Answering "Who Do I Trust?" (3/12)

Hey everyone, Danielyn here with Freedom Family Investments. In this video, we are going to be covering the most important of the top three questions, which is who do I trust? But I encourage you to stay till the end because after I explain this question, I would love for you to stay on and hear from some of the real estate investors and team members who have been working with us over the years, sharing their stories with you. Hey everyone, Danielyn here with Freedom Family Investments. In this video, I'm going to answer one of the top three questions that we get. The top three questions are where do I start? Which path is right for me? And who do I trust? I've recorded another video that answers the first two questions. So in this video we are going to cover the third question, which is who do I trust? So one of the things that I like to see from people that I'm working with is their track record. What does their performance history look like? This performance history absolutely ties into a get real component. Let's talk about that. So I'm going to tell you our track record multifamily because I just wrote down we have done eight properties. So I'm just going to say eight MF multifamily properties. So I'm giving you my track record for our fund and syndication management company. If you are asking us, we have case studies for all of these multifamily properties. Of our eight properties, we have Manchester Apartments and Grimes Townhouses. That was the very first 56 unit apartment complex that we bought. We nicknamed drugs, thugs and bugs. Let me tell you, that was an experience and if you haven't heard about it, find the YouTube video about it. Because we tell the whole story. We tell the numbers. It ended up being a home run, but boy was that first one a doozy. We learned all the things so now all the rest are like a cakewalk. So that Manchester and Grimes townhouse, that was 56 units in total. We ended up refinancing 48 units and we kept them and held them. The eight unit was too small for us to want to hold, so we actually sold that. So that's two exits. You want to see somebody go through a cycle. A cycle means that they have bought it and they have done an exit strategy. An exit strategy could be they refined financed it because they want to keep it or they sold it because they decided they wanted the profit from the property after they renovated it. So that's two exits for us right there. We refinance our 48 unit Manchester and we sold our eight unit Grimes then the third deal we did was Lake Forest Apartments in Daytona Beach, Florida. That was a 384 unit apartment complex. We went in with other general partners for that deal. The operator was a 40 year veteran and that property also has exited. We have sold that property and again, a home run for that property. Ridgeland Ranch Apartments in Mississippi is 129unit is which we also partnered with that. The operators are fantastic. We are still in the middle of stabilizing that property. We have a full case study on it. We have Serena Gordon Apartments in our backyard. We own a majority of those apartments and we are about 95% complete. We're actually just hiring a contractor to do some plumbing work on the exterior of one of the units. But I think we're all but two units occupied on the entire 48 unit and most of that happened in less than a year. So super excited about that one. Riverwood Apartments is another. That's a 16 unit. We partnered with somebody on here locally. It was 100% occupied within months of that purchase. We are continuing to renovate units as tenants leave or our residents leave. Ivy Core Apartments is in North Carolina. That one was 100% occupied in three months, if I can read that right of us purchasing it again as residents leave. Then we turn those units. So occupancy ensures that the cash flow keeps on coming in, which is very important to us. And then Hartstown Village Apartments, that is in Menorah, Ohio, we did partner with that one again. The operators are fantastic. We're ahead of schedule. And that was an exciting property as well. So we actually have case studies on every single one of these that you can ask for. And the ones that we've exited on, which are 1, 2, 3. We have exited on three of these so far. And then we have 1, 2, 3, 4, 5 that are an ongoing process. Serena Gordon is the closest of all of these to being finished and refinanced when we choose to, just based on getting the cash flow back up, watching the interest rate environment and deciding when we want to refinance. And that will be a fourth exit. So we have case studies that tell you exactly where we're at with all of these properties, whether we're in progress, if we're ahead of schedule. We are very rarely behind schedule. There's only been a few times where I've heard somebody say to me in an asset management meeting that we are actually behind something happen. And then they gave the solutions of how we're catching back up. But we have never not paid our investors exactly what was owed to them. That is very, very important to know and understand. When you're answering the question of who do I trust? What is the experience of your investors when you have a bad deal? What happens to them? And so that's where I'm going to go to this Get Real component. I call it Get Real because that's the name of our book. And so we kind of use it a lot because it's important to us that we always stay very authentic for you, the investor. I think it's really important that we say, hey, you haven't asked us about this. And this is really important for you, not only to ask us, but to ask other people. Because I want to know what your worst deal was. I want to know what happened to the investor during that worst deal. Why do you want to know those things? Because you're going to understand the true character of somebody when you answer those questions. So I'm going to give you our worst deal. We haven't actually had a bad deal in the multifamily arena, thank God. Very grateful for that. But in the turnkey arena, we have had our share of bumps and bruises along the way. There was a duplex in Daytona that is our worst deal. We lost somewhere between. It's over $50,000 for sure. But what happened to our private lender that was on that deal? And let me explain what happened as well. So there was contractors that were on that property. We had a project manager. The project manager was trusting the pictures of that contractor because the contractor had done work for us before. Well, the pictures were not even of that property. They would send in pictures of another property. And so when Flip and I went out to visit was after we were told, hey, this property hasn't even been rehabbed. It's still gutted. And we've paid out a whole lot of money for that rehab to be done. And so there was a lot that happened in that scenario with our project manager, obviously. But we cleaned it up and we got another contractor on it. And we essentially paid for rehab twice. That's why we lost so much money, is because we had already paid out so much money that never actually was done. And we thought our team was going and walking the properties every single time before they actually paid. And instead there was just too much trust that they thought was built. And that contractor betrayed that trust. And it was an unfortunate situation. But I tell you this story to explain. Number one, we fixed the problem. Nobody gets paid until the property's locked. We will never, ever do that again. And that's how a lot of lessons are learned. That's how you get to be successful, because you fail and you pick yourself back up. You learn your lesson and you move on. But what happened to our private lender on that property? We could have gone back to them and just let them know, hey, you know, this is what happened. We're not going to be able to afford to be able to pay you the interest that we promised, but we'll make sure that you get your capital back. We absolutely could have had that conversation and just seen what the private lender was going to say. We didn't. In fact, the private lender never even knew what happened. Why? Because integrity is absolutely one of my core values. Authenticity, transparency, all of that is to my core. I need to make sure that the private money and lender relationships are always first. In my book, my investors come first. Because if I do anything that hurts the trust of that relationship, that hurts the trust of every single relationship going forward. There's no reason that anybody should trust me if I hurt someone, somebody else. And so I wasn't going to do that. I wasn't going to even let them know that that happened to us. It was our fault. We needed to fix it. And that private lender who trusted us needed to get their capital back, plus every single penny that we owed them in interest for the time that we had their money. And that's exactly what we did. So we took the loss and our private lender earned every single penny that they had. And that private lender has been investing with us for years and years and years. And still to this day likely doesn't know this story unless they're watching the videos and emailing us and going, was that me? And they probably wouldn't because they got paid and they just don't care. That's the trust that we've built with the investors that work with us. And so that is the get real component. That is the question that I tell everybody to ask. And you should see when I'm in Mastermind sometimes, and I tell people, like, how we have gained so much loyalty from our investors. And I say we talk to them about our worst deal. We tell them our failures. And people are literally jaw dropping. Like what? Like, I'm not going to talk about where I screwed up. They're not going to trust me. And I explained that's actually why people trust you, because you show the character that you have when things get bad. You didn't tuck tail and run, right? You made sure that your investor was taken care of. That is incredibly important. So make sure that you know the track record. Make sure you see case studies, if you can, even on current deals, you understand what they're doing right now. As this market has shifted, material prices have risen, interest rate environment has gone, gone up. People who were on bridge loans that are coming due, they're facing a lot of people are facing a lot of challenges right now. Our team, fortunately, we have very conservative underwriting. And I know a lot of people say that, but when we get into a market like this, you're going to understand how conservative they were. Please also understand though, nobody could have predicted what has happened right between Covid and and the material shortage. Labor, materials rising, labor costs rising, the interest rate environment changing. Nobody could have predicted this. So people who actually thought that they were underwriting the worst case scenario, they didn't have a crystal ball to see what was going on. But how are they dealing with the challenge right this second? That's what you want to be asking and that's how you learn to trust them, is because they say, this is what's happening. This is what we've done to mitigate it. This is how we've communicated to our investors. So there is not a point in time ever to date that we have not paid our investors exactly what was owed. They have chosen to invest with us for a reason. Because they believe in us and they trust in us because of our track record and because we explain what we do when things go wrong. And because we have never not paid exactly what was owed, plus all interest is owed. We have never renegotiated anything. I will take the loss before I let my investors take the loss. That's just going to be part of my core values that I convey to people so they understand who we are and what our character looks like. So you also want to know about their third parties. Who are the third parties that are checking all the financials and all the information. So we have three third parties. They are nav, that is a fund management company. Nav, they are a fund management company. So all of our financials actually go through them so that they can double check us, let us know if anything is incorrect. They ask us questions all the time. What was this transfer for? What was this transfer for? We let them know there was one time in one of our funds that we transferred money that we thought was okay for us to have as a management fee. And they told us, no, no, you can't take that. The way the ppm, the Private placement memorandum is written. You can't take that fund until the fund closes. We're like, oh, man. Okay, so we're not going to even make a profit until this whole fund is done, which was three years. So that was like a. Ah. So we transfer the management fee right back into the fund. Why? Because that's what we're supposed to do. Because we have a third party double checking us and making sure that we are doing the right thing. That is super important. We also have our CPA team, which is lodestar. They are also looking at our financials, making sure that everything is in line. Boy, when September 15th and October 15th comes our way, our team is talking to them a lot to get our taxes done. And then we also have Robinson and Franz. I don't know how to say it. Robinson and Franzman. We have documents with all this information and you can contact any of these people. These are the people that we're working with. But RF this is actually Nick Moore. This is our attorney. So he's our SEC attorney that helps create all of our docs for our funds and syndications. He makes sure that we are doing everything legally and correct. So you want to know who are those third parties and feel free to vet them, feel free to double check them, feel free to call them and say, hey, did Dani said that she works with you? Is that right? Absolutely. Do all of these things. Another thing is the team. Who is the team? Everything matters. I don't do this by myself. My team is why we are where we are today. So everything that goes wrong is my fault. Everything that goes right is the team's is to the team's credit because they are absolutely amazing. And so right now we have 59 team members across our family of companies and they are fantastic. Know who the people on the team are. Make sure that you can see their faces. I hate websites that I go to and I can't see anybody's face. So find out who the team is, get on the phone with them, talk to them. Make sure that you feel comfortable with the people that you are entrusting your hard earned money with. We talked about get real already. And the last thing here is social proof. So there's a few things for social proof. Testimonials are fantastic. We like video testimonials. We like getting the people in there. Not everybody's comfortable doing them, so we don't always get a whole bunch of them. But we always ask whenever somebody is comfortable, if they get on a video and just talk about their experience of working with us because it's important for us to share that with you. And then also I created an expert panel video years ago that had my CFO on there, had the title company attorney on there. It had one of my private lenders that had been with us for a year, had a self directed custodian on there. And what I did was I asked them questions that I get every single day on the phone and I said, hey, I'm not going to answer them. I want you guys to answer them. And the point was, is I wanted people to know, hey, these are people that have been working with me for years. These are people, my CFO sees our books, he knows our financials. Here's the title company attorney and the title company that knows we have never not paid a private lender back 100% in full plus all interest. These are people that can tell you a private lender who's been with us for years who can tell you she has always gotten paid back and always gotten paid on time. So these are people that can tell you from their mouth that what I am saying is true. You don't have to trust me. You can trust the people that are on that video. When I did that video, I gave their names, their phone numbers, absolutely everything so that people could reach out to them if they wanted to continue to vet me before in my family of companies, before they actually worked with us. So any type of social proof that you can get, keep in mind, a lot of people do ask for references. We've got a lot of like references and people who have given us permission to actually put their phone numbers on things. There was one investor that was going to invest quite a bit of sum of money and he asked if he could talk to some of our investors. What did I do? I shot emails to some of our investors and I said, hey, I know I don't want to disrespect your privacy. I'm not going to give out information if you don't want me to. But we have an investor that would like to invest with us. He wants to talk to people that have invested with us for years now and what their experience is like. Do you give me permission to hand your phone number to them? And only then do I do that. So it's very, very, very rare for me to ask my private lenders or any investor to jump on the phone with it. Because honestly, after seeing all this stuff, people are very, very comfortable with who we are and what we do. But that is to the extent that we go to just to make sure that you can answer this most important question out there, in my opinion, is who to trust. So those are the things that we do. I hope whoever that you're working with that you look at these things as well and continue to just ask all the questions that you need to ask to make sure that you are comfortable before you invest. That is truly the most important thing. So I hope all of this answered your questions. If you would like to ask more questions that I haven't answered in this video, please feel free to go to chatwithfreedom.com scroll down to talk to our investor relations team, jump on one of their calendars, and they will be happy to answer any questions that you have. And I hope we have the opportunity to work together and I look forward to it. I hope this video was helpful. Well, I hope you enjoyed the video. Now it's time to get real. We're going to share with you some stories from real investors who are going to share their experiences with you so that these examples can come to life.

I deal with a lot of companies like geoperators across the country, and sometimes they're just kind of this entity interacting, transacting with this big entity, I think with you and maybe just, you know, I've been working and talking to for a long time. You really do make it sound like a partnership, you know, where, yes, you got Freedom Investments, you're your company. But this dialogue, for you to not just say, here's what we're doing, it's like, hey, what are you thinking? I thought that goes such a long way. So I just applaud you for being approachable, taking feedback and you're kind of building it with people in mind versus, oh, we already got it figured out. You, you need this. You know, it's like, it's like Steve Jobs, you need this iPhone. You might not know it, but you need this. I don't think market access, I mean market, you know, the market of real estate works like an iPhone in that way. But I, I just appreciate your approach. It's a very humble, genuine, you know, kind of, hey, if you make mistakes, we'll admit a type of culture I think you guys are building. And that's why, I mean, as you know, it's not only me, but I've gotten my family to invest with you. You know, they're like, who are these guys from Ohio? I'm in California. And I said, it worked out so far. They've been investing with you last two years. Right.

Is there anything else that you would speak to. That's important for investors to be looking at or talking through. When it comes down to who do you trust?

I think just knowing you guys for so long that, you know, before you guys were even create freedom. We've known you and just being awesome people, you know, genuine people. You know, you guys make time to check on us, you know, as friends, more than just business associates or investors, CEOs, that kind of thing is. I feel like I would have no problem trusting you even if we just lent you money. You know, if you guys just text us or called us like, hey, something came up, we need to borrow some money. I'd be like, okay, here. You know, you can borrow some money because we trust you that much. And then you guys are willing to pay us interest on my investment money.

Why not?

You know, it's awesome. So, yeah, just knowing you guys and, like, how awesome and genuine you guys are, you guys aren't putting up a front or acting away just to, you know, fake it till you make it kind of thing. It's not that way, you know, because dealing with investors of the title company, 50% of you know, who we deal with, you know, fake it till you make it. Where they call us four or five times a week asking us questions about investment things that we shouldn't be answering, those kind of things if they're an investor in their own. Right.

Right.

You know, just genuine market questions and stuff like that. Where if they were as important as they say they are, they would already know this kind of thing. Like, they watch one YouTube video or listen to one podcast, and they, you know, want to buy a thousand properties a year without any kind of funds or anything like that. But, you know, it's just. It's just wild where I'll be stuck on the phone for half an hour, 45 minutes, just answering questions.

Wow. Yeah, it's.

It's interesting. But, you know, knowing that you guys can do it and have done it and will continue to do it, it's just a big, big relief and makes it easier to part with the money, I guess. You know, in the grand scheme.

That'S who I trust. I know that you guys have done it for a long time. You guys have obviously built a huge foundation, a huge following, and you actually are doing it yourself. So for me, that. That was spoke volumes. For me to be like, okay, this is where we can go now and really become passive investors. Right. And just have my money making money. Yes. That's the best part. Like, that's when I Say I. I've crossed the finish line, man, I love that. Yes, yes, yes, yes. Love that. So the last thing that I just wanted to ask you was about the trust factor. So I always tell people that there's three questions that I get, and it's where do I start? Which path is right for me? And who do I trust? And of those three questions, I think the most critical is the who do you trust? Because I've been on the phone with many investors who have trusted a friend or an investor who is possibly new. And like you said, they didn't really know how to underwrite the deal themselves. They just trusted the person but didn't check maybe the track record or do a little bit of due diligence. So you actually physically came to our office. So I'd love to hear from you. Like, how did you determine the trust factor?

Well, the other three questions you mentioned, I think really they should be asked backwards. Right? It's who do you trust?

That's right.

Do not trust this person. Whether it's your spouse. Right. If it's the person you're dating, don't get married to them. If you don't trust and you have financial dealings with, don't exchange money with them.

That's right.

And once that was established, and I think your transparency has been key, there has never been a time where, if I had a question saying, oh, well, you know, I had this investment, or I remember investing this much, and I'm just wondering kind of where we're at now. Within 24 hours, I would have an answer. I mean, it was never, oh, hold on a second, or this person's out of the office or anything. I mean, it was always, this is exactly what it is. Here's. Over the past however many months, if you'd like, and here's where our projections are going. And, you know, we started. You know, I. I don't really know what to say if it's small or big. I mean, we started with $100,000, which I think that's a big amount of money. And thankfully, over these years, with different investments now and including syndications, you know, I'm happy to say that I have with you and the way the money has grown, it's about $2.5 million now.

Nice. Our relationship has grown over the years, and I. I love when I get the, you know, little text or email from you and you're like, hey, Danny, just letting you know, I've got some more funds. You know, what do you have available?