Creating Wealth through Passive Apartment Investing

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EP#112 Raising $6mn in 30 days with Joshua Ferrari

by Rama Krishna
July 30th 2021
00:28:04
Description

Joshua specializes in raising private capital, locating, negotiating, & acquiring value-add multifamily assets, & teaching others how to follow in my footsteps.

He has been a licensed... More

Welcome to creating wealth through pass your apartment investing podcast. In this show, we will discuss about best and worst experiences about pass you on at your apartment investing and I'm your host democracy. Now, let's begin the show. Today is our guest is Joshua Ferrari from Green light Capital. Welcome Joshua thanks so much for having me on the show. Rahma. A little bit about Joshua. Joshua specializes in raising private capital, locating, negotiating and acquiring value and multi family asserts and teaching others how to follow in his footsteps. Has been a licensed aircraft technician for the last three years. He currently once over like 13 millions of certain under management which equates to 2 39 units in his portfolio. With that Joshua. Would you like to add anything to your background? My background was had nothing to do with finance at all. I mean as you heard, I am a licensed aircraft technician, I've always worked well with my hands have always been into sports and music.

I'm a drummer and I never had any intention whatsoever to be in the finance industry or investing or real estate. It was just kind of a fluke thing that happened a little over 3.5 years ago at this point. Cool. So with the sheriff a thought process of getting into multi family and real estate, how that happened? Yeah. So I had moved out of my parents house for about six months initially from Memphis Tennessee and moved down here to southern Alabama to start what I thought was going to be a long standing career as an aircraft technician and I had just gotten married. We just finished our honeymoon, just move my wife into our new house down here and mobile Alabama and I thought that was the path, you know, we were only there for maybe like two months, just grinding and working and doing the life thing. And then one day in january of 2000 and 18, sometime after work, my dad calls me up and tells me that he has some news to tell myself and my wife. And when you put it like that, I was like, okay, like what's the news you're making it sound like it's this horrible thing.

And he says, well, your mom and I are going to spend 40 grand on this course, that's gonna teach us how to flip houses. And I was just so appalled. Like it's just shocked like what do you mean 40 grand real estate flipping houses? Like why real estate? Why now I had so many questions and the conversation end up being like a four hour long conversation. But at the end of it, my interest was piqued. You know, I thought I probably don't really want to get into flipping. It's probably really not for me. But I do love the idea the concept of being able to earn more than a year's wage and one or two deals, you know, that sounds awesome. And then being able to scale out eventually, it sounds like I can get out of this job and live the life that I want to live on my terms. And so that's kind of what brought me down the path initially into real estate investing in general. But then it wasn't until about a year later that I got serious about multi family syndication because we tried our hand at wholesaling for six months, didn't closed a single deal, didn't work, it didn't work out for us. We pivoted, bought a four plex which the house hacked and that deal end up being a living nightmare.

So we thought, well, we probably need to partner with folks. We probably need, there's a few things we need. And then also a few things we want that we're not really getting from the avenues in the niches were taking with what we've done to date. You know, like the wholesaling. I would've just been creating another job and then with house hacking a four plex and trying to continue to buy houses all by myself as I was continuing to grow, it would've taken much, much, much longer than I ever wanted it to to get out of my day job. And so I had to pivot again. I mean that's just, that's the word of today's show. I just had to continue pivoting. But it all came from the basis of knowledge. So I was, we had the four plex, which is a small multi family and I really liked the concept having multiple units inside like underneath one roof, one lone one location, all those things. But this deal was going horribly wrong. So I knew I must have been doing something wrong. I need, the deal was probably bad or maybe I just didn't have enough capital and experience that I was a partner with the right person because I was a partner with anybody. It's just me. And so I was continuing to dive deeper into the idea of multi family and what that was going to look like.

And I remember getting an email from our local real estate meet up that there's gonna be a guest speaker come over from Pensacola to mobile to talk on multi family syndication. I was like, well, perfect. I'll go check this out here. It's all about and you just go from there. You know, maybe it's for me, maybe it's not, Maybe it helps solidify a couple of things, maybe I'll learn some things I don't know yet about this, this niche. And I went to the meet up, the meat up ended and I remember just being in all just dumbfounded at how awesome multi family syndication sounded like this sounds perfect, this is just for me, this is exactly what I wanted to do, All of the benefits, everything in one location, the scalability of it being able to bring other passive investors alongside with me in the journey to financial freedom. So then that helped me out with my goal of wanting to help people and educate folks and help others create financial independence. Like I was trying to create for myself and there's just so many benefits to this niche, and it was really cool. Not only was there a lot of benefits, and I kind of met all my goals. Actually had like a burning passion for it was like this is really exciting, you know, that I can literally wake up every day and be excited about doing this and so I knew that was what I needed to do.

So I end up talking to the speaker afterwards, found out we both had aviation in common. He was actually a naval helicopter pilot was kind of how we click. And then from there he let me take him out to lunch about a week later and for about two years, he was somewhat of a, like a Q and a mentor. And I say that because he wasn't a mentor from the viewpoint of, he gave me investor leads and he introduced me to his investors and introduced me to brokers and let me partner with him on deals and all this other stuff. He didn't do any of that. There was no courses, there was no education, like none of that was there. It was literally just anytime I had a question, I knew I could call him and he would be 100% willing to answer the question and I only do that. But then like tell me what he did, but also give me advice on what he thought I should do based on my circumstance, my goals and kind of the direction I was headed in. So I feel like that helped a lot from kind of getting me started in the space and then, you know, fast forward to today and we've now got 239 units, $13 million over $13 million in assets under management. And I have two business partners that there's no way I'd be able to do any of this without.

And uh, we're looking to get to 1000 units this year in 2021 we're on the right trajectory. We're on the right path. We might actually get surpassed that goal possibly. We'll see what ends up happening. Sure, thank you. Thanks for sharing that. Would you like to ship? Guest speaker? The guest speaker was jeremy hand. You know, he doesn't do mentor ship or nothing paid or anything like that. It was just strictly like right place, right time, I think. And then not only that, but it was me taking action. You know, if I had gone to that meet up and you know, I could have been like, that was awesome. Now let me go home and do some more research and figure out what I want to get started because most of the time when I went to these meet ups, the speaker is kind of like pie in the sky, so to say, it's the only phrase I can come up with, but this this individual that's almost unreachable that you feel like you can't talk to because they have so much knowledge and experience, you don't want to waste their time. So instead you focus on talking to all of the individuals that are in the room that we're a part of the meat up and asking them about where they're at and what they're doing.

But there was just something inside of me at that meeting. It was like you need to go talk to this guy. Like this guy is the one who is an expert in this, not any of these other people in the room or else they'd be speaking. So go talk to this guy, see what he's all about and see if you can create some kind of relationship. And sure enough, he was super down to earth, he was more than willing to chat with me and I'm so glad I took that leap of faith because I can only imagine where I'd be today, had I not done that, could go and thank you unless one step back. So, and you have passion in sports and music terms, and also you work in aircraft technician side. So any skills from those areas translating into multi family space, you said, are any of those passions, passions and skills acquired through your aircraft technician role translating into multi family space? You know, that's a really good question because I've been thinking about that for the last couple of days because of the jobs have been put on at work and how I have been working extra hard basically on these particular jobs while I'm being partnered with folks that are being really lazy and I'm kind of doing the front end of the work and they're taking breaks all the time and not really caring to do anything or pay any attention or like I might be trying to teach them something that they don't know, but they think they already know it.

And so I think what I have learned or translated from my day job into what I'm doing is just working. It's just the ability to grind and get in there day in and day out. Probably consistent consistency is probably what it is, getting up every day, doing what needs to get done in order to see success because it took me two years, two full years, 24 months before we ever actually close our first multi family deal after getting super serious about that being what we wanted to do. I mean, just imagine day in and day out for two years going by of analyzing deals, talking to brokers, talking to investors, trying to build relationships, trying to build systems, trying to partner with the right people, trying to raise capital to learn what this business is all about, submitting Elouise, getting turned down, imagine doing all those things day in and day out for two years and continuing to see zero success. And obviously there was little tiny bits of success happening all throughout the way, but had nothing to show for it because I had no real estate, I had no deals.

I had no multi family, which is what I was trying to do. So I think one thing that translated from my day job to what I do in my business is just the consistency that continued getting up and doing it every single day. But as far as the musical work and the sports, I think you'd probably say the same thing for the sports consistency and hustle and just getting in there every day. But I honestly can't think of anything right off the bat from the musical side. I just know that from being a musician, from being a drummer, I've actually been able to relate and connect with a lot of really cool individuals inside of the real estate space that just so happened to also be musicians. And so I felt like that that's been a leg up that I've had, that other people that aren't musicians wouldn't have. So you could say that translated Could and thank you. And I think you started three years back and in three years you almost rates or $7 million. So we share your experience and third process and how did you establish a credible deputy for investors and also some challenging experiences?

You know, I'm not even sure where the establishment of credibility came from. I probably leveraged it from folks that was partnering with because the only deal I had done, you know, before we did the first big syndication was the foreplay. And that one went totally completely sideways and was not a good financial investment by any means. So the credibility for me wasn't wasn't really there from being honest. So if you're out there and you feel like you have no credibility and experience, I don't think that just because you don't have that, you suddenly can't raise money or you suddenly can't get into this business or can't be successful or can't close a big deal. None of those things are true. They're all limiting beliefs. And so I actually started or got into a capital raising challenge. It's very interesting. It's nothing is unlike anything I'd ever heard of. And I remember he, the guy by the bill out actually posted about it on social media. I've been following the guy for a while, he was real heavy into the local real estate meet up that I was in and he mentioned that he had this 30 day to 500 K.

Challenge. I was like the heck is that 30 days to $500,000? Is that like I'm gonna spend 30 days and suddenly have $500,000 in equity or profit like like that I made from selling a real estate deal or like what does that mean? So I had to learn more and so I went to the website and it was a capital raising challenge. He was teaching you on those 30 days how to raise $500,000 like what the groundwork of that was going to look like. And I thought it was super cool. It was only $100 to get into this little challenge. And I thought you know what, I could spend this 100 bucks and learn nothing and waste 30 days of my life. And if that happens then whatever, it's only $100 it's only 30 days, I'm sure I'll meet some people, they'll probably be cool people, maybe they'll be good connections in the future. Like if nothing else I can get some connections so let's just try this out. So I paid 100 bucks again. The challenge, I'm kind of excited challenge starts first of july of 2020 and immediately he tells us okay for the next 30 days, he had to go live on social media once a day. Like, like every day I thought, what the heck go live on social media.

I didn't even really like social media before that. I was not big in it at all and all of the people I was friends with like old high school buddies and college friends and old people I went to church with and grew up with back in Memphis and a couple of like obviously a few people that I was starting to meet in the real estate space now that had been in it for a little bit. But I didn't really feel like I had any following of people trying to give me money and so I was kind of scared. I was hesitant. I didn't really want to do the lives, but I thought I paid the money and already in the challenge I might as well do what he's asking me to do and who knows who knows what happened. So I start doing the live videos and I start gaining some traction. But they six day seven, I start getting some phone calls from these investors. People starting to comment on my post, starting to like it, starting to DM me and ask if they can learn more about what the heck this challenge is all about or what the heck I'm doing in real estate. And long story short, the 30 days passes and I raised $6 million in just a 30 day time frame and I was just in shock.

I thought there's no way this is real. You know, this could not have just happened because I hadn't raised any capital at all previous to the challenge. So going into that challenge with never having raised money to suddenly, 30 days later, raising $6 million I was just dumbfounded. I could not believe I had that many people in my inner circle or people that I knew that we're interested in investing, but not only that they wanted to give it to me, they wanted to partner with me. And so I think what I really built the credibility was not only like an engineer, they're kind of stealing it for my partner's partying with the right folks that have had that experience and have done very well in the business. But I think also it was just being personally being related. You know, there's a study done where it's actually cliche saying that most folks by on emotion and justify it with logic. Well, there's actually a study done on that. It was proven that 95% of people buy on emotion and justify it with lots of, 95% of people in the whole world are buying stuff and getting interested in things based off of emotion. Then golly, I got to connect to the emotional side of people.

So I don't need to just be talking about capital stack. I don't need to just be talking about how much money they're going to make or what the perhaps going to look like or what the structure of the deal is going to look like or how awesome real estate is with the text benefits. I mean all that stuff is cool and that's a great side benefit of it all. But I need to tap into people's emotion. And so I had to really open up myself, start talking about myself on a more personal level what I was doing in my life, what I was doing for the day, what my daily routine look like, what my hobbies were, what my faith was, how I lived life with family. Have we spent time together all these different things. People started to get to see me and the fact that they were live videos they're able to see my face. I think that was a whole another level of it. But they're starting to see me and kind of dive into my life it's just kind of like a T. V. Show and you watch a tv show and you have this character you really really like. You start to feel like you really know that character like you you know their voice you know their body language you know their sense of humor. You know the kind of things that they like the kind of things they don't like what makes them angry or irritated really quickly and like their level of sarcasm you start to learn all these things about him and so I feel like that's what other people were starting to learn about me when I was doing these live videos, it was almost like a little reality show That was just free that folks were getting to dump into.

And I really believe that the whole aspect of the live video is truly what was pivotal to folks kind of grabbing onto me, my story, my life, my business. And then that's really kind of what took me from nothing to now, $7 million dollars of equity raised for the deals we've done awesome, awesome and thank you, thanks for sharing. That is truly inspirational. Yeah, and we share any of your best multi family or real estate investing experience. So far my best experience has to be just off the cuff. It has to be that first deal. So the first deal we got, you know, it was so exhilarating and exciting because it's the first one we've been working on it for two years, were just like grinding and submitting offers and partnering and it's just trying to raise capital and all these things and we finally got something and the way we got it was actually really cool. It was my mentor, it's the Q. And a mentor that I had, he had been watching me, tried to get deals and tried to dive into the space and build relationships and submit these offers and talk to these programs.

You've been watching all of that for the last two years. And he finally one day said, hey, I see what you've been doing, I see how hard you've been working towards this. You know, I actually have a lot of people that come up to me and they want to ask about real estate or how, how to get in it or how to do the multi family thing like I'm doing and I'll tell them something, I'll give them a piece of advice and 99% of them don't do it, they don't follow up, they don't come back to me, they don't do anything. And I thought, well that's insane because this is like the best thing ever. So everything you tell me I want to do and I want to be great at. So he was seeing that all along the full two year time span. So once we got to this point, he said, okay, you know, we've got this deal, you know, on the note of you working super hard, I got this deal I'm getting ready to sell and this was actually august of 2020 said, hey, we're thinking about selling it with a broker in february of 2021. We sell it with a broker, it's going to be at this price. But I'll tell you what, if you think that you can close this deal before the end of 2020 and if you think that we can do it without going through a broker, then I'll give you a $400,000 discount.

And man, when I heard that I was like, oh, this is it, this is my ticket to riches. No, I'm just kidding. But I was, I was so excited. It's like this is the breakthrough that I've been waiting for and I'm so excited that he is like trusting me with this asset that he had as this deal and not only that, but giving me a discount, like first deal I bought him getting a discount. I know I'm getting a good deal on it. He's been my mentor for the last couple of years. I know he's not screwing me over and it was just a really exciting. So I know that was long winded version of telling that story, but that would probably have to be my best experience. Awesome, awesome. Is that's in mobile Alabama. Yeah, it's a mobile. Okay. So would you also share any, what I start challenging experience so far, you know, the most challenging experience I think is I don't know, this is hard, there's so many, you know, there's so many different challenges that you face that you come along. I'm gonna have to say that the most recent one for us has been asset management and that's not to say that asset management is difficult by any means or that it's complex or complicated or you need a PhD to do it.

It is none of those things, but we grew so fast, you know, it's only been seven months as of the time of this recording in july of 2021 that we've been closing deals and we've already got 239 units, another 88 under contract with more on the way. And so the level of growth we've seen over the last seven months, it's kind of hit us like a wrecking ball in the way. You know, we were set up for success and a lot of ways, but we've really had to start building some serious systems and processes around asset manager because there's been a lot of duplication of efforts. And uh, a couple of times we dropped the ball on something like our most recent acquisition, we almost forgot to change the switch over. The utilities are property manager did because a whole bunch of different reasons, but the utilities almost didn't get transferred over. So 148 units were almost without water during 1/4 of july weekend. So that would have been crazy. And so we were chaotically trying to make sure that doesn't happen. We know that making sure it didn't happen. So it's a good thing, but it's like the some of the small minutiae to day to day tasks that need to be accomplished in order to be successful asset manager and successful in your business plan are some of the things we're really having to start creating some systems around now.

We actually have, we got an asset management tool that we're using now. It's just software and and putting all of our data in there and rpm in there and it's really kind of become a centralized location for all this stuff to eliminate the duplicated efforts and everything else. But I got to say, I would say the biggest challenge for us recently has been making sure that we're properly asset managing all the deals we have. Okay, sure. And so what is your current focus and share? Something you're excited about now that Our current focus is to get to 1000 units by the end of the year and are vivid vision for the next three years is to reach $100 million dollars of assets under management were honestly thinking we're gonna blow that out the water at the trajectory that we have. But that is our goal right now. 100 million. We're super excited about that. We've got, if you've never heard of vivid vision, you actually go on our website at G L cap, that's golf lima cap, C A P dot co and then click on the about tab you guys you read are vivid vision. It's super detailed in the lifestyle. We want to live, the kind of team we want to have, how the business is going to operate, what you're going to get if you join alongside us from investors standpoint or from an employee standpoint or the true impact that we're trying to make the level of units that we're trying to get $100 million of assets under management.

We're trying to get those are awesome are are vivid vision for the next three years is what that is really what we're striving for. And so I would say we're super excited about that. But in the immediate, I'm really excited about these deals deal that we just closed and pretty much every deal that we're looking to potentially close in the future because we implemented a new model into our strategy. Now, all the deals we had done previous were the standard kind of syndication model. The standard 5, 10 year flip where you buy it, investors come in 70 30 split, maybe an 8% press thrown in there somewhere. And at the end of the 5, 10 years you sell the asset, double or triple your investors money. Everyone's happy rinse and repeat. Well, that is what we did up until this most recent deal that we close. We actually partnered with key principle of team and partnering with them. They had so much experience that they introduced us to a new model of how to do syndication. And when they introduced it to us, I was thinking that there's no way that this is even like, like does this really work or investors are actually excited about this?

You know, could this work? But they had seen nothing but success with it over the last couple of years. And sure enough, we pitched out to our investors and we had like a 90% response rate of nothing but positivity of folks saying yes, it sounds awesome. I'd love to do this and it's actually a perpetuity model. So instead of selling in 5 to 10 years, in essence, we're just returning member capital in the first 2 to 3 years, 100%. And then we're all cash flowing for life after that. And everyone was stoked about this new model. So I'm really excited about it because it will help me and my partners really create the lifestyle that we want some of that more passive side and kind of building the business around the asset management and continuing the day to day management and relations and everything that goes along with syndication. While three of us are able to be more of the visionaries in the business. Kind of be a little a little more out of that day to day minutia and live that true passive lifestyle that we're all working towards right now. Cool. Yeah. So anyone advised that impacted you advice that's impacted me is so much advice that's impacted me more recently.

I'm gonna say it's been extreme ownership. So being a, it's actually the book extreme ownership by Jacko willing. I read that book beginning of last year 2020 and ever since reading it, it's just been life changing and how different you can truly approach situations and not only approach situations, but have a successful outcome for all parties when you take extreme ownership of everything that you're involved in, especially if you're the leader of whatever it is that's happening. Like for us being the asset managers, when the water almost got shut off for all these tenants, you know, that was our fault, granted it was property managers responsibility to do so, but it was our responsibility to make sure that the property manager was doing what needed to be done and that we were executing on the business plan and 148 tenants aren't without water and that, you know, all these things at the end of the day, it was our fault. So I think taking extreme ownership and everything, not only business, but you know, your personal relationships with your kids, with your spouse, all those things, I think that's made a big impact on my life.

That's so powerful. And how are you giving back to community Joshua? Give me back to the community? You know, I think there's there's a lot of ways of giving back and one in particular, I actually had a phone call with a guy literally today, about an hour before we recorded this guy who's just getting started. I say just getting started. He's actually been trying to get into this space, the multi family syndication space for the last two years and he hasn't had any luck. He's just been trying and trying and trying and nothing is working out for him. Partnerships aren't really working and he keeps getting turned down all offers. He's submitting and he's getting, he just was getting discouraged and he wasn't really sure what he needed to do, where he needed to turn when he should just give up on it all together. You know, try this for two years is not working. What am I supposed to do? This kind of down in the dumps? Well, we'd scheduled this call because I actually posted something on social media about my story and how a year ago today I had nothing. I had only the four plex and wasn't in multi family trying to get in it and trying to get it for two years previous and had never raised a dime of capital before and all these things.

And then I listed out everything that I've done now, where I am today and my success and everything that's happened over the last year. And he saw that he directly resonated with it. So he wanted to schedule a call with me. So the way I feel like I've given back from this aspect is that I am not one that says, hey, I'm too busy to take your call or I, you know, schedule it with my assistant or we'll have my executive assistant email you reply back to your, my social media managers. We'll do this or set this up. Actually took the time to take the phone call and he was overjoyed, he could not fathom that. I even took the time to take the phone call. And he was like, this is the boost of confidence I needed. I'm so glad you took this call and that I scheduled it because I'm going to get back out there and I'm gonna do this thing. Awesome. Thank you. Thanks for sharing that. And how can business can connect with you, Joshua. You can directly connect with us at G. L. Cap dot co. Again, that was golf lima, charlie, alpha papa dot co. And everything is on the website. You know, all of our social media links are monthly newsletters are my own podcast, Creative Capital.

You can check that out. All our information are free, e book, ultimate guide to investing in multifamily syndication. All that stuff is in there so you want to learn more about us. Feel free to go check out the website. Awesome. Thank you Joshua. I really enjoyed the conversation and thanks for adding value to the show. Thanks so much for having me robert. If you like the show, please subscribe, share, rate and review and if you want to connect with me, please send me a message info at Bouchard Capital dot com. Thank you for listening, creating wealth through past your apartment investing podcast. I hope you learned something from the show. See you in the next absorb. Thank you. Any information provided from these shows or educational purposes. Only as always, please consult with your own C. P. A legal and financial advisor before investing.

EP#112 Raising $6mn in 30 days with Joshua Ferrari
EP#112 Raising $6mn in 30 days with Joshua Ferrari
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