Liz Faircloth - Secrets of Real Estate InvestHER Revealed: 5 Minute Success - The Podcast

Welcome to the Five Minute Success Podcast. Yes, you too can achieve success at a higher level by investing just 5 minutes a day. Join host Karen Briscoe each week to hear powerful success stories of inspiration and information that will transform your business and life.

Welcome to the Five Minute Success Podcast. Today's guest is Liz Faircloth, and she is going to share secrets of real estate invest— her revealed. And she should know, she is the founder of the DeRosa Group, which is a developer of commercial and residential property with a mission to revitalize urban America. They do that by repurposing existing buildings to their highest Invest, use also the co-host of the Real Estate InvestHer podcast, which I've had an opportunity to be a guest on. And she loves talking about investing with a spouse, scaling a multifamily portfolio, entrepreneurship, building a powerhouse team, and why women should invest in real estate. She considers it her passion to transform lives through real estate. Welcome, Liz.

Thank you so much for having me on the show, Karen. That was a wonderful introduction.

Well, so every guest, the Successpreneur community, we love to hear the guest's story, their success story. So how did you get into this space?

Sure. So my husband and I, at the time he was my boyfriend, we both were in our mid-20s or so and really started just talking about our lives, where we wanted them to go. And I guess all the things you do, hopefully when you're, you know, you're potentially going to be, you know, marrying the person person you're spending a lot of time with. And something that came up a lot for us, we both got further degrees. He was an engineer. I got my master's degree in social work. So we were big into education in that path and kind of getting corporate jobs and, you know, what most people do. And in a lot of discussions and kind of soul searching, we really realized through Rich Dad Poor Dad and all these different things we went through, we're like, we want more out of life and we really would love to create and build a business. We didn't have any business experience. We had no entrepreneurial experience. We were pretty, you know, green. We're pretty young. As well. But we decided to jump into real estate. We both went to a bunch of courses and went through properties and just started to fall in love with the idea of making properties better and really improving them. And we, you know, educated ourselves and, you know, trials and tribulations. But we bought our first duplex about a year into it. We were still engaged and my father lent us $30,000, you know, which was pretty amazing of him because I don't know if I would have lent myself $30,000 at the time because we didn't know as much as we probably should have. But he trusted us and we were going to be good stewards of it either way. And We learned a lot in that project and bought our first duplex. And then we ended up leaving Philly, the Philly area, which was right outside of Philly that we bought our first property. We did a 1031 exchange, which is pretty much just, you know, buying a new property tax deferred into, you know, another property. We started to really build our portfolio in the Trenton, Mercer County, Central Jersey area for many years. So my husband quit his job about a year later, just said, I'm done. And I said, well, one of us needs to keep working so we can make sure we build a business and, you know, keep food on our table and all that. All that good stuff, pay a mortgage. So he decided to quit and take it on full-time, and I had a, you know, strategic part-time role in our business for, for a number of years. And kind of, of course, that was in 2005 when we started our business, and here we are now. So we've kind of built up a really a multifamily portfolio, me and my husband, and now we've gone into the Southeast, we've gone through Pennsylvania, we have about 3 or 4 regions we focus on now. But we learned a lot because I feel like we were young, we were inexperienced, and we didn't know as much as we probably needed to or should have. But we never gave up and kept retweaking, tweaking, and tweaking. And we are an owner or part owner of over 700 units now. So that's kind of where we sit right now. Yeah, that's kind of where we are with that. And then through the trials and tribulations with my really good friend and business partner as well, Andresa Guidelli, we decided to really create a movement and a community for women real estate investors, which is the Real Estate InvestHer community and podcasts, and we're creating a lot of things around that. It's just a passion of mine through my corporate experience. I love working with women and helping them and kind of married that passion for helping women with real estate. So that's where that venture is as well.

So 700 units means 700 doors in the vernacular of investing. That's, that's a significant portfolio, I would say. So in the revitalizing of the communities predominantly residential, but how does the commercial piece fit in? Because it becomes commercial funding or—

No, we, you know, we got our start in, you know, like I said, we, we really want, because of my background being social work, we really wanted to make a difference and buy real estate. And, you know, I think, I think a lot of people have, you know, some of that same goal. Some people are just like, I just want to make money. It just depends on the, depends on the person and their goals. But we focused in on urban areas to begin with. And we were in Trenton, New Jersey, which for those who aren't familiar with the East Coast, it's the, you know, capital of New Jersey, and it's still figuring itself out from a development perspective. So commercial, from the perspective that we bought, um, we have one commercial building that's a big office building that we rent out to small business owners, but everything else is residential in nature. So it's either a mixed-use building, commercial on the, you know, bottom floor, and then there's like 3 apartments above it. And then beyond that are multifamily from a, you know, 10-unit to 222-unit. So, you know, people call that commercial, but it's really residential because people are living there. So it can get a little confusing there. But yeah, our focus from a, you know, we buying office buildings, we're buying, you know, properties that people live in is the latter. Like I said, we do have a couple, we have a number of mixed-use buildings, but they tend to be more of our local kind of Jersey area. Versus like, you know, far, far, you know, long distance investing.

Well, that is how many people enter into the space. So the first component of 5 Minute Success is commit to get leads. And we chatted about that because as an investor, there are a couple of ways or that I look at lead generation. One is leads of the investors, and then the other one is the leads of the property. So share a little bit more about that.

Sure. So it was about 2010 or so. And, you know, when my husband and I got started, we used some of our own money and we also used money of friends and family. And we had plateaued. Maybe it was a little earlier than that. We had plateaued from a kind of— we were tapped out, you know, in our finances and just where we can go from there in terms of growth, of buying more property, had gotten tapped out, which is a common, you know, thread for people. You're, you know, just sitting on millions, which is awesome. But we were certainly— we're not. So what we ended up doing was really getting present to raising private money. And in essence, you're doing that through debt, where you're going into partnership with a person, or you're, you know, person's lending you money and they become a private lender. So those are the two strategies that we kind of began at that point. And our first investor was a gentleman who I went to college with, and I was meeting with him networking in the city. I was in New York City at the time, and good friend of mine as well. And we started chatting and he said, I'd love to real— I'd love to get in real estate investing, but I just don't have the time. And I said, oh, wow, we have the time. But you know, where we are in our We have a track record, but we're looking to buy more property. And, you know, we want to do that through private money, not just, you know, hard money and the other ways you can kind of get financing. We were using banks, but we needed that down payment money. So he, you know, that was one of our first private investors, so to speak, and he was a partner with us. And then we kind of grew really from there in terms of getting into larger properties, syndications, and really pulling in people's funds and buying larger and larger buildings. With investors. So, you know, our tenants at first were our customers, and they are in a sense, of course, but primarily our investors, because we have over 100 of them now where, you know, people don't invest millions with us. They're investing, you know, $50,000, $100 grand. They're not, you know, these aren't their people who are— they have wealth, but they're looking to preserve it. They're looking to, you know, to diversify, what have you. So that's the common investor that we work with, you know, have a self-directed IRA. So to me, that's one way that we grow our business is bringing in more investors, obviously, and taking good care of them and growing our wealth and their wealth, and their wealth obviously becoming primary. Lead generation, yeah, in terms of lead generation for us, we got started with the rule that we do not invest more than 30 minutes away from our home. At the time, we're living in New Jersey. So everything that we bought, we were managing, we were investing locally. And then through the years, especially the crash happened, '08, we lived through that. We had properties through that. We kind of saw the, what kind of happens during that timeframe, we really learned that New Jersey and the Northeast were like, this is getting tighter and tighter to make the numbers work, especially that we're bringing in private money. And, you know, if you're using your own money, that's one thing, but you know, when you're, when you're raising capital from others, they're looking for a certain percentage, right? They have a certain goal in mind. So you need to meet that whether it's locally or wherever it is. So that became the higher goal and kind of like the focus. So we started to say, let's, let's kind of look a little outside our comfort zone here. And then we went into, you know, an area in Pennsylvania, Lancaster area, which is about 2 hours of a drive. We're like, whoa, this is— we're going to be hiring a property manager. It really got us out of our comfort zone because we had managed everything locally ourselves and our team. And then we really then got expanded into the Southeast area, which the numbers just started to work more favorably. And it— and there was a lot of great kind of economic, you know, indicators for us to really grow in this, in the Southeast as well. So the You know, looking at the local market and then saying, okay, what do we need and want to give back to our investors and ourselves? You know, our area started just not making any more sense. So that's what made us kind of look elsewhere. And really, that beyond that really made us grow our team and ourselves because we couldn't manage everything in various states ourselves when we were managing the asset. But you're obviously not managing the, you know, tenant relations. You're not, you know, you're not there physically every day.

So, well, so that's actually a great segue to the next topic, but I want to take a moment to thank the 5 Minute Success community for subscribing, rating, sharing, reviewing, and listening to the 5 Minute Success podcast, um, so that other people find out about great guests such as Liz Faircloth. So the next topic is consult to sell. So you dived in a little bit into the process of finding the properties and investors. So give us a little bit more on what you're looking for in a property other than a great return?

Yeah, absolutely. So, you know, when you get, when you get started, you're like, this property is available, it's close to our house. Oh, we can afford it. Awesome. You know, let's buy it. I mean, that was the strategic mind behind some of our earlier projects, which is funny in some ways now because you're like, wow, that was a little limiting in our approach. But, you know, you live and learn and you kind of grow. Grow. And okay, this is going to be a lot more strategic if you're buying 100-unit, 200-unit, etc. So yeah, as we've, as we've expanded the local economy and the job diversity, the job growth, the stability becomes even more important. And you know what employers are there. The key is we didn't even think about beginning was actually job diversity. Are there multiple jobs here in various industries in case there's an economic downturn, in case there's a recession, in case Amazon up and want to leave this area to go somewhere else or whatever is happening in that local market? Are there multiple growing economies and kind of job industries happening in the area that you're looking to invest? It's a great indication that something good is happening there and there's growth and there's, you know, there's a comfort there, right? That you're going to put those investment dollars in and there'll be plenty of really good strong tenants to pull from. So that became a really important kind of aspect as we've looked. We also look for, you know, markets that are not on the top 10 hottest markets to invest in. I mean, we really don't ever want to invest in those if they're on a list, because that means you've gotten, you've gotten, you know, you're too late to the party, so to speak, you know.

Yeah, by the time they make it, it's kind of like an announcement about a stock or something. It's like, by the time everybody knows, everybody knows, right?

Exactly. So we really like, you know, Class C, if you will, in layman's terms, properties that need, you know, almost like a makeover. They have really good bones, but they need a makeover. Been mismanaged, they've been misled, they've been mis— kind of guided, so to speak. And those are like, you know, C, they're not these beautiful A-class properties. They need work. They need something to kind of create this little more of a brand and marketing in that local area. It's not— the building may not be looked at positively right now. That's okay. We have no problem with those. There are a lot of properties we've bought, but we look for a stable B-class market. That's, you know, which again, when we started, we probably weren't looking for that as strongly as we are now. So a market that's already stable, but it's not this like, you know, market that is on a top 10 list. So it's like an up-and-coming, strong market, stable workforce housing, you know, middle-class environment. Those are our favorite, you know, kind of markets, so to speak, to invest in.

And I started out my career as a real estate developer. And one of the things that I find is And I think you figured out the secret as well, is you're looking for where the market is going, right? Because once the market has already gotten there, then you've, you in a lot of ways have missed the value opportunity.

That's right. Yep. Absolutely.

So when you have the, the fundamentals of, I call that New York, New York, where if you can make it there, you can make it anywhere. If you have the fundamentals and you can see them in another market segment, then you can make that that same process often happen quicker and easier.

Absolutely. Because what, what's interesting is like almost like, you know, what we've seen in Philadelphia, you get Center City, there's always a center city, there's always a center area of a market. And then people say, okay, this is getting a little expensive, I gotta move out, I gotta move out. And then the communities around it, if it's a city, it's just another neighborhood. If it's an actual— if it's the city and it could be beyond just that city, it's maybe a neighborhood outside that city. But you start to see this migration. And I think that's something we look for. Like, where's that, where's that expensive hot market, and then where's those submarkets around that people are going to need to start to go to because they're getting, they're getting outpriced in, in like the downtown fill in the blank. And that's a very common theme that you see. Um, in Philadelphia, we did like a new construction project, and I remember this is one that we did with Andresa Guidelli as one of our partners. And we didn't— it wasn't in Philly, it was like this up-and-coming neighborhood that wasn't quite there, but it was on the way of being there, where the comps were were, you know, increasing as we developed it, which was really neat. Where we, you know, a couple of other projects, you know, in stable environments, they are what they are when you start, when you finish. But this, you know, when you're in those areas that are kind of moving up— so something we look for is that, okay, where is that kind of up-and-coming, you know, where are the coffee shops, you know, where are those areas where people are investing money, where could we go from there.

Yeah, that's a trend to look for, they say. Starbucks halo effect. So, the next component is connect to build and grow. So, we were talking about how scaling is key when you leverage, when you reach levels where you can't get to it in 30 minutes. So, share a little bit some of the other systems that you put in place and are still putting in place.

Yeah, absolutely. So, one thing that we've really became very present to as we've grown is our investors and meeting their goals, getting them the communications they need, their distributions, all of that sort of thing. And we have certain processes in place now. But we're really getting present to automating and systematizing it where, you know, there's a lot of these, you know, email programs where this triggers that and that triggers that. And I feel like we've done a lot of stuff manually over the years because you kind of just keep doing what you're doing. You know, I think all of us do. And certainly, we're in those seats now. My husband and I are really involved in our apartment building business, raising money, and, you know, also really investor communications, things of that sort. We have a business partner who's really in charge of operations. And then we have a very strong team member who's also a partner who's in charge of the construction and asset management of the building once you get them going. So, you know, we're all involved in everything because we're still growing and what have you, but the investor relations is really what we're looking to scale and systematize. There's a lot of places people could put their money and there's a lot of great places people could put their money. So we really want to not just exceed people's, you know, investors' returns, but what are the other things they're looking for? And that was something we got present to that We started a YouTube page on our real estate business and we became thought leaders. This is about 4 years ago. We have about 20,000 subscribers now. It's not enormous, but we've grown it in a way that is just educating authentically, real, transparent education. It's not like, here's a check and we just made it overnight and you do nothing and you just sit back. And, you know, it's just, we were really trying to create a channel that was real. And like, things don't always go the way you think they're going to go. You know, you have challenges. It's not all roses and sunshine. And anyone tells you that, I don't trust them. So, anyway, long story short, we created this thought leadership, which was a fuel to basically put our stuff out there and start building relationships with people who wanted to work with us and invest with us. And that was one of the greatest things we did because that created this lead generation. And then, in terms of systems and processes, now, we are putting together like there's these portals where we're really trying to step up where investors can go get there. Returns and get all their information in a more systematized way versus us sending it to them and things of that sort. So I'm in the throes of creating that kind of process and making it happen in the next quarter, you know, which is critical for us as we scale. Because again, we have 40 to 50 investors per deal because a lot of these investors, you know, a lot of them are putting $50,000 to $100,000 into the project. So we have a lot of smaller invest— not smaller in a bad way, it's just, you know, smaller investment numbers. So you're really looking to how do we create a systematized process 'cause a lot of people involved in this one project. So that's what I'm in the throes of, and that's what we continually are trying to get better with. And also give more to these folks, you know, education. We're doing a monthly, you know, kind of behind the scenes what's coming up in our real estate investing, you know, tenure, so to speak. So they can almost like ask the team anything they want. So a lot of these folks want to invest, but they want to learn. Some of them want to become active themselves. So we're trying to give that to investors as well. Not everyone wants to be passive. Their whole life. Some do. They probably won't be on the call, but the folks that want to be more active, that's a big thing that they come to us. They want to learn. They want to learn the behind the scenes. So we're going to be doing that like a, you know, once a month kind of webinar free to our investors to just really open our, open up our kind of books, so to speak, from a, you know, brains perspective. Like, what could we teach you? What can we, you know, pass along to you?

Well, brain shares are like mindshare and mastermind communities that, you know, Think and Grow Rich and Napoleon Hill. So that's, that's brilliant. So I want to take a moment to have a little mindshare with the 5 Minute Success community and shout out to the sponsors that bring the podcast to you.

Want to know more about how you too can achieve a higher level of success by investing just 5 minutes a day? Karen Briscoe, creator of 5 Minute Success is here to help. The books Real Estate Success in 5 Minutes a Day and Commit to Get Leads: 66-Day Challenge are available on Amazon and Audible, as well as in bulk on the 5 Minute Success website. Pick up your copy at 5minutesuccess.com. Secrets of a of a top producer are revealed and are sure to help you achieve success at a higher level in business and life. That's 5minutessuccess.com.

So now let's segue to success thinking activities and vision, and that is these principles of you set a vision for creating wealth through investing, and then you think about how to do it and you put it into place. So, What are some of your other mindset and motivation that you've discovered?

We've done a lot of work on ourselves over the years, you know, and I think that's really critical from weekends to books to masterminds to you name it. I mean, you know, because as you're— the better you get, the more you can give to others. And we got that early on, you know, beyond Rich Dad Poor Dad, all the different, all the different books and workshops. The idea of goal setting was something else that we were very big into. We wrote a business plan like, you know, this is what we would do. Me and my husband, when we got together, we didn't even live close to each other. I think about it, I laugh, you know, now. But we put a business plan together like, where do we want to be in 10 years, 5 years? Now, what's interesting is that a lot of those goals we eventually achieved, but it took a longer time than what maybe the time frame you put out there. So I think the idea of goal setting, we all know how important that is, but to actually visualize yourself and image yourself there already is a huge, I think, component to our success. Because even now there's certain projects where, you know, we're really, you know, working through. There's a couple projects in our local community where just taking longer than we wanted. And every morning I have this mantra, I read it and I still I visualize like the closing table or the handshake that we need to make with the person or the issue getting resolved. I see the end, the end that I want to see. And I think that has been enormous. And the idea of really visualizing and imaging what you want to see in any area of your life, but certainly in business, you know, the vacation you want to take to see yourself there. What are you feeling? What are you smelling? What are you experiencing? You know, I'd love to be interviewed by Oprah. I see that every morning. You know, Oprah hasn't reached out to me yet. That's okay. Okay, but I see it, you know, and I, I still visualize it as though it's happening already. I think that's critical.

Well, there are many athletes that they visualize the swing before they, you know, go up to the plate, or golf, or whatever it is. So the, the visualization is found to be very powerful. I think that it, it sets in motion the manifestation, but it also requires thinking about how to do it And then putting the actions in place, which you clearly have been doing. And the other thought I had was there's a, I think a quote by Jim Rohn, but you will never be— business will never achieve any higher than what your own personal development, your own personal capacity. So growing your capacity is going to grow your business.

Yeah. And it's also never giving up. I think that's the other big thing. We've had a lot of things that have happened over the years where you can go one way or the other. You could just, you know, hang the towel. And not every project is a home run. Not every project, you know, works exactly how you want it to, or what have you, whether we were flipping a property, whether it's just, you know, buying a multi or whatever we've been involved in over the years. And I think just the idea of never giving up, having that future vision, and that's, that's hard sometimes because you're like, this is hard, you know, this sucks, you know, you really you really have those moments that you're just like, wow, this is tough. But you get through it and you become very resilient and you don't give up and you just make it better. You learn from it and you make it better. I think that has gotten us to where we are. There's no question because it just didn't go the way we all think it's going to go sometimes. It's not as easy as sometimes it looks.

Well, definitely a learn, grow, or become better than before. So thank you for sharing that. So as we wrap up today's conversation, would love to have you share how the community can reach you and for sure about the podcast as well.

Sure, sure. Yeah. So, you know, in terms of like my active, where we're actively investing, so to speak, is, you know, really on the side of where my husband and I are investing. It's called the DeRosa Group, derosagroup.com, and tells a little bit about what we're up to with projects and investing with us and things. In terms of, you know, my passion, one of my other passions and really supporting women in this business is it's TheRealEstateInvestHer.com. And basically we have a weekly podcast where we only interview women, women rock stars like Karen in space. And, you know, they share their ideas and how to balance it all as a woman, as an investor, and as a person, you're really wearing a lot of hats. So we get into kind of how-tos and certain things around real estate, but we also go to the, you know, how to make it all work and do it in a peaceful way, which I think is just, I've we've created a community that we want to be part of. That's really what Andresa and I are doing. We're not creating something that we're not kind of active in, if that makes any sense. So we got a Facebook community. We have meetups we're starting in the country with about 14 of them, one in Canada as well. And we're putting together a membership, a little more going in depth and where women on a monthly basis will get certain things and support and eventually doing some conferences and things like that.

Well, we will put all that information as well as how to ways to connect with you and reach out to you in the show notes. Those of you that are driving, you can find them there. If you want to look back later, be sure to, to connect with Liz and listen to the InvestHer podcast. So as we close today's conversation, would love to have you share your inspiring message, your sweet spot of success.

Sure. So I would say, and it was a recent quote I read, and if some sums up a lot of sometimes, you know, where I'm at and how I'm looking to grow is you cannot fail. You either learn or win. And that to me really helps me move through experiences because you really can't fail. You can't. You're going to win. We just learn from it and you make it better the next time and you keep making it better. It's the people who don't make it better or don't learn from it or don't blame everybody else and take accountability for what they did is the key. You can't blame people in this business, or any business for that matter. You've got to own what was your part in something not working or something not going the way you wanted it to. And that's a big thing that I would just leave folks with. And keep, keep, you know, keep moving and don't give up. Something better is going to come. Just gotta learn from it, take accountability, and move through it.

Well, thank you, Liz Faircloth, for sharing secrets of real estate Best Her Revealed, truly inspiration and insight that transforms businesses and lives. And here's to your success.

Thanks for listening. If you enjoy the show, please rate and recommend on iTunes, Overcast, or wherever you get your podcasts. Continue the conversation and connect for exclusive content. 5-Minute Success Facebook group and website. Here's to your success in business and life.