Gaining Freedom Through Multifamily Investing with Joe Fairless

Gaining Freedom Through Multifamily Investing with Joe Fairless

I wholeheartedly believe that everyone is here for a reason. That’s my belief. And everyone has special talents. So when someone’s not working out in that specific role, it’s just that it’s not right for them. So I have no problem with a quick hook. So you know, for people who don’t have that skill set, naturally? Well, I mean, the same thing for people who don’t have other skill sets, you find people on your team who do, I’m a believer in doubling down on your strengths, and finding team members who can compliment you in areas where you’re weak.”

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Gaining Freedom Through Multifamily Investing with Joe Fairless

 

Brett: 

I am excited about our next guest. He’s out of the great state of Ohio, and he has a passion for multifamily investing. He has over about 1.1 billion properties under management now collectively with his company, Ashcroft Capital, as well. This is partners and investors. And he’s the host of the longest-running daily real estate investing podcast, the Best Ever Real Estate Podcast, also best-selling author, and just as tons of value for people looking to invest in real estate, and especially multifamily. And so please welcome the show with me, Joe Fairless. Hey, Joe, how are you doing?

Joe: 

I’m doing well. Looking forward to our conversation, Brett. Thanks for having me.

Brett: 

Absolutely. Thanks for being here. And for listeners to get to know you for the first time. Would you give a little bit about your background and your current focus? 

Joe: 

Sure. So the current focus is as you mentioned, I’m a value add multifamily investor, co-founder of a company that does that Ashcroft capital. And a little bit of background. I’m from Texas originally grew up in Fort Worth, I moved from Texas to New York City after I graduated, graduated college, and worked in the advertising industry. Actually, I was a junior project manager on Madison Avenue right out of school. And I was making $30,000 a year in New York City that doesn’t go very far. I was renting an apartment in East Flatbush, Brooklyn for about 750 or 775 a month. And that was my paycheck also every two weeks, so wasn’t a whole lot to save. In fact, there wasn’t anything to save. I had about $18,000 worth of student loans as well coming out of Texas Tech is where I went to school. So I climbed the corporate ladder, and relatively quickly, because I needed to, and because I enjoyed what I was doing. And I was also doing jobs on the side. I worked at a daycare in college. And after I graduated college, I was a managing male nanny on the side. And I would do that on the weekends, I would also have my full-time job. So I was pretty busy making extra money. I would also keep my living expenses really low, especially or relative to New York City standards. I didn’t pay any more than like $1200 at most. During the 10 years that I lived in New York City and rent. I had a roommate the entire time. My friends made fun of me. They said I was living like a college kid, which I was. But I was also saving like an adult. I was living like a college kid I was saving like an adult and the natural progression in New York City is you have roommates then you have a studio apartment, then you have a one-bedroom apartment. You’re a big kid. Well, I just stayed with a roommate the entire time as they were rotating in and out. And I was saving my money and I eventually saved up enough to buy my first single-family house and Duncanville Texas for $76,000. I save $20,000 in order to make that happen. And I bought that one and then a year or two later, I bought another and then another and another having four single-family homes. But what I realized is that you make 250 I was making 250 bucks a month from each of the homes but then someone would move out and that would be $5,000 for getting it to be moving ready again and then that wipes away all the profits of 250 bucks a month for that entire year and then some so I knew there had to be a better way. I looked at and studied multifamily investing. And then I ended up acquiring a large apartment community 168 unit apartment community from my four single-family homes to 168 unit that flopped and did not do well. It lost money. I paid back my investors Plus 14% annualized return out of my own pocket, which was a challenging experience personally, but something that I’m very proud of. And, you know, something that also with those investors who were in that deal, I mean, they’re investors for life. And it was interesting. Someone asked me, Oh, you were thinking really about the long game of how, how that can be beneficial for the business when you pay them back or not. I was thinking about what I was just wanting to be. I wanted to be proud of who I am. Matthew McConaughey has a commencement address. Have you seen that one for universities, University of Texas, does that make sense?

Brett: 

It’s been phenomenal. Keep going.

Joe: 

Yeah. Where he talks about don’t leave crumbs. One of the things he talks about don’t leave crumbs. And basically, it means “Don’t do something in life that later you’re going to be looking back over your shoulder and thinking, I hope that doesn’t come up again.” I hope I hope I didn’t, I hope I hope I didn’t have some crumbs that are eventually going to come back and, you know, be an issue. And so that’s why I did it had nothing to do with investors at all, everything to do with who I want to be and who I am. And then learn lessons from that. I can certainly talk specifics if you’d like to. And then one of the main things I learned is what I’m good at and what I’m not good at what I’m average at as it relates to the business. So I found a business partner who is exceptional at the areas that I am not exceptional at, oh, we’ve, we formed a company. And as you mentioned, I think you mentioned that we have over a billion dollars worth of apartment communities now. And you know, still making mistakes, obviously, that’s just part of it. But not, you know, learning from anything that happens, then, of course, correcting and you know, that’s the name of the game. I believe life happened, I believe, one of Tony Robbins sayings that says “life happens for us, not to us.” But something unrelated note that really drives my personal philosophy is “Nothing has meaning in life until you give it meaning. Until you decide what meaning you want to give something, it has no meaning at all”. And I embrace that philosophy wholeheartedly because the same thing can happen to 10 different people and it can have the results of that thing can be 10 different results because everyone interprets an event differently. And so I believe it’s all about finding empowering interpretations for whatever life throws at us. And then approaching accordingly.

Brett: 

Amazing, amazing introduction and amazing story. I love the Texas part I love Ohio, New York part, and so much there to unpack. Before we dive into some of the actual investing some of the tangible stuff on value add multifamily. I want to take one step back, Joe, you know, I believe we’ve all been given certain gifts in these lives. Some people call them superpowers or strengths. I believe their God-given gifts and these gifts are given to us to be able to be a blessing for others. So I’m curious when we with that one or two gifts, Joe, that you believe you were given? And how does that help how you help and bless other people today?

Joe: 

I have a high degree of emotional intelligence. It’s something that is hereditary. My sister has it. One of my brothers does not have it. My other brother has it, and I have it. I can read people really well. I believe I can tell if someone’s a good poster person or not relatively quickly. I can. I can read situations, fairly street smart. So  I mentioned multiple bullet points but basically, it’s emotional intelligence. I’m not the smartest book smart person, not the most technical person. And so it’s important to be self-aware with areas that I’m not, you know, aren’t my special areas of talent. But emotional intelligence is an area that I excel in.

Brett: 

Excellent. Now let’s apply that to, you know, investing in multifamily, right. It’s a relationship with your team, with vendors with property management, with lenders with brokers, right direct to owners, so walk through how you were able to scale using that strength and maybe a tip for those who aren’t as high on the EQ part.

Joe: 

Yeah, I think it’s what you mentioned, it’s attracting, being attractive not finding attractive business partners. Huge personal development student Jim Rohn talks about, he passed away he talked about being attractive and not physically attractive but attractive from, you know, attracting the right type of people to your business. And in order to attract those people, like business partners like investors, you have to be attractive. And again, not talking physically, I’m talking about knowing how to approach business knowing how to approach relationships. So how has it helped me? How has it helped me? You know, specifically the cause and effect? Well, it allows me to bring on the right team members and also have the ability to quickly identify if they’re not going to work out. And if they’re not, then I have no problem letting people go. And the reason why is because it’s beneficial for them to be let go if they’re not performing or not the right fit. Because we all have gifts, we all have talents, like you just mentioned, I think it’s a very, in my opinion, unique question to ask someone on a podcast, I’m glad that you asked it. And I wholeheartedly believe that everyone’s here for a reason. That’s my belief. And everyone has special talents. So when someone’s not working out in that specific role, it’s just that it’s not right for them. So I have no problem with a quick hook. So you know, for people who don’t have that skill set, naturally? Well, I mean, the same thing for people who don’t have other skill sets, you find people on your team who do, I’m a believer in doubling down on your strengths, and finding team members who can compliment you in areas where you’re weak. Think if you spend your whole life trying to become a well-rounded person who has no weaknesses, you’re also not going to maximize the skill-set that you were born with. And you’re going to be, you know, you’re going to be not, not giving the gift to the world that you could give. So it’d be a pretty boring world if everyone tried to meet in the middle versus everyone focuses on what our unique skill sets are. So I think being self-aware, I mean, I think we should all strive to be self-aware. I’m reading a book right now. Mastery by Robert Greene. And I read a passage or a paragraph this morning, and he talked about how the leaders have a really hard time in organizations and have a hard time getting, getting feedback from others. That’s truly candid, because people try to avoid conflict naturally, or they don’t want to feel like they’re being mean spirited. So it’s on us as individuals to think about the situations, some negative events that have happened in the past and think about how we are responsible in some way of that taking place? And then taking the doing a self-assessment of Okay, well, how are we responsible in some capacity for that taking place? And now I’m self-aware of that. Now I can try and course correct In fact, for finding the right team numbers, to compliment me.

Gaining Freedom Through Multifamily Investing with Joe Fairless

Gaining Freedom Through Multifamily Investing with Joe Fairless – “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” – Franklin D. Roosevelt, U.S. president

 

Brett:

Beautiful, so much wisdom there. And I heard a unique formula the other day says, your unique gift that you’ve been given, right? The one thing that you potentially do better than most people and or it’s the best thing that you’ve been given, plus, maximizing that potential, that game maximizing that equals fulfillment, no worse if of course, it’s encapsulated with helping enough people helping other people, right? So using that to make an impact for others, that is when we find the most fulfillment you’re right it isn’t it is a gift to someone else to let them go if they’re not in the right role or the right fit or using the right gift or at the right timing of their stage of life. And by keeping them on you can essentially maybe stagnate that because they’re not ready to course correct or they’re not ready, the maturity of a leader to that part. So that I think is powerful. So now let’s dive into real estate investing now right because at the heart of what we’re doing, and hopefully, you’re catching with Joe soon, as well as we’re hopefully building leadership organizations, right building our teams using our new gifts, but the product is real estate or for us, it’s capital gains tax deferral, and we want to be able to bring in some of the best to be able to invest once in if you do use the deferred sales trust, but also or just directly invest with someone like Joe to build your real estate. wealth. so let’s dive into that right now. Talk to us, maybe the three top you know, secrets right now, for 2021 and beyond. Right and some of them are of course, fundamentals to investing in real estate buying well value add for structure. opportunities, but maybe what are some of the nuances because there are a lot of our listeners, they already own multifamily of their own right? They’re already very successful in their businesses. So what are the things that perhaps you’re on the kind of the cutting edge on that, that you’d like to share with us today?

Joe: 

Digital marketing, in a pandemic world and even post-pandemic world, is going to be a differentiator for any multifamily owner because people, the pandemic has shifted the user experience. I’ll be more clear in my English, the pandemic has shifted the customers the prospective renter’s experience. whenever they’re considering where they’re going to live. It’s completely changed the game. And what it’s done is it’s illuminated the importance of having a digital marketing team, that is top-notch. And knows how to attract residents and knows how to engage them remotely. That’s different from where we were prior to the pandemic, it was important prior to the pandemic. Sure everyone did SEO everyone. Well, not everyone, but a lot of people did SEO, a lot of people did, you know, advertise on websites, but how are you bringing the experience of living in your apartment community, to the prospective resident so that they will be more inclined and to rent and your conversions are increased. And so it’s about hiring the right people and investing in digital marketing experts on your team. If you’re a multifamily owner, even if you have one property, you should have a freelance digital marketing specialist or the property management companies managing it for you should have a digital marketing team that is attracting residents in unique ways. Both online and offline but primarily online, because that’s also very scalable. Versus boots on the ground. We can do remote showings and not have anyone actually show the unit because of how we’re able to do keyless entries, keyless access, and the different systems that we have set up but also on the front end, just to get them to that point. The teams that have the digital marketing experts are going to be the ones that are going to have the higher occupancy and get the better read premiums because they’re going to have more supply, meaning more residents to choose from, which will help with their price points.

Brett:

Yeah, so much there to unpack. But one of the key things that I am sensing going on with what’s happened in 2020, which is the acceleration of technology, and those who are using it in their favor, and those who maybe have left or feel like they’re getting left behind. And I feel like the Amazon of real estate is going on with those who are digital marketing, who are building teams that can work, you know, remote, who can do the types of things that you’re saying like the showings that are remote or anything else that’s going to make the experience better for the tenant, but as well as connect and make it easier to achieve better turn rates on the units, right? Of course, using things like you already are using different tools that are tracking rents. So you’re on it, you’re on the right, right, right, rental level, all of those things. If you’re not doing that, it’s kind of like you’re the small mom and pops right and not the Amazon who’s doing all of those things right now. Speak to anything else besides digital marketing. What other thing is sticking out for you there?

Joe: 

Well, I mean, in 2021, I don’t think you’re going to see a major change from the work from home movement, I think you’re going to see offices continue to struggle. And with the government assistance for residents, I think you’re going to help some residents who are only a month or so late, but those residents who are two-plus months late, it’s not going to move the needle. So what I’ve seen is the lower income. Household apartment communities are the ones that get hurt the worst or get hit the worse during the pandemic. So what you’re likely going to see in the latter half of 2021 is a very favorable time to buy should you choose to target CND properties because you’re going to have a bunch of owners who have CND property, but they have residents who haven’t been paying and are unable to pay. And if the property was undercapitalized to begin with, or the owner doesn’t have a slush fund to pull from to ride through these times, then those CND property owners are going to be motivated sellers. And it’s, uh, it’d be a beautiful time to buy because I don’t think interest rates are going to be increasing anytime soon. So you’re going to have favorable interest rates as a buyer, and you’re going to have some motivated sellers of CND properties. I don’t think that’s going to happen on B cup B properties or properties. That’s my opinion. I mean, we’re speculating here talking about the future. But yeah, and i don’t buy CND  properties. But for multifamily owners who do buy CND properties, there’s gonna be a lot of buying opportunities towards the second half of 2021.

Brett:

Excellent. Well said, and we’re running out of time. So we’re ready for the lightning round? We’ll go fast here. You ready, Joe?

Joe: 

Yep.

Brett:

What project are you working on right now that is the most important to you at the moment? And what impact do you think it might have for your team or your investors?

Joe: 

So I created something called the thoughtful project and started it about six months ago, Monday through Friday, my team and I identify one person through social or through life that is talking about something, and then we proactively send them a gift a note, something to just acknowledge what they’re talking about. And that’s something that I really enjoy being part of. Now. I personally don’t get as involved as I was initially but I oversee the project and I love that we do it.

Brett:

Love that! Best real estate deal ever?

Joe: 

Oh, I think the first large deal bought it for 14.1 refinanced for 21.6 15 months later returned a chunk of money to investors, the first large one with the current company I’m at, not that one that lost money.

Nothing has meaning in life until you give it meaning. Until you decide what meaning you want to give something, it has no meaning at all. - Joe Fairless Click To Tweet

 

Brett:

Beautiful. What’s the biggest challenge facing multifamily syndicators as it pertains to raising capital?

Joe: 

Biggest challenge for syndicators raising capital? I don’t know. Yeah. Things are going well, on our side. I don’t know, you stumped me on that one. Um, biggest challenge? 

Brett:

It might not be for you but for somebody else, right? Are there other syndications that you work with? You are coaching?

Joe: 

I think, um, I think establishing a track record, it’s tough to establish a track record. It’s like chicken or the egg. I want to wait to invest with you until you have a good deal while until you have a couple of deals under your belt. And it’s like, well, I can’t have a couple of deals under my belt until you actually invest with me.

Brett:

Yeah, absolutely. I faced that in multifamily brokerage as well, right at the beginning, you’re like, hey, I want to list your 510 million dollar property. Like, yeah, what’s your tracker? Well, that’s when my mentor comes in. Right? It’s important to partner with folks and then learn that so. Alright, last two last questions. What are you curious about right now?Gaining Freedom Through Multifamily Investing with Joe Fairless

Joe:

I am curious about how people have mastered things in the past. That’s why I’m reading the book, Mastery by Robert Greene. I want to learn historically how others have mastered certain things. And there’s a lot of lessons and Robert Greene is a phenomenal author. If you haven’t read 48 Laws Of Power, please put that on your list, read it and then read Mastery. Mastery is a little more boring, but it’s still very insightful, but 48 Laws of Power. That’s the one that read.

Gaining Freedom Through Multifamily Investing with Joe FairlessBrett:

I’m adding that right away. And the last question Joe, and we so appreciate your time coming on today’s show and it kind of hopefully encapsulates a little bit of your journey, but also helps us to understand what keeps continuing to drive you so this is the question. After all your success with your books, right with the Podcast, with real estate investing with 1.1 billion under management for departments. How do you stay centered in your values? And how do you stay encouraged to charge forward to reach new goals?

 

Joe: 

Serve as many leads to greatness I have in my vision board which you can’t see from the video. But it’s in the middle that says “The secret to living is giving”. So I know, if I’m filling in a rut, then I give my time, I give money and that makes me feel good. And I know it does good for others. So that’s my approach.

Brett:

Beautiful. Yes. Always more blessed to give than receive. And by the way, I don’t know if you can move your camera but for those who don’t know, Joe has a death clock. Oh, yeah, you want to share that?

Joe: 

Death clock’s currently dead right now. There it is on the floor with my trampoline. A trampoline is a great way to just get your energy up in the middle of day. But yeah, the death clock was going weird green color. So it’s currently sick right now, but it’s gonna go to the hospital and hopefully get better.

Brett:

Yeah, hopefully, it does and hopefully, it stays healthy and safe like you and your family. And so Joe, I want to thank you for being on the show for sharing a bit about your story, your current focus for our listeners, just so you know. I mean for my clients at Capital Gains Tax Solutions, Joe is our preferred partner slash strategic alliance as it pertains to potential investment opportunities. Okay, I’m not in direct partnership, it’s more so being able to invest in opportunities that are value add multifamily, mostly B class assets and growing communities such as Texas and growing states such as Texas so if you’re interested in learning more about Joe’s opportunities or even deferring capital gains tax using the Deferred Sales Trust and then investing in Joe’s opportunities, just reach out to me You can go to a capitalgainstaxsolutions.com and book a free time and Joe for our listeners one last time if they want to get in touch with you directly what’s the best place for them to find you?

Joe:

Email me at joe@ashcroftcapital.com

Brett:

Perfect. Thanks, everyone for listening to the show

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Gaining Freedom Through Multifamily Investing with Joe Fairless

About Joe Fairless

Personally – I believe in doing what I say I’m going to do then a little extra. I know how important it is to be proud of who I am when nobody is looking so I act accordingly. And I’m aware of how little time we really have on earth together so I give back as much as I can (but understand there’s always room to do more).

Professionally – I co-founded a company that buys apt buildings and has approx $1B in assets under management. Host the world’s longest-running daily real estate podcast (Best Real Estate Investing Advice Ever,) and co-authored Best Ever Apartment Syndication Book.

Specialties: real estate investing, business modeling, adding tremendous value to accredited investors and clients, brand building, start-ups, career consulting, writing, word-of-mouth programs, teaching, public speaking, and big ideas that make things happen.

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