in some ways and less than others. So anyway, all that to say that, you know, yeah, it's a full time job. And you get some flexibility to schedule your life as you want it. So you know, you could probably tell you can make it work benefit of working for yourself. Exactly, exactly. But don't don't think this is not passive, passive investing. This is where no

Neil Henderson: 50:49

chosen active investors. So could he do this strategy from anywhere in the world?

Brittany Henderson: 50:53

We talked about this pretty specifically, for a certain amount of time. Yes. And we didn't talk about actually waiting get that specific with how long he could take a trip and and make this work. And I would guess that he could probably choose a strategic time where he knew he probably wasn't going to need to like be available a lot, particularly if he's going someplace where the time time zone makes it particularly difficult to communicate. And and then if he didn't need to go somewhere, he didn't need to communicate and figure out how to do that. And the he's got a team, which we talked a lot about team and how important that was. And I think that's really important and giving him that flexibility is but there are other people who are doing those day to day tasks. And you know, so if he's right in the middle of figuring out a deal is probably not the best time to go on vacation. Correct. Any other tidbits they feel like we should.

Neil Henderson: 51:49

That's all I gather. I feel like I talked a lot. I like it when you talk about

Joe Fairless: 51:55

that. I think we're we're getting a little too personal.

Brittany Henderson: 51:59

Awesome. Thanks for joining us.

Neil Henderson: 52:01

Let's hit the road. And if you liked this podcast, we would really appreciate it if you take just a few minutes and leave a review for us on iTunes. It's really simple to do just go to road to family freedom comm slash review for links and instructions. Thanks for listening. We're doing this all again next week. Tobin Safe travels