Ep 48 - Week 7 Live Progress Update

Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.

Podcast called Freedom through Passive Income.

That's right. And today we have another live, live, live in a new location. This is. Well, again, you're used to seeing us in other areas. So this is one of our newer locations, but this is our week seven.

Yeah, sweet.

What's seven in Spanish? Siete. Yes, I think so. Look at that. My two years of Spanish back in high school, back when we rode dinosaurs to school. But this is week seven Live update. Just to give you an update on our podcast. We've had over 2,500 downloads since we started on January 1st, and now we have over 1,000 YouTube views. That's huge. So keep sharing it. Thank you so much.

Yeah, and thank you, Jody, who is actually the one who sent us an email and said, hey, you have over 1,000 YouTube videos. Do you want me to send you these stats each week? And so that was really fantastic. So thank you, Jody, for being incredible and giving us those stats. So the next thing that I want to talk about was Ben had sent us an email and said, hey, I'm just checking out this website and it's, you know, looking at current housing prices and inflation and what's going on in the market. It'd be great to hear your take on that. And so I wanted to mention it. We're not economists. We don't study the economy. That's just not, you know, who we are. Although I'm getting more and more geeked out about it, I really am, like, listening to the people who do study it and their opinions, and there's so many different opinions. So I collect kind of all of that information and apply it to what we're seeing personally in our local area and what we're doing as a business. And so if I'm going to speak to housing prices and inflation, right now, inflation is still around, I think, 7.5%. They predict that it's going to go to 8% here in this month, February of 2022, and then it's going to continue to rise. But we're in the cash flow game. We're in the rental game. Right. I think buying. We are planning to move to Florida. So it's not going to be the greatest of feeling to have possibly rising interest rates and a higher price on a house. And, you know, we normally, normally would have to pay because of the market right now. That would be the thing that I would say is bad is for the Owner occupants like us that want to go buy something. But for us, on a rental standpoint, I feel like we're doing okay still because rents increase with inflation, they tend to keep up. So even though the prices of properties are getting higher, the cap rates going in, cap rates even are getting more and more compressed because people are willing to pay higher dollar for propert, the rents are still keeping up in order to still have good decision and purchasing power in those scenarios. So I'm not really concerned about the investor side of us.

Right.

And it's just bad timing for us that we want to move to Florida when the market is kind of crazy. It's a seller's market. Yeah. Pretty much everywhere. So that's my take there.

Yeah. And apparently right now it's only 80 to $90,000 above asking price for houses in Florida. So we're doing good. Yeah, that's great. Time. All right, everybody, if you're watching on LinkedIn or Facebook or YouTube, this is your chance right now. I know you see the like button right here and you see the heart button right there. This is your chance in the video to these buttons, make sure you hit that heart button. Make sure you hit that like button if you like what you're seeing and if you enjoy what you're watching. But this is your chance right now.

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Yeah. So again, Hulk smash. So a little update on some projects that we're doing. There's the 129 unit that was supposed to close, I believe last month.

Yes.

Yeah. And then earlier this month. And so it's still pending. We're still working through all the documents and helping the seller gets all the information over to us. And then the 48 unit we've told you about a couple weeks now, we just got a little twist that I just found out about 30 seconds before we started recording this live video Today on Thursday, February 17th.

And the twist is the seller says he has, we're on walk number three. We do walk number three tomorrow. And it's because a lot of property units are occupied and we have to, you know, go in with pest control to be able to go see all the units. And so told our acquisition specialist Della just yesterday that he's got a sight unseen offer higher than what we're even really considering because we have walked the Properties, we know how much it's going to cost in order to get this property where it needs to be in order for us to raise the rents to where we want to do it. And so I just, I hate stuff like that because, like, we. I'm not going to tell you a little story. I just, I'm not a big fan. If somebody's willing to pay, you know, a certain price sight unseen, you know, so be it. Let them. But we're not going to, you know, fall in love with the deal and pay higher than we should just because there's a competing offer.

Yeah. It's taken me years to stop being emotional.

Yeah.

About purchases. I mean, many years ago, if I would have heard that, I was, I'll pay more. You know, that's. And that's what, that's what's going on in the residential world right now.

Exactly.

You know, the site unseen offers 50, $60,000 above asking price without even seeing the property or doing an inspection.

Yeah.

That's ludicrous. And so now, after many years of doing this, you know, she just told me this 30 seconds before we started recording. And what did I say right before we started? What did I say?

Oh, sell it to them.

Take it. Yeah, yeah. If you got an offer for that amount sight unseen, take it.

Yeah, yeah, exactly. Right.

Because we're not going to pay it.

Yeah. And the seller's really cool, by the way. Like, you know, it kind of, the whole thing kind of sucks. We really like the area, we like the buildings, you know, we like the seller. We think it's a good win, win. But, you know, ultimately the numbers have.

To work onto another deal.

Yeah.

And so, so that's the twist. And so then the last thing.

Okay, so I've been talking to multi. I'm in like seven masterminds, the ones that are multifamily masterminds. I've been starting conversations about funds because we're exploring new things. And you guys know that we're always exploring things that are going to be better for us, be better for our investors. And it's a learning process. Right. Of all the different ways you can structure things. So sometimes I don't know what questions I'm not asking because I don't even know to ask them.

You don't know what you don't know.

That's why I kind of threw out to some mat mastermind groups. And seven figure multifamily is one of the mastermind groups. I'm in with Jason and Peely and Chad. And it Kind of started a small conversation. Then I said, hey, I'm just going to talk about this real quick on our Facebook, not Facebook Live, our podcast, our Week seven live podcast, so that I can kind of share what we're doing. And I know I'm running out of time, so this is going to go really fast. So what we're doing right now has been one fund per deal, right? So it's been a syndication. Our 384 unit was a fund of funds that we invested in the main fund and our investors was in our fund. So we did that, and that was one deal, right? Then we did a opportunity fund, and we're having an SPV per deal. And that opportunity fund is going to be open for a year for us to raise and not have to do a fund every single time we do a deal. And so this 129 unit is the first SPV of that particular deal. The next deal that we do, we can do another SPV in that deal, the next deal, and then, you know, keep doing that for a full year and then do Opportunity fund number two, if that's what we so choose. But instead, we're exploring the idea of $100 million fund, just building a big fund that diversifies within the fund itself. So all the properties are in that fund. And now our investors aren't going, I'm investing this 384 unit. I'm investing in this 129 unit. I'm investing in this 48 unit. Now they're investing in all three, and they're diversified between Florida and Mississippi and Ohio and size of units. And so we love that idea because as the market shifts in different areas, there's some opportunity that, hey, this asset is not performing maybe as good as this asset. And so it provides some diversity and balance between, you know, everything. So then we're also trying to meet the needs of our investors. And some people want depreciation, no cash flow. Some people want high returns in cash flow. Some people want to put their money back in and allow it to compound. There's just different things that people want. And so then we're trying to create classes within this big fund that's going to allow for diversification and allow different classes to meet different needs depending on the investor. So those are the things that I'm working through in my head. And then the last piece, I'll say, I know I'm already over time, is we're exploring a liquidity fund. And the liquidity fund is one of the things that our investors like they don't mind a lower interest rate for the opportunity to have liquidity and to give us 90 days notice or whatever that looks like to be able to get their money back out. And there's people with millions of dollars that want that liquidity fund and again, they're okay with low interest rates just to have that power because they're getting the benefit of liquidity and therefore don't need the high returns where their money is locked in. So now it's exploring that because the real with that is what if we're, what where is that money? What is it invested in? And what if a lot of people want to take money out at the same time? Then we've got to raise more and we've got to replace it. Like, I'm really nervous about the liquidity fund, but I understand the power of it. So those are the things that we're working on right now and what we're brainstorming. The goal again is just to be a win for us, win for our investors, and to do a lot of great things. So for those in our masterminds that are going to listen to this, that's what we're exploring, that's what we've done, and any questions that we're not asking and any ideas or experiences that you guys have, that's what we're looking for feedback on. So I'm sorry, this one was longer than normal. Okay, done.

Now, we just recorded an episode that's going to air a little bit later this month or early next month about acronyms. I don't think it was SPV on there. I don't think it was. So what is spv?

Special purpose vehicle.

There we go. Vehicles. And then also shout out to Jocko Good.

Yes.

If you've not seen this video, it's a three minute video. Just type in Jocko Good on YouTube and you'll get the three minute video. It's awesome. But we like to keep these short and sweet, except for this one. So again, hope you're enjoying it. Hope you're enjoying it. On all the podcast platforms, YouTube, make sure you hit the subscribe. Make sure you're joining our Facebook group, our LinkedIn group. Make sure you're interacting with our team members. But we like to keep these as short and sweet as possible. And we always end with invest smart, Live happy. Bye, everybody.

You.

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