Are you dragging yourself out of bed every morning to go to work? If so, it’s time to switch up! If you feel like there’s more out there for you, there probably is! Take it from the founder of LiveFree Investments and co-founder and Principal of FTW Investments, “Mr. Kansas City” Logan Freeman, as he shares the wisdom he has gained from the different shifts he has made leading him to the real estate private equity space. In this episode, Logan talks about setting your mindset, acknowledging your strength and weaknesses, proper delegation, and learning from people who have successfully done it and how it contributed to his success in managing a real estate private equity firm. If you are looking to make a breakthrough in real estate or any market, you can’t miss this episode! Tune in and pick up the golden nuggets from the man who acquired 225 units in a little over a year and has returned all his investors’ capital while maintaining cash flow.
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- DETOX, DECLUTTER, DOMINATE
- The ONE Thing
About Logan D. Freeman
Logan Freeman is key principal, co-founder, and Chief Development Officer of FTW Investments. Mr. Freeman oversees the company’s acquisitions and investment strategies. He also personally selects all key investment markets and asset classes to meet the goals of investors.
Mr. Freeman brings to the company over six years of real estate investing experience. Prior to FTW Investments, Mr. Freeman was the Director of Acquisitions for a fund where he originated the concept, developed the operating plan, and created the company’s products worth over $50M. He also acquired over 225 doors in little over a year and completed a portfolio refinance, returning all of the investors capital as well as maintaining positive cash flow.
Prior to working with the real estate investment group, Mr. Freeman worked as a director of sales for Service Management Group. This position involved working with startup, medium sized service, and consulting companies in and around Kansas City.
Prior to his entrepreneurial activities, Logan was an All-American collegiate football athlete at the University of Central Missouri, where he graduated from in 2013. After his final season in college he was picked up as an undrafted free agent by the Oakland Raiders.
From The NFL To Managing A Real Estate Private Equity Firm – Logan Freeman
In this episode, we are joined by Logan Freeman. A little bit about him. He is the Cofounder of FTW Investments. He oversees the company’s acquisitions and investment strategies. He also personally selects all key investment markets and asset classes to meet the goals of investors. Prior to FTW Investments, Logan was the Director of Acquisitions for a fund where he originated the concept, develop the operating plan, and created the company’s products worth over $50 million. He also acquired 225 doors in a little over a year and completed a portfolio refinance, returning all the investors’ capital, as well as maintaining a positive cashflow.
Prior to his entrepreneurial activities, Logan was an All-America college football athlete at the University of Central Missouri where he graduated in 2013. After his final season in college, he was picked up as an undrafted free agent by the Oakland Raiders. We believe this interview with Logan will bring great value to active and passive investors looking to learn more about how acquisitions and asset management of a real estate private equity firm are managed. Welcome, Logan. Thank you so much for being here.
Thank you both for having me. I’m very excited to be here and hopefully, to give some glimpses of wisdom that I’ve learned over the years.
That’s going to be a matter of fact, not hopefully. We’re certain that you are going to be adding a lot of value. We’re excited about this show. Please tell us about your background and your start in real estate.
I grew up in Jefferson City, Missouri. That’s the capital of Missouri. I’ve got two children now, but it reminds me of Carol Dweck’s book Mindset. She lays out two mindsets, the growth mindset and the fixed mindset. The fixed mindset is saying, “This is the way it has been always. This is the way it’s going to continue to be.” The growth mindset says, “I’m going to put a stake in the ground and say, ‘I can make some changes.’ It doesn’t always have to be the same as it has in the past.” I detailed that because Jefferson City is a great place. It’s a great safe environment to grow up in, but there’s not a lot of the growth mindset
When I moved to Warrensburg for college, I started to visit Kansas City. It is 10, 15 or 20 times bigger than Jefferson City. It’s a lot larger. I started to see different opportunities and businesses. I would meet people from Kansas City and they would talk about certain things. I would then meet people from other cities and I was like, “I got to get out of Jefferson City.”
When I graduated college, I was picked up as an undrafted free agent, but I didn’t love the athletic endeavors after college. What I loved about athletics in college was teamwork. It was goal oriented. You were working for the next man right next to you. When you get to that next level, it is all business. That’s fine to an extent, but I didn’t have the passion, drive or fire that I felt in college when I went to the next level. I was ultimately cut from the NFL. I had the opportunity to head over to San Francisco and play for the 49ers. I put another stake in the ground and I said, “No, I’m changing my identity. I’m not going to go and play football anymore.”
That’s when I went back to school and finished my Master’s program, but this is when a massive shift in my mindset happened. I was an offensive lineman. I weighed 335 pounds at the NFL Combine. Six months later, I was 219 pounds. I lost over 100 pounds while working and going to school full-time. I had to drive one hour to the job that I had from my apartment in Warrensburg. I heard somebody say, “You need to turn your car to your classroom on wheels,” and I did.
I got two hours of education outside of my Master’s program in real-world economics and theory. I’m listening to folks like John Lee Dumas, Lewis Howes, and the Rich Dad Poor Dad guy. It started to open up my mind. I graduated and had a job. I landed in Kansas City with Jimmy John’s as the youngest franchise consultant they had ever hired. The week that I was moving out, my dad couldn’t walk up the stairs at my small apartment. He was a 6’3 strapping native American, who dunk a basketball and hit a golf ball 325 yards. He had battled drugs and alcohol addiction his whole life. Two weeks later, my dad passed away from complications of that.
I had another big turning point in my life. You can imagine, a young man just getting out of the NFL, finishing up school, moving to a new city, and then losing my dad. I had to reinvent who I was as an individual, which I know we’ll talk about later. I moved to Kansas City as a franchise consultant with Jimmy John’s for about one year. I started seeing what was next. I brought that to my boss and he said, “You got to put your time in.” I could not understand the concept of being paid the same as somebody that wasn’t performing at the same level that I was.
Two weeks later I was out of there. I joined a startup company in Kansas City with two other people. I was the third person on staff. I was able to get paid for what I was worth and helped scale that company. I left that company and met my wife. I was the best man at that company. It was a great endeavor for me, but I left there and went to a larger company in Kansas City. Fifteen months in, I could tell someone right. I was forcing myself every day to get up, go there, drive and dread my time.If you want to do anything at scale, you have to get a team. Click To Tweet
I’m a pretty stubborn guy who just got married. I was trying to be safe and comfortable. I think God had different plans for me. I was fired. One morning I woke up with an email saying, “You need to be at the office at 6:00 AM.” I brought my own box with me to grab my books because I knew I was on the way out. When I got fired, I called my wife and said, “I’m out.” She said, “No worries. Check your email whenever you get home.” I’m like, “Okay.” I checked my email. My wife had already started what is now my holding company in real estate, LiveFree Investments. I had 100% support from her from day one, but I knew I didn’t know much about real estate at the time. I had read the books, but I had never gotten out there in theory. I knew what I was doing but in practicality, I had no idea.
I joined as the head of acquisitions for a $50 million fund in Kansas City. I got to learn the ropes. These were all single-family homes portfolio. This was back in ‘17 or ‘18 when you could still do this at scale in Kansas City. You can’t anymore. We did a big core best portfolio refinance and return that capital to those investors. It was still cashflowing. I sat down with those sponsors and this was the light bulb moment for me. I said, “Where did the money come from?” They said syndication. I never heard that word before. That set me on a new trajectory of understanding, “What is this business? What is syndication?” I started reading books, going to conferences, and networking my tail off.
I said, “This is what I want to do.” I brought that to the broker that I was working with at the time. He said, “That’s great but that’s not what I do. You’re going to get your lunch eaten. There are a lot of big players out there.” I said, “See you later.” I left that company and started working with larger buyers. It’s 1031 exchange buyers with larger multifamily and commercial shopping centers. I started doing those transactions to get another two years under my belt before I ever bought my first piece of property. After doing about $450 million in sales, all on the acquisition side, I said, “I can start to figure out what I’m going to buy myself.” I’ve got a little bit of capital.
I went in and started purchasing some properties. I quickly realized that if you want to do anything at scale, you got to get a team. There were some things that I was good at in the business, but there were some things that I didn’t enjoy. I had that same feeling. When I was back at that job that I was fired, I was like, “Some of these pieces of the business, I don’t enjoy. I’m not good at it. I need to figure out how to solve that.”
I did a skills assessment myself, and then I thought about the commercial real estate industry as a whole. I looked at the transaction process, broke it down, and figured out what my sweet spot is. I went out and networked my tail off for another twelve months. I found two partners that I have. We’ve grown FTW that can handle the other aspects of our business. That has allowed us to scale to the position that we’re in now. I know that was a lot of information and background. I’m going to pause there. I’m sure we want to unpack some of that.
Those are lots of information, but a lot of great information. Thank you for your transparency and for sharing that information. I want to focus on a couple of things you said, particularly about living in Jefferson City. You’re feeling that you’ve hit the ceiling there and looking for growth. It reminds me of Ava’s story where she becomes the number one agent in a small city called Fort Saskatchewan and she says, “This is not what I want.” She’s making good money and looking to go to the big city. She makes the move to Vancouver. Eventually, we meet and start CPI Capital, realizing the problem that existed.
We found our purpose in life. It’s very similar, so I can resonate.
The other part is coming to the realization of this concept of syndication or real estate private equity, and working with a group you’re working with. Also, realize that the equity piece that comes from the bank gets their deals through you sourcing those deals. The equity comes from a group of investors. You are realizing, “What is this syndication? What is going on here? It is interesting to see that.” That also talks about your business acumen and your astuteness in business to realize, “What is this? Let me pursue and investigate this a bit further.” I wanted to quickly unpack that and get into the next topic which is about this concept of syndication.
I wanted to discuss the concept of syndication or as we like to call it here, real estate private equity. When did you first realize the strategy existed and how did it change your perspective about real estate investing?
The first point that I found out was when I sat down with those sponsors and they raised a fund. It was a little bit different than doing single asset syndication, but the concept is the same thing. You can pool collective resources together and go do something larger. It was the same team framework that I had in college. I was like, “That’s an interesting way to think about doing these types of business.” I was a broker. I had been driving up and down the cities and the streets saying, “That’s a big property. I wonder who owns that?” I go look to see who owns it and it is an LLC. I’m like, “I wonder who owns that LLC?” You see some names start to pop up.
The best learning that I ever did was finding out who owned these properties here in Kansas City, who was in this business and start meeting with them and asking them, “I read this book about these things and that’s great, but how are you doing this like you are doing it right now?” I started to shadow people that were successful in the private equity space in real estate, either as operators, capital allocators, deal finders or whatever it was. I found out that there are a few groups that are vertically integrated.
That is what interested me because myself and my partner are control freaks. I mean that in a good way. I saw a lot of real estate transactions before I ever bought my first deal. Where I saw the breakdown was when the owner did not have a piece of control of their business. They could not effectively positively affect change. They had to rely on somebody else. I started to hone in on the groups that I knew in Kansas City that were vertically integrated from acquisitions, brokerage, property management, construction, leasing, asset management, finance, you name it. That was interesting to me.
As I met with these individuals, a few of them wanted me to come work for them. I think that I might work myself into another job that I hate. I need to be able to try to prove to myself that I can go build this thing out. I was willing to be patient in the sense that I did not get started doing 400 units properties. I got started doing 35, 45, 55 or 100-unit properties. For me, it was learning from these people who were successfully doing it.
When I would meet with them, I would pull these things out. For example, I was like, “Where are you finding investors?” They’re like, “I play a lot of golf and I’m a part of this country club.” I was like, “That’s cool,” but I got to separate my time from being able to scale my business. One of the five commandments of business is being able to separate your time from what you’re doing, utilizing leverage through capital, people or technology.
I said, “Have you ever thought about utilizing digital marketing and social media to find investors?” “No.” I quickly found out that there was this old boys’ network where they did projects as groups, and those groups have been together for 25 years. I’m 32 years old and I don’t have 25 years’ worth of connections. I needed to go build those.
Out of the books that I read, Joe Fairless, Michael Blank, and all of those platform builders, I started following all of these folks. I said, “What can I do to start building a platform that’s going to attract those types of investors?” I still go to the events here in Kansas City. I still make sure I’m on nonprofit boards and meeting individuals that are business owners. That’s very important. How do I scale that a little bit faster? It was through LinkedIn. That’s where I put a lot of my time in regards to building a platform on LinkedIn. I hope that answers the question. I know we touched on quite a few things there.
Talking about real estate private equity or syndication, you can’t talk about it without talking about equity investor relations, and capital raising as you were touching on. You can’t talk about raising capital without building a brand. A lot of people leverage the network they are part of. We know a lot of physicians, surgeons or doctors who left their profession and are involved in real estate private equity as allocators, raising capital or advisors. They’re leveraging that platform or that fraternity that they’re part of.
In your case, since you don’t have that fraternity or you’re not going down the route of becoming a member of a golf country club, it is to build that brand like the greats of the business as Joe Fairless and Michael Blank teach. Talk to us about creating the brand and the different strategies utilized to create a brand. As our mentor, Dan Hanford, talks about, having a platform that you create content on is great, but it’s about having as many fishing line lines out there as possible.Humility is a part of humanity. If you can be humble, you're going to be able to connect with a lot more people. Click To Tweet
How do you navigate and assess where to put your time and resources, and where to focus? You touched on LinkedIn, but talk to us when you come to this realization that, “I got to build a brand around myself and my private equity firm. I got to create content,” what was your first step? How did you grow about it? We’ve noticed you and that’s why you’re on our show.
The first thing is action creates curiosity. When you’re making things happen, whether that be hustling, talking to people, doing deals on the brokerage side or whatever it is, that creates curiosity because your name starts to pop up on the big hitter’s lists. They keep seeing your signs out there. They see your emails or they see you at events or things like that. I started documenting what I was doing. That was day one. It was like, “What am I doing on a regular basis that might create some curiosity?”
I’m a big reader so I started to share what my schedule looked like. I started to share the learning and I was giving out books. I started to share the deals that we were closing. I started to share a little bit more on the personal side on certain platforms as well, just so I could get people to understand who I was as an individual. What that has leveraged into or transpired into is now I’ve got some experiences. Now I can start to talk about actual things that are happening in my market, in the macroeconomic environment and commercial real estate in general.
Five years later, we’ve done some things. My brand positioning is more of thought leadership on, “I’m reading Ray Dalio. This is what I’m seeing, feeling and hearing. This is how I think it’s going to affect what we’re doing.” It then becomes, “What can I share on a regular basis that’s going to create that curiosity, not just about me, but more focused on the business and what we’re doing now?”
What happens is a lot of people get started. They’re like, “I don’t have anything to share. I haven’t done anything.” That’s not true. You have done a lot of things. They may not be the things that you’ve done compared to what you’re trying to do, but you need to be able to share and know who your identity is and find your own unique voice first. That will then leverage into the experiences that you can share.
My wife always says, “I could never build something like you are building.” I said, “Why?” She said, “You are so open. You’re willing to take criticism and share your failings, your learnings, and all of these things.” I think that humility is a part of humanity. If you can be humble, you’re going to be able to connect with a lot more people. That was how I got started on the brand side of things, but I was meeting 5 to 6 people a day. I filled my schedule up with phone calls, LinkedIn connections, with in-person meetings that helped me shape my voice and find that voice for me that allowed me to then add value to those individuals.
What I got after two and a half years of meeting 40 to 50 people a week, which I know is a lot, I would have a pretty rigorous process of how am I going to add value to this person, but I would recap emails, with meetings. You guys meet with a lot of people, but when I meet with somebody that I know is going to be advantageous to my business, I make sure to send an email recap with the things that they said specifically, the value that I got out of it, and what I’m going to do. I did that for over two and a half years.
That’s a golden nugget right there.
The referrals just started turning on because they have an email for me and they can say, “Somebody says, ‘Commercial real estate Kansas City,’ I’m going to search that,” then my name popped up and they have that email that brought them some joy because they got something out of the meeting that I was there, or I connect them with somebody else. The Law of Reciprocity is in motion. That took some time to get that momentum going, but now thousands of people are reaching out on a regular basis. I have to have gatekeepers up to make sure I can keep doing what I need to be doing.
What is important is knowing who my identity was, which I had done that work after going from the NFL to what I’m doing now, understanding that I don’t have to experience what I want to have, but I do have some knowledge and experience of what I’m doing right now. It’s like, “How did you lose 100 pounds? How did you reach 750 books? What did you get out of them?”
If you’re a curious person and you’re doing cool things, that’s going to attract people to you, and you can start sharing that first. As you get going in your business, then you can start sharing things like that. People are trying to share things like, “I’m this thought leader, but I haven’t done a deal yet, but you should listen to me.” That’s this emotional or mental disconnect because they don’t know who you are. They don’t know what you’ve done, and now you transitioned from a salesperson to a real estate person without giving them any why.
How about taking a year and posting, “This has been my transition process through this. I know a lot of people who are thinking about transitioning out of their W-2 job into something else.” Document that journey. It’s things like that that helped me connect with individuals, and had led to over 17,000 followers on LinkedIn now, which is unreal in the timeframe that I’ve been on that platform.
I don’t think it’s unreal because watching you on LinkedIn and researching you a bit on there, I believe you’ve had over 100 articles posted on LinkedIn. These are comprehensive and detailed articles about different aspects of real estate, private equity, and other wealth-building strategies. It talks about how much dedication and time you’ve put into creating that free content that goes right into your followers. There must be a great benefit that exists there as well.
I love what you’ve said there about connecting with people is number one, and then in becoming a thought leader, it builds that know, like and trust that we always talk about. People need to know, like and trust you in order to want to do business with you, but you hit them with connecting with them first. When people can relate to you, that’s where they want to work with you as well. You’ve done a great job.
I make this comparison with a real estate private equity business. I compare it to a pie I. If you look at the real estate private equity business on the operational side and how this business is conducted, it’s looking at it as a pie divided into three sections. One piece of the pie is the equity piece. It’s the investor relations, raising capital, and investor communications. Another piece of the pie is the acquisition. It’s finding the deal, relationship with brokers, underwriting, and physical due diligence. I put financing also in the same piece.
The other piece of the pie is the management. That’s the asset management, property management, and value-add renovations. Usually, the sponsors, operators, and general partners fit into one of these pieces and they run with it. They either bring in employees and executives or partners to fill in the other places. What is evident to us after speaking with you is that not only you are literally boots on the ground because you were already an acquisition director for this other private equity firm finding deals. You’re already doing that on a full scale. I’ll get into the very unique strategy you’ve put into place as a buyer’s agent for multifamily. We’ll discuss that in a moment.
You’re also talking about being a thought leader. You’re going out there, doing all this research, gaining all this knowledge, and then sending that knowledge to your investor community and your community on LinkedIn. That’s also working on the investor relations side of it. How are you balancing the two? Which one do you see fits the best? How are you balancing your time being involved in both? Talk to us about that dynamic of being involved in investor cultivation and nurture, and also on the deal side of acquisition, and the deal flow side.
The way I’ll start with this is there’s a difference between being a real estate investor and being in the business of real estate investing. We are absolutely in the business of real estate investing, which means we handle all of those aspects. Early on, we did self-manage in quite a few properties. We saw an opportunity to acquire. It was like, “Which business do we want to scale? Is it the property management business or the acquisitions business?” I’m thankful that we scale our acquisitions business because COVID happened and gave us a great opportunity to make a big splash, which was important.You can learn, you can read, but until you can teach it, you don't really know it. Click To Tweet
Now, I’m transitioning from being a solopreneur with two partners and an admin to a full-scale team. What I mean by that is we have nineteen people now. We’re scaling up the business side of this because it takes a lot to run these properties as everybody probably knows or should know. At the end of the day for me on the posting side, digital marketing side and social media side, if I have a new aspect of economics, a new asset class or something that I’m learning, then that becomes what I’m posting about.
If you look at the trends on what I’m posting, every week, there are five different topics that I’m posting on. One is going to be an investment thesis. The other one is going to be a specific asset class I’m interested in. The third one is going to be something around the FTW team. The fourth one is probably going to be a little bit more personal and professional development, and the fifth one is going to be more Midwest focus. Usually, the sixth one is a Ray Dalio macroeconomic type of thing.
Those are all the things that are very interesting to me than I’m learning about, so I’m sharing that. I usually did it almost as a tool for me to learn. What they say is you can learn and read, but until you can teach it, you don’t really know it. If I’m putting this out there to 17,000 people on a regular basis, I better be ready for those comments. August, I know for a fact that you don’t shy away from LinkedIn. You’re going to post something and you’re going to get people’s feedback. I absolutely love that. That’s crucial because that means you have the confidence to back up what you’re saying, and to have an engaging conversation.
The things that I post are not always going to be accepted by everybody. I’m welcoming the challenge of backing up my position. That’s that part of it. In regards to the operation side, I have two business partners that are high-level guys that have different backgrounds than I do. When we looked at it, you said there are three kinds of pies, the operations, the equity side, and the management side. I focus on the equity and deal-finding side of our business because that’s naturally where my strengths lie. Their backgrounds are more in operation and finance. We have those three pieces taken care of.
Underneath that, we’ve quickly found that there are a lot of tasks. We have the spectrum. It’s from Perry Marshall, a guy that I like. He wrote the book DETOX, DECLUTTER, DOMINATE. In that book, there’s a graph that says, “All the tasks that you’re doing fall into these four buckets, $10, $100, $1,000 and $10,000 an hour tasks. As a business owner, you have got to get out of the $10 and $100 tasks. You’ve got to spend your time in less than $1,000 mostly in $10,000. I spoke a lot about this, but that $10,000 an hour task is brilliance. It’s where you’re synthesizing ideas that you hear from other people or other individuals. You bring them together in a cohesive manner. Not only are they complete at the theoretical level, but they’re effective at the applied level, and you can go put them into action.
That’s where we want our principals’ heads out all the time, $10,000 an hour tasks. How do you get out of that? You have to delegate and elevate. It now becomes a hiring game. We’re attracting talent. Guess where we find everybody that works for us? LinkedIn, 100%. People are coming to us. I haven’t used one of those resources. All I got to do is put a posting up and say, “Go to this link and apply,” and we got 45 or 50 people.
The big part of this is understanding that you have to attract the right talent. Once they come into the business, now there are three levels of delegation. One is directive, which is like, “You do this at this time.” Objective, I need this done.” Leadership is, “You decide what we need to do, but here’s the goal that we need to get to.” You’re trying to get every employee or every person that you’re working to more towards that leadership spectrum. That will allow you to spend more time on the $10,000 an hour task.
For me, this is a $10,000 an hour task because you have a great following. We’re here. We’re chatting about private equity commercial real estate. That’s going to be blown up by thousands of people, which is very exciting. I’m spending one hour here with you guys doing that and talking about the things that are important to the business. The $100 an hour task is I see 114 emails in my inbox right now. I know that a lot of those don’t need my attention. I have Jill sitting right outside this office, going through that inbox right now and starring the ones that need my attention that I need to get back to.
There are things that you can do to delegate and elevate. You have to become a leader of an actual business. That’s where the brilliance is created because of leveraging through people. The commercial real estate business is a people business. If you can leverage using people, technology and capital, those are the three areas that we’re always trying to figure out where we can get better at.
The biggest part of that for us is people. Making sure that, “We have 60 new investor leads that I need to call. I was doing all those up until twelve months ago.” That was good. It was a good exercise, but it wasn’t a $10,000 an hour task. It was probably between that $100,000 and $1,000 an hour tasks because 50% of them were not qualified to spend time with me and take the next step.
Guess what I did? I hire an investor relations associate. I trained him up for three months on calls with me. Now he takes every single call and sends me a list every single week that I need to reach out to personally and have meetings. That’s a $10,000 an hour task because the ROI on $100,000 is extremely high. After you get that first sale, they’re going to become repeat investors if you do what you say you’re going to do.
It’s tremendous wisdom that our friend here is dropping, a truly brilliant young man. I’ve never said this on our show, but I can’t wait to go back to this episode again, take notes and listen to everything that Logan has said so far. This is truly incredible. This is amazing talking to you. We both feel envious of your partners because they got their acquisition guy and their investor relations guy. Between Ava and I, I’m more involved in deal sourcing and finding the right operating partners and boots on the ground. Ava is more on the investor relations side, but we always brag to each other about it. Ava is like, “I’m the most important part of the company, the equity.” I’m like,” I got the deals. The equity doesn’t make sense.”
These are all jokes. It’s all fun.
Imagine having a partner who does both of those aspects. I’m definitely envious of your group. Let’s bring a quick focus back on you, the broker. It’s an extremely important part of the business. You are the boots on the ground. You’re sourcing the deals. You know everything about the business, but within that space, outside of your real estate private equity firm, you’re also a broker who services investors who are looking to either get into multifamily or looking to scale their business. You’ve created this very unique and interesting strategy to help people. Talk to us about what you’ve done and how you help people either starting or scaling in purchasing multifamily in your region or other regions.
When I got started in the business, as a broker, I wanted to say, “What is the unserved and untapped market? Where are folks not being represented?” I found through BiggerPockets and talking with people that a lot of people fall into 1031 exchanges, meaning they might own a piece of property, they inherit a piece of property, or they had a piece of property for business use and they no longer need it, or somebody came and said, “I’m going to buy this thing from you.” They then searched, “Selling commercial real estate,” and they’re like, “I’m going to have a huge tax liability. What do I do?” 1031 exchange pulls up. DSTs will also pull up because they pay $9 a click for those leads.
I know that personally because I was doing some advertising around that. DSTs and 1031 exchanges will always pop up whenever you do your search. I felt like somebody is under the gun. With 1031 exchange, you have 45 days to identify your next three properties. That puts a panic in people’s minds. What I was seeing was people were unrepresented, meaning they were reaching out to listing brokers and saying, “I’ve got this 1031 exchange. I want to do this deal. I need to do this deal.” That’s when the lights would turn off for the other broker because they’re unsophisticated, not represented, and worthy for me. They don’t know what they don’t know.
I started to grab those people and say, “Come over here. I will find you a property that represents you and underwrite the deal. You need a lender, a property manager and a general contractor. I’ve got all those referrals. You need insurance. I’ve got it taken care of.” We put it into the buyer’s representation success system. We put that out to the ethos and said, “We can help 1031 exchange buyers.” That was well-received.
That’s where our brokerage focuses on. It’s this $2 million to $8 million transaction size that if you have a 1031 exchange larger than that, you typically are sophisticated enough where you have a team that’s going to help you do that, but there was this nice little niche market that people were unrepresented that we could bring in, talk about the process and say, “Let’s alleviate some of this stress that you have,” and then we would go identify a property, either off market or on market saying, “I see this list of deals. Can you help me understand? Is this a good project?”You have to delegate and elevate. Click To Tweet
We would start to go to properties, do virtual tours and do all of these different things. For me, that has transitioned into two things. One is an online marketplace for 1031 exchange buyers, which we’re building now. Meaning that if you got a 1031 exchange, you log into our marketplace. There are off-market deals there that you can get access to. The biggest part of this is a lot of these investors, would say, “I have no interest in being an active investor in any type of real estate deal, but I also don’t want to pay my taxes. I also don’t want to go into a Delaware Statutory Trust and get 4%.” I said, “How can we help?” Tendency and comments. We put ticks together.
We’ll start putting two or three 1031 exchanges together to identify a larger property, then guess who manages it? FTW takes care of all the asset management and all of the property management. This is a newer iteration of this. It’s like this opportunity for someone to say, “I want to actively own this real estate. I don’t want any partners on it, but I still don’t want to manage it.” We have a private account model where we do the asset management and property management, and we have a fee-based model for this, but we’re not the owner of any of the real estate. It still allows somebody to be the sole owner, but be passive. That model has started to pick up a lot of steam.
The 1031 exchange market is so large. It’s a big market and there are a lot of folks that need a lot of support. There’s a little niche inside of that that we can help on. That’s what I started to build out. We have a full-time broker, transaction manager, and asset managers, all focused on helping these 1031 exchange buyers complete their transactions. I have not heard of or seen that model in very many markets.
What we’re doing is proving this out. We’ve done this in the last few years. We’re proving out this online marketplace and then hoping to take that to different markets and say, “Keller Williams or KW Commercial, whoever it is, here’s a new module that you can bolt on into your training, utilize our marketplace in our system and be able to tap into working with buyers,” which traditionally has not been a focus for many brokerages.
Is this in your region where you are?
It is in Kansas and Missouri.
You are looking to expand and create a platform where other brokers can utilize it as well when they have clients.
That’s a cool business model. There is a problem that people had. You found a solution to that problem, you brought it together, and that’s how great companies are formed.
Commercial real estate has been done a certain way for a long time. The internet and blockchain are here and it’s going to shape our industry in the coming years. Making sure that your brokerage or your individual companies can adopt the new technology is going to be very important. Commercial real estate owners are becoming younger. I’m 32 and I have 1,400 units. That’s what is happening. That’s going to force people to get online and transactions are going to happen there. We want to be at the forefront of that, or at least, I’m ready for that new wave of transactions that could happen.
When you listen to a podcast or watch a YouTube show, there’s a lot of motivation and upbuilding. Let’s also talk about the resilience that’s needed to persevere through the process. I’m sure everything hasn’t been a royal flush for you. You talk about being cut from the NFL, and your father passing away from drugs and alcohol, which must be very difficult for you at the time. You talk about your wife having your back, being shoulder to shoulder and helping you succeed.
Ava and I being in the real estate private equity business, it’s a very dynamic and juggling act because of those different components that exist. In our case, we’re also investing in the US. We’re located in Canada. We help Canadian and US investors invest in US multifamily, but it creates a lot of difficulties at different levels.
Talk to us about resilience, also going to your DNA, how you’re built and being an athlete. Athletes always have this certain drive and focus to them. What has been that factor within you? Is it part of your genes? Is it something that you’ve helped cultivate and something you’ve helped build inside you to become resilient, to roll with the punches? Talk about that journey and the difficulties you went through to achieve and reach success where you’re at now?
The first word I would start with is clarity. You have to have clarity on not just who you are as an individual, but clearly on what you’re trying to accomplish. A lot of shiny objects are out there. My favorite story is the story of 5 feet from gold. These 49ers went out to this land speculation. They started digging and they were out there for three months, and then they stopped digging. Somebody sold the land for a loss. Somebody came onto the land and 5 feet down, they hit the goldmine.
You have to stay in the game. That is the biggest piece of this. I learned this in college and football. I was an offensive lineman. I had a job every single play to block the man in front of me. It wasn’t like I was a wide receiver. If there was a running play across the field. I could take the playoff. You had to stay very steady all at the time. I focus a lot on emotional intelligence, breathing and stress management. “Always being able to tell somebody you hate him tomorrow.” That’s from Abe Lincoln. You write it down and you put it in a drawer.
It’s called the Lincoln Letter. After his passing, they found all these letters on his desk.
He would give them to his wife to go mail them and she will put them in a drawer. No joke. It’s things like that that you have to stay very emotionally resilient through this whole process. I was at a real estate conference, and I heard it put very well by a very successful individual. He said, “This is a knife fight every single day.” It’s a knife fight personally with your own emotions, but also competing out there in the marketplace, doing what you said you were going to do and showing up.
Unfortunately, there are not a lot of days off in the real estate space. We own buildings that people live in. If it’s Christmas, there are things that need to happen. If there’s a big snowstorm, there are things that need to happen. That snow needs to be plowed. For me, it was understanding my identity, getting clear on who I wanted to be, and how I was going to deal with the world. A lot of that came from my dad. My dad was a great individual in a lot of ways. My dad always told me, “You can achieve whatever you want in life, but you have to set your mind to it.”
I don’t know if that’s why two of my top talents through StrengthFinders are discipline and focus, but that’s what it is. For me, it’s being able to put blinders on, know that I have a goal, and then set every direction straight towards that. I don’t get sidetracked with TV shows, social media or things like that because I studied stoicism so much. Being able to delay gratification now. When was the last time you guys took a cold shower? Mine was this morning. My wife’s like, “Why do you do that to yourself?” It’s because I want to do something tough right in the morning. If I can get over that and I can make my bed, I’ve got two wins already going on. It’s things like that that mentally sharpen and harden you.Put blinders on. Know that you have a goal and then set every direction straight towards that. Click To Tweet
Seeing my dad’s decisions and him no longer being here, never meeting my wife and never meeting my children hits home because I never want to be that for my children. I want to be here to see who they marry, walk my daughter down the aisle, and all of those things. At the very core, I am scared to death of mediocrity. I am scared to death like Ed Mylett says, “To die and meet the man that I could have been.” What drives me every single day is to be the best version of myself, use my God-given talents, develop them into strengths, and hopefully, achieve good things in life, then maybe even embrace the people along with me on the journey. It is another piece of that.
Before we go move to the next segment of our show, what would be the advice that you would have for a passive investor that’s looking to start investing in real estate private equity? I love to know your opinion on this.
Be quick but don’t hurry. This is a get-wealthy slow game. It’s not just the next get-rich-quick scheme. If you try to do it that way, you can get yourself into a bad position with your brand and yourself financially, and then emotionally you can get disturbed because you’re wishing that something could happen that won’t happen because it’s out of your control. It’s back to that stoicism. I can’t control what the Fed does to interest rates. I can’t control what the next guy is going to pay for that building. What I can control are the relationships that I’m building with the people that have the relationships with the owners of that. When the time is right, they will call me.
It’s a part of being patient, but not getting in a hurry and being able to pivot quickly. For example, acquisitions are tough right now. Everybody knows that. Why did I start this brokerage years ago? It’s because, in times that you cannot purchase, there are people with a lower cost of capital that needs your support and services. If you can’t purchase, then maybe you can help somebody else purchase. It’s different things like that you have to be ready for and be patient. Be quick but don’t hurry would be my best advice. Be patient with the results. The other way to put this is to be impatient with actions, but patient with results. That is important. You got to stay the course.
Let’s move on to the next segment of our show. I’m looking forward to knowing these answers.
It’s called the ten championship rounds to financial freedom, whatever comes top of mind. I’ll start with the first question. Who is the most influential person in your life?
It’s Jesus Christ. I’m a big Catholic guy. I’m reading the gospels every single morning, and trying to live that out is my main focus and absolutely the most influential person for me every single day.
What’s the number one book you recommend?
I have to gift one book, the only book for the rest of my life, it would be Gary Keller’s The ONE Thing. Underneath that one, I would have Essentialism by Greg McKeown because they’re very similar theories but in different ways. That message can hit somebody a little bit differently. It’s focusing on the one thing that if completed will make everything else easier or unnecessary. A lot of times, as humans, we make simple problems very complex and they don’t have to be that way. You need to look for the simple answer and things and make sure you have focus and clarity. Those two books, I would definitely give to a lot of people and I have gifted them to a lot of people.
If you had the opportunity to travel back in time, what advice would you give your younger self?
“Don’t have such an ego.” I remember when I was playing football and even afterwards, I was 10 feet tall and bulletproof. You don’t know everything and the wiser you get, the less you know. For me, it’s about, “Keep your ego at home and focus on humility.” That’s what I would tell my younger self.
What’s the best investment you’ve ever made?
I’m sure many people have said, “The investment in myself.” I won’t say that. The best investment I ever made was relentlessly pursuing my wife and all of the money that I spent on dates and different gifts. My wife still gets flowers every single week from me on a regular basis. It’s the investment in my wife and the time and that relationship. There’s a saying, “Behind every great man, there’s a better woman.” For me, that is absolutely true. She keeps me grounded and confident, builds me up, brings me down when I need to be, and keeps me humble. That is so important in life. Finding that partner that you can do life with, that you have complementary skills with and truly love each other, that investment in that relationship absolutely has been the best one that I could ever make.
What’s the worst investment you’ve ever made and what lessons did you learn from it?
I am the worst at buying a course online and then never going to log in. I will see a new course on copywriting, investor relations or something like that, and then forget that I bought it. It will just sit there. These are $1,000 courses. I never have or make the time to go do it. I’m so global when it comes to that because I read it. I’m like, “That’s going to be wonderful. I’m going to do it at this time,” then life happens and I don’t get to it. If you have a product or service, send it to me because I’ll probably buy it. The worst investment is buying those things and never using them. I know that they would be helpful, but I don’t make time to do it.
How much would you need in the bank to retire today? What’s your number?
You stumped me with this one because I’m not sure. Maybe $1 billion? I don’t even know if I would stop. It’s a part of who I am now and what I do. I heard a quote one time. It says, “What you do is not who you are,” but it is a big piece of it. I look at what I do on a regular basis as a reflection of what I’m trying to accomplish as a legacy. If somebody handed me a big old check and say, “You can’t do anything for the rest of your life. You’ve got to retire,” I might die. I may roll over at that time, and get sad and depressed. If somebody did give me $1 billion, I would use that to be a passive investor in your guys’ deals. That’s for sure.
If you could have dinner with someone dead or alive, who would it be?Be quick, but don't hurry. This is a get-wealthy-slow game and not just the next get-rich-quick scheme. Click To Tweet
I would have dinner with Ray Dalio, one of the most successful hedge fund managers in the world ever. Mostly because of his breadth of knowledge, not just with investing. He created the all-weather portfolio. That’s unreal. It wasn’t even out there. He created this diversified income stream or portfolio that can weather all the storms. With his knowledge of China, capital markets, and everything that he has experienced in his life, I truly believe he is one of the last gems that are out there that’s taking the last segment of his life and then passing that on to us. I would love to have dinner with Ray Dalio. He might not be able to get me to leave. I may stay there for as long as possible, but that’s who I would pick.
Next question, if you weren’t doing what you’re doing today, what would you be doing now?
I would be involved in solving or doing my part to help the affordable housing crisis and figuring out how to end homelessness, at least in my own community. That would be some civic organization to work with government leaders, but also nonprofits and for-profit businesses. I do see myself transitioning into that at some point of trying to be a conduit to say, “I’ve seen it on all sides. How can we bring something together?” The way that you have that impact is you don’t have to go raise money to do it. I’m going to do what I’m doing now until I have enough money, credibility,d relationships and experience to effect positive change in that space. That’s exactly what I would be doing.
My favorite question, book smarts or street smarts?
I’m a street-smart guy because I got started when I was fourteen years old, baling hay in Jefferson City, Missouri. I got the calluses on my hands still to this day. I’ve transitioned myself into a book-smart guy after I read enough of those books saying, “You don’t have to use your brawn to make money. You can actually use your brain.” There’s a quote around that. It’s something like, “You got to work smarter, not harder.” I think we’ve all heard that. It is true.
There’s a different game being played than I’ve ever seen before. I’ve been exposed to those at that level. You think you’re doing well, and then you meet somebody who has been doing it for 45 years and they’re like, “I bought a couple of banks and sold a couple of banks.” I’m like, “Aren’t you a real estate developer?” “I know I am.” It’s things like that where conversations happen and you’re like, “That guy hasn’t picked up a book his whole life. He is 100% street smart.” If you compare both of those things together, you can learn from books and then go meet people on the street that are doing it. That’s the best way to do that.
Last question. If you had $1 million cash, and you had to make one investment today, what would it be?
Let me rephrase that one more time. It was $1 million cash, you can make one investment and you have to do it today.
I would call Ray Dalio’s team and beg them to take my $1 million and not get off the phone. I would drive to Massachusetts and drop the checkoff in their mailbox and wait until they did it. Even though their minimum is $7.5 billion or something like that. That’s what I would try to do, or if I could go and raise fund, I would go find a business owner here in Kansas City that I know that is growing his business in manufacturing space and I would invest it there.Be impatient with actions, but patient with results. Click To Tweet
I haven’t been this excited to go back to one of our shows for a long time. I appreciate your time being with us here. What’s the best way people can reach you?
Thanks for being here.
Thank you for having me.