387: From NFL Sidelines to Real Estate Investing Success

SHOW NOTES FOR EPISODE 387: FROM NFL SIDELINES TO REAL ESTATE INVESTING SUCCESS

When his lifetime NFL dream career went sour, Logan Freeman had to rethink the next 60 years of his life.  In this episode, Logan shares his career re-engineering process and how real estate became the vehicle to provide massive income and wealth creation.  He also shares insider tricks and tips that have allowed him to accelerate and optimize his journey.

What You Will Learn

• Why is real estate the I.D.E.A.L. investment?
• Why it’s important to re-access your goals and focus your priorities
• What the difference is between building wealth and building income
• Can you still find pocket listings from brokers?
• 4 unique ways to build long term broker relationships
• Updates on rules for Opportunity Zones
• How sales experience and training can help you become a better real estate investor

About Our Guest

Logan Freeman

Logan Freeman is a real estate investor, developer, and agent who has found his niche in the industry acting as an investment property specialist and actually representing buyers instead of sellers in the transaction process.  He has also completed multiple joint venture projects, equity partnerships and works as a developer.  Completing over 120 transactions in less than a year, Logan has found a process, and relies on his most valuable priorities to guide his profit-producing activities.  In 2018, Logan founded LiveFree Investments, a successful real estate investment firm that ensures strong returns on capital from secure, collateralized real estate investments.

More About Logan

• From a small town in Missouri – the capital – Jefferson City
• The “fixed mindset” place to live
• Lived there 18 years
• Bailing hay at 14 years of age and at a catering business – $5.15 an hour
• At 15, he took a personal finance class as a freshman in high school
• Went to his mom and said, “I need to set up a Roth IRA.  Dave Ramsey said that’s the thing to do.”
• His mom took him to a bank and he opened one up
• He wanted to “make his money work for him”
• Went to a Catholic high school in Jefferson City

From High School & College Football to the Pros

• Logan got a scholarship out of high school to play football at a Division 2 school near Kansas City, the University of Central Missouri
• He love it!
• Great football career – team captain for multiple seasons
• After college, he got picked up by the Oakland Raiders
• Had a try out and was there for about a month
• He had loved the leadership and team aspects of a football team that he experienced in high school- working for a common goal
• But when he got to the NFL, he saw how it was “every man for himself, I’m going to make this team, I’m not going to help you out”
• His heart was no longer in it
• Ultimately, he ended up getting cut from the team
• He had a major decision to make: “Should I continue playing football or should I start to use my brain, instead of my body.”

From Brawn to Brain

• He decided to start using his brain
• He was at a family event, and while sitting up on a rooftop with some friends he got a call from the San Francisco 49ers.  It had been 4-5 weeks after he got cut from the Raiders.  They had lost their Center and want him to fill the spot.
• He’s currently 6’3″, 260 lbs.  At that time he was 335 lbs.  And to maintain  that weight, he had to eat nearly 10,000 calories a day, and a lot of it was protein – 400-500 grams of proteins a day (not fun to eat)
• He had lost quite a bit of weight when the 49ers called.  They asked, “Are you in good shape.?”  He said “Yes.”  and they asked how much he weighed and he said, “285 pounds.”  They commented that that was quite a bit less than he weighed a month ago.  He proceeded to tell them that he was no longer pursuing football.  They said, “We are willing to fly you out to camp right now.”  He said he appreciated the offer but he was no longer interested.
• Now he had to figure out what he wanted to do with the rest of his life!

Back to School

• He decided to go back to school to get an education in business —  an MBA degree!
• However, he no longer had a sports scholarship like he did his first four years of college.
• He now needed to finance his education
• He took on a full-times sales position while attending school full-time
• He was making 200 cold calls a day selling educational data to K-12 vendors.
• He would wake up at 3:30am every day, work out at the gym, drive one hour to work, make his calls, leave his office at 5pm, get to school by 6pm, go to school until 9pm
• This became his new normal
• He lost over 100 lbs at that time

Dealing With Loss and Prioritizing His Life

• Shortly after he graduated, he got news that his father had passed away after a long term battle with drugs and alcohol
• His death hit Logan hard
• It was a period in his life when he needed to “re-assess and re-invent” himself
  • He was no longer an athlete
  • Lost his father (who was barely 60 years old)
  • He saw how fleeting life can be
  • He was working full-time
  • Going to school full-time
  • He was trying to figure out his purpose
  • During this difficult time, he sought answers from God
  • He found out what was really important to him:
    • Faith
    • Family
    • Fitness

The Sales Experience

• Zig Ziglar said, “The best classroom can be your own car,” especially if you are salesperson who is out visiting people everyday
• Logan, however, wasn’t meeting people everyday in person but he was meeting 200 potential clients everyday on the phone, as he was sitting in front of a computer monitor
• He had an hour drive to and from his sales job, so he would use that opportunity to listen podcasts, CDs, success audios
  • Listened to podcasts – John Lee Dumas’ “Entrepreneur on Fire” and Lewis Howes “The School of Greatness”
  • CDs by Zig Ziglar, John Wooden, Stephen Covey
• His sales job was more about “getting over fears” than just learning how to sell – F.E.A.R – False Emotions Appearing Real
• He learned how to handle rejection
  • He saw that people were not rejecting him, they were rejecting is message
  • As a result, he kept refining his message to make it more appealing to potential clients
• He focused on his message
• He also decided to focus on only one of his company’s products – one “high-end” product that had the biggest return
  • It was a product that the other sales people weren’t as likely to sell because it was confusing and complex
  • He studied and learned to be an expert on the product
  • It paid out two-fold
  • He became the number one sales person in the company
• He didn’t stay that long at the company but it was a great experience where he learned invaluable skills that would help him later on

Moving into Real Estate

• His dad worked for the State of Missouri and when he passed, Logan unexpectedly received a life insurance check of around $15-20,000 – more than he had ever seen
• He began researching on how he would use hte money to leverage his future
• He picked up a copy of “Rich Dad Poor Dad” and it opened his eyes to new options and strategies for  wealth creation
• Read other real estate books as well
• Logan got another job as a franchise consultant for Jimmy Johns
• He had a good salary
• As he traveled around, he started looking for and buying real estate in Kansas City
• He hired a good firm to help him find properties and from that firm, he found his first real estate mentor
  • His mentor taught him to identify properties you could live in and fix up for two years and then sell the properties
  • His roommates would pay the rent while he rehabbed
  • Learned contracting/construction
  • Would buy a house for $120k and sell it for $190k
• He was building wealth but he really wanted to build income
• He then wanted to build a portfolio
• He got another job that brought in a private equity firm and he was laid off from that job by the private equity firm
• Went home and shared what had happened with his wife
• Because of his love for real estate, he sought to focus his career in that direction
• He decided to get his real estate license
• When a real estate buddy lost his director of acquisitions he offered Logan the job
• Picked up a big client ($50 million fund) and, over two years, helped them acquire 250 doors and renovated every one of the units, leased the properties up and managed the properties as well for the client
• He saw the BRRRR (Buy, Renovate, Rent it out, Refinance and Repeat) model first hand, but with larger properties
• He got a lot of transactions under his belt
• They did a big re-finance deal with Corevest
• He sat down with the sponsors and asked them how they got all that money and they said through syndication

Re-Educating and Re-Engineering Himself

• Logan wanted to learn everything he could about syndications
• Started reading and studying everything about syndications
• He flew around the country meeting people like Michael Blank, Russel Gray and Robert Holms (the Real Estate Guys)
• He decided he wanted to do larger transactions
• Moved his real estate license over to a commercial brokerage
• Found some properties
• Found some partners
• Started raising capital for his own real estate deals in Kansas City
• This was about 13-14 months ago

Identifying a Need

• There’s an under-served group of people trying to purchase real estate — buyers
• Listing agents and brokers usually do not want to cooperate or “co-broker” with other people
  • This means that buyers are often unrepresented
• What you have are a group of people who have lots of money and who want to buy real estate
• Unfortunately, because they are unrepresented, they can get into some bad deals
• They need someone with the experience and the knowledge to make the right decisions
• What he finds is that people want the benefits of owning real estate but not the associated headaches of ownership
• He read Joe Fairless’ book Best Ever Apartment Syndication Book and attended the Real Estate Guys’ syndication training
• Logan’s niche became being that professional who can help out-of-state investors to find good properties and make the right purchase decisions there in Kansas City through passive investment in syndications
• His “buyer clients” became passive syndication investors and as they got more experience as a passive investor, they want to do their own bigger deals
• The brokers at his firm, Clemons Real Estate, co-sponsor a lot of the deals.  They have been investing in real estate for 17 years
• Logan also paired up with a group of investors in Kansas City who own over 4,500 units who co-sponsor deals as well
• Their niche:  “We know the market better than anyone else.  We can manage and operate it well, too”
• A project he is currently working on with out-of-state investors
  • Self-Storage facility in Lansing, MI
    • Off-market opportunity that one of his co-sponsors knows because he lives there
    • It’s in an opportunity zone

Opportunity Zones

• He is also positioning himself as an expert on Kansas City opportunity zones
• His firm’s attorneys are very knowledgeable in this area
• A lot of people think you have to do ground-up development
• In the second batch of regulations that came out on opportunity zones, the docs said that if it is “original use provision” (the property has not been depreciated and no income has been generated on the property), it can still qualify
• His group has targeted projects that have TCO (Temporary Certificate of Occupancy) at closing.  They have eliminated all development and construction risk but they still get all the benefits of being in an opportunity zone
• They are also looking at Oklahoma right now as well

Projects They Are Doing

• Self-storage
• Two boutique bed and breakfast hotels
• Two multifamily projects (their “bread and butter)
• Office park
• Straight up commercial
• Lots of redevelopment projects (he bought a 12,000 sq ft building they are currently redeveloping)
• No ground-up development
• They buy a lot of older buildings
• They are buying on the line and moving the line
• Keeping the communities involved
• Developing a whole corridor on the Kansas City “dividing line” – Troost Avenue
• Logan is not the “listing agent” on any projects but he has other agents at Clemons who are listed
• He does, however, work directly with buyers
• All of their projects are listed on their website

How He Assesses a Client’s Needs

• He sees real estate as the I.D.E.A.L. investment
  • I – Income
  • D – Depreciation
  • E – Equity build up
  • A – Appreciation
  • L – Leverage on your dollars and time
• Before he does anything with a new client, he always asks, “Out of those 5 things, what is the most important for you?
• After that, then they start looking at certain asset classes
• He also tries to educate people that multifamily is not the only thing out there
• In his opinion, some commercial retail properties are the only thing priced correctly right now
  • He has closed on quite a few triple-net leasing opportunities
• They have a pretty vigorous underwriting process
  • If he doesn’t understand how someone else is looking at the numbers and how they are going to be underwriting the property, he is never going to be able to find the property that meets their criteria
  • They take past projects that have been completed and work through the appraisals and underwriting for those projects
  • Then they look at the financing – how the banks looked at the financing
  • Pretty intense process
  • He only works with 3 or 4 people at a time
• After the underwriting process is finished, he introduces the client to local lenders to talk about the various financing programs that are available in Kansas City
• They then talk with local property management companies
• And then they talk with local real estate attorneys
• He shares the REI network he personally works with in Kansas City with his clients
• By the time they get through that process, clients feel that they have a solid Kansas City team in place
• When they find a good property, then they are able to move fast and execute on a transaction without having to worry assembling a team or other basic foundational items

A Few Great Tips for People Trying to Establish Broker Relationships

• Create Value
  • First, get on Co-Star or Loopnet and find brokers that are selling the types of properties you are interested in
  • Start calling them and getting marketing materials on properties you like (T-12s, Rent Rolls, etc.)
  • Put their properties through your own underwriting analysis and getting back to the brokers with your own feedback
  • He’s had some clients that have done this, even recording them to their computer screens (in a brief 3 minute video), comparing their results to his underwriting, and saying why it does or doesn’t work and the questions that they have
  • If someone takes the time to do that and can talk confidently and communicate clearly about what they’re looking for and how they would think about a process like that, they have shown that they are person worth calling back and developing a relationship with
• Ask for Referrals
  • Also, ask them, “Do you normally work with buyers?”  And if they don’t, ask them if they know another broker who does work with buyers and if they do could they refer that person to you
• Narrowing Down – Finding Your Key Contacts
  • Get on the broker mailing lists
  • When you receive the OEMs, send an email with three or four bullet pointed questions, so they can respond quickly
  • See who responds
  • If a broker wants to work with a buyer or feel that you are a good quality candidate, they will respond
  • If they don’t respond, then you move on to the next one
  • Most of the leading brokers (follow the 80/20 rule – Pareto’s Principle) – 80% of the listings are from 20% of the brokers
• Visit the Market
  • Logan insists that his clients, if they are out-of-state, they must visit Kansas City
  • Logan is not motivated to make offers for clients who have never been to Kansas City

Pocket Listings (Off-Market Properties)

• They are becoming few and far between
• If you own a 100 plus unit apartment building (or above $1 million), typically you are somewhat of a sophisticated real estate person
• Most markets in the US are close to or at the top of the market cycle (bubble) in their area
• And if this is the case, why wouldn’t you take that property to a broker

Advice for Old Dawgs Looking at Real Estate Investing  to Help in Their Retirement

• He has noticed that a lot of his investors are using some type of retirement account
• This is a  great way to unlock capital to invest
• Start to research what types of retirement investment accounts they would need and the requirements could be helpful

Current Business

• He’s trying to build his business
• In commercial real estate, you’re tied to your time
• He has a business coach and mentor that has “5 Commandments of Business”
  • One of the commandments is being able to step away from your business while it still creates income for you
  • He’s creating income on the investing side
  • He’s setting up a system and process that allows people to engage with him by going through the process he described earlier by through automation and not in person
  • They have been tracking and he normally spends 15 hours in the process currently before making an offer
  • This obviously limits the number of people he can work with at a time
  • He is working on streamlined method he calls a “Buyers or Investors Journey” that utilizes email, video, digital marketing and social media
  • He’s really excited about this project in that it will allow him to scale up on the acquisition and capital-raising sides

Rap-It-Up

• Favorite real estate book: Capital Raising by Richard C. Wilson
• Favorite business book: The Millionaire Fastlane by MJ DeMarco
• Most valuable web site for success (other than your own): BiggerPockets.com
• Favorite app: G-Tasks
• Favorite quote: “Ambition is the path to success but persistence is the vehicle we arrive in.” – Bill Bradley
• If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? He would use the $1,000 to get a brand authority online and I would start calling on podcast hosts to get his message out.

How to Reach Logan

• Website: LiveFreeInvestments.com

DISCLAIMER:  Many of the above strategies take knowledge and have a higher degree of risk.  You need to do your research and/or work with someone who is experienced to reduce your risk.

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com