Flip and Danny argue that the sponsorship team matters more than any single deal. They advise vetting sponsors carefully, valuing experience and simple structures, and treating investing as a numbers game.
Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies, and welcome to another episode of our.
Podcast, which is called Freedom through Passive Income.
That's right. And today's episode is called what's More important, the deal or the Sponsorship Team.
I like to call this the chicken or the egg.
Which came first?
I played with this title so many times, I was like, let's just put that as a thumbnail. The chicken or the egg. So what this is really about is it stems from conversations that I've had many times with investors who are wanting to work with us, and they're doing their due diligence and talking to us now. Cj, Ben and Carrie have a lot of these conversations, and they're, you know, they experience the same thing. And it's. You know, some people have some horrible stories to share with us in that. That they invested with somebody who ultimately lost their money for whatever reason. It could have been they just misjudged the rehab. It could have been that they really are, you know, you know, con artists of some kind, and they were never intending to do a good job at all. It could have been lack of experience. It could have been anything. But so many people tell me stories about losing money due to investing with somebody else, whoever it might have been.
So the answer is the sponsorship team.
Yes. That is more important than the deal. Right.
Because a good team will use their knowledge and experience through different market cycles, and when faced with challenges, they will navigate them to the best possible outcome.
That's right. Yeah. And so we had talked about this, that even if you have a good deal and the numbers look good, so let's just say you are familiar with real estate and you know how to look at a deal and check out the numbers and feel good yourself about, you know, hey, this is an actually good deal. I'm going to give Flip some money.
Right.
Even if it is a good deal, if Flip's not a good experience sponsor, if he's a con artist, if he just makes human mistakes and doesn't have the grit to follow through when the going gets tough, all of those things still mean you lose money. Even if it was a good deal.
So it's not a good deal.
Yes. So one of the most important things that I think that you need to remember is that it's going to take time to find deals and find sponsors. Likely more time to find sponsors, because it's not always really easy to find sponsors. You can find some. Some of the really, really big ones. They do tend to be a little confusing, in my opinion. I don't even invest with them because there's just. I always say, what was our line? Whenever we were creating compensation structures, we're like, if it's too complicated, I feel like I'm getting screwed somewhere. So we've talked about recently, too, that we're known for our simplicity, that we keep things simple. We keep things very easy to understand because that's when you can confidently go forward and say yes. So maybe looking for a sponsor maybe takes a little bit more time, but ultimately it's going to be the win because a sponsor is going to bring you the good deals. I don't know if I missed anything in there, but I kind of went off on a tangent.
Yeah. I don't know where to jump back in. But the main point that is a bad team can even ruin a good deal. That's the main point.
I wanted to throw that in there. In the example, I made you the bad guy.
I'm always the bad guy.
You're not the bad guy. But anyways, yeah, I think this is really, really important. I know that we kind of made a joke about the chicken and the egg, but there's too many people that go and they want to find the deal. They see senior housing and they know senior housing is hot. Right. And so they see this and they see the email subject line and they're like, okay, this looks like a good deal. I'm going forward. And you didn't take the opportunity to vet the sponsorship team because that's way more important than the deal. So we want to shift your mindset a little bit and just go, vet, vet, vet that team, that person, first and foremost. And that person should have a team, whether they have a team in house like we do, or whether they have external partnerships that bring the experience and the knowledge. You want to know every person that's on that team. You want to be asking all of the questions and then let the deals come to you because you trust the people around them.
And just remember, it's always a numbers game.
Yes.
Whether it's a bad deal or a good deal, it takes a lot of deals until you find the really good one.
Yeah, that's right. I think I read something the other day. If you're not underwriting 100 deals before buying one, then you're probably paying too much money.
There you go.
Interesting, huh?
There you go. Well, we like to keep these as short as possible. We hope that you enjoyed this episode. Make sure that you're joining our investor club right down here. FreedomCapitalInvestments.com head on over to our investor club. Now, this is different than our social media groups, but make sure you're going over to those as well. Meeting the team, hanging out with the team, asking questions, letting us know how we're doing, requests, recommendations, whatever it may be. 5 star reviews and make sure you're subscribing if you're watching on YouTube. But we always like to end all of our episodes with Invest Smart, Live Happy.
Bye everybody.
Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss, y' all.
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