Welcome To The Real Estate Underground Show #95!
In today’s episode, we have a special guest, Josh Cantwell from Freeland Ventures! Josh is a highly successful multifamily syndicator who has completed 19 apartment syndications, including a massive 730-unit property. Currently, his portfolio consists of 3000 units.
Josh takes immense pride in his ability to identify value add properties and focuses on construction to maximize returns. His journey in real estate began back in 2001 when he caught the "real estate bug" and purchased his first duplex. As a former financial advisor, he learned the art of raising money, which proved to be invaluable in his real estate endeavors.
In this episode,
If you're eager to learn more about Josh, his coaching program, or Freeland Ventures, visit their website at https://freelandventures.com/. They also host live events three times a year, where individuals can acquire valuable knowledge about multifamily investing systems. Whether you're looking to be a passive investor or explore other opportunities, freelandventures.com is the place to go. Don't miss out!
Resources:
Additional Resources:
Welcome To The Real Estate Underground Show #95!
In today’s episode, we have a special guest, Josh Cantwell from Freeland Ventures! Josh is a highly successful multifamily syndicator who has completed 19 apartment syndications, including a massive 730-unit property. Currently, his portfolio consists of 3000 units.
Josh takes immense pride in his ability to identify value add properties and focuses on construction to maximize returns. His journey in real estate began back in 2001 when he caught the "real estate bug" and purchased his first duplex. As a former financial advisor, he learned the art of raising money, which proved to be invaluable in his real estate endeavors.
In this episode,
If you're eager to learn more about Josh, his coaching program, or Freeland Ventures, visit their website at https://freelandventures.com/. They also host live events three times a year, where individuals can acquire valuable knowledge about multifamily investing systems. Whether you're looking to be a passive investor or explore other opportunities, freelandventures.com is the place to go. Don't miss out!
Resources:
Additional Resources:
Greetings and salutations. Real estate undergrouners. Ed Matthews, with the real estate underground, thank you so much for joining us on this show Today. I'm pretty fired up. I got to be honest with you because this guy, I have been paying attention to him for years and I've learned from him. He doesn't know this, but I've been stalking him on YouTube for a long time and it's truly an honor to have Josh Cantwell from Freeland Ventures on the show today. Welcome.
Speaker 2:And good to see you, my friend, hey, thanks, thanks for having me on. I mean, I'm looking forward to this and looking forward to sharing with your group.
Speaker 1:Yes, when we when I look at the business right, I mean bought 4500 units, I think you've raised well over $100 million in cash, and I'd say that most of the capital, most of the folks that are listening right now, are probably aspiring to that. I want to ask you a whole bunch of loaded questions on on what your secret sauce is, and let's see if we can unpack it All right.
Speaker 2:Perfect, all right, I can share.
Speaker 1:Okay, cool. So for the very few people out there that probably don't know who you are, why don't you just give us a little bit on your background and we'll dive in?
Speaker 2:Sure, today I'm a successful multi-family syndicator. We've done 19 apartments syndications. The largest one that we bought was 730 units. I've done a small as a five unit. Right now we're sitting on 3000 units that we own. I am righted myself on buying value add properties and really focused on construction. Okay, buy value add. The idea is you're going to create value. Oftentimes you're going to be doing improvements of some kind. Last year we spent over $5 million in value add improvements and that's what we've hung our head on, so we'll be good at that part of the business. And we own a big portfolio at Cleveland. We own about 800 units in Houston. We own another thousand units in Atlanta.
Speaker 2:I'm also a former single family investor. I did a thousand units of multi-family, a thousand deals. We've done over 400 private lender loans. Today I truly have the freedom both the time freedom, the personal freedom and the financial freedom that I always thought real estate would give me. It just took me kind of three separate journeys, three separate phases, if you will, right of my life, to get where I'm at now, and so my only, one of my only regrets is that I didn't do multi-family first, because I would be there much, much sooner. But that's where we're at. It's been an incredible journey and we're super excited to be managing the portfolio we have now.
Speaker 1:Yeah, so thank you, so let's talk about your phases right, so walk us through. You started as a single family. Were you buying, rehabbing and holding or flipping or accommodation thereof or something else?
Speaker 2:Yeah yeah. I caught the real estate bug early 2001. I was 24 years old. I bought a duplex. I house hacked it. I lived in it by 2003, 2004.
Speaker 2:I was getting soured on. I was a financial advisor so I'd already learned how to raise money. I was serious 666, 63 licensed. Most of my clients were three times my age I was 25. They were 75, but I loved it. But it was a gripe about accumulating clients and assets under management.
Speaker 2:So started looking at real estate and I went into a wholesaling and three, four closures because I lived in the Cleveland area. Starting in 2001, cleveland had a major group of companies leave Cleveland so there were all these houses and all these foreclosures and we were like, okay, where are we going to invest? It was obvious that the foreclosure market in Cleveland was already started in 2003, 2000. So we became an expert at finding three, four closures, negotiating short sales, buying some of those but mostly wholesaling them in a quick short sale kind of wholesale situation. We became a nation's leading expert. We were doing events in Vegas and Dallas and all that kind of stuff. That was a keynote speaker at the homebusters franchise national convention in 2006, 2007,. Basically telling everybody that these short sales were coming. They had just hit Cleveland three years early and then all of a sudden it hit. I continued to teach that and do a ton of those deals.
Speaker 2:That was the first phase until about 2011. And that's when I got sick. I was actually diagnosed with pancreatic cancer. I was 35 years old. Major diagnosis and I quickly realized that pancreatic cancer had a 7% survival rate, and so that journey of the next year or so of being diagnosed, going through surgery, going through recovery, relearning how to eat and all these crazy things that I went through, led me to phase two and then ultimately, phase three was where I'm at today. But my first phase was definitely in the residential single family wholesaling and we became really good at really building that business very early before it hit the rest of the United States economy.
Speaker 1:Wow, that's amazing. So it's fascinating and I've had a similar experience and I'm so glad you're part of the 7%. When you have a health scare like that, that forces you to confront mortality, when you fight your way through it, my experience was the wine tastes a little sweeter, the air smells a little better, day is an opportunity, not a slug vest. But it's OK, I'm awake, let's go. And it's amazing what kind of motivator that is for you when you have to confront that it's the. Anodinus, I think it's probably similar for you.
Speaker 2:Yeah, I think what it's done is. It made me a more mature business owner and a more mature person, because I realized that when your life is nearly taken away from you and I would have left behind my wife, newly married with two babies she was eight months pregnant when I was diagnosed oh my goodness, so we're about a third kid she would have been at home alone with three little kids you realize that all the decisions that you should have made, all the choices that you could have made, you realize all the regrets you would have had, and then you start to really start to think about what the next phase of your life wants to be, and it's almost a license to rip your whole previous life apart and rebuild it the way you now want to build it, which led me into that second phase of my real estate life, but also led me into a phase of I didn't have time to be asked people anymore, like I realized I was going to be ultra transparent with everybody all the time. I was going to tell people exactly how I think to help me make better decisions and help them make better decisions, and that led me to be a more mature entrepreneur. Also, let me understand that I made a huge mistake as a real estate investor.
Speaker 2:I was very transactional in that first phase, and I had to go to work, I had to talk to sellers, I had to get on the phone, I had to run the business, I had to get into dirt in order to make money. I realized I had made a huge mistake in not investing for cashflow, investing in things that created long-term, permanent cashflow, and so that was. A huge lesson for me is that I always thought, hey, I'll create cashflow, but I have this business that's paying me a half a million a million dollars a year of personal income, although it's very transactional. I always wanted to get out of it, and then, all of a sudden, I was forced to get out of it. So those are some of the things that I learned from that phase.
Speaker 1:That's amazing. And when you made the transition from single family, got through your health scare and then moved to multi-family, what was that transition like? I mean, how did you make that happen? Was it just simple, tearing off of the bandaid and selling everything off and using the capital to go buy multi? Or was it some known?
Speaker 2:Here's what happened While I was in recovery. I had a super major surgery. I lost 50 pounds, I had a real amount of E. They took out my whole stomach and all this crazy stuff. I had a lot of time to think Wait till next time to think but what happened was is I had bought a number of properties with a private investor money that were fixed in flabs and buy and holds before my surgery and then during my recovery I never really went to see those houses, but I was able to stroll the property by controlling the funding and not bank funding, but private money, private funding from private lenders and equity investors.
Speaker 2:And so that was really the pivot. And I realized look, josh, you have this experience as a former financial advisor. We know how to talk to people about money. Let's just really get focused on the rules, regulations and understanding how to really scale and raise private money. And what we did was we built up all this private money and we started not only buying our own fix and flips, our own fix and holds, but we also started a fund and that fund we able to really scale private money by putting all the money into a fund structure, and that was a in a debt fund and we were doing private lending and card money lending out of that fund and in some cases we were even lending to ourselves for our own deals.
Speaker 2:And all of a sudden I had a vehicle where I could constantly be recruiting capital into that vehicle. We created a lending company so that we could lend money out of that and what happened was is that now some of our investor friends that were doing single family and residential started by multifamily and they were doing I would consider small balance multifamily $5 million, $10 million, $2 million multifamily deals. So I actually entered the multifamily space as a lender. I got to see their deals as a private lender. I got to underwrite their deals as a private lender and sometimes we were even brokering with other people you know, blakum, getting paid points as a broker, right? So in multiple different ways we could fund their deals, but I got to see these as an underwriter.
Speaker 2:Then my buddies were like looking you're funding our debt for us. We need equity in order to scale. Can you also help us recruit some of the equity? And I was like sure. So we became a GP in some of the deals because not only were we funding some of the debt, now some of my money, some of these investors from the fund that liked the debt. They were saying, hey, we have this debt investment in this fund. Josh, what else do you get? What else do you have so that we could bring in some of the equity in the downstroke for some of these deals and that was a natural pivot right. So I was just in the moth. I was in these deals mostly on the financial side, on the money side of things.
Speaker 2:And that I got to the point where I was like, look, we're providing these other investors all their debt, all their equity, or most of their equity. Why aren't we just buying these for ourselves? Sure, and it was a very natural migration. I've never bought a course, I never read a book, I never went to an event for multi-family investing. I just got in it as a lender, as somebody that could provide equity and JV on deals. It got very much into the nuts and bolts of the PPMs, the private placement, asset management, because all of that had to protect the capital that we're bringing to the deal. And then, ultimately, we put the operator hat on. So it was a very natural migration the whole time through.
Speaker 1:Yeah, and it seems to me that's a multi-year transformation, no doubt.
Speaker 2:That was from 2014, 2013, 2014, when we started the fund all the way until 2017, 2018, about a four to five-year journey until we decided to say, hey, we're going to now kind of close the fund, we're going to cap the fund, it's going to be close-ended, we're not going to recruit any capital in the fund and we're going to start buying our own buildings and we started becoming our own GP and our lead sponsor of our own deals Excellent.
Speaker 1:Wow, awesome. One of the things that I'm always interested in is how operators like you and capital raisers like you run their business, and the ones that I follow that have really scaled effectively, are devoted to systems, and so I know, just from watching you on YouTube and catching the other places, that you have the very. You have a refined, very mature way of raising capital, of creating deal flow, of managing your back office, and I'm interested in two of those, if we have time. One of those is I'm interested a lot more, but we only have a finite amount of time, but I can talk for days about this, though.
Speaker 1:But the terms of raising capital, you have a very rigorous process that you go through to grow your capital position, and I'm curious for the folks out there who are interested in the ones that stopped me at the local coffee shop and say, hey man, I'd love to do this, but I don't know where to find the money. And my question tends to be where are you looking? And because the fact is that there's a lot of dry powder, even today, with tons of like threatened I would say billions and maybe more on the sidelines. And the fact is, in order to be a successful real estate investor, you need 50 to 200 investors that you're taking good care of over the course of time, and so I'm curious how do you do that? How do you, how do you create awareness? How do you grow your capital stack?
Speaker 2:Yeah, there's a long answer. However, I can break it down really into six steps. No-transcript. Breaking it into steps starts with mindset. The one thing I will say that I think has really served me well is this mindset of if you have something that you think that other people can benefit from, you have a moral obligation to share it with them. So I literally feel in my backbone that I have a moral obligation to share my investment strategies with other people Because, look, everybody in the world is saving for retirement, wants to be a smart investor, wants to have more capital, wants to retire sooner, wants to have a very safe and secure retirement plan. I am convinced that my multifamily opportunities are a great piece of that pie. It's not the whole pie. I don't expect everybody to put all their money with me, but I am convinced that this is going to help people be a better investor, reduce their risk, be more diversified. So I feel like I have a moral obligation to share it, whereas with other people are mentally at their, scared to share it because they're afraid to sell or they're afraid to pitch To me. If I don't share it, these other people are going to be worse off. So it starts with that mindset. Now that I know that I'm 100% convinced that investing in our multifamily deals or investing with any good operator doesn't be lost anybody is a good part of the retirement plan, now it becomes. How do I share the message? The first thing I'm going to do is I'm going to skip all the way forward to basically step number four.
Speaker 2:Step number four is you have to have a way for people to engage with you in your sleep. So you have to have a great website where people can opt in. That is a must have. You've got to have a website, an investor portal or website where people can engage. You can lead them to that website. They can learn about you their time not threatening whenever they want. So we get hundreds and hundreds of opt-ins every year just for people that want to know more about our investment opportunities. So that's a must do. Now you back up and say, okay, now I've got this program, I've got a website. There's lots of websites that you can buy and subscribe to that are just fully built out from lots of different vendors. Now you back up and say how can I drive traffic to those sites? And step one, step two, leading up to step number four, is really about? Are you an old school or are you new school? So the old school way to gain interest in traffic to your business, the old school way to notice traditional networking right, it's doing all of the different events, meetups, facebook groups, seminars, workshops, all these multifamily events that are out there, going and meeting with family offices, retail investors, other general partners and just muscling it. That's the old school way, yep. Now the new school is what I call a brand syndication system. So step number one is the old school muscle it through networking. Step number two brand syndication system.
Speaker 2:Brand syndication system to me is my unique approach to putting out our brand, our content, out to the world. You mentioned at YouTube it was one of 12 different platforms that were on where we share our content for the world to consume, which ultimately leads them to wanting more information. Joe Polish she's a very successful marketer I've been following for years. Joe Polish once said marketing is sales in print. Now that we're in the digital world, marketing is sales and it could be print, could be video, could be audio, could be any kind of digital media Right on. So a brand syndication system is the process of sharing your best of content. That's what you and I are doing right now on this podcast. So it could be picking one platform. It could be Facebook lives. One of my favorites is LinkedIn, because LinkedIn audience is a very professional audience. Okay, instagram is great, podcasting is great, youtube, all these platforms. Tiktok is coming up, so there's all these different ways to do it with the purpose of driving traffic right To that website.
Speaker 2:Okay, step number three, which actually goes back to step number one, is that not everybody's online. A lot of this, 55 to 85 year olds that have tons of cash are not on freaking TikTok and Instagram. So we want to serve that first audience, that manual audience, networking audience. I still send out a very methodical quarterly investor newsletter to those people that are offline. Okay, the people that I get at meetups, facebook, family, friends, colleagues. I have a list of them and I serve them through a quarterly investor newsletter that we produce and send out. It's glossy, it's beautiful and it's updated every quarter. So that's important. So that's steps one, two and three. Right. Step one muscle it manual networking, which goes with step number three, which is the physical quarterly newsletter. That number two your brand syndication system. Push out your best of content, which leads to step number four, which is a digital opt-in. That creates those four steps, create an abundance of lead flow and deal flow. That for me. Now step number five, that is critical.
Speaker 2:I meet with anybody who wants to meet. I meet with them online through a zoom call, one on one, always going to that first meeting 15 minute match. So I get on the phone with them. I don't care if they're worth a bazillion dollars, I've only got 15 minutes and that is an opportunity for me to set the table for. Are they an active investor? Are they a passive investor, or both? That is literally the first question I asked, because that sets the table. Which bucket am I going to put them in? Are they a potential partner on the GP side? Are they on the LP side? Are they just fishing for information? What does that look like? So then I get through that conversation and find out what do they want to do?
Speaker 2:A lot of people want to be passive. And then I tee this conversation up to say, look, the Securities Exchange Commission requires that we have a prior existing relationships. The next time we get together, I'm actually going to ask you a bunch of questions about your investment experience. I control the conversation at he who asks the questions is in control. Exactly. A lot of people want to get online and they want to barf all over the phone or the Zoom about their business and how awesome they are. There's a quote I have downstairs at my home gym that's written on the mirror that says if you're explaining, you're losing. So he who asks the questions is in control. I use the SEC as my excuse so that in meeting number two I'm asking them questions to see if they qualify to be one of my partners.
Speaker 2:And now I've set the stage for the rest of my relationship, ed, with them for the next six months to six years or however long it goes. I've set myself up kind of on a pedestal a little bit, where they're kind of looking up to me as a partner. And I think that's important to set that stage, to create the reputation now for that relationship that now I'm the one that's in control. I control the deal flow and we're going to be, hopefully, partners. But at the end of the day I'm going to be the GP. I think that we're going to go to set the stage early and then from there, look, I want them to invest, I want them to be a partner. There's all kind of follow-up that happens after that. Steps one, two, three and four lead to step number five those first two conversations. And if you get those first two conversations, you're going to create an amazing relationship with these folks. That's going to create an abundance of opportunity for the next five or 10 years. I've built my life around those six steps. You got it.
Speaker 1:And I think it's so important that you do it the way you do it. I refer to it as you got to date. First, right, you have to figure out who they are, where they are in their journey, where they're looking to go, and then your interrogation, your questioning techniques, are all around. Ok, am I the right person or entity, company to help you along the way to get you where you want to go? Sometimes yes, sometimes no, and the service that you provide them is that, that vetting, and so if they are a good fit, then you become you're the prize, right. I mean, you're providing them an opportunity, and it's such a big hurdle to jump over that mindset that you were talking about earlier of you're not asking anyone for money. You're providing an opportunity for them to get a little closer to their end goal. Whatever, that is right, it's right.
Speaker 2:Sometimes you're fit, sometimes. Here's one of the ways that we do it. That, I think, is it really sets the stage for that. This is this is some of the secret sauce that really works for me.
Speaker 2:I asked investors very early in this first conversation. I asked them again are they an active investor, a passive investor or both? Second thing I say is look, if you had to describe yourself as an investor, which one of these two buckets better describes you? Bucket A, where you want to preserve your principle and you're willing to accept a lower return in order to preserve your capital, preserve your principle and you don't want any fluctuation in your principle. That's bucket A. Or bucket B, which is you're willing to risk your principle and have your principle go up and down in value and have a little bit of volatility in order to get a higher return. Which one of those better describes you? And I let them talk. And then, after that, done talking, I say what if you could have both? And I shut up. And so if they can get principle preservation with a again could be a preferred return or some sort of faculty and that equity on top of that, and that's going to pencil out to, let's say, a 20% annualized return, if they can have principle preservation with a higher return. Most people think it's one or the other. If I'm going to preserve my principle at that lower return, if I'm going to have a higher return, I have to risk my principle If they, if I say, what if you could have both? And they say, oh my God, I would love that, but they're locked, like I now have their pension around, and so that is a critical question that I asked everybody and I've learned.
Speaker 2:I've been managing money for 25 years. I was a financial advisor for six or seven years but we're not going into real estate. I understand the psychology of money and you have to be a little bit different. You have to have some salesmanship, not that you have to be a salesman, that is really to have some salesmanship in order to keep people's attention. And if I can ask those two questions in the first 13 minutes, they're dying to have a second appointment with me, not me dying to have a second appointment with them. They're dying to have a second meeting with me, like when can I get back under Calend? And so that psychology of money, the psychology of having an offer, the psychology of the positioning, is huge to getting people wanting to kind of almost jump through the computer screen to invest with us. That's what we want and that's what sets the stage yeah, huge for us. Yeah, you only learn that over experience, but I'm trying to get your audience some of these little nuggets so they can take this away in their own business here. Thank you, thank you.
Speaker 1:So I'm always curious about operators and capital region folks that are operating on your level and I fundamentally believe leaders are readers and so I'm curious you as a professional, in these days, reading is kind of a catch all for podcasts and YouTube videos and audio books and reading physical books and going to conferences and all the other things you do to take in information. So I'm curious, I mean, given your schedule, given your responsibilities, as well as the way that you learn, how do you take in information? What are the things, what are the tools that you use? Do you read, you know physical books, do you watch videos, listen to podcasts or whatever? And in the most curious, who you paying attention to these days?
Speaker 2:Yeah, great questions. For sure I listen to lots of audio books. I listen in my car and listen in the gym all the time. I'm looking at my audible list right now. The book I'm going through now is called the Road Less Stupid by Keith Cunningham. What are the favorite books I just read was the Psychology of Money Yep. Eight Rules of Love by Jay Shetty. Greenlight by Matthew McConaughey, as a man thinketh, which is a classic that's a must must listen to. One of my good friends is Justin Donald, the author of Lifestyle Investor, so it's a phenomenal investing book. And Ryan Moran is a good friend of mine from Capitalismcom. His book is 12 Months to a Million. So those are some of the things I've gone through recently and some of my friends.
Speaker 2:I will tell you that I actually don't traveling. I don't like going to lots of events. I don't like consuming lots of books. I think a real entrepreneur who's really performing at a high level consumes a lot of information on the surface but realizes what can be used and added into their existing business plan. When I was a much younger business owner, more immature, I thought everything was a great idea and I wanted to implement everything right away. Right Now I implement almost nothing new unless it's been highly vetted.
Speaker 2:Because the second consequence of a decision, I think, is where you realize where you've made your money or made a good decision. Making the first decision to implement whether it's new software, hiring a new employee, implementing some sort of new system into your business that consequence is important and often that consequence can be positive. But they're going to be a second or a third consequence to that decision that is often unknown or unseen. Immature entrepreneurs, immature leaders, cannot see the second and the third and the fourth consequence of a decision. So they make one decision, they implement a lot of new things, they try a lot of new things. Little do they know that every decision has a second, third and fourth consequence. And so if they're adding lots of new decisions or lots of new software, lots of new employees, or they're constantly changing gears, not only are they making that first decision, but there's all the second, third and fourth consequences. That is mucking everything up. Okay, no, it's still critical now as an entrepreneur for me $250 million portfolio and all the stuff that we've done that when I make the first decision I have the second, third and fourth consequence already contemplated and I have a feeling and a pretty good idea of what those second, third, fourth consequences are. So I'm more focused today on making one good decision, that I know what the risks are.
Speaker 2:One of the quotes I heard recently is that in the moment of a final decision is when an entrepreneur has the most risk, because when you're about to actually make a decision to implement a system add a new employee, add some new software, buy a new build, whatever it is it's when you're adding the most risk because of the second, third and fourth consequence that you may not see. Although I have lots of different, I love Kevin O'Leary. Kevin O'Leary's been on my show and I've spoken with Kevin on some stages. He's probably my favorite entrepreneur to follow. My friend, justin Donald from Lifestyle Investor, is a total animal when it comes to investing. Those are some of my favorites, but I actually don't like going to a lot of conferences and confusing myself with new information. Right now it's about just spreading the screws a little bit on what we've already got. Make sense.
Speaker 1:Make sense. Make sense, yeah. So I suffer from a, I would say, profound case of entrepreneurial ADD, and so one of the things that I'm always focused on sounds like you are as well is removing those shiny objects from my world. And when we get something in place, we're big on documentation and all that, and so when we bring somebody on, when I'm handing them over the process, the procedures, the video, the training all that I give it to them, with the caveat my way is the way I want you to start doing it. But if you come up with a better way, let's talk about it, cause if your way is better, we'll adjust and we'll keep going as a product. I'll give you one better ad.
Speaker 2:Yeah, give you one better. We don't even hire people anymore into our business when they come in to adopt our systems. What I mean is, when I hire now somebody into our business, if they're at the kind of the executive level, they're taking over an entire swim lane and I expect them to completely disrupt and rebuild the swim lane and do it their way. I've hired them to take what we have but to make it 10x better, and it's only 10x better if it's their ideas. So during the interview we bring them in. They're sharing those ideas in the interview and we're bringing them on so that they're implementing that on day one.
Speaker 2:Now if it's more of I hate to use this term but more of a rank and file person, staff member, employee, they have to kind of fold into the existing systems that we have. But I do not hire people to learn the job on my done. I expect them, when they come in, to be bringing in a tremendous amount of new ideas on what they're gonna do to optimize my already existing successful business and that's why we're hiring them is to bring in those ideas and bolt them on Love. It Makes sense. So we're not looking for people to come in and fold into the business. If they're at that executive level, if they're gonna really move the needle, we're basically hiring them because they already they know something that we don't and we want them to bring that and fold that into the company.
Speaker 1:Makes sense. Yeah, so you and I are at different points in the growth structure. Obviously, you're running multiple businesses and you're hiring at an executive level because you are looking to replace you or a direct report of yours in a particular business a swim lane, as you said. You know me, I'm a little 150 unit real estate investor and I'm hiring VA's to help us push the ball down the field. So we're getting there, sure, but I hear you and it's funny, I was listening to your philosophy on that and it brought me back to my Silicon Valley days where I was like, okay, now I understand how to apply the life experience that you're talking about, the philosophy you're talking about, relative to my days when I was hiring somebody on an executive team to run a software company that I was managing, or something like that.
Speaker 1:Yeah, it's interesting, right, but it's all about making sure that for me, it's not. Only is it about do you know what you're doing? And now I'm only teaching you in our world the Clark Street way, right, or is? And on top of that, are you a passion player or a paycheck player, right? I only hire passion players.
Speaker 1:I want folks that are gonna run hard and buy into what we're trying to do here and, like I said earlier, push the ball down the field a little bit a lot actually, that's right, but I love the 10X.
Speaker 2:That's right For us. We've got three major swim lanes right, and so what I tell people, look, is if you have a scale problem, if you want to get to a thousand units, you don't really have an execution problem. You have a partner problem, and here's what I mean A lot of investors that are between, let's say, somewhere between 50 units and a thousand units. They haven't bought enough units where there's enough cash flow, enough profit, to have. In my world, I think the perfect multifamily business has three swim lanes and three partners. The CEO someone that sits in my seat focuses on primarily marketing and investors okay, passive investors, the brand syndication system and acquisitions. That's my swim lane, because I have to put my name and I have to rubber stamp every deal we buy, I have to sell that to investors and I have to support that for the life of that deal.
Speaker 2:So many people are trying to do both the construction, the cap box, the investor relations, acquisitions, asset management, property management, reviewing the financials. They're trying to do it all. Instead of that, what we decided to do is we were going to get to a thousand units as fast as possible so that we could have three swim lanes. So the first swim lane is the CEO swim lane, which handles a lot of marketing, investor relations and acquisitions. That's me. My partner, tyler, handles asset management, which he oversees all of our third party property managers we have four and he's the lead on acquisitions, which means he's the lead on marketing to brokers, marketing to wholesalers, investor relationships with not investors, limited partners, but general partners underwriting, deal review, site visits. He's doing all the acquisitions. That asset management. That's Tyler. And then Glenn, my third partner, handles all of our CapEx. Like I said, we spent somewhere near $5 million last year on capital improvements. We turned like 600 units. But everything that goes with CapEx including buying materials, labor, building up a team accounts, payable accounts, receivable balance sheet, draw ceilings, budgets, all that stuff.
Speaker 2:So you don't really, if you're not at yet a place where you have financial freedom or someone's not a place where they feel like they have some free time, they need to get to scale. And to get to scale to me is at least 500 units, if not a thousand. And to get to scale you don't need to be great at executing. You need to find partners who are great at one of those three swim lanes and that partner needs to be great at executing their swim lane right To me.
Speaker 2:I've been able to find two amazing partners. We bought 2,000 units together out of our portfolio the three of us and that's what's allowed me to. Surprisingly, I probably work about 10 to 20 hours a week that I have to work and the other 20 to 30 hours a week that I get to work if I want doing podcasts, fun stuff like this, events dealing with investors, things like that because the swim lanes are split up and so I tell people look, if you're in that place where you're kind of doing a little bit of everything, you have a scale problem and to sort of solve your scale problem, you have to solve the partner problem and round out those three swim lanes. That, to me, is the key to get where we've gone.
Speaker 1:Awesome. Thank you, I appreciate that and are you giving me something to think about? Hopefully are you giving the audience something to think about as well. So, josh, I know we're a little tight on times. If I'm curious about how you spend your time when you're not slaying the real estate dragons out there, right yeah, what do you like to do for fun?
Speaker 2:So I coach club volleyball, right, so I'm a club volleyball coach. My daughters play competitive club volleyball and we actually next week, we're actually going to USAV Nationals. So there's seven or eight or 9,000 teams in the 13 U age bracket and my daughter's team, the team that I coach has qualified as one of the top 200 teams in the country Wow, congrats. And so we're going, and so club volleyball takes up a lot of my time. I love to stand shape, I love to do things and I have a passion for kids. So if I get an opportunity to speak, I've spoken at colleges, high schools, grade schools.
Speaker 2:I think that the world has a significant lack of leaders that are focused on kids. I think there's a lot of people that are old school, that have always done it the way they've always done it. I think our world needs a lot of new leaders and entrepreneurs. So I love to speak to those kind of groups and so anytime I can have an impact on them a speaking engagement, a podcast that I can record coaching young kids.
Speaker 2:When I coach my kids at volleyball, I probably spend five to 10% of the time talking about just like, about money, about building companies, about entrepreneurship, leadership behind, treat people, how to be a good human, like. Those things to me are very important, and sports is to me. It's a small place that is very similar to business. In sports you have all kind of wild personalities, you have a leader, you have a coach. It dovetails into business very well and even when I hire people, I love to hire athletes, and so if I could spend my time speaking to kids and helping them understand financial literacy, money, math and volleyball, I'm a pretty happy guy at my free time.
Speaker 1:Oh, that's awesome. Yeah, it's amazing. The things you learn as a child From coaches. You learn character, you learn how to be a human being, right, and nothing makes me have. My daughter plays. My youngest daughter plays competitive softball. She's a little older than yours, she's a 16-year-old kid in softball and it's great to hear hey, your daughter's a really good softball player. That's fine. What I love to hear is and she's such a great kid, right, and that's the part I was like okay, the chest comes out and the buttons pop, and I think that being a coach, being a mentor to younger kids, provides a great opportunity both for you and for them to figure it out, because sometimes they get in a moment, sometimes they don't, and so at least you become one of those people in their lives that hopefully you tell them one good thing that'll help them stay on the path and become a productive adult at some point in their life, no doubt.
Speaker 2:Yeah, I gave a talk just two weeks ago to a group of seventh and eighth graders about leadership and my main message to them was if you wanna be a leader of a lot of people, be ready to be disliked by a small group of people. And if you're not comfortable being disliked by a small group of people in order to lead a large group of people, then you're not cut out to be a leader, right? Cause some people wanna just be liked by everybody, they wanna be popular and all that kind of stuff. But popularity is not leadership, right? Popularity is having a vision, having a path, taking people down that path and at the same time, you're gonna alienate some people and you have to be okay with that. That was my message. I spoke to about 200 kids that were self-selected, that were selected to be in this leadership conference, and we talked about being disliked.
Speaker 1:That was a main message to that group, which at 12, 13 years old is a really hard message to hear because they oh yeah, popularity is everything at that point in your life, right?
Speaker 2:Yeah, but aren't we as adults, aren't we very similar, right? So many adults wanna be liked by everybody? Adults maybe have a little bit thicker skin, but you have to be ready to be debated. You have to be a good leader. You have to be ready to be debated. You have to be ready to have proof. You have to be ready to be disliked. But I mean, look at Steve Jobs. Like black people hate Steve Jobs, but he's still considered one of the probably the top three leaders of all time, and so that is something I prepared for, and if I can prepare kids to be better leaders and entrepreneurs as they get older, that's for sure one of my passion projects, one of the things I love.
Speaker 1:That's fantastic. I admire that. So, josh, I really enjoyed this conversation and, once again, thank you for joining us today. If people wanna find out more about you or your coaching program or Freeland Ventures, what's the best way to do that?
Speaker 2:Yeah, our website, our main website, is freelandventurescom. So freelandventurescom. They'll find everything there. We host live events three times a year for a few hundred bucks. People can learn all over our multifamily. They invest in systems. Wanna be a passive investor? Look at that kind of thing. They can visit us all at freelandventurescom. That's the place to go Awesome.
Speaker 1:Josh K. Well, thank you so much for your time today and all your wisdom and expertise. It's a pleasure to see you, my friend, and thank you very much.
Speaker 2:All right, thanks for having me on.
Speaker 1:I appreciate it.