949-392-1999
SHOW NOTES FOR EPISODE 325: SUCCESSFUL REAL ESTATE INVESTING THROUGH VALUE-ADD APARTMENT SYNDICATIONS
He started real estate investing with only 4 cash flowing single family homes. In only six years, he grew his portfolio to over $600 million in properties through value add strategies using syndication. In today’s podcast episode, real estate entrepreneur, educator, author, podcast host and philanthropist Joe Fairless shares his insider secrets on how he achieved this tremendous success.
What You Will Learn
- The importance of partnering and identifying the necessary skill sets for real estate investing success, assessing your own skills and filling the gaps with the expertise of others
- What the three main components of real estate investing are
- How to scale your real estate business with limited funds
- Delegating the right way
- The importance of giving back
- Understanding and creating a value-add business plan for your real estate investing business
- Strategies for rapid portfolio growth
About Our Guest
Joe Fairless
Joe Fairless is perhaps best known as the host of the world’s longest-running daily podcast about real estate, The Best Ever Real Estate Advice Ever Podcast. But, even more important, Joe is known as the best ever first guest on the Old Dawg’s REI Network, appearing on episode #001, way back on May 17, 2016. That’s right! In fact, he was the crazy guy to insist I start a podcast. I’ll never forgive you for that Joe – haha just kidding! No, it was actually the best ever real estate related advice I’ve had to-date! – since becoming a real estate investor. To give you a little more background, Joe Fairless was the youngest VP of a NY Advertising Agency. He left the advertising world in 2012 to pursue real estate investing full-time. At that time, he owned 4 SFRs that produced monthly income. Later, he decided to go exclusively into multifamily and his very first deal was a 168-unit apartment, of which he raised $1 million from private investors. Today, Joe now has control of more than $572,000,000 worth of real estate. He has written three books, Best Real Estate Investing Advice Ever Volumes I and II and the Best Ever Apartment Syndication Book. His books have been endorsed by celebrity real estate mogul and Shark Tank star, Barbara Corcoran.
Besides, investing and hosting a top podcast, he writes a blog, which includes nearly 1,400 informative posts, is an avid Philanthropist, he coaches, and hosts the world famous Best Ever Real Estate Investing Advice Conference (coming up in February of 2020)
Some trivia on Joe
- Team captain of championship flag football team
- Performed stand-up comedy at Gotham Comedy Club in NYC
- Attends more Third Eye Blind concerts than anyone you know (yes, they still tour)
- Joe invented the now INFAMOUS old dawg closing howl!
More About Joe
- Joe is married to Colleen and they just celebrated 2 year wedding anniversary
- They also have a 7 month year old daughter
- A big part of Joe’s focus current is his philanthropic work
- Three quotes are on the “Vision Board” on his wall – he saws he lives by these and they are ingrained in what he does:
- “The secret to living is giving. ” – Tony Robbins
- “You can have everything in life you want if, if you will just help other people get what they want.” Zig Ziglar
- “Service to many leads to greatness-great respect, great satisfaction.” – Jim Rohn
- In working with investors, his philosophy is “How can I help them achieve their financial goals?”
- When you have that mindset, you are going to do better than not
- Listens to Jim Rohn when he works out (search in Spotify playlists for Jim Rohn speeches and jazzy music mix for motivation)
- Jim Rohn, when speaking on becoming a millionaire, said make the goal on being a millionaire not about getting the money but on who it will make you become. Then, give away the million dollars.
- The point is to have a monetary goal but the money is not the goal. The goal is to become that person that achieved that goal
- Joe is focused on:
- Personal development
- Adding value to investors
- Ashcroft Capital is the real estate investing company Joe and his partner Frank founded
- Frank Roessler has been Joe’s partner from the beginning
- Just closed on a deal, bringing their total holdings to $610 million
- Ashcroft is located in New York City
- Their business has grown thru partnerships
- The key to their success has been to leverage each partners’ individual strengths
- What each partner does is to assess what they are good at and what they are NOT good at and then they direct their efforts based on their strengths
- They ask, “What do the best of the best businesses in our area do really well – what are the skill sets that are needed to be the best?”
- Then, they look at their selves and ask, “In these skill sets, where can I really excel? and where would I not do well”
- When he started, he tried to do everything himself
- Now, Frank and Joe have complimentary skill sets and they have hired people at Ashcroft who are really good at the other specific skill sets required for success
- They have brought in people who:
- Have a proven track record focused in the areas they require
- And are more inclined to have the personalities that match those skill sets
- They have brought in people who:
- That’s how they have been able to scale so rapidly
- Now, Frank and Joe have complimentary skill sets and they have hired people at Ashcroft who are really good at the other specific skill sets required for success
Three Main Focuses of a Successful Real Estate Investing Business
- Joe’s company, Ashcroft Capital, is designed around three main components of their apartment investing business: The Money, The Deal and The Execution
- Money
- Joe’s focus in his business is on
- Raising capital
- Investor relations
- Monthly reporting to investors
- Updates
- Premiums in relation to projections
- Cap Ex Projects
- Relevant market news
- Quarterly
- Detailed financials
- P&L statements
- Rent roll
- Detailed financials
- Building long term relationships with investors
- Monthly reporting to investors
- Joe’s focus in his business is on
- The Deal
- Frank oversees
- Director of Acquisitions: Scott Lebenhart
- Broker Relationships
- Travel to markets they are focused on
- Getting the deals
- Overseeing a team of underwriters
- Director of Acquisitions: Scott Lebenhart
- Frank oversees
- Execution
- Frank oversees
- Director of Asset Management: Alec Raggio
- Frank oversees
- They have structured their business and staff around these three elements
- Skilled, experienced people
- Hiring up!
- They are investing in the business through the people they hire
How You Can Grow Your Business Early On With a Limited Budget
- Many people look at their business early on and don’t think they have the money to hire full-time employees in these areas
- Or they have access to money but can’t find deals
- One way you can grow early on is by bringing in other partners
- Joint Venture Partners
- Vendors
- Vendors who have “upside” in the deal
- Property Managers
- Hire as a third party company
- Bring them in your deal where they can get equity in the deal
- Negotiate a lower fee
- For example, if they are supposed to work for 4% of rental income, you could instead offer them 3%, but with a bonus when they achieve a certain NOI upon a re-finance
- What it would look like:
- Let’s say the difference between 3-4% is $100,000 over the lifetime of the project
- They will get a bonus of $150K , when they reach the specific NOI goal on a re-finance or when they sell a property if they achieve a certain purchase price
- If they perform well, they will come out ahead (not being an equity owner)
- And you come out ahead because, over the life of the project, you’ve saved on your property management fees
- What it would look like:
- For example, if they are supposed to work for 4% of rental income, you could instead offer them 3%, but with a bonus when they achieve a certain NOI upon a re-finance
- It’s a matter of identifying, based on what your unique skill set is, where you fit in the puzzle, it’s a matter of putting the right pieces around you and making sure the alignment of interests, as well as all people focused on what they’re especially talented at
- Property Managers
- Vendors who have “upside” in the deal
How He Successfully Manages So Many Multiple Activities
- Joe currently does the following:
- Manages and grows a property portfolio currently valued at $600,000,000
- Mentors and coaches
- Puts on annual conferences’writes blog posts
- Produces a YouTube channel
- 7-day-a-week daily podcast
- Write books
- Philanthropic work
- Is a husband and father
- He attributes his success in all these areas to team members and integration
- The family part he addressed first
- He just celebrated 2nd year anniversary but been together 4 years
- Has a 7 month old daughter
- Always with his family throughout the day
- His number one priority, after family, is his current portfolio and investors
- Has a large team to support that effort
- Has full-time social media guy that does YouTube channel
- For podcast, Theo does 2 episodes a week and has syndication school
- On finding interesting guests for the podcast, Jordan Peterson says, “We can learn something from everyone. If we aren’t learning, we’re not asking the right questions.”
- Joe does interviews for his podcast every Thursday – does 9 interviews
- Has recorded podcasts 6 months in advance
- Blog posts – Joe comes up with ideas – Theo does the content
- Books – same as blog post
On Travel
- Not traveling as much because of the baby
- Does meet up with his team members at properties
Advice for Old Dawgs Interested in Real Estate Investing
- He was on a call today with someone who has has about a dozen properties worth $1.5 million, all owned free and clear and cash flow is about $5,000 per month
- They asked Joe for his advice because he has lots of equity in the properties
- The way to generate significant income from real estate while still being conservative is by buying cash flowing properties that have value add components
- Joe suggested that he invest in deals, find operators if you don’t want to do it on your own and hire your own management company
- Find operators who invest in cash flowing properties that make money day one and have a business plan to increase the value
- By doing that, you’re getting the best of both worlds
- You’re getting the cash flow
- You’re also getting the upside potential from the forced appreciation through renovating the interiors, increasing the rents, adding amenities, etc.
- This is something he didn’t recognize when he was starting out
- He bought single family homes
- He didn’t have a value-add business plan
- He just bought the homes and they cash flowed
- He was fortunate that he bought the properties at the right time, when the prices were relatively low and they appreciated greatly
- Today, he can pull some of that equity and roll it into some of his value-add apartment deals they have
- If he knew what he knows now, he would have bought more value-add deals back then
- If you have a specific business plan on how you will add value, you won’t have to just guess or hope the properties increase in equity
Giving Back
- He handles much of his philanthropic efforts through BestEverCauses.com
- This is an initiative Joe and his wife have been doing for about a year and a half
- Every month they highlight a new non-profit organization and donate money
- Some of the recent recepients include:
- Rejuvinating Women – A faith-based, non-profit organization providing hope and restoration to those enslaved in human trafficking.
- Kids Cancer Alliance – Provides a “normal” camping experience for children with cancer.
- St. Jude Children’s Research Hospital – St. Jude Children’s Hospital is a specialty research hospital for children, not a general children’s hospital.
- This is an initiative Joe and his wife have been doing for about a year and a half
- Personally, Joe volunteers for hospice service, visiting patients twice a month for the last two years
- On the Board of Junior Achievement
- Teaches classes also with them
- He loves the more hands-on stuff the most
- Texas Tech scholarships that helps them get into advertising agencies in New York
How to Reach Joe
- InvestWithAshcroft.com – If you’re interested in investing in Joe’s projects
- BestEverPassiveInvestor.com – To learn more about apartment syndication, free educational resources guide
- ApartmentSyndication.com – Free educational resources on how to syndicate yourself
IF YOU LIKED THIS PODCAST, we would love if you would go to iTunes, Stitcher, GooglePlay, iHeartRADIO and Spotify and Subscribe, Rate & Review our podcast. This will greatly help in sharing this podcast with others seeking to learn real estate investing as aCBRE means to achieve a successful retirement.
Check out our other podcasts at olddawgsreinetwork.com.
Get a FREE copy of our 3-Minute Rental Property Analyzer at olddawgsreinetwork.com.
Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com
