Out of State Investing & Working With Strategic Partners | Real Estate Investing | EP. 14 | FREG

Hey, everybody. Flip and Danny here, co founders of the Freedom Real Estate Group family of companies.

And this is real talk, which is real talk for real estate investors, our very own podcast. Today we are going to be talking about out of state investing and working with strategic partners.

One of the things that we always say is live where you want, invest where it's smart, which is very important. Now, it's funny you just said that about out of state investing. It's funny because it actually could be out of country investing because we actually have a lot of investors that work with us that are many, many, many thousands of miles away from us outside of the United States. Switzerland, Israel.

Israel. There's like, I just read Japan. Japan. Yeah. I was just writing something, our vivid vision. And I wrote all countries. And so now we do have more.

Out of state investors than we do out of country investors. But we wanted to throw that in there as well.

Absolutely. So we've kind of broken this down into three categories of the three steps that we feel like you should take, because we do the same thing. In fact, we moved from Arizona to Ohio so that we could actually build our company and business in a state in which we loved. So we broke down everything that we've done in our business. Right. And said, what are the top three things that we think about whenever we're working or wanting to invest in something? So we're going, going to start with identify your goals. So we're always trying to see what the end game is. Right. Because the best way to figure out how you're going to get there is to reverse engineer, say, I want to be here. How do I get there? And you just keep on working backwards until you take that first step and you've figured out all the steps. So that's what we're going to start with. Identify your goals. And so the first thing that we had is a list of different things that even Flip and I have talked about. And ultimately we do a lot of these things because investors, and a lot of our investors actually say this to me on the phone. You know, we're doing this with you because we don't have anybody else that we really trust to do this with. So we're just diversifying. We're all, you know, we're doing 30 syndications, we're your private lender, and we're doing a master note. So we can do some short term private lending and some long term private lending. And they're doing that to diversify where their funds are and, you know, the different returns. So do you want to go into like rental properties? Is owning rental property one of your goals? And I know this could refer back to our podcast that we did for syndication versus Fix and Flips versus Turnkey, I think is what we did on the whiteboard and everything. So anybody watching on YouTube could see all the things that we wrote. There was lots of variables. You want to talk about that a little bit?

Well, number one. Well, the three different kind of rental properties that we offer are the number one, we have icf, which is the Investor's Choice series.

It's actually Instant cash flow.

Instant cash flow. Sorry, we got rid of that. We changed that one.

Sorry.

Instant cash flow. And so this is a way for you to buy a property from us that's already cash flowing. Because we tend to buy a lot of properties and not all of them are vacant. And some of them still have good paying tenants that we don't want to get rid of. And the house is in great condition still. It's not up to our level, but it's in good condition. And so it's a way for you to purchase a rental property out of the gate. You're already cash flowing and thus why it's called instant cash flow.

We actually have a property on one of the properties that we bought as a part of a package. We plucked a couple of them. One of them, the tenants weren't good, so we got them out and rehabbed that one. The other one, the tenants are good. So we're just like, we're not going to rehab that one right away. We're just going to take the income. Right?

That's right.

Perfect example that we have done as well.

Then there's the, the equity. What is it?

Equity Advantage Series. Advantage Series, Yeah, we just renamed these. So, you know, bear with us. The programs are new and we renamed one of the programs. Right.

So this was the Equity Advantage series. Now this is a property that the tenant is no longer in there. But we haven't gotten to the stage two where our rehab team has gotten to rehab it yet.

Yep.

So this property is whatever you want to do. And when you buy this property, you're going to know what the rehab is going to be. And when you buy it, plus the paying for the rehab, you're already going to have equity in it before you put a tenant in the property. So that's why it's called the Equity Advantage. So you're buying it at a discounted price, but you'll have equity in the property based on its finished value.

Yes. You Also get the tax advantages of it. So for people who are familiar with the BRRRR method, essentially our equity advantage series is the BRRRR method. We just named it something different because we wanted. And it is. It's an equity play. Right. Plus you get the tax advantages. And then there was one more thing. Oh. One of the things that we always like to say is, so you'll see like a scope of work essentially. And what our project manager is, he goes out to walk a property and he has what categories like roof or H vac, Right?

Yeah.

General crew. Yeah, those are the things that he has on there. So we show you those so that you can see how much each thing is going to cost for us to do the signature series rehab. Right. Because everything that the project manager said, signature series, here it is. If you saw a roof on there and you saw in the notes or they told you that in the notes when he walked the property, that he feels like there's five years left. If it were me, I'm waiting five years to do that roof. I'm not doing it right now. I'm going to wait and I'm going to repair it and I'm going to get the most amount of life that I can for it and then I'm going to replace it. That's some of the cool things that you can do in a BRRRR or for us, Equity Advantage series. So I just want to make mention of that because a lot of people don't. They love that turnkey model of. It's done for you, it's done for you. There's some real true advantages to buying like we did sutfen leaving the tenants there because we'll rehab it when they get out. But we got instant cash flow. And then there's real advantage to doing a custom rehab so that it's not all the way. This the reason we have a signature series is because we wanted a McDonald's.

Yeah, exactly. For you. But we know exactly what it's going to be.

Yeah, yeah. And a lot of people like that. Peace and comfort. I'll let you talk about it. Sorry. Right. Well.

Well, the difference too as well is when we do our signature series, you know, it is the same thing on every property, but it is up to a higher level. And some people like, oh, we didn't need to do all that, you know. And so that gives you the advantage also of doing the rehab for a lesser price.

Yes. Yeah.

So. But then there's the signature series, and this is what we call our McDonald's. This is if you buy one and you buy one another one, you know, whenever it is it's going to be the same. We're, we're using the same light fixtures, we're using the same flooring, we're using the same everything, same paint, same everything. So that way now the house is obviously going to be a little different, whatever the layout or whatever, but everything is still the same. And so that way, you know, it's going to be LVT flooring. So we do a higher grade flooring throughout the house because that's going to last longer.

Yes.

If the roof does only has a little bit left of it. Well, we replace the roof.

Yes.

You know, we don't leave that for you to replace in a couple years. Same with the H Vac and same with the plumbing and the electrical. We make sure everything is to, it's a very high standard but it's done for you. So that way you don't need to worry about it.

Yes. So it's choosing if you're going to go the rental property route as a goal. I want to own rental property. I don't mind, you know, the communication, the little more hands on approach. Right. When we did the comparison of all three Fix and Flip was you're 100% hands on and it's active income. Turnkey is, it's medium hands on because you still have to deal with hey, you know, hot water heater broke down, it's over your 500 threshold so I need your permission. So you still gotta do a little bit of stuff.

But it's minimal.

Yeah, it is minimal. So but if you like the rental property avenue then like Flip said, what do you like instant cash flow? Do you like the EAS which is the brrrr method? Do you like it completely and 100% done for you? Because everybody is a little bit different and sometimes the people who love done for you now go let me try that EAS or let me try that. And then they kind of test it out and they see how the numbers work and everything and then suddenly they're diversifying even in their thought process and investing, you know, mindset. It's just a little bit more hands on in those situations.

Yep, absolutely. It depends on what your excitement level is.

Yeah, yeah, absolutely. And if you want to be hands on, there' have been like can I do this to the rehab going, you know what? And back when we didn't have the other two products, we're like it's going to be our McDonald's approach. And if you like that, great. If you don't, you need to go do your own flip. Now that person can do an ICF or eas and then when it comes rehab time, they can pick and choose what they want to do out of that rehab. So I love the multiple options that we have. And then also single family versus multifamily. Right. So if they're going to choose rental property as one of their goals that they like, they have to choose which one. And I think we were in Tennessee, maybe Washington, we were on chairs, we were talking about multifamily versus single family.

That Washington.

Okay. Yeah, so I remember that podcast. So there's some podcasts you can go back to to really see, you know, as you're identifying the goals, learn more about what we feel about syndication versus active fix and flipping versus turnkey or multifamily versus single family.

The pros and cons of each. Yeah.

Okay. So that's one of the options when identifying your goals that we wrote down, that we've evaluated. We've also written down short term lending and long term lending. So the difference would be, are you going to be one of our private lenders who's on a note and mortgage basis means Tiffany sends you a private lending packet and says, hey, flip, would you be interested in funding this deal? Here's all the information, the comps, the pictures, financial information, yada yada yada. And you know that there's going to be a 12 month note, but we might be done in four months, we might be done in six months. So it's short term. You're going in and out of each deal as soon as the deal sells and you're going to get a payoff statement, you're going to get your funding back and Tiffany's going to go flip, you want to do another one. And if you said yes, then she's going to try and put you back into a deal as soon as possible. Now that soon as possible depends on our pipeline and what's going on. Right. So it could be two weeks, it could be a month, it could be two months. But some people like the liquidity of short term lending and so they choose that as an option. And then long term lending is the people who like lending as one of the things that they do with their funds, but they want the longer term. So they've invested with us for like in a masternote, which is a term of five years, but it renews every year. So every single year they've got some type of option in order to say, hey, I'm going to give you just heads up that I would like to get this funding out. Now we don't always open up the masternote program because we don't always need masternote investors. But we are going to start creating funds that do a little bit of the same thing because it's going to be a fun. It's SEC regulated, so it won't be as easy, I would say, as the masternote because masternode is really an attorney written agreement that if somebody called me up and said, hey, I know the note says this and blah, blah, blah, well, I'm just going to figure out, let me figure out how to make that happen because it's just between me and you. But if it's an SEC regulated fund, we really have to do a good job of following all the rules. So that would be long term lending. I have money to lend. I want to diversify my money in this way. But I want to be hands off. I don't want Tiffany having to send me a funding packet, having to get a payoff statement, having to then invest again, which isn't hard. I mean, I laugh when I say all that because it's not hard. We made it so super simple. But you know, some people don't want to do even that little bit.

Well, I think we're a little spoiled too because whenever we have to wire money, we can just go into my office and wire money.

Yes.

Not everyone else has that, you know, that, that, that ease of being able to wire money. They've got to go to their bank. Their bank might not be right down the street. Yeah, I mean, we knew one person that they had to move money from one account to the other account, then they had to wait for two days for that account to show that that money was there and then they had to wire that money. But that bank is only open on the third Tuesday of every fourth month.

Right.

You know, so it's not always that easy. So yes, we laugh about it, but some, some people, it is an ordeal and they're like, I don't want to wire any more money.

Yeah, I want to do something once and have it, you know, let it sit there and get the rate of return.

And other thing I wanted to talk about on the short term lending too. It also depends on how much that you're investing too, because if you don't have, you know, if you have a smaller amount, you know, we might not be able to fit you into a deal for, you know, like, you Said two, three months or whatever. But if you have a much larger amount, well, that's usually easier to get you into a deal.

Yes.

So it also, so that also depends, you know, one person only had like, I don't know, $50,000 or $60,000 or whatever. It's, it's. Yes, we are able to pick up properties that can fit in that, that parameter.

Yes.

It's not as often.

Right, yeah.

And so getting the ability for us to be able to get your money in play and to make your money, make money on you or make money for you, it's. That's a little harder.

Yes. Yeah, that's a really great point. Also great point is that now some of those short term lenders they're getting, they're like the entry Point is $50,000. Right. For us, the funds that we're creating for long term are going to have that same minimum. So now these people who we've been having difficulty getting into deals, we've created this fund honestly specifically for them because there's so many people at that entry point that say, I have this money and I don't want it sitting in my bank account because I'm not getting any return or the return is less than inflation. So I'm just losing money having it sit there. So they say I want to use. And some people use it as a plan for their real estate purchases. So they buy a property and then they lend with us to get the highest rate of return that they can for short term liquidity and then they pull the money out and they keep on doing that until they've saved enough down payment of extra money as opposed to like including that because they're saving every single month. But this was a way for them to go. I can pile on more money if I just take this amount and put it with you or higher interest. So they're just using that technique of, you know, it's very, very interesting. I love talking to people and listening to all the different ways that they' trying to figure out how to diversify and which tool is going to really help them hit their goals. So we've gone over as far as identify your goals. You could be somebody who wants to invest in rental property and own it yourself. Short term lending and long term lending. And then the last one we have here is long term equity. This typically is going to be the syndication route that we talked about, right. Where you're going to be an investor, not a lender in the company that owns the big. So 384 unit in Florida.

Right.

The people who invested money in that are part of the investing group. They are limited partners who are part of the investing group that owns the company that owns the 384 units. So different than being a lender, which is, you know, you're a debt partner, essentially, you've got the note mortgage, you've got that protection piece of the security. There's a little bit more risk when you're the equity piece, because hope we do good and if we do, these are going to be your returns. The great thing about like the Florida complex is the limited partners that are investing money, they are preferred. Right. So we have to make money.

Right.

In order for us to get paid, because we're paying them first before we even make anything. So looking at the structure, if you're going to be an equity partner, understanding the risk that's involved, looking at the structure of the deal and what it means as far as how much risk that you have and how much return that you have. So that is the last one, I think. One, two, three. Yeah. We had four listed as things you and I have talked about in terms of diversifying our investments. So that's where we would start for identifying your goals is which of those investments do you want to go into? And if you're already in one, do you want to go into another? Which one? So once we've made a list, then we list the pros and cons of each one, which we won't go through. The pros and cons of each one we sorted a little bit just talking about it here and in the other podcast about syndication versus turnkey versus active fix and flip, we literally went through.

A lot of pros and cons, a.

Lot of pros and cons. So you can listen to that one. So that's what you would do as a next step. And then, so now we're gonna. We're done with number one. We've identified the goals, we've identified the pros and cons, and we've chosen what we want to do. We decided on something long term. Lending, it doesn't matter. Right. And then, so number two, the next step is you're going to create the list of questions. So I'm going to relate this to what we're doing right now. July 1, I said 1,000 doors in 12 months. And it was our mutual goal that we wanted, 1,000 doors. I just decided to give myself a finish line because that's how I do anything. If I give myself a firm finish line, if I Make it aggressive. It'll push me super, super fast and hard. And it's really. It means nothing. Like, people have said, why 1,000 doors? And then I do explain a little bit the simple math, Right. That you did in Philippe's pool while we were in Cancun. But I said, it's. It's. It's not. It's not the benchmark that you think we have in our head. It's only a finish line. I just want a simple finish line in my head that tells me how fast I have to move in order to try and hit it. Because if we hit 500, if we hit 750, I don't care. Like, I'm not a person that goes, I didn't hit my goal. I'm just gonna, you know, do everything I can or die trying, I think is one of the things that I said in Facebook the other day, because I would like to hit a thousand. But it's just a. It's not even a serious goal. It's a finish line that I would like to cross and make it happen, and I'll do everything in my power to do it. So this goes to the list of questions. Now that we have the goal, we've identified our goal. Right. Then we said multifamily versus single family.

Right.

What do we decide?

Multifamily and why? Oh, well, I mean, you and I have been doing this enough that we've realized that with multifamily, it's, you know, multiple properties under one roof.

Yes.

The ease and ability for our rehab teams to go in and rehab the entire building if we have to.

The cost savings to that, too.

The cost savings, exactly. And just for property managers as well, you have 40 units in one building instead of 40 single family houses all over. Tarnation.

Yes.

And so those are just a few.

Yeah. And we went through a ton in our multifamily versus single family podcast. But the other reason is because of the goal we decided we accomplished. Number one, we said 1,000 doors, 12 months. I might have been the jerk that said the 12 months, but because I like finish lines. So because we said that, we ultimately said we not only like multifamily, but we have to do multifamily. Can you imagine buying thousand single family doors in 12 months? That's just crazy.

I think our title company would love us.

Yes, but that's another good point. The cost. We went into that on our podcast about the cost associated with one deal versus buying 40 deals. And that's just one transaction. One closing cost. One inspection, one appraisal. Anyways, so we ultimately said, hey, how fast can we get to this goal? Can we do it in 12 months? Well, what are we going to do? We could buy 10, 100 unit buildings. We could buy 5, 200 unit buildings. We could buy 3, 300 unit or 1 and plus 1100 unit. There's lots of ways that we can buy large things. One transaction, it's going to take a while. There's a lot of doors to inspect and figure out, but that's okay because it's a big chunk as opposed to one at a time, and all the costs and the pain, essentially, pain associated with buying one at a time. So we chose multifamily for all the reasons that we just talked about. So you're going to be on number two because you already defined your goal. And you're going to start with. If you said rental property, you're going to decide if you're going to do multifamily versus single family. Then for us, we said large, multifamily or small. Obviously we decided on large.

Well, we did large because. Well, we started small with like a 50 unit. I mean, I wouldn't. I wouldn't suggest someone. You know what? I think I'm gonna do multi family. I'm gonna do 200 units to start.

Right.

Unless you have a mentor or someone or a strategic partner, someone guiding you through the process, I would definitely would not suggest that. But. So we obviously decided to do large because. Exactly what you said. I mean, you know, we can do five 200 units and that's five closings. That's. And we can do that in a month. Come on. I'm just kidding.

Yeah. I was about to say. I don't know why we're pushing that one.

I want to say. You do have.

I do.

Okay. But yeah, so obviously we decided to do large because what we don't want to do is 500 duplexes. You know, so it's not that that's bad, but it would just take a lot longer.

Yeah, for sure. So that was the next thing on our list for questions. And we decided on large, the type of fund, whether we wanted to do a debt fund, an equity fund. What does that look like? How is it structured? We have done one fund so far with a 384 unit in Florida. It was a 506B, which meant friends and family. It was an equity fund, which means we're giving some risk to the investors because they are part of the. They're the limited partners. That own the LLC that owns the essentially the building. So we have, we have to figure that out for this. And we're actually now exploring ideas on how to create funds for even our short term private lenders so that they can dump $50,000 and still keep it liquid enough that it makes sense for us to spend the money on a fund because it's not che but gives them the ability to fund for longer time. And so our attorneys like when we can have a menu of options. If you invest this much or this much, exactly what we're doing now. If you invest 50 or 100 or 300, that affects your interest rate. If you're investing for one year or two year or three year, that affects your interest rate. The amount of interest is a combination of how much and for how long, which is really super cool. So you got to figure out that that might not apply to everybody. We're kind of going pretty big at this point in time. But it was on our list so I wrote it down and then areas. So we had to figure where we wanted to invest. So I'll let you talk about this.

Well, for, for single family. Well, that's why we moved back here to Ohio and I say back because I was born here.

Yeah.

But that's why we moved here. The cash flow was way better for the purchase price of the properties. Living in Arizona, we weren't even close to this cap rate that we're getting here and we wanted to be boots on the ground and just really dig in.

Yeah.

So that's for single family. Now multifamily, it's a little bit of the same thing. I mean there's, there's areas that are going to be really good for, for multifamily and areas that are not going to be very good. So it's, it's doing the research. You know, you want a good, I don't know, blue collar type of area which is where we did our 56 unit. Yep.

You know, B and C class areas.

B and C class areas. Yep. And then, and then when we grow up and get, get to be adults in the multifamily world, then we'll go to the A class areas.

I don't know. It's not as good cash flow. You can go to class. I'm sticking them busy.

So. But that, those are the areas that we want to go to and they're everywhere.

Yeah. Yes. But particularly I love where we're located in the Midwest because cash flow means everything. I really, I guess a class, I mean it's it's great for appreciation and I guess luxury, you know, so that might be something we explore. I'll never say no. But I love cash flow. It's like that's what I'm in for. I want passive income and I want a lot of it.

Right.

And so I love, love B and C type areas. So we are so close to states that have cash flow.

We're in the middle of it right now.

Yes, cash flow. So we're just fortunate. So you got to decide what areas that you want to be doing. Whatever it is that you're doing. If you're working with us, then you're going to be doing it with us wherever we are. So obviously a lot of Ohio stuff because that's our backyard. But Kentucky's right over here. Indiana's right over here. Tennessee's right over here. North Carolina not too far away.

Michigan.

Yeah. So there's lots of places that we can touch easily and be hands on and still be able to drive there and identify our own strategic partners for those areas that will be, that'll be their backyard. But we're not far away. It's not even a flight, it's a quick drive. So. Yeah, so that's, that's one of the things that we identified. So we have our list of areas. The next one is the type of partnerships. So you know, funds are a type of partnership. So what we did on the Florida complex, right. That was limited partners in general partners and that's how we partner together to get this deal done. There's also, forget about the fund, let's just work with one other person. We're going to do half the work, they're going to do half the work. We're going to split the profits 50, 50. Let's work with five other people. And each one of us is going to do what really we're really great at. And we're going to identify the split based on the work involved. Some people are going to be working the length of the investment. Some people are going to want to work on the front end or the back end. So, you know, figuring out what, what that partnership piece looks, looks like. And so that was our list of questions. We are still exploring the partnership, although we've already talked to a few people with really good ideas and experience in the space and what they've done previously. So we love what we've learned now we'll probably do more partnerships with people as opposed to funds. But we're still, that's the two big pieces, I think we're still going. What do we want to do here? Is it going to be a fund? Is it going to be pure private lenders? Are we going to. We're actually. I'm talking to Pather today about our first goal with every property that we buy is owner finance. So ideally, many people will go and get the bank financing for 75%, and then they fund 25% from themselves. A private lender, multiple private lenders in a fund. So there's all these ways to do it. Ideally, it'd be great if the seller doesn't want their cash ira, they actually want income, and they're gonna finance the whole daggom thing for us. So now we don't even need. Now it's really strategic partnerships that are doing the work that get to create or a part of the equity and the growth of this building or whatever it is. But then you could also have the seller, you can tell them, flip, I'm going to give you 75% down, and then you're going to fund 25%. And so you create a note just for 25% of the purchase price. These two options allow you to give, you know, sellers a higher purchase price, and they don't really hurt you because you're saving the fact from having to, you know, borrow funds at maybe a higher interest rate than what the seller is going to give you.

Right.

Because they don't necessarily want, you know, the tax consequences of selling a property and getting this windfall of cash either. So it makes sense for them to have a note. So we've got that. Because if we put 75% down, what that means is it's a bank loan, Right. We're still just going to the bank and the seller is actually funding the down payment. You have to disclose that to the bank, of course, but as long as the bank's okay with it, that's like kind of strategy number two for us. So there's all these things that we're exploring right now, which is kind of the point of number two, what's your list now that you've identified the goal, what's the list of questions you have to answer so that you can figure out what are you doing strategically? And now that I'm talking to Packer about, you know, this is the first option we want to go after this, Then option number two, then option number three, all cash. And the price is going to change at each interval because we'll pay higher for, you know, a seller that's going to own our finance.

Right.

So what do you want to add to that? Sorry, I was just going off because of all the conversations I'm having right.

Now, you know, well, creating the list of questions is, you know, this. When we get down to the types of partnerships, there's, well, going through all of that. It's. Especially with multifamily, it's not nearly as fast as single family, single family, that somebody sends me an address, I can evaluate it. Send out the rehab guy. Oh, it's only 20,000. Let's do it. We'll close next Friday.

Yep.

You know, it's. But multifamily is not even close to that. Even a duplex.

Yep.

I mean, very rarely.

Right.

And so. And then trying to figure out partnerships and then how we're buying it, owner finance, and things like that. There's so many more questions, especially when you get to multifamily and especially when to get to large multifamily. You know, these aren't. These aren't quickies, one and dones and, you know, or whatever you want to call it. These are just. Just make sure you're relaxed.

Yep.

Take your time.

I never do that.

You're not in a hurry?

I can't. Like, I'm like, I have question. I. I like, I email, like, four people. I post in Facebook group, and I'm like, I need these answers and I need them now. And it's like, boom, got one, got one. Got one five minutes ago. Yeah, just be. Because again, I wanted a finish line, and I always need a finish line. So I know I can just see it. That's where I'm going. Yeah. And so speed is something. Especially when you're starting. It's like 12 months may seem like a long time. It's not a long time. So I'm like, nervous, and I'm like, I've got all these questions to answer before I can even start. So I gotta get them answered, and I gotta get them answered fast because all I want to do is start doing due diligence and making offers and starting creating this so I can get, you know, deal number one under the belt once deal number one is under us because we did the 56 unit in what, two weeks?

Two weeks.

So that was just insane. And we have fantastic private lenders. So we did it, you know, in an odd way, paid a high interest rate for our lenders to go, hey, want to get on in on this with us? Because we got two weeks, right? Yeah.

So results not typical.

Yeah.

Just saying. Disclaimer. There was a lot of work done in the prior six months to that. So. But we, we decided to buy it and figured out financing and bought it in two weeks. But we had already done all the inspections and everything else and no, we.

Did our own inspections in the two weeks.

Oh, that's true.

Well, yeah, because the other buyer did their inspections. We had to do our own.

Yeah, yeah, yeah. Results not typical.

Yes. Anyways, so then listing the pros and cons of those questions and figuring out what do they look like. So on the partnerships and the funds that I'm still dealing with, that's what I'm doing is every time I get an answer, I go, okay, what is the pro of this versus the con? What's the pro and con list for this one? And ultimately, you and I are going to come down to be able to make a decision because we've got the information that we want of the different stock styles, what may be more common than others, what's going to be the win for us, and maybe the investors that are involved, whether they be lenders that are lending or whether they be actual partners that are actually doing something in the deal and therefore they're part of the equity. So that would be number two. So we've identified the goal now we've created a list of questions. So if you're following along with this thousand dollar project, Flip and I are in block number two right now. We're actually in block number two and three. So we've achieved number one. We created the list of questions, but we're getting them answered essentially correct. So number three is identifying your strategic partners. Once you've answered your entire list of questions, who are the people that you're going to work with? So one of the things that we talk about is experience. Yes, experience in real estate. Not only in real estate, but also the niche that you're trying to go into. So if you decided short term rentals like Airbnbs, we'll make sure that they're not just, I've been in real estate for 30 years, make sure they've actually done short term rentals and they know that space. In fact, there's one that I think we still have under contract that we're looking at, you know, and we interviewed a few people that we were referred to about and then we ultimately decided on the person so that now we don't even have to. This is our backyard. We know the property and now we have somebody who strategically can fill the need without us having to figure it all out on our own. Right? Yep. So Pick your niche. So if it's a multifamily, make sure that they're small or large, depending on your goal. If it's single family or, you know, two to four units, make sure that they're doing that too. And then values, and the reason we put value second, I'll let you talk about it because values really is first for us. You have to have the right values. But I'm not going to talk to 100 people that don't have experience in my niche of real estate before I determine what their values are. Right. So I'll let you kind of talk to about that.

Yeah. So one of the main things that we looked for was like you said, someone that we know like and trust, you know, someone that we know has done something similar or better, and they've done it successfully and not just once. You know, they've done it multiple times. And they know what they're doing and they know and they've got the same, like you said, same values as we do. They're highly ethical people. They're, you know, the give first mentality. And so that. And it's very both of those, they work hand in hand, you know, both of those do you know? So, yeah, that's right where we're gonna look.

Yeah. And for me, I believe that trust, which we're gonna talk about, because everything we're talking about here, number three, is about trust. So I work with people who have a good win win mentality. They're not saying, I'm gonna do this little bit of work and I want 50% of the profits right there. You just told me you're not a win win person that broke my value chain. So. So I'm not going to work with you. And so also, you don't really know this until the end, but I think you have the instinct or gut feeling when they go through that win win mentality. I want 50% for only doing this part. Suddenly, you're not win win, which means at the end you're probably gonna be like, well, I did this and I did this, and I don't think I should be getting this. I think I should be getting this instead. You're gonna cause this friction, this problem, and there's going to be just issues. So it's a no when it's not a win win type person. Because I'm trusting at the end of the teal, if they are win win how it all works out. It's not a problem. I trust them and how we agreed upon it, obviously, everything is in writing. The larger things you do, I've done. We have both done handshake type stuff before. But the larger stuff we do, we get all the attorneys involved and we just go, okay, let's make sure that we've covered everything up front because we don't want to have any questions back in. And we do it for our lenders and partners or investors if they are equity, because they want to know that everything's been thought through and it's, you know, we've got all the documentation to protect all parties of it. So no more handshake stuff at that point in the game. But when it comes to values, I don't have to worry. I don't want to have to worry and depend on the paperwork. I want to trust you, Flip. When I'm on the phone with you, it's like, man, he is a good guy. He's got good references. I know the network he hangs around. Same type of network I hang around. We know the same people. I'm starting to get a feel for you and the fact that you created a win win. You know, when we first start talking about about it, I'm like, okay, so it's those types of things that I'm looking for. And that's number two, because if you break it, if you've got experience in real estate and in the niche that I want, but you break the value thing, boom, boom, it's done. Yeah, move on. All right. The next thing we have in there is vertical integration. So, Flip, do you want to describe what that is?

So vertical integrations is when a company either merges or works with another company that is in a different either before or after them in the chain of the process. So I used as an example when I was was telling you about this earlier, our rehab company. Right, Our rehab company, while working with our acquisitions company. The acquisitions companies in the same chain, but it's before them, and then our property management company is after them. So that's vertical integration. We have six companies, and they are all vertically integrated from beginning to end.

Yes, exactly right. And that is a very, very powerful tool when you're trying to find somebody that's got the experience. Because if you've got somebody that has multiple companies that can handle every arm of the business, you're working with one person instead of five. So I talked about when you're figuring things out, you can have a partnership of, you know, this person is going to raise the money, this person is going to source the deal and underwrite the deal. This person is going to create the business plan and we have the asset management. This person is going to get the bank financing, you know, beginning and help and do the refi at the end. So you have all these people and all these roles and there's many of them, them. And you're determining where are you working, how long are you working, what does that percentage, you know, look like? And when you're working with somebody who's got all the pieces of the puzzle, it's like you've got one person, you know, you can identify, but you're going to one person instead of five people. You don't have a meeting with five different people, which isn't bad. It's just, it's better when you've got that, you know, one touch.

It's a lot less meetings.

Yes. And we tell people who are investing with us turnkey wise, it's like, okay, you know, we're going to sell you a deal. You could call that person back and have a question about property management and they can walk down the hall, knock on the door and get the answer for you. As opposed to going, you know, that's this company and you're gonna have to call and talk to this person. Like, we can literally be hands on help. And that's like, it's huge in terms of peace of mind and ease of ability to work with, you know, a company that's got that many arms. That also means they have that much experience. Because how does property management affect our rehab team? How does rehab affect our property management team? All those pieces, we learned it as we were like, okay, rehabilitation, you can't, you've got to change it and do it this way because you're affecting property management over here and we own that company. It's costing us in that company because of what happened here. So let's fix that. And then that way we're over here. If you've got, you know, multiple arms that are third parties, you're not always getting that information to be more strategic and how each company affects the other down the line. So I think it's huge.

Even last week we saw the email from one of our turnkey buyers from Israel.

Yes.

He had emailed Tiffany saying, oh my gosh, thank you so much. Because, you know, he's in Israel, the property's here in Ohio, and he's like, it feels like I'm five minutes away from my property, you know, and it's just because he was dealing with something with the property that Tiffany's like, don't worry. We got this. Let me take care of this. And it wasn't in her role. That's not her role at all. But because she could, within this company, handle it directly with somebody else, she was taking care of it for him. Which just, you know, this goes back to the other podcast about creating raving fans.

Yes, I was gonna say the same thing, but.

So that makes it even more powerful, the whole vertical integration that we do have here.

Yeah, Yeah, I love that. Okay. I would also look for it when you're identifying strategic partners. Look at their network. Who do they know? How much have they done? So one of our partners that we're working with on the 1000 deal project, they have done 1800 doors, and they have the same and better network than we do. So we know a lot of the same people, but they know people that we don't know because they've been doing this for much longer. So really looking at that piece and that they know the same people that we do that kind of told us values. Right. And a lot of people said, these guys are great. These guys are great. These are. So we've already kind of answered the value thing before we even said on our 56 unit, can you help us? Can you partner with us on this deal? So, you know, looking at their network and the people that they have at their fingertips and then references and due diligence. We did a expert panel for private lending. It's on our website. And what cracked me up is one of our biggest investors, almost $2 million with us. Maybe it is over 2 million now. But one of the things that he said was, I watched that video and I was just like, you just interviewed all the people that you work with, and you gave me their name, their phone number, their email. Just like, okay, if you ever, like, default on something or do something that's questionable, I've got all these people, you know, hunt you down or whatever. And he just thought that was, you know, the transparency of that was super, super cool. And it's very rare for us to have people ask for references. And so somebody did recently, and it was another large investor who's going to invest a very large chunk amount of money. And I typically answer for privacy reasons, we don't give out names and phone numbers of the people that we work with. And he said, well, I really want to talk to, like, two or three people, you know, that are investing the same as I am. And I said, no, no problem. What we'll do is we're going to send out an email and say, hey, if you've worked with us at this level, can you give us permission? Because we have somebody that would like to just vet us and do their due diligence. Would you give us permission to pass along your information so that they can call you? And we just got. And I have this long list of names now of going, yeah, use my name. Use my phone. I'm just like, oh, my gosh, that's so freaking awesome. Again, we do this lightly because I hate passing. Passing out information of other people, and I don't want them ever to be like, there's too many people calling me. But literally had it happen twice now. One One of the people ended up not calling for some reason because they found out some other information. They were just like, no, I don't even need to call them. I like that. You guys are the most professional and knowledgeable people that I've ever talked to, and I'm just fine going ahead and move forward. So just do your due diligence on who they are. Get references. You know, if you are the type of person that. That need that. And the last thing that we have. I'll let you go on this one. Flip.

Oh, so the office.

Yeah.

So, I mean, that was one of the biggest things when we first started is like, we need to have an office. I'm tired of meeting people at, you know, friendly or not friendly.

Starbucks.

Starbucks.

Tim Hortons.

Yeah. Or what. What's the Chili's? You know, I'm. I'm just. We need an office. So that was one of the first things that we did well right after hiring Betty. But we were trying to get it while we were. Yeah, but we needed an office, and we got an office. And we didn't want just an office that was in the side door of a warehouse or whatever. We needed an office that looked good and looked respectable and looked professional. And we lucked out when we found our first office. It used to be an attorney's office. So it already looked good.

Yeah, it sure did.

So that was the first thing. And then while we were there for three years, and now we needed a bigger office. And this used to be a real estate office, actually a property management office office. And it's. And it's awesome. It's. It's got a great feel to it. It's got a. You know, it's got great offices here. We got training rooms. We've got larger rooms for other warehouse needs or whatever, but we've got this video room in here. We sort of created this.

It Was supposed to be an office. We stole it.

So. But yeah, but it's so that they. They can come. They can come visit us. You know, we're right off of a highway, so they can, you know, it's real easy to get to, but they can stop by. We'll give them a tour, we'll meet with them, whatever they want. It also adds more to the credibility. We're not working out of our garage.

Yes. Yeah. You can touch and feel them, right? Because the Internet these days, anybody can make themselves out to be whoever they want. In fact, we personally know of some local turnkey companies, and they're not necessarily local. They started off in another state, came to Ohio because it's a great place to invest and do turnkey real estate. But they are a website, essentially. You don't know where their office is. You can't really go touch and feel, and you don't know who they are. And they're the that ones. Ones in the forums all the time going, this freaking company did this. And they even changed their name here locally because they had so many bad reviews. So we're actually doing a podcast next week about good turnkey companies. We'll totally get into that in more detail. But that sounds like fun. I know, I can't wait. We won't name. We're not here to bash anybody. But you really have to do your due diligence and know who you're working with. Can you touch and feel them? Do they have a website with people's names and information? You know, we've got every single team member on there. You come to our office, you can meet all the team members. Like, that's how transparent that we get. And we do that because we don't want to work with a company that doesn't do that. Because I don't trust you. I don't have, like, I need touch feel. Yeah.

I like the ones that the about us on their website. You go to it and it's a stock photo of a family, and it says, we're a real estate company that strives to do great business. And there's nobody. Nobody's name on it. Nobody's. Yeah.

Not working with you. Yeah, that's my first, like, red flag. At least put people's pictures up there and hopefully they're real pictures.

Yeah.

I promise you can come to our office and you'll see real pictures. So, yeah, so that's our list for number three. So identifying strategic partners and what we wrote down, we kind of put a little squiggly line next to these notes and said, what number three about is all about is trust. And I talked about this on the phone all the time when I'm talking to people. I said, this is a trust based relationship. We'll have tons of legal documents that do this, that and whatever. But ultimately you're working with us because you, you know, like and trust us.

Right?

And it could be just from a phone conversation, it could be from doing little due diligence, it could be from seeing our vlogs or a podcast or being on our website. It could be from a different things. But you got to trust the people you're working with. Otherwise, just don't work with them because you want to have that peace of mind that where you're putting your hard earned money is actually going to do a good job and provide the fruit that you're trying to get it to provide to meet number one, which is your goals. So as a recap, goal item number one or step number one was identify your goals. Step number two is create that list of questions. And with both of those steps, you're creating a pro con list to be able to make decisions, decisions. And then step number three was identifying the strategic partners. So with our thousand dollar goal. Thousand dollar, not a thousand dollars. I want to make a whole lot more than that. With our thousand door goal in 12 months, we're working on, we've already done number one, but we're working on step two and three right now. And so that helped us with out of state investing, which is what we're talking about, and figuring out who it is that we're working with so that we trust the people that have our backs and are part of the investment that we're doing.

So.

So is there anything else that you think that we missed that you want to talk about?

Not at all.

We feel like we try to get thorough.

That was very thorough, I thought.

Okay, good. Well, we hope you guys enjoyed it. We hope you got a lot out of it. If you do have questions, feel free to comment. I think there's places to comment. I don't even know that for sure. For sure. On YouTube. If you're watching it on YouTube, there's places to comment. But if you have questions, feel free to reach out to us. And if you have any other ideas for podcasts, like I said, we're talking about turnkey companies and how to decide who to work with and the pros and cons. We're actually going to do some of this for you live on the next podcast. So if you ever have stuff that you want to say to us, then say it, because that's what we're here for. So again, thank you for listening to our podcast, Real Talk, which is real talk for real estate investors. And we always like to end it saying invest smart, Live happy. Bye, everybody.

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