How I Raised $10 Million in Private Equity ft Joseph Kimbrough
Are you curious about the world of private equity and real estate investments? Tune in to the latest episode of the Power Unit Successcast Podcast, titled "The Surprising Path to Private Equity Success: How I Raised $10 Million in Just 6 Months!" In this riveting episode, host Chastin J. Miles engages in a candid conversation with Joseph Kimbrough, a seasoned private equity fund manager who shares insider secrets on navigating the complex terrain of private equity and real estate investments.
100:00:00,000 --> 00:00:02,280Do you feel like he was asking those questions to?
200:00:02,280 --> 00:00:03,720I know why they asked those questions.
300:00:03,720 --> 00:00:07,120They want to test me because obviously, again, like you said,
400:00:07,120 --> 00:00:09,960big black guy looked like I played football,
500:00:09,960 --> 00:00:12,840but they think athlete, throw a football, jubble a ball.
600:00:12,840 --> 00:00:15,880They're not thinking private equity fund manager.
700:00:15,880 --> 00:00:16,280No.
800:00:16,280 --> 00:00:18,920They just got that money sitting there waiting for you to call.
900:00:18,920 --> 00:00:21,760You need to raise $10 million in equity.
1000:00:21,760 --> 00:00:23,840You need people that can bring half a million,
1100:00:23,840 --> 00:00:25,400$250 million.
1200:00:25,400 --> 00:00:29,240They make a lot of money because they're trying to get taxes down.
1300:00:29,240 --> 00:00:32,000How did you start to bind these people?
1400:00:32,000 --> 00:00:36,640To operate an agreement, that's like another 40, 50 pages.
1500:00:36,640 --> 00:00:39,960I read through every single one of them.
1600:00:39,960 --> 00:00:40,960Word for word.
1700:00:40,960 --> 00:00:42,520Because this is real--
1800:00:42,520 --> 00:00:43,680this is jammed your life.
1900:00:43,680 --> 00:00:46,760If you're in a lot of someone about something like taxes,
2000:00:46,760 --> 00:00:49,200how much they can get reducing their taxes?
2100:00:49,200 --> 00:00:50,960Because you're the manager of the fund.
2200:00:50,960 --> 00:00:51,840You can't get sued.
2300:00:51,840 --> 00:00:53,920I'm going to cut you off right quick and apologize.
2400:00:53,920 --> 00:00:59,040Welcome to the Power Unit Success Cast.
2500:00:59,280 --> 00:01:02,440The show where we push the limits to unlock our greatness.
2600:01:02,440 --> 00:01:05,520Each week, we dive into the world of real estate, business,
2700:01:05,520 --> 00:01:08,880and entrepreneurship to bring you stimulating talks, insights
2800:01:08,880 --> 00:01:11,880from movers and shakers, and the mindset to do more
2900:01:11,880 --> 00:01:13,480so we can become more.
3000:01:13,480 --> 00:01:14,920Let's get into this week's episode.
3100:01:14,920 --> 00:01:18,560What's up, everybody?
3200:01:18,560 --> 00:01:22,040Welcome to another episode of the Power Unit Success Cast.
3300:01:22,040 --> 00:01:25,360Man, y'all been getting some heat on this show.
3400:01:25,360 --> 00:01:28,160I hope you've been writing down the jam
3500:01:28,160 --> 00:01:30,680people been dropping because I know
3600:01:30,680 --> 00:01:34,360that I have received some transformation.
3700:01:34,360 --> 00:01:38,400Just with the guests that we've had on here lately,
3800:01:38,400 --> 00:01:39,920I mean, we've talked about real estate.
3900:01:39,920 --> 00:01:42,880We've talked childhood traumas.
4000:01:42,880 --> 00:01:45,120We've talked emotions.
4100:01:45,120 --> 00:01:47,520We've talked relationships.
4200:01:47,520 --> 00:01:49,880We talk about it all here on the Power Unit Success Cast.
4300:01:49,880 --> 00:01:53,440So if that's what you are into, we support the lives
4400:01:53,440 --> 00:01:56,640of entrepreneurs, people out there making it happen.
4500:01:56,640 --> 00:01:58,720I know a lot of you are in real estate.
4600:01:58,720 --> 00:02:01,760However, if you're an entrepreneur, small business owner,
4700:02:01,760 --> 00:02:04,760you're thinking about starting your own business,
4800:02:04,760 --> 00:02:07,640you definitely want to be tuned into this show
4900:02:07,640 --> 00:02:10,880because we are very well-rounded.
5000:02:10,880 --> 00:02:14,800And look, I wish I had this when I was building my business.
5100:02:14,800 --> 00:02:20,800So I appreciate all the love everybody's been giving.
5200:02:20,800 --> 00:02:22,720Thank you for the reviews.
5300:02:22,720 --> 00:02:25,200I can see y'all sharing these episodes.
5400:02:25,200 --> 00:02:27,720And so I really, really, really appreciate it.
5500:02:27,720 --> 00:02:31,680And if this is your first time here, definitely leave a review
5600:02:31,680 --> 00:02:34,720after the episode and subscribe.
5700:02:34,720 --> 00:02:36,200Let us know what you need to hear.
5800:02:36,200 --> 00:02:37,800Let us know who we need to talk to.
5900:02:37,800 --> 00:02:40,280That's how this podcast grows.
6000:02:40,280 --> 00:02:44,840Now today, I have another great guest on here,
6100:02:44,840 --> 00:02:48,920Y'all gonna get filled with some very tactical things
6200:02:48,920 --> 00:02:52,480that you can do to pretty much make more money.
6300:02:53,600 --> 00:02:57,880My guest today manages a lot of people's money.
6400:02:57,880 --> 00:03:00,760Hundreds of thousands of millions of dollars
6500:03:00,760 --> 00:03:02,520big into multi-family.
6600:03:02,520 --> 00:03:05,720And I'm gonna let him explain what all he does
6700:03:05,720 --> 00:03:07,760because I don't wanna mess anything up.
6800:03:07,760 --> 00:03:10,520But we recently got connected.
6900:03:10,520 --> 00:03:12,000But well, let me just bring him on.
7000:03:12,000 --> 00:03:16,200Everybody, welcome to the Power In the Testcast, Mr. Joseph Kimbro.
7100:03:16,200 --> 00:03:17,520Hey, thank you for having me on.
7200:03:17,520 --> 00:03:22,160Yeah, so Joseph and I, we actually this past weekend,
7300:03:22,160 --> 00:03:26,640we participated in a TED Talk together.
7400:03:26,640 --> 00:03:29,320So he was another speaker at the TED Talk
7500:03:29,320 --> 00:03:34,320and leading up to that, we have to do these coaching sessions
7600:03:34,320 --> 00:03:38,760and it was a whole thing, but that's how we connected.
7700:03:38,760 --> 00:03:43,760And during the whole process of it, it was kinda like,
7800:03:43,760 --> 00:03:45,800man, you gotta be on the podcast.
7900:03:45,800 --> 00:03:48,920He wanted to be on the podcast, so I'm glad you're here.
8000:03:48,920 --> 00:03:50,880So yeah, welcome, welcome, Joseph.
8100:03:50,880 --> 00:03:51,680Yeah, thanks.
8200:03:51,680 --> 00:03:54,600Yeah, tell everybody a little bit about you, what you do,
8300:03:54,600 --> 00:03:57,320who you are, whatever you wanna share really.
8400:03:57,320 --> 00:03:58,760Yeah, first off, I was gonna say,
8500:03:58,760 --> 00:04:01,800when I saw you using real estate on those things,
8600:04:01,800 --> 00:04:03,880'cause we at Followed Treadon Instagram,
8700:04:03,880 --> 00:04:05,520I said, this one, my real estate, bro, is right here.
8800:04:05,520 --> 00:04:06,840We gotta talk.
8900:04:06,840 --> 00:04:08,160Yeah, yeah, I'm sure.
9000:04:08,160 --> 00:04:09,000For sure.
9100:04:09,000 --> 00:04:11,400So yeah, so just to explain what I do is,
9200:04:11,400 --> 00:04:14,600I managed what's called a 506C fund.
9300:04:14,600 --> 00:04:17,760And what that allows me to do is to raise funds
9400:04:17,760 --> 00:04:19,680from accredited investors.
9500:04:19,680 --> 00:04:23,280So let's say, for example, someone makes $200,000 a year,
9600:04:23,280 --> 00:04:26,480as a single individual or $300,000 a year,
9700:04:26,480 --> 00:04:28,760as a married couple, or they have a net worth
9800:04:28,760 --> 00:04:31,640of $1 million of fund investment,
9900:04:31,640 --> 00:04:34,320excluding their primary residents,
10000:04:34,320 --> 00:04:36,440then they are accredited.
10100:04:36,440 --> 00:04:38,320And they can invest in my fund.
10200:04:38,320 --> 00:04:40,440So how that works is they invest a minimum
10300:04:40,440 --> 00:04:43,480of $100,000 into my fund.
10400:04:43,480 --> 00:04:46,680And then that money is diversified
10500:04:46,680 --> 00:04:49,480amongst multiple apartment buildings,
10600:04:49,480 --> 00:04:53,200throughout all of Texas and the Southeast markets.
10700:04:53,200 --> 00:04:59,160So Southeast markets such as Alabama, Florida, Tennessee,
10800:04:59,160 --> 00:05:03,400Louisiana, Mississippi, all over the Southeast,
10900:05:03,400 --> 00:05:06,160all landlord-friendly states primarily.
11000:05:06,160 --> 00:05:10,120Okay, so you take people's money and invest it
11100:05:10,120 --> 00:05:13,320in these apartment communities
11200:05:13,320 --> 00:05:16,040that what are they already making money or?
11300:05:16,040 --> 00:05:17,040They already making money.
11400:05:17,040 --> 00:05:19,560So we acquire these buildings, typically,
11500:05:19,560 --> 00:05:24,360they're gonna be roughly 90% to 99% already occupied
11600:05:24,360 --> 00:05:26,000and cash flowing.
11700:05:26,000 --> 00:05:29,400They're gonna be class B, class C, some class A,
11800:05:29,400 --> 00:05:31,280we never touch class D.
11900:05:31,280 --> 00:05:33,440I have this rule, I was in the Marine Corps.
12000:05:33,440 --> 00:05:36,760If I need my rifle to go to a building that I'm part owner of,
12100:05:36,760 --> 00:05:38,280
- You're trying to do that.
12200:05:38,280 --> 00:05:39,720
- I don't need to be there,
12300:05:39,720 --> 00:05:41,560none of that clearing out houses.
12400:05:41,560 --> 00:05:44,320
- Yeah, yeah, yeah, yeah, I got you.
12500:05:44,320 --> 00:05:45,960Wow, okay.
12600:05:45,960 --> 00:05:47,360This is interesting.
12700:05:47,360 --> 00:05:50,960All right, so obviously someone has to be accredited.
12800:05:50,960 --> 00:05:53,320They have to have a certain amount of money
12900:05:53,320 --> 00:05:57,160and this is a liquid cash available to straight up give you
13000:05:57,160 --> 00:05:58,000at that time.
13100:05:58,000 --> 00:06:00,560
- Exactly, liquid cash or they can,
13200:06:00,560 --> 00:06:03,680like they've been doing business for a long time,
13300:06:03,680 --> 00:06:07,720but they've worked in a professional corporate America job
13400:06:07,720 --> 00:06:09,760role for a long time.
13500:06:09,760 --> 00:06:13,200They can roll over their 401(k) or an IRA
13600:06:13,200 --> 00:06:16,320into what's called a self-directed IRA.
13700:06:16,320 --> 00:06:19,560And now you can invest that into the fund as well
13800:06:19,560 --> 00:06:21,520and it's protected from taxes.
13900:06:21,520 --> 00:06:24,320
- All right.
14000:06:24,320 --> 00:06:27,840
- Joe, how did you get in all of that?
14100:06:27,840 --> 00:06:28,760Like, what?
14200:06:28,760 --> 00:06:29,760(laughs)
14300:06:29,760 --> 00:06:32,840Okay, you were in the Marines
14400:06:32,840 --> 00:06:35,360and is this what you started doing right after?
14500:06:35,360 --> 00:06:36,200
- No, okay.
14600:06:36,200 --> 00:06:40,280
- Supposed enough, I did nothing to this tune right after.
14700:06:40,280 --> 00:06:42,880I was a personal trainer for two years, bro.
14800:06:42,880 --> 00:06:47,040
- Mm, yep, and then, but while I was a personal trainer,
14900:06:47,040 --> 00:06:51,040I started learning how to do what's called wholesaling.
15000:06:51,040 --> 00:06:53,040And while learning how to wholesal,
15100:06:53,040 --> 00:06:57,080I also was learning like, hey, how do you flip houses?
15200:06:57,080 --> 00:06:59,920I did taxes, I prepared taxes for people.
15300:06:59,920 --> 00:07:02,480And while I was a personal trainer,
15400:07:02,480 --> 00:07:04,640I did it not at your regular gym,
15500:07:04,640 --> 00:07:06,360but I did it more at a private gym
15600:07:06,360 --> 00:07:08,320where people coming in there with bent leaves
15700:07:08,320 --> 00:07:10,200and rose, roses and stuff.
15800:07:10,200 --> 00:07:12,760And so I started talking to people, hey, what do you do?
15900:07:12,760 --> 00:07:14,240Guys, like they're all in gas.
16000:07:14,240 --> 00:07:16,000They do all this serious stuff in private equity.
16100:07:16,000 --> 00:07:19,680So I started thinking, I wanna get into private equity
16200:07:19,680 --> 00:07:22,120one day by having the cash.
16300:07:22,120 --> 00:07:25,640So I started off in wholesale and did that for three years.
16400:07:25,640 --> 00:07:29,840And 2021 sold over 20 something properties,
16500:07:29,840 --> 00:07:34,360land, mobile homes, houses.
16600:07:34,360 --> 00:07:37,640And then also was learning multi-family during that time.
16700:07:37,640 --> 00:07:42,240And then met some mentors later that year of 2021.
16800:07:42,960 --> 00:07:45,880And they don't want to got me started with the fund.
16900:07:45,880 --> 00:07:46,800
- Hmm.
17000:07:46,800 --> 00:07:48,480So, okay.
17100:07:48,480 --> 00:07:52,200If I wanted to get in private equity,
17200:07:52,200 --> 00:07:53,600I don't want to, though.
17300:07:53,600 --> 00:07:55,320So I'm not gonna try to do what you do.
17400:07:55,320 --> 00:07:57,600I'm so busy.
17500:07:57,600 --> 00:08:02,600But like, what's the first things that someone has to do?
17600:08:02,600 --> 00:08:07,880So you were saving up money through wholesaling, right?
17700:08:07,880 --> 00:08:08,700
- Yes.
17800:08:08,700 --> 00:08:12,120
- So obviously you need some money to get into private equity.
17900:08:12,120 --> 00:08:12,960
- Yeah.
18000:08:12,960 --> 00:08:15,280Okay.
18100:08:15,280 --> 00:08:18,040First, explain where private equity is.
18200:08:18,040 --> 00:08:22,280And then second, how would one get into that line of work,
18300:08:22,280 --> 00:08:23,360line of business?
18400:08:23,360 --> 00:08:27,160
- So private equity, when you said it was called a 5.6 C,
18500:08:27,160 --> 00:08:29,200or a 5.6 B fund.
18600:08:29,200 --> 00:08:31,680And just to explain what a 5.6 B is,
18700:08:31,680 --> 00:08:35,480a 5.6 B is for none accredited investors as well.
18800:08:35,480 --> 00:08:37,760So let's say someone's making 175,
18900:08:37,760 --> 00:08:41,480they got like 50 to 75,000 to invest.
19000:08:41,480 --> 00:08:46,480Now, that person's allowed to invest in these type of assets.
19100:08:46,480 --> 00:08:50,120But the type of assets you invest have to be only approved
19200:08:50,120 --> 00:08:51,120by 5.6 B.
19300:08:51,120 --> 00:08:53,000So that's kind of a caveat with that.
19400:08:53,000 --> 00:08:55,520But by doing so,
19500:08:55,520 --> 00:08:58,240and there's a bunch of ways you can move this around.
19600:08:58,240 --> 00:09:00,760Like I can sit up a 5.6 B fund and then say,
19700:09:00,760 --> 00:09:03,160"Hey, if you're none accredited, invest with me.
19800:09:03,160 --> 00:09:04,920You have 90 days.
19900:09:04,920 --> 00:09:08,040I'm taking as much none accredited as money as possible
20000:09:08,040 --> 00:09:10,640up to 22 people, 35 people."
20100:09:10,640 --> 00:09:14,520And then what I'm gonna do is switch it over
20200:09:14,520 --> 00:09:19,040to what's called a 5.6 C fund, which then allows me
20300:09:19,040 --> 00:09:20,960to market to the masses.
20400:09:20,960 --> 00:09:21,800
- Yeah, so it's--
20500:09:21,800 --> 00:09:24,960
- Now I'm giving none accredited, I hate to do this.
20600:09:24,960 --> 00:09:25,840(laughs)
20700:09:25,840 --> 00:09:28,800This is already going over my head.
20800:09:28,800 --> 00:09:32,120And I mean, maybe it's the phones,
20900:09:32,120 --> 00:09:36,040the 5.0, you know, 'cause every time I hear you say 5,
21000:09:36,040 --> 00:09:38,040something, I think 5.1 C3, 5.0,
21100:09:38,040 --> 00:09:38,880(laughs)
21200:09:38,880 --> 00:09:39,720'Cause that's all I'm really--
21300:09:39,720 --> 00:09:41,520
- You think charities, yeah.
21400:09:41,520 --> 00:09:42,360
- Yeah, yeah.
21500:09:42,360 --> 00:09:44,520
- So there are, there's a lot of stuff in it.
21600:09:44,520 --> 00:09:45,600You need attorneys.
21700:09:45,600 --> 00:09:46,680
- Yeah. - Yeah.
21800:09:46,680 --> 00:09:47,760
- Huh.
21900:09:47,760 --> 00:09:49,400
- Yeah, upfront cost is like,
22000:09:49,400 --> 00:09:50,920I'm telling you now, the upfront cost,
22100:09:50,920 --> 00:09:55,400let's say you want to sit up a 5.6 B or 5.6 C fund,
22200:09:55,400 --> 00:09:59,200you're paying that attorney $15,000 cash out your pocket.
22300:09:59,200 --> 00:10:02,720
- Okay, so to break it down,
22400:10:02,720 --> 00:10:07,720a fund has to be set up in order for people to give you money
22500:10:08,520 --> 00:10:09,520for it to be legal.
22600:10:09,520 --> 00:10:10,600
- For it to be--
22700:10:10,600 --> 00:10:12,480
- Yes, you get registered with the SEC.
22800:10:12,480 --> 00:10:14,680
- No, no, you didn't say for it to be legal, look,
22900:10:14,680 --> 00:10:17,280and my mind, well, what's the alternate way?
23000:10:17,280 --> 00:10:18,120(laughs)
23100:10:18,120 --> 00:10:18,960
- Some people--
23200:10:18,960 --> 00:10:21,040
- Some people doing, hey, some people--
23300:10:21,040 --> 00:10:22,280
- What's the way to get started?
23400:10:22,280 --> 00:10:23,520They will get legal.
23500:10:23,520 --> 00:10:25,280(laughs)
23600:10:25,280 --> 00:10:30,280Okay, so you gotta get this, this 5.0, whatever,
23700:10:30,280 --> 00:10:34,560to, that will let you open up a fund.
23800:10:34,560 --> 00:10:35,400
- Yes.
23900:10:35,400 --> 00:10:37,320
- Once you have the fund open,
24000:10:37,320 --> 00:10:41,960you, and it's accredited, you can, I don't wanna say solicit,
24100:10:41,960 --> 00:10:46,400but you can get investments from people like me
24200:10:46,400 --> 00:10:49,920and take that money to invest it in other stuff.
24300:10:49,920 --> 00:10:51,320
- Into apartment buildings.
24400:10:51,320 --> 00:10:52,160
- Okay.
24500:10:52,160 --> 00:10:54,560
- So I have to tell you exactly what I'm investing in.
24600:10:54,560 --> 00:10:58,080I can't say I'm investing in apartment buildings,
24700:10:58,080 --> 00:11:03,080and then call you and say, yo, I'm about to buy 300 properties,
24800:11:03,080 --> 00:11:06,040single family home, life, yeah.
24900:11:06,040 --> 00:11:06,880
- Okay.
25000:11:06,880 --> 00:11:11,880
- So, is this what, like, grant card owned,
25100:11:11,880 --> 00:11:13,360like card owned cash, but--
25200:11:13,360 --> 00:11:14,360
- It's similar, okay.
25300:11:14,360 --> 00:11:15,200
- It's similar.
25400:11:15,200 --> 00:11:18,160We, we somewhat use the same attorneys.
25500:11:18,160 --> 00:11:21,280One of the attorneys they use is, actually,
25600:11:21,280 --> 00:11:23,640we've been in discussion, if I wanted to set up a fund
25700:11:23,640 --> 00:11:28,720similar to his, then it's what would be called a regulation,
25800:11:28,720 --> 00:11:29,560A fund.
25900:11:29,560 --> 00:11:35,800That fund allows everybody to invest as little as $2,000.
26000:11:36,200 --> 00:11:40,280For me, I'm not sitting it up because $2,000 is not gonna be
26100:11:40,280 --> 00:11:42,480life changing for that person.
26200:11:42,480 --> 00:11:46,240In my eyes, you could take that $2,000 by a course,
26300:11:46,240 --> 00:11:48,560you can invest in yourself, anything else.
26400:11:48,560 --> 00:11:50,120
- Right. - Right.
26500:11:50,120 --> 00:11:51,920So, and y'all can tell--
26600:11:51,920 --> 00:11:53,160
- Also, that's more expensive.
26700:11:53,160 --> 00:11:56,000It's like $60,000 to sit there to cash out your pocket.
26800:11:56,000 --> 00:11:57,000
- Please.
26900:11:57,000 --> 00:12:02,000
- Well, y'all can tell that I'm very interested in this topic
27000:12:02,000 --> 00:12:03,720right now, so,
27100:12:04,920 --> 00:12:07,600not that we ever use a script on this show,
27200:12:07,600 --> 00:12:09,480but I'm about to be all over the place
27300:12:09,480 --> 00:12:10,840'cause that's how my brain works.
27400:12:10,840 --> 00:12:13,000I got a real ADHD brain.
27500:12:13,000 --> 00:12:15,160And so, I'm about to get the information
27600:12:15,160 --> 00:12:17,960that I want out of him for this,
27700:12:17,960 --> 00:12:20,440because I'm so intrigued right now.
27800:12:20,440 --> 00:12:24,920So, you as the person who sets it up
27900:12:24,920 --> 00:12:27,760and goes through all that, what's,
28000:12:27,760 --> 00:12:29,280like, what do you get out of it?
28100:12:29,280 --> 00:12:32,920Is it what a percentage of the returns?
28200:12:32,920 --> 00:12:33,760I mean,
28300:12:33,760 --> 00:12:36,680so I get paid a yearly salary,
28400:12:36,680 --> 00:12:40,760which is pretty small in comparison to the size of the fund.
28500:12:40,760 --> 00:12:42,400And then also,
28600:12:42,400 --> 00:12:46,000I make the bulk of my money off of acquiring assets.
28700:12:46,000 --> 00:12:47,880So, I'll invest in,
28800:12:47,880 --> 00:12:51,760by the way, I invest in a hundred units or more.
28900:12:51,760 --> 00:12:55,080If it's 99 units, I'm not touching it.
29000:12:55,080 --> 00:12:57,760So, a hundred units or more.
29100:12:57,760 --> 00:12:59,200So, like, right now, for example,
29200:12:59,200 --> 00:13:02,120working on 400 plus units and Phoenix.
29300:13:02,120 --> 00:13:04,480And then almost 300 units in Grand Prairie,
29400:13:04,480 --> 00:13:07,680almost 200 units in the Valley Ranch Area,
29500:13:07,680 --> 00:13:09,200Lost Cleaners Area,
29600:13:09,200 --> 00:13:11,800working on getting invested into those.
29700:13:11,800 --> 00:13:14,760I might come on as what's called a limited partner,
29800:13:14,760 --> 00:13:17,440through my fund with some of those,
29900:13:17,440 --> 00:13:20,640or I might come on as what's called a general partner,
30000:13:20,640 --> 00:13:25,400where now I have more say so, more responsibility,
30100:13:25,400 --> 00:13:27,960okay, with more responsibility, more risk.
30200:13:27,960 --> 00:13:31,920So, this actually reminds me,
30300:13:31,920 --> 00:13:33,520and you could tell me if this is the same thing,
30400:13:33,520 --> 00:13:36,880because a buddy of mine approached me
30500:13:36,880 --> 00:13:39,280about being a part of a fund,
30600:13:39,280 --> 00:13:43,160and it was kind of broken down to,
30700:13:43,160 --> 00:13:46,800hey, we're gonna invest in commercial buildings,
30800:13:46,800 --> 00:13:51,800and whatever the amount of your investment,
30900:13:51,800 --> 00:13:53,320basically all of the investors,
31000:13:53,320 --> 00:13:55,280there was big investors at the top,
31100:13:55,280 --> 00:13:57,840which I was one of the big investors,
31200:13:57,840 --> 00:14:01,840where I had to bring a sizeable amount,
31300:14:01,840 --> 00:14:06,840now I could source the funds from other people,
31400:14:06,840 --> 00:14:09,200to make up that sizeable amount,
31500:14:09,200 --> 00:14:13,080but based on the amount that I was bringing to the table,
31600:14:13,080 --> 00:14:16,960that's what kind of gave me a role, right?
31700:14:16,960 --> 00:14:19,160And then with these roles,
31800:14:19,160 --> 00:14:22,600you can have someone who fronts the credit,
31900:14:22,600 --> 00:14:25,240someone who fronts the lawyers,
32000:14:25,240 --> 00:14:28,440and these people are coming together, I guess,
32100:14:28,440 --> 00:14:30,480that's just more like a syndication.
32200:14:30,480 --> 00:14:32,320
- Okay. - So, for example,
32300:14:32,320 --> 00:14:35,040there's a difference between a syndicator
32400:14:35,040 --> 00:14:37,080and a fund manager.
32500:14:37,080 --> 00:14:38,480The main difference is,
32600:14:38,480 --> 00:14:40,400when a syndicator needs money to close
32700:14:40,400 --> 00:14:42,040on these apartment buildings,
32800:14:42,040 --> 00:14:44,720they'll come talk to me, the fund manager,
32900:14:44,720 --> 00:14:49,240and I bring equity and exchange for general partnership.
33000:14:49,240 --> 00:14:51,240Or sometimes I don't want general partnership,
33100:14:51,240 --> 00:14:53,360I'll just say, look, I'll be a limited partner,
33200:14:53,360 --> 00:14:56,240because I trust you.
33300:14:56,240 --> 00:14:58,520I know I've seen your track record is strong,
33400:14:59,480 --> 00:15:01,760but you have to have a really strong track record
33500:15:01,760 --> 00:15:04,080for me to come on as a limited partner.
33600:15:04,080 --> 00:15:09,080
- So, is this something that anyone can get into?
33700:15:09,080 --> 00:15:15,360I mean, not from the standpoint of being an investor
33800:15:15,360 --> 00:15:20,080but someone becoming a fund manager
33900:15:20,080 --> 00:15:24,760or getting into this private equity space.
34000:15:24,760 --> 00:15:29,120
- I think it's very possible for people to get into this space.
34100:15:29,120 --> 00:15:31,800I think that you do have to be willing to,
34200:15:31,800 --> 00:15:36,360like if you know people who really have money accredited,
34300:15:36,360 --> 00:15:37,360definitely go for it.
34400:15:37,360 --> 00:15:40,640I would not recommend anyone start off
34500:15:40,640 --> 00:15:44,600as with a 506B fund, because that's word of mouth.
34600:15:44,600 --> 00:15:48,840
- You gotta stop using those terms.
34700:15:48,840 --> 00:15:51,400
- Is there another word we can say for it?
34800:15:51,400 --> 00:15:53,000
- Okay, the five of it.
34900:15:53,000 --> 00:15:57,280
- I would say, I would not recommend someone start a fund
35000:15:57,280 --> 00:16:00,320where you can accept none accredited investors
35100:16:00,320 --> 00:16:04,040and the reason why is because you have to only do things
35200:16:04,040 --> 00:16:05,520word of mouth.
35300:16:05,520 --> 00:16:07,680And when you do things word of mouth,
35400:16:07,680 --> 00:16:10,920if you don't already have a strong network of wealthy people,
35500:16:10,920 --> 00:16:11,840it makes it harder.
35600:16:11,840 --> 00:16:13,720
- It makes it way harder.
35700:16:13,720 --> 00:16:17,640I've been there, done it, sucked, made it through,
35800:16:17,640 --> 00:16:19,040by switching my fund over.
35900:16:19,040 --> 00:16:23,800
- This is the people who have the money under the mattress.
36000:16:23,800 --> 00:16:24,640
- Yes.
36100:16:24,640 --> 00:16:29,640
- So it's not document, like there's no paper trail all the time,
36200:16:29,640 --> 00:16:31,600or it's not an asset.
36300:16:31,600 --> 00:16:32,600
- But no, there's a paper trail.
36400:16:32,600 --> 00:16:33,440
- No, there's paper trail.
36500:16:33,440 --> 00:16:36,680Why do I mean by none accredited is people who,
36600:16:36,680 --> 00:16:38,480they're making one 75 a year.
36700:16:38,480 --> 00:16:40,080
- Oh, it does need that.
36800:16:40,080 --> 00:16:41,760
- Exactly, they don't need that threshold,
36900:16:41,760 --> 00:16:43,680but they every 10,
37000:16:43,680 --> 00:16:47,400invest still nonetheless, $25,000.
37100:16:47,400 --> 00:16:53,520
- Now, so what's the, well, I guess if they're none accredited,
37200:16:54,480 --> 00:16:59,240you have to find more of them to make the deal happen.
37300:16:59,240 --> 00:17:01,600
- That's another reason why people stick with,
37400:17:01,600 --> 00:17:04,920I would say dealing with only accredited investors,
37500:17:04,920 --> 00:17:06,600'cause I ain't wanna use the acronym again.
37600:17:06,600 --> 00:17:07,440
- Yeah, thank you.
37700:17:07,440 --> 00:17:09,120
- Yes, 'cause that threw me off.
37800:17:09,120 --> 00:17:13,640
- That's why people stick with using accredited investors only,
37900:17:13,640 --> 00:17:17,920because when you need to raise $10 million in equity,
38000:17:17,920 --> 00:17:20,840you can't, like, chipping away 50, 100,
38100:17:20,840 --> 00:17:24,920you need people that can bring half a million, $250 million.
38200:17:24,920 --> 00:17:27,760
- Yes, so.
38300:17:27,760 --> 00:17:29,440
- And I love talking big money.
38400:17:29,440 --> 00:17:30,640I'm not gonna lie.
38500:17:30,640 --> 00:17:34,240I love talking big money, but I'm just a little kid
38600:17:34,240 --> 00:17:35,960from the hood too.
38700:17:35,960 --> 00:17:37,600So you saying those, those,
38800:17:37,600 --> 00:17:38,880
- I grew up in Oak Cliff, man.
38900:17:38,880 --> 00:17:39,720
- Gotcha.
39000:17:39,720 --> 00:17:41,120So when you're saying those numbers,
39100:17:41,120 --> 00:17:42,480I'm sitting here like,
39200:17:42,480 --> 00:17:44,000they just got that money sitting there,
39300:17:44,000 --> 00:17:45,960waiting for you to call.
39400:17:45,960 --> 00:17:48,960And because, like, for instance, me,
39500:17:48,960 --> 00:17:51,360most of my money is invested in stuff,
39600:17:51,360 --> 00:17:55,280which makes it very difficult when I need it,
39700:17:55,280 --> 00:17:58,880because there's all this red tape around, you know,
39800:17:58,880 --> 00:18:03,320just the stuff, but these people who you reach out to,
39900:18:03,320 --> 00:18:06,080is it just, yeah, they got that 100, 200,
40000:18:06,080 --> 00:18:08,520just sitting there waiting for your call.
40100:18:08,520 --> 00:18:11,400
- Like a lot of people who I work with,
40200:18:11,400 --> 00:18:13,640in this space, they really will have
40300:18:13,640 --> 00:18:16,800like a hundred, 200,000 sitting in liquid cash.
40400:18:16,800 --> 00:18:17,720
- Okay, so there we go.
40500:18:17,720 --> 00:18:19,960This is a good turning point.
40600:18:19,960 --> 00:18:22,600So as you're building this business,
40700:18:22,600 --> 00:18:25,840how did you start to find these people
40800:18:25,840 --> 00:18:28,480or know who these people are?
40900:18:28,480 --> 00:18:30,080
- Well, I had to do first,
41000:18:30,080 --> 00:18:32,840was be able to recognize who really has money
41100:18:32,840 --> 00:18:33,760and who doesn't.
41200:18:33,760 --> 00:18:36,920So at first, I was going to people,
41300:18:36,920 --> 00:18:39,960while I was like, hey, this person has a Porsche 911,
41400:18:39,960 --> 00:18:41,640chances are they got the money.
41500:18:41,640 --> 00:18:44,120I'm looking at the cars, that kind of stuff.
41600:18:45,040 --> 00:18:48,040I realized, nope, this person don't have the money.
41700:18:48,040 --> 00:18:50,560All the money is sitting in that Porsche 911.
41800:18:50,560 --> 00:18:53,000All the money is sitting in that Lamborghini,
41900:18:53,000 --> 00:18:56,400but you check that bank account, nothing is there.
42000:18:56,400 --> 00:18:58,640They're living paycheck to paycheck.
42100:18:58,640 --> 00:19:01,880So I said, okay, avoid those people.
42200:19:01,880 --> 00:19:03,960I started meeting people, they didn't necessarily
42300:19:03,960 --> 00:19:07,080have those kind of cars, regular cars,
42400:19:07,080 --> 00:19:11,200but then they're able to write a check for 100,000
42500:19:11,200 --> 00:19:14,240and it goes through into the fund account.
42600:19:14,240 --> 00:19:16,240I'm like, hold up.
42700:19:16,240 --> 00:19:17,520As I'm on to something, okay?
42800:19:17,520 --> 00:19:19,360So I started paying attention to little things
42900:19:19,360 --> 00:19:21,440people said, what do they do?
43000:19:21,440 --> 00:19:24,200Someone says, hey, I like to go big game hunting
43100:19:24,200 --> 00:19:27,440in East Africa or South Africa.
43200:19:27,440 --> 00:19:30,680Yeah, okay, that's not normal for most people.
43300:19:30,680 --> 00:19:31,680He talked to you.
43400:19:31,680 --> 00:19:33,520(laughing)
43500:19:33,520 --> 00:19:34,360
- Happy?
43600:19:34,360 --> 00:19:35,520That's what happy?
43700:19:35,520 --> 00:19:36,680Yeah.
43800:19:36,680 --> 00:19:37,520Yeah.
43900:19:37,520 --> 00:19:39,320'Cause I'm talking to him and we connect because, look,
44000:19:39,320 --> 00:19:43,120I've been on Safari where we did what's called glamping,
44100:19:43,120 --> 00:19:46,600and you sit like you have like this really nice tan
44200:19:46,600 --> 00:19:47,920and everything, not the regular tan,
44300:19:47,920 --> 00:19:50,400but really nice tan, nice view and everything,
44400:19:50,400 --> 00:19:52,800but you're out there looking at lines,
44500:19:52,800 --> 00:19:54,760hyenas and stuff, so I've done this.
44600:19:54,760 --> 00:19:55,920I connect with them.
44700:19:55,920 --> 00:19:58,480
- Joseph, I'm gonna cut you off right quick and I apologize,
44800:19:58,480 --> 00:20:00,920but I wanna make sure that everyone is paying attention
44900:20:00,920 --> 00:20:04,640to this because although we're talking about private equity,
45000:20:04,640 --> 00:20:08,560a lot of you who are watching this are real estate agents
45100:20:08,560 --> 00:20:13,100who wanna do more hiring deals and work with hiring people,
45200:20:13,100 --> 00:20:17,020this is straight up networking right here.
45300:20:17,020 --> 00:20:20,860This is something you can apply to any business, okay.
45400:20:20,860 --> 00:20:23,540So, sorry to cut you off.
45500:20:23,540 --> 00:20:24,380
- Oh no you've got it.
45600:20:24,380 --> 00:20:27,540
- I just wanted to make sure everybody's ears perked up
45700:20:27,540 --> 00:20:31,220'cause this is real, this is gems you're dropping right now.
45800:20:31,220 --> 00:20:32,380Okay.
45900:20:32,380 --> 00:20:35,060
- African Safari, y'all connected on that glamping.
46000:20:35,060 --> 00:20:37,900
- Glamping, we connect on stuff like that.
46100:20:37,900 --> 00:20:40,420Most people who go on safaris, they stay in the tent,
46200:20:40,420 --> 00:20:42,420out in the field with the snakes.
46300:20:42,420 --> 00:20:45,620I tell them, no, I say I pay the extra money.
46400:20:45,620 --> 00:20:48,900I don't wanna feel like I'm on a military app on vacation.
46500:20:48,900 --> 00:20:50,860
- Right, right.
46600:20:50,860 --> 00:20:51,860
- Yes.
46700:20:51,860 --> 00:20:52,700
- Yeah.
46800:20:52,700 --> 00:20:54,780
- I say I'm slipping in tents, I'm good.
46900:20:54,780 --> 00:20:56,020
- Yeah.
47000:20:56,020 --> 00:20:59,100
- So, yeah, so just connecting on things like that,
47100:20:59,100 --> 00:21:02,460or even going vacation in East Africa,
47200:21:02,460 --> 00:21:04,420you would be surprised how many people,
47300:21:04,420 --> 00:21:07,060or even West Africa, you'd be surprised how many people
47400:21:07,060 --> 00:21:10,660who make money, they tend to vacation there
47500:21:10,660 --> 00:21:12,820versus going to Europe.
47600:21:12,820 --> 00:21:14,340
- Hmm.
47700:21:14,340 --> 00:21:15,180
- Hmm.
47800:21:15,180 --> 00:21:17,180
- Europe becomes very cliche after a while.
47900:21:17,180 --> 00:21:21,060So, they wanna do stuff different.
48000:21:21,060 --> 00:21:25,860
- But, okay, so I get that, it makes sense.
48100:21:25,860 --> 00:21:30,180How did you even get up to that,
48200:21:30,180 --> 00:21:32,620like, where were you placing yourself
48300:21:32,620 --> 00:21:34,940to even have these conversations,
48400:21:34,940 --> 00:21:36,940to even meet these people?
48500:21:36,940 --> 00:21:38,900
- Different networking events.
48600:21:38,900 --> 00:21:40,980
- Also, I'm a member, like, at a private club
48700:21:40,980 --> 00:21:42,420here in the Dallas-Fort Worth area.
48800:21:42,420 --> 00:21:45,140I was just there earlier today as a matter of fact.
48900:21:45,140 --> 00:21:48,060But, you will meet a lot of people there
49000:21:48,060 --> 00:21:51,380that there's stuff called the investor club there.
49100:21:51,380 --> 00:21:53,340You have to be a member of the club,
49200:21:53,340 --> 00:21:56,340to even go to be a part of that club.
49300:21:56,340 --> 00:21:58,180And so, just putting yourself in those rooms,
49400:21:58,180 --> 00:22:02,180very exclusive rooms, go to, I would say,
49500:22:02,180 --> 00:22:04,980and then also, who you talk to,
49600:22:04,980 --> 00:22:08,380I would say go to places where
49700:22:08,380 --> 00:22:09,740you know where money is gonna be.
49800:22:09,740 --> 00:22:12,900So, I don't go to a, like, a cheap gym.
49900:22:12,900 --> 00:22:16,180I go to a lifetime, maybe Cowboys fit.
50000:22:16,180 --> 00:22:20,620If the gym is 100 plus, lifetime is what,
50100:22:20,620 --> 00:22:23,020$200, $220 almost.
50200:22:23,020 --> 00:22:25,780So, you paying that much to be at a gym,
50300:22:25,780 --> 00:22:27,460that automatically priceless out the people
50400:22:27,460 --> 00:22:29,220who can't afford to be there.
50500:22:29,220 --> 00:22:31,060Now, when you're having a conversation,
50600:22:31,060 --> 00:22:34,460it's more likely that you're having a conversation
50700:22:34,460 --> 00:22:37,660with someone who can afford what you're offering.
50800:22:37,660 --> 00:22:40,900I love that you brought up lifetime.
50900:22:40,900 --> 00:22:45,300Gems like lifetime, equinox, all those high-up gyms.
51000:22:45,300 --> 00:22:51,420For one, I used to work in a gym, back in high school.
51100:22:51,420 --> 00:22:52,500I worked in a gym.
51200:22:52,500 --> 00:22:55,860Gym rates are negotiable.
51300:22:55,860 --> 00:22:57,220Memberships are negotiable.
51400:22:57,220 --> 00:23:00,180But if you're listening to this and you're under,
51500:23:00,180 --> 00:23:02,780I wanna say under 40, right?
51600:23:02,780 --> 00:23:07,780Most places like gyms, even the private clubs.
51700:23:07,780 --> 00:23:10,220I have a membership set at all of them.
51800:23:10,220 --> 00:23:12,860And most of them offer a discount.
51900:23:12,860 --> 00:23:15,620If you're under 40, under 35,
52000:23:15,620 --> 00:23:18,460you get discount to these places.
52100:23:18,460 --> 00:23:21,980Like for the private club that I'm a part of,
52200:23:21,980 --> 00:23:24,580my discount was significant.
52300:23:24,580 --> 00:23:28,740It was significant just because I was under a certain age.
52400:23:28,740 --> 00:23:31,700And then they had a little referral program.
52500:23:31,700 --> 00:23:35,300So as you introduce people there and they get memberships,
52600:23:35,300 --> 00:23:37,340you get money off of your membership.
52700:23:37,340 --> 00:23:39,900So I ended up making it free for me.
52800:23:39,900 --> 00:23:40,740
- Exactly.
52900:23:40,740 --> 00:23:43,380
- My house does it for dining, so I can eat free.
53000:23:43,380 --> 00:23:44,220
- Exactly.
53100:23:44,220 --> 00:23:48,660And that's how you can work the system to cut your costs,
53200:23:48,660 --> 00:23:50,980but don't think that this stuff is so--
53300:23:50,980 --> 00:23:51,900
- Overly price.
53400:23:51,900 --> 00:23:52,740
- Right.
53500:23:52,740 --> 00:23:53,900
- Yeah, it's not overly priced at all.
53600:23:53,900 --> 00:23:58,900
- It's not, you don't get the value or just going there,
53700:24:00,100 --> 00:24:02,980seeing the views, the amenities, yeah, that's all good.
53800:24:02,980 --> 00:24:04,460That's not what you're paying for.
53900:24:04,460 --> 00:24:08,940You're paying for the conversations and the access
54000:24:08,940 --> 00:24:11,660that those types of places get you, right?
54100:24:11,660 --> 00:24:15,940Like, I mean, there's a lot of things out there
54200:24:15,940 --> 00:24:18,220such as charity events or greats.
54300:24:18,220 --> 00:24:19,740
- Charities are great, yes.
54400:24:19,740 --> 00:24:20,580
- Absolutely.
54500:24:20,580 --> 00:24:21,420
- You wanna be at those.
54600:24:21,420 --> 00:24:23,500
- You wanna be at charity events.
54700:24:23,500 --> 00:24:25,260Because what are people doing there?
54800:24:25,260 --> 00:24:26,900They're donating money.
54900:24:26,900 --> 00:24:27,740
- Donating money.
55000:24:27,740 --> 00:24:29,820
- Chances are, they're donating money.
55100:24:29,820 --> 00:24:33,780They make a lot of money because they're trying to get taxes
55200:24:33,780 --> 00:24:36,660down as being someone like myself.
55300:24:36,660 --> 00:24:38,260And being someone like myself.
55400:24:38,260 --> 00:24:39,460I'm sorry, it's the truth.
55500:24:39,460 --> 00:24:40,300
- Yeah, yeah, yeah.
55600:24:40,300 --> 00:24:41,260
- Everybody is just doing this stuff
55700:24:41,260 --> 00:24:42,940about the kind of hard, hard, hard times.
55800:24:42,940 --> 00:24:46,300
- So that person was doing the big donations.
55900:24:46,300 --> 00:24:48,460You know, they got a big tax bill,
56000:24:48,460 --> 00:24:50,020and they gonna ask for their receipt.
56100:24:50,020 --> 00:24:51,380
- Exactly.
56200:24:51,380 --> 00:24:53,100
- Tell them to donate half a million
56300:24:53,100 --> 00:24:55,380and walk away with no receipt and see if they do it.
56400:24:55,380 --> 00:24:56,380
- Oh, it's not happening.
56500:24:56,380 --> 00:24:57,220It's not happening.
56600:24:57,220 --> 00:24:58,220But that's real.
56700:24:58,220 --> 00:25:03,220And especially in real estate, where for one,
56800:25:03,220 --> 00:25:05,860we don't get taxes taken out,
56900:25:05,860 --> 00:25:08,900'cause we're commission and with that commission,
57000:25:08,900 --> 00:25:11,020that tax rate can be very high.
57100:25:11,020 --> 00:25:14,540There's only so much you can write off,
57200:25:14,540 --> 00:25:17,380but think about like for one,
57300:25:17,380 --> 00:25:21,500what rooms can you get in that can end up being tax deductible?
57400:25:21,500 --> 00:25:23,100Like my memberships.
57500:25:23,100 --> 00:25:25,580Tax deductible because I'm working.
57600:25:25,580 --> 00:25:28,620I'm always talking business when I go to the club.
57700:25:28,620 --> 00:25:30,900And I'm not talking about the dance club.
57800:25:30,900 --> 00:25:32,860I'm literally talking about the private clubs.
57900:25:32,860 --> 00:25:33,860
- The private clubs, yeah.
58000:25:33,860 --> 00:25:37,260
- Okay, country clubs, whatever you wanna call them.
58100:25:37,260 --> 00:25:38,980These events that you go to,
58200:25:38,980 --> 00:25:42,500that you have to make donations at your tickets,
58300:25:42,500 --> 00:25:44,980your donation amount, all of that.
58400:25:44,980 --> 00:25:48,900Like that's what helps you when it comes to tax time.
58500:25:48,900 --> 00:25:50,940And you're getting that double benefit
58600:25:50,940 --> 00:25:54,980because you are building your business.
58700:25:54,980 --> 00:25:56,660
- Because you're meeting those people.
58800:25:56,660 --> 00:25:57,700
- Yep.
58900:25:57,700 --> 00:26:00,620
- So you start meeting these people
59000:26:00,620 --> 00:26:05,260and you're realizing who has money, this and the other.
59100:26:05,260 --> 00:26:10,140Do you already have deals when you approach them
59200:26:10,140 --> 00:26:14,420or is it more so, hey, I'm just trying to build a relationship
59300:26:14,420 --> 00:26:16,980and I'm gonna see if they'd be interested.
59400:26:16,980 --> 00:26:19,980Like what's your next step once you identify these people?
59500:26:19,980 --> 00:26:22,180
- What I do is I build the relationship.
59600:26:22,180 --> 00:26:27,180Starting now, I just talked to them, maybe do a FaceTime.
59700:26:27,180 --> 00:26:28,780Like I'll give you an example.
59800:26:28,780 --> 00:26:31,460I did online networking before.
59900:26:31,460 --> 00:26:34,100This was last year, end of last year.
60000:26:34,100 --> 00:26:37,340And a guy, he maybe knew me for a week or two weeks.
60100:26:37,340 --> 00:26:39,220He invested a hundred thousand with me.
60200:26:39,220 --> 00:26:41,820We had a conversation maybe twice,
60300:26:41,820 --> 00:26:43,540do FaceTime and phone call.
60400:26:43,540 --> 00:26:46,900Same thing happened at the beginning of this year.
60500:26:46,900 --> 00:26:49,300Had a conversation maybe twice.
60600:26:49,300 --> 00:26:51,300Also, because I do webinars as well.
60700:26:51,300 --> 00:26:53,260Like I do a webinar where I teach people
60800:26:53,260 --> 00:26:56,300the 10 benefits of investing to multi-family.
60900:26:56,300 --> 00:26:57,940So they would've already started a webinar
61000:26:57,940 --> 00:26:59,820when they reach out or something.
61100:26:59,820 --> 00:27:02,740So that's automatically, they know, hey, this guy,
61200:27:02,740 --> 00:27:03,700he's with this company.
61300:27:03,700 --> 00:27:05,540This company has two billion
61400:27:05,540 --> 00:27:07,540and X number of funds on the management.
61500:27:07,540 --> 00:27:08,660They obviously trust him.
61600:27:08,660 --> 00:27:10,460Okay, I'll park my money with him too.
61700:27:10,460 --> 00:27:15,020
- I'm gonna ask you a question.
61800:27:15,020 --> 00:27:17,620'Cause...
61900:27:19,420 --> 00:27:20,500You're a black man.
62000:27:20,500 --> 00:27:22,860You're a big black man.
62100:27:22,860 --> 00:27:23,700
- I know about the good thing.
62200:27:23,700 --> 00:27:24,540
- Black question.
62300:27:24,540 --> 00:27:26,300
- Yeah, he's milled to...
62400:27:26,300 --> 00:27:27,300All the muscles.
62500:27:27,300 --> 00:27:28,140
- Six three.
62600:27:28,140 --> 00:27:28,980
- Six three.
62700:27:28,980 --> 00:27:30,660You're a big black man.
62800:27:30,660 --> 00:27:31,500Okay.
62900:27:31,500 --> 00:27:34,180And I can only imagine who you're approaching
63000:27:34,180 --> 00:27:38,060for this type of money and everything.
63100:27:38,060 --> 00:27:43,940Did you or do you face adversities or trusts with people?
63200:27:47,020 --> 00:27:49,660I mean, how do you break that barrier?
63300:27:49,660 --> 00:27:50,740'Cause I know that it exists.
63400:27:50,740 --> 00:27:52,260Please don't tell me that it doesn't exist.
63500:27:52,260 --> 00:27:53,500
- No, it exists, trust me.
63600:27:53,500 --> 00:27:57,420How do you break down those walls and barriers?
63700:27:57,420 --> 00:27:59,820
- By being extremely knowledgeable.
63800:27:59,820 --> 00:28:01,460When I first set my fund up,
63900:28:01,460 --> 00:28:06,700the private placement memorandum is 60 something pages.
64000:28:06,700 --> 00:28:10,620The subscription agreement is roughly 50 to 60 something pages.
64100:28:10,620 --> 00:28:12,340
- And I don't know what need are those already, way.
64200:28:12,340 --> 00:28:15,100
- Exactly, but the operating agreement,
64300:28:15,100 --> 00:28:18,220that's like another what 40, 50 pages.
64400:28:18,220 --> 00:28:22,720I read through every single one of them, word for word.
64500:28:22,720 --> 00:28:25,380If they ask me, when I sit in,
64600:28:25,380 --> 00:28:27,460and I've sat in the room with a guy,
64700:28:27,460 --> 00:28:30,900older white guy, oil and gas for 30 years.
64800:28:30,900 --> 00:28:35,260Yeah, and he asked me questions.
64900:28:35,260 --> 00:28:36,660All of them asked me questions.
65000:28:36,660 --> 00:28:38,500I'm the only black person in the room
65100:28:38,500 --> 00:28:40,620asking me questions, questions, questions.
65200:28:40,620 --> 00:28:43,020And I'm just answering, boom, boom.
65300:28:43,020 --> 00:28:45,380Do you feel like he was asking those questions to?
65400:28:45,380 --> 00:28:46,900
- I know why they asked those questions.
65500:28:46,900 --> 00:28:50,220They want to test me because obviously, again, like you said,
65600:28:50,220 --> 00:28:53,820big black guy, look like I played football.
65700:28:53,820 --> 00:28:58,380They're not thinking athlete, private equity fund manager.
65800:28:58,380 --> 00:29:02,540No, they think athlete, throw a football, jibble ball,
65900:29:02,540 --> 00:29:03,660is different.
66000:29:03,660 --> 00:29:05,780So you have to know your stuff.
66100:29:05,780 --> 00:29:09,300And so when I knew every single thing that they was asking,
66200:29:09,300 --> 00:29:11,900and even more than what they even knew,
66300:29:11,900 --> 00:29:14,460it was like, okay, this guy, wow.
66400:29:14,460 --> 00:29:18,140
- Yeah, and that's true.
66500:29:18,140 --> 00:29:21,980I've definitely said that here on this podcast
66600:29:21,980 --> 00:29:26,540before, even about how you present yourself,
66700:29:26,540 --> 00:29:29,980like, yeah, be the smartest person in the room,
66800:29:29,980 --> 00:29:31,900but don't be the loudest.
66900:29:31,900 --> 00:29:32,900
- Exactly.
67000:29:32,900 --> 00:29:33,740
- Right?
67100:29:33,740 --> 00:29:38,740And like the rooms, I tend to be very mysterious.
67200:29:38,740 --> 00:29:41,660Like even the room we were in.
67300:29:41,660 --> 00:29:44,980You know, I'm a very introverted person,
67400:29:44,980 --> 00:29:47,340but I'm very mysterious.
67500:29:47,340 --> 00:29:51,660And then when you open your mouth and you start talking
67600:29:51,660 --> 00:29:54,420and doing whatever performance you gotta do,
67700:29:54,420 --> 00:29:56,020then they're like, oh snap.
67800:29:56,020 --> 00:29:59,420Like this guy, where did he come from?
67900:29:59,420 --> 00:30:02,300Then you're gonna see everybody wants to know.
68000:30:02,300 --> 00:30:06,740And so I definitely know what you're talking about.
68100:30:06,740 --> 00:30:08,500And that starts with being knowledgeable, yeah.
68200:30:08,500 --> 00:30:10,540
- Yeah, starts with being knowledgeable.
68300:30:10,540 --> 00:30:12,020If you don't know something,
68400:30:12,020 --> 00:30:14,020and if you don't know the answer to something, let 'em know.
68500:30:14,020 --> 00:30:15,620Look, I can figure this out.
68600:30:15,620 --> 00:30:16,460
- I can figure this out.
68700:30:16,460 --> 00:30:17,300
- I can figure this out.
68800:30:17,300 --> 00:30:18,140
- Yes, yes.
68900:30:18,140 --> 00:30:18,980
- I figure it out.
69000:30:18,980 --> 00:30:18,980
- Yes.
69100:30:18,980 --> 00:30:19,940
- Is somewhere in my private place,
69200:30:19,940 --> 00:30:21,220Memorandum was something.
69300:30:21,220 --> 00:30:22,820Probably forgot, but I figure it out.
69400:30:22,820 --> 00:30:24,300I'll send it to you.
69500:30:24,300 --> 00:30:27,700
- Yes, that's something I feel like more people need
69600:30:27,700 --> 00:30:29,300to be comfortable with.
69700:30:29,300 --> 00:30:32,820And I think that that shows a different confidence.
69800:30:32,820 --> 00:30:35,620When you say you don't know something,
69900:30:35,620 --> 00:30:37,860but you're gonna figure it out, that shows that,
70000:30:37,860 --> 00:30:39,660hey, I'm comfortable with what I'm doing.
70100:30:39,660 --> 00:30:41,540I'm comfortable with what I'm saying.
70200:30:41,540 --> 00:30:44,620And I'm willing to admit that I don't necessarily
70300:30:44,620 --> 00:30:46,100know the answer to this,
70400:30:46,100 --> 00:30:49,540but I will get back to you versus that person
70500:30:49,540 --> 00:30:52,820who tries to make up what they think it is.
70600:30:52,820 --> 00:30:54,900And then that person on the other side saying,
70700:30:54,900 --> 00:30:55,900oh, this is very important.
70800:30:55,900 --> 00:30:56,740
- Yeah.
70900:30:56,740 --> 00:30:59,980And let's just be completely transparent.
71000:30:59,980 --> 00:31:03,780From going from being a wholesaler, selling contracts
71100:31:03,780 --> 00:31:05,260to in buyers,
71200:31:05,260 --> 00:31:06,460I need nothing about this world.
71300:31:06,460 --> 00:31:08,100Why, first, I started.
71400:31:08,100 --> 00:31:10,060So I had to educate myself.
71500:31:10,060 --> 00:31:12,900And that educating myself on real estate so much,
71600:31:12,900 --> 00:31:15,260I didn't know about retirement accounts.
71700:31:15,260 --> 00:31:17,460But when I started talking to people about retirement accounts,
71800:31:17,460 --> 00:31:18,500that's okay.
71900:31:18,500 --> 00:31:21,540As a fund manager, I can't just know real estate,
72000:31:21,540 --> 00:31:24,620how to pick a good deal to invest in for my investors.
72100:31:24,620 --> 00:31:28,060I need to also know how to self-direct the IRA's work.
72200:31:28,060 --> 00:31:30,820So I need to know how that works.
72300:31:30,820 --> 00:31:33,260I need to know how trust works.
72400:31:33,260 --> 00:31:35,820Everything in the financial perspective,
72500:31:35,820 --> 00:31:36,820I need to know how it works.
72600:31:36,820 --> 00:31:39,100How long it should take to roll something over
72700:31:39,100 --> 00:31:41,220to get funds to me?
72800:31:41,220 --> 00:31:42,940I should know all of that stuff.
72900:31:42,940 --> 00:31:46,340It's a lot broader than just picking a deal.
73000:31:46,340 --> 00:31:47,180
- Yep.
73100:31:47,180 --> 00:31:50,260And that parallels with even real estate agency,
73200:31:50,260 --> 00:31:54,620you know, you don't just want to know how to sell a house
73300:31:54,620 --> 00:31:55,820or help a buyer,
73400:31:55,820 --> 00:31:59,700but when you start working with high net worth individuals,
73500:31:59,700 --> 00:32:03,740you want to know how our tax is going to affect
73600:32:03,740 --> 00:32:05,180what they're doing with you
73700:32:05,180 --> 00:32:07,940and what recommendations can you provide
73800:32:07,940 --> 00:32:10,060to lower their tax liability?
73900:32:10,060 --> 00:32:12,660Say they have a whole bunch of equity in the home,
74000:32:12,660 --> 00:32:14,620you want to be able to provide their recommendation
74100:32:14,620 --> 00:32:18,140to roll X amount over to another property or put it here,
74200:32:18,140 --> 00:32:20,660so you won't get taxes like--
74300:32:20,660 --> 00:32:22,660
- Plus in my business too,
74400:32:22,660 --> 00:32:26,300with you lot of someone about something like taxes,
74500:32:26,300 --> 00:32:29,380how much they can get reducing their taxes
74600:32:29,380 --> 00:32:31,140because you're the manager of the fund,
74700:32:31,140 --> 00:32:32,740you can't get sued.
74800:32:32,740 --> 00:32:33,580
- I'm sure.
74900:32:33,580 --> 00:32:35,140
- Like you can get sued a lot in my business.
75000:32:35,140 --> 00:32:35,980
- Yeah.
75100:32:35,980 --> 00:32:37,220
- And there are also,
75200:32:37,220 --> 00:32:39,540also if you don't do something right,
75300:32:39,540 --> 00:32:41,860misappropriate funds, don't invest in something
75400:32:41,860 --> 00:32:44,220like you said you're just gonna invest in,
75500:32:44,220 --> 00:32:46,500you can find yourself in federal prison.
75600:32:46,500 --> 00:32:47,340
- I'm sure.
75700:32:47,340 --> 00:32:50,340That's like, like American greed right there.
75800:32:50,340 --> 00:32:51,340
- I tell people,
75900:32:51,340 --> 00:32:53,260I look, a cage is a cage and,
76000:32:53,260 --> 00:32:54,900I mean, you can be,
76100:32:54,900 --> 00:32:57,260I can be playing tennis with a bunch of people
76200:32:57,260 --> 00:32:58,540or basketball,
76300:32:58,540 --> 00:33:00,940it's still a cage, it's still a cage.
76400:33:00,940 --> 00:33:05,260So, okay, we made some good traction,
76500:33:05,260 --> 00:33:06,540my head is spinning.
76600:33:06,540 --> 00:33:11,900When it comes to the actual deals, right?
76700:33:11,900 --> 00:33:15,700So the community is that you're going to invest in,
76800:33:15,700 --> 00:33:16,900how does that go down?
76900:33:16,900 --> 00:33:18,540Do you source the deals?
77000:33:18,540 --> 00:33:20,100Do people bring them to you?
77100:33:20,100 --> 00:33:21,180
- People bring them to me.
77200:33:21,180 --> 00:33:22,020
- Okay.
77300:33:22,020 --> 00:33:23,820
- I would say, so syndicators,
77400:33:23,820 --> 00:33:25,540so that's why I always make it very clear,
77500:33:25,540 --> 00:33:26,540like if people,
77600:33:26,540 --> 00:33:29,260so when I say I invest in multi-family,
77700:33:29,260 --> 00:33:31,180syndicators might see me as competition,
77800:33:31,180 --> 00:33:32,460so I make it very clear to them,
77900:33:32,460 --> 00:33:34,300you are not my competition.
78000:33:34,300 --> 00:33:36,140My competition is another fund.
78100:33:36,140 --> 00:33:40,700You, I will be willing to work with you.
78200:33:40,700 --> 00:33:43,780I wanna work with the best syndicators,
78300:33:43,780 --> 00:33:47,260because the better the deals in the stronger,
78400:33:47,260 --> 00:33:50,460the syndicators/operators are,
78500:33:50,460 --> 00:33:52,140over those deals,
78600:33:52,140 --> 00:33:54,340the better returns it is for my investors.
78700:33:54,340 --> 00:33:58,540
- Okay.
78800:33:58,540 --> 00:34:00,580What's going through my head right now,
78900:34:00,580 --> 00:34:03,700especially since you brought up the syndicators is,
79000:34:03,700 --> 00:34:08,700okay, you have you plus all of your investors on your side,
79100:34:08,700 --> 00:34:12,180then the syndicators and everyone who they have involved
79200:34:12,180 --> 00:34:13,420on their side.
79300:34:13,420 --> 00:34:15,900So these returns,
79400:34:15,900 --> 00:34:18,340are they being split with everybody?
79500:34:18,340 --> 00:34:20,660Like, it's blended, right?
79600:34:20,660 --> 00:34:23,260So you're not getting paid off the returns
79700:34:23,260 --> 00:34:25,700of just one property in my fund.
79800:34:25,700 --> 00:34:28,260One fund will have 1,000 plus units in it.
79900:34:28,260 --> 00:34:31,020You're getting paid from all 1,000 plus units.
80000:34:31,020 --> 00:34:34,180Now that return on your investment is all blended
80100:34:34,180 --> 00:34:36,580on an annual basis,
80200:34:36,580 --> 00:34:38,900because you own units of the fund.
80300:34:38,900 --> 00:34:39,900
- Yeah.
80400:34:39,900 --> 00:34:42,900
- And this is great for people who are in real estate
80500:34:42,900 --> 00:34:43,940full of time.
80600:34:43,940 --> 00:34:47,260If you're flipping houses, if you're wholesaling,
80700:34:47,260 --> 00:34:49,780you're a realtor, you making 200,000 plus a year,
80800:34:49,780 --> 00:34:51,460and you invest into the fund,
80900:34:51,460 --> 00:34:54,740you're getting tax benefits.
81000:34:54,740 --> 00:34:56,020You're writing off,
81100:34:56,020 --> 00:34:57,100like this year alone,
81200:34:57,100 --> 00:34:59,460you're writing off up to 80% of what you're investing.
81300:34:59,460 --> 00:35:01,500
- Oh, okay.
81400:35:01,500 --> 00:35:04,940Let's dissect that.
81500:35:04,940 --> 00:35:06,340Okay.
81600:35:06,340 --> 00:35:10,020The tax benefits of this, 80% is a lot.
81700:35:10,020 --> 00:35:14,340And here it goes, my head is like,
81800:35:14,340 --> 00:35:17,940"Wait, so I might get a refund by doing this stuff?"
81900:35:17,940 --> 00:35:21,020I haven't got a refund since high school, damn, man.
82000:35:21,020 --> 00:35:22,580
- But,
82100:35:22,580 --> 00:35:23,420
- But,
82200:35:23,420 --> 00:35:26,220okay, the tax advantages of this,
82300:35:26,980 --> 00:35:29,740what do those look like?
82400:35:29,740 --> 00:35:32,820
- You get to, when we do these cost-seq studies
82500:35:32,820 --> 00:35:33,820on these properties,
82600:35:33,820 --> 00:35:37,420to see how much was lost
82700:35:37,420 --> 00:35:40,500from doing all the renovations and stuff to the properties,
82800:35:40,500 --> 00:35:42,500then you get to take advantage of what's called
82900:35:42,500 --> 00:35:44,780bonus depreciation.
83000:35:44,780 --> 00:35:46,460Now, that allows you,
83100:35:46,460 --> 00:35:49,700let's say you invest 100,000,
83200:35:49,700 --> 00:35:52,940that allows you to write off up to 80,000
83300:35:52,940 --> 00:35:55,180of that investment this year.
83400:35:55,180 --> 00:35:59,220On top of that, you get quarterly distributions,
83500:35:59,220 --> 00:36:00,860you get monthly distributions,
83600:36:00,860 --> 00:36:03,620depending on which operators I work with.
83700:36:03,620 --> 00:36:04,980You're also getting,
83800:36:04,980 --> 00:36:06,740let's say we do cash-yay refinances,
83900:36:06,740 --> 00:36:09,540which we are not doing in this current market.
84000:36:09,540 --> 00:36:11,580Let's say we do a cash-yay refinance,
84100:36:11,580 --> 00:36:13,180you get paid from that as well.
84200:36:13,180 --> 00:36:16,940So, and then when we sell the property,
84300:36:16,940 --> 00:36:19,260you get paid from that as well.
84400:36:19,260 --> 00:36:24,020
- So, within, with an investor on your end,
84500:36:24,020 --> 00:36:27,620are you, so say I gave you 100,000 dollars, right?
84600:36:27,620 --> 00:36:32,180Would I know specifically what property I'm investing in,
84700:36:32,180 --> 00:36:34,060and is it just one property,
84800:36:34,060 --> 00:36:37,260or do you work kind of like a mutual fund
84900:36:37,260 --> 00:36:41,420where it's like, I'm gonna put 20 of his here, 30 here,
85000:36:41,420 --> 00:36:45,100where it's diversified on different projects.
85100:36:45,100 --> 00:36:46,260
- It's diversified.
85200:36:46,260 --> 00:36:47,100
- Okay.
85300:36:47,100 --> 00:36:50,460
- Now, you'll know the properties that are already in the fund.
85400:36:50,460 --> 00:36:52,380So, when we're talking prior, I'll tell you,
85500:36:52,380 --> 00:36:57,020hey, for example, Charleston South Carolina property,
85600:36:57,020 --> 00:36:59,500that I have, that's 160 units.
85700:36:59,500 --> 00:37:01,500Then I'll tell you about a Phoenix property
85800:37:01,500 --> 00:37:04,020that's 400 plus units, that's in the fund.
85900:37:04,020 --> 00:37:07,100I will show you those, you will see the numbers on them.
86000:37:07,100 --> 00:37:09,220And then, those are properties,
86100:37:09,220 --> 00:37:11,260every property I acquire after
86200:37:11,260 --> 00:37:13,740is gonna be extremely similar to those.
86300:37:13,740 --> 00:37:20,220
- And are these returns similar to like,
86400:37:20,220 --> 00:37:22,540you know, just like normal real estate appreciation,
86500:37:22,540 --> 00:37:25,380or is there a bigger upside with?
86600:37:25,380 --> 00:37:27,580
- It's a bigger upside because it's more units, right?
86700:37:27,580 --> 00:37:29,660So, better economies of scale.
86800:37:29,660 --> 00:37:34,460Also, what in multi-family, it's not like single family.
86900:37:34,460 --> 00:37:39,060You know, in single family, it's based off Cumps, ARV.
87000:37:39,060 --> 00:37:42,420So, you say, hey, you could put a million dollars
87100:37:42,420 --> 00:37:43,540into your house.
87200:37:43,540 --> 00:37:46,140If this is a $250,000 neighborhood,
87300:37:46,140 --> 00:37:48,420I promise you you won't get past $250,000.
87400:37:48,420 --> 00:37:49,260
- Right.
87500:37:49,260 --> 00:37:51,420
- Right, yeah. - True.
87600:37:51,420 --> 00:37:54,020
- But the thing is though, in multi-family,
87700:37:54,020 --> 00:37:57,020we have what's called forced appreciation.
87800:37:57,020 --> 00:37:59,580An apartment building is ran more like a business
87900:37:59,580 --> 00:38:01,980than it is a piece of real estate.
88000:38:01,980 --> 00:38:04,540So, what we'll do is,
88100:38:04,540 --> 00:38:07,100cover parking, charge for that.
88200:38:07,100 --> 00:38:09,980We'll cover, we might put a vending machine,
88300:38:09,980 --> 00:38:11,700little things that add money,
88400:38:11,700 --> 00:38:13,620depending on if it's class C or not,
88500:38:13,620 --> 00:38:17,980you could add in maybe a paid washing machines or something.
88600:38:18,900 --> 00:38:21,140You can renovate the units.
88700:38:21,140 --> 00:38:25,140So, you go and you renovate 200 of the units in a building.
88800:38:25,140 --> 00:38:30,020Now you can charge more rent, $400 plus in rent.
88900:38:30,020 --> 00:38:31,340You can increase it.
89000:38:31,340 --> 00:38:34,580All those little increases in value,
89100:38:34,580 --> 00:38:36,420raises the value of the building.
89200:38:36,420 --> 00:38:39,180I know of a property right now,
89300:38:39,180 --> 00:38:43,180gained what, a million dollars in value
89400:38:43,180 --> 00:38:44,420over the year of holding it.
89500:38:46,180 --> 00:38:50,420What, a million dollars over a year?
89600:38:50,420 --> 00:38:51,260
- Of holding it.
89700:38:51,260 --> 00:38:54,340I know of a property right now that gained.
89800:38:54,340 --> 00:38:55,940So, I was telling me about it,
89900:38:55,940 --> 00:38:58,740gained over a million dollars in value.
90000:38:58,740 --> 00:39:02,820
- 12 months. - 12 months just by adding all these things.
90100:39:02,820 --> 00:39:06,100
- So, at that point,
90200:39:06,100 --> 00:39:10,100who do you get to make the decision?
90300:39:10,100 --> 00:39:11,780
- You hold that property still.
90400:39:11,780 --> 00:39:13,220
- 'Cause you're still adding value.
90500:39:13,220 --> 00:39:15,900But I've seen some operators
90600:39:15,900 --> 00:39:18,140but they've showed me their track records
90700:39:18,140 --> 00:39:20,700and they've made a bond the property for,
90800:39:20,700 --> 00:39:23,940let's say, $4.75 million.
90900:39:23,940 --> 00:39:27,580And they've sold it at $9.15 million three years later.
91000:39:27,580 --> 00:39:30,260I've actually seen that.
91100:39:30,260 --> 00:39:32,300So, that's the power of multifamily
91200:39:32,300 --> 00:39:34,140when you're adding value to these buildings
91300:39:34,140 --> 00:39:36,500and you're raising that rent up.
91400:39:36,500 --> 00:39:39,300
- So, who makes those decisions?
91500:39:39,300 --> 00:39:44,300
- The operators, the lead GPs, lead general partners.
91600:39:44,460 --> 00:39:46,900
- Okay. - Lead general partners.
91700:39:46,900 --> 00:39:51,460I'm literally like, right now.
91800:39:51,460 --> 00:39:56,460Okay, so, breakdown the structure of everyone
91900:39:56,460 --> 00:39:59,540that comes together to make this deal.
92000:39:59,540 --> 00:40:01,820So, you say, lead general partners.
92100:40:01,820 --> 00:40:03,580
- Yeah, general partners. - Limited partners.
92200:40:03,580 --> 00:40:04,500
- Limited partners.
92300:40:04,500 --> 00:40:08,020You might need someone to guarantee loans.
92400:40:08,020 --> 00:40:10,980You call them KP's, I forget what that stands for.
92500:40:10,980 --> 00:40:13,860But, keep partners, that's what stands for.
92600:40:13,860 --> 00:40:15,500KP's key partners.
92700:40:15,500 --> 00:40:17,660So, you have those three.
92800:40:17,660 --> 00:40:19,420And the reason why you might need a key partners
92900:40:19,420 --> 00:40:22,100because if you're getting into multifamily,
93000:40:22,100 --> 00:40:25,180because you say, well, shoot, I want to be a general partner
93100:40:25,180 --> 00:40:27,740and do that, it's kind of tough
93200:40:27,740 --> 00:40:29,900because you need to have a net worth
93300:40:29,900 --> 00:40:32,820to guarantee the loan on some of these buildings.
93400:40:32,820 --> 00:40:35,340You can't walk in and say, I want a loan
93500:40:35,340 --> 00:40:37,340for a $30 million property
93600:40:37,340 --> 00:40:39,740and your net worth isn't anywhere near $30 million.
93700:40:39,740 --> 00:40:42,380So, now you got to bring in a key partner.
93800:40:42,380 --> 00:40:44,900And now you're going to give up part of the general partnership
93900:40:44,900 --> 00:40:49,580to them meaning they might ask for 10% in return
94000:40:49,580 --> 00:40:51,020or 20% in return.
94100:40:51,020 --> 00:40:57,100So, with those roles, what's your role in all of that?
94200:40:57,100 --> 00:41:01,900You're just the manager.
94300:41:01,900 --> 00:41:02,740
- My role?
94400:41:02,740 --> 00:41:04,780
- No, so my role is fund management.
94500:41:04,780 --> 00:41:05,980I provide equity.
94600:41:05,980 --> 00:41:10,740I come in and I come in as a general partner.
94700:41:10,740 --> 00:41:13,220I come in as a limited partner.
94800:41:13,220 --> 00:41:18,220I could even be a key partner on deals based off of net worth.
94900:41:18,220 --> 00:41:20,180That's another beautiful thing to why I switch
95000:41:20,180 --> 00:41:23,060from wholesaling to this because when you're wholesaling,
95100:41:23,060 --> 00:41:25,220you don't have a net worth, not really.
95200:41:25,220 --> 00:41:28,380But when you switch over and you acquire assets,
95300:41:28,380 --> 00:41:29,540
- Oh, this is part of your life.
95400:41:29,540 --> 00:41:30,740
- You have a net worth.
95500:41:30,740 --> 00:41:37,060
- I don't know if this is going over Y'all's heads
95600:41:37,060 --> 00:41:42,060and I hope not, but this is some real real stuff.
95700:41:42,060 --> 00:41:49,540Yeah, 'cause all that is under you at that point.
95800:41:49,540 --> 00:41:51,460
- All that is under my fund.
95900:41:51,460 --> 00:41:53,660I get based off how much money is in my fund.
96000:41:53,660 --> 00:41:55,180That's part of my net worth.
96100:41:55,180 --> 00:41:57,340That would be like a few million dollars in the fund.
96200:41:57,340 --> 00:42:01,100Then you have based off of these properties
96300:42:01,100 --> 00:42:04,620every time I acquire a new property, my net worth goes up.
96400:42:05,620 --> 00:42:07,460So now I'm building my net worth
96500:42:07,460 --> 00:42:12,460and then I can go guarantee a $30 million, $40, $50 million asset
96600:42:12,460 --> 00:42:15,620and then getting paid more just because
96700:42:15,620 --> 00:42:18,420not only am I a general partner on that building,
96800:42:18,420 --> 00:42:21,740I'm also a key partner, so I can ask for more.
96900:42:21,740 --> 00:42:24,660
- And that's how the equity percentages break up,
97000:42:24,660 --> 00:42:27,060depending on what role you are.
97100:42:27,060 --> 00:42:27,900
- Exactly.
97200:42:27,900 --> 00:42:31,460
- And like my mentors, for the $30 million property,
97300:42:31,460 --> 00:42:33,660they were key partners on that.
97400:42:33,660 --> 00:42:35,300They guaranteed the loan for $30 million.
97500:42:35,300 --> 00:42:38,900The net worth is higher than $30 million, like $50 or more each.
97600:42:38,900 --> 00:42:44,540
- Okay, I'm getting it all now.
97700:42:44,540 --> 00:42:45,380I'm getting it all.
97800:42:45,380 --> 00:42:48,780So that's the assets.
97900:42:48,780 --> 00:42:53,260When it comes down to deciding whether to sell
98000:42:53,260 --> 00:42:55,460at a third point or whole, is that already said
98100:42:55,460 --> 00:43:00,260in stone ahead of time or does everyone have input into that?
98200:43:00,260 --> 00:43:02,420
- Went to sales, so all the general partners
98300:43:02,420 --> 00:43:03,940determine have input.
98400:43:03,940 --> 00:43:04,780
- Okay.
98500:43:04,780 --> 00:43:08,700
- Typically with these deals, they're gonna sell conservatively
98600:43:08,700 --> 00:43:10,340within five to seven years.
98700:43:10,340 --> 00:43:13,780Some can sell in three years.
98800:43:13,780 --> 00:43:15,140You might sell one in two years
98900:43:15,140 --> 00:43:16,860if the market is permits.
99000:43:16,860 --> 00:43:19,980Like I told you before, I've literally seen
99100:43:19,980 --> 00:43:23,340where some of these operators showed me their pitch decks.
99200:43:23,340 --> 00:43:28,340I've seen them hold a property, buy it at 4.75 million.
99300:43:28,340 --> 00:43:32,780Three years later, sell it at 9.5, 9.15 million, I mean.
99400:43:33,780 --> 00:43:36,380And you just like, that is phenomenal.
99500:43:36,380 --> 00:43:39,620And then they show a body of work
99600:43:39,620 --> 00:43:42,140where they've done this 26 times.
99700:43:42,140 --> 00:43:43,780Over 20 years.
99800:43:43,780 --> 00:43:46,420They own over 10,000 units already.
99900:43:46,420 --> 00:43:47,980These are the people I work with.
100000:43:47,980 --> 00:43:51,620
- We'll be right back.
100100:43:51,620 --> 00:43:52,820
- Attention, real estate agents,
100200:43:52,820 --> 00:43:54,420are you at a point in your business
100300:43:54,420 --> 00:43:57,940where you simply just need some systems and processes?
100400:43:57,940 --> 00:44:00,100You're selling homes, you're making money,
100500:44:00,100 --> 00:44:02,620however, everything on the back end is a mess.
100600:44:02,620 --> 00:44:04,700You need to hire some assistance
100700:44:04,700 --> 00:44:06,300or possibly even some agents,
100800:44:06,300 --> 00:44:08,700but you don't want to bring them into this whole mess
100900:44:08,700 --> 00:44:10,660of an operation that you have going on.
101000:44:10,660 --> 00:44:13,020That's exactly how I can help you.
101100:44:13,020 --> 00:44:15,860Lately, I've been helping real estate agents get
101200:44:15,860 --> 00:44:17,700to that next level and make sure
101300:44:17,700 --> 00:44:19,660that they are consistently closing,
101400:44:19,660 --> 00:44:24,020expanding into teams and running a sustainable real estate
101500:44:24,020 --> 00:44:24,540business.
101600:44:24,540 --> 00:44:25,700How are we doing this?
101700:44:25,700 --> 00:44:29,220We're implementing six pillars inside of your business
101800:44:29,220 --> 00:44:32,020to make sure that everything gets done
101900:44:32,020 --> 00:44:33,500when it's supposed to get done.
102000:44:33,500 --> 00:44:35,860Just here recently, I helped an agent
102100:44:35,860 --> 00:44:39,060who was making great money, closing deals,
102200:44:39,060 --> 00:44:41,620but she couldn't move up to the next level.
102300:44:41,620 --> 00:44:45,140She couldn't bring anybody in and she was getting unhappy.
102400:44:45,140 --> 00:44:47,660She was getting resentful to the business.
102500:44:47,660 --> 00:44:51,500I said, hey, we don't need to completely change up everything
102600:44:51,500 --> 00:44:53,060and it's not a matter of time.
102700:44:53,060 --> 00:44:55,300It's just a matter of making sure
102800:44:55,300 --> 00:44:57,660that we have everything running smoothly.
102900:44:57,660 --> 00:45:00,540I have these systems that I created when I was
103000:45:00,540 --> 00:45:03,700running my real estate team and it helped us close
103100:45:03,700 --> 00:45:06,340over 100 homes year after year.
103200:45:06,340 --> 00:45:08,820And that's the system that we are implementing
103300:45:08,820 --> 00:45:10,500into your business.
103400:45:10,500 --> 00:45:13,900So this opportunity is available for you
103500:45:13,900 --> 00:45:18,620if you want me to hand hold, if you want me to hold you by the hand
103600:45:18,620 --> 00:45:21,620and work with you one on one for six months.
103700:45:21,620 --> 00:45:24,300While we implement these systems and processes
103800:45:24,300 --> 00:45:26,420and expand your real estate business
103900:45:26,420 --> 00:45:28,820from being just a solo agent to where
104000:45:28,820 --> 00:45:31,700now you have a team that's consistently closing
104100:45:31,700 --> 00:45:35,260two to three deals a month at minimum on autopilot.
104200:45:35,260 --> 00:45:36,820If that's something that you're looking for,
104300:45:36,820 --> 00:45:38,820go ahead, click the link on this video
104400:45:38,820 --> 00:45:40,220and let's get to talking.
104500:45:40,220 --> 00:45:42,340Let's see how I can help you.
104600:45:42,340 --> 00:45:43,340All right, and we're back.
104700:45:43,340 --> 00:45:49,340So Joseph, one thing is you the first black person
104800:45:49,340 --> 00:45:54,580I have ever seen and talked to about this type of thing.
104900:45:55,820 --> 00:46:00,820So the private equity, the investing, I noted it exists.
105000:46:00,820 --> 00:46:04,340I've heard of some scammers out there.
105100:46:04,340 --> 00:46:06,500I'm not gonna, yeah, I can say any names.
105200:46:06,500 --> 00:46:08,740Yeah, yeah, I'm not gonna say any names,
105300:46:08,740 --> 00:46:13,500but why are we so,
105400:46:13,500 --> 00:46:16,860why are we not represented in this space?
105500:46:16,860 --> 00:46:21,500I would say because not many people just know about it.
105600:46:21,500 --> 00:46:23,860Like think about early when I was saying five or six
105700:46:23,860 --> 00:46:26,220being if I was six years old, you just like,
105800:46:26,220 --> 00:46:27,220what is that?
105900:46:27,220 --> 00:46:28,500Is it like a charity?
106000:46:28,500 --> 00:46:29,340Yeah.
106100:46:29,340 --> 00:46:30,860Like not many of us know about it,
106200:46:30,860 --> 00:46:32,820and they also the barrier of entry.
106300:46:32,820 --> 00:46:36,820People started now, how many people started now
106400:46:36,820 --> 00:46:40,180have 15 to $20,000 to put on the line
106500:46:40,180 --> 00:46:43,180to even get into this kind of business?
106600:46:43,180 --> 00:46:46,780You know, coming from like,
106700:46:46,780 --> 00:46:49,460where we come, like you said you grew up in the hood,
106800:46:49,460 --> 00:46:51,380I grew up in Oak Cliff, I don't know people in Oak Cliff,
106900:46:51,380 --> 00:46:55,980they got 15, $20,000 land around there, if they do,
107000:46:55,980 --> 00:46:57,220they still can't do this here,
107100:46:57,220 --> 00:46:59,340'cause they got a record account here.
107200:46:59,340 --> 00:47:01,220It's already a account, you know what that money's going.
107300:47:01,220 --> 00:47:04,180Exactly, you know where it came from, too, they can't do it.
107400:47:04,180 --> 00:47:05,180Yeah.
107500:47:05,180 --> 00:47:06,020Yep.
107600:47:06,020 --> 00:47:09,380So, okay, so with that barrier of entry,
107700:47:09,380 --> 00:47:12,020well, not just the barrier of entry,
107800:47:12,020 --> 00:47:16,500how can we get going in this?
107900:47:16,500 --> 00:47:21,020How can one get started, get going, start to build this,
108000:47:21,020 --> 00:47:23,460'cause I think this is a legacy project,
108100:47:23,460 --> 00:47:26,700like this can last, right?
108200:47:26,700 --> 00:47:29,780I could take this business public if I wanted to.
108300:47:29,780 --> 00:47:33,420Like literally, do it on the stock market, shares.
108400:47:33,420 --> 00:47:36,540It can literally change, it can change generations,
108500:47:36,540 --> 00:47:40,540it can change your family line, your lineage.
108600:47:40,540 --> 00:47:45,380Like, okay, so how does one get going in it?
108700:47:45,380 --> 00:47:48,180I would say how I got going,
108800:47:48,180 --> 00:47:49,860I can give you the blue print if I did it.
108900:47:49,860 --> 00:47:50,700Okay.
109000:47:51,100 --> 00:47:52,980I got into a wholesaling.
109100:47:52,980 --> 00:47:56,700Holes selling and being a realtor is very similar.
109200:47:56,700 --> 00:48:01,460Contrary to how most people might believe is very similar.
109300:48:01,460 --> 00:48:03,140One is making a spread on the deal,
109400:48:03,140 --> 00:48:05,420the other one is making a percentage on the deal.
109500:48:05,420 --> 00:48:07,140You both can pay commissions, though.
109600:48:07,140 --> 00:48:10,580So, build that up.
109700:48:10,580 --> 00:48:13,340When I got started in a wholesaling,
109800:48:13,340 --> 00:48:16,460I did not, when I started getting checks consistently,
109900:48:16,460 --> 00:48:19,860I never went in bought a bunch of fancy stuff.
110000:48:19,860 --> 00:48:21,700I only pay for stuff that got me in rooms
110100:48:21,700 --> 00:48:23,860around people who had more than what I had.
110200:48:23,860 --> 00:48:28,860But I kept the same old things that always had the same car,
110300:48:28,860 --> 00:48:34,380same clothes, everything, and just very conservative.
110400:48:34,380 --> 00:48:38,460And saved up money, saved up money,
110500:48:38,460 --> 00:48:40,300and when I started this fund,
110600:48:40,300 --> 00:48:42,420I actually, the first three to six months,
110700:48:42,420 --> 00:48:44,620three to eight months, I didn't even get an investor.
110800:48:44,620 --> 00:48:48,300Remember, I was sold, the reason why is because
110900:48:48,300 --> 00:48:51,420I was in East Africa on vacation,
111000:48:51,420 --> 00:48:53,060and I stayed there for three months.
111100:48:53,060 --> 00:48:56,220So people wasn't wiring funds to someone
111200:48:56,220 --> 00:48:58,740with a big African symbol sitting in the background
111300:48:58,740 --> 00:49:00,380of the off-camera.
111400:49:00,380 --> 00:49:04,140Yeah, somebody asked me, it's like, dude, are you like an African prince?
111500:49:04,140 --> 00:49:05,300I was like, no, what is it?
111600:49:05,300 --> 00:49:08,300I was like, are you an African scammer?
111700:49:08,300 --> 00:49:11,620Yeah, you said I'm hurt about that.
111800:49:11,620 --> 00:49:14,140I was like, nah, man, I'm American, yeah.
111900:49:14,140 --> 00:49:15,220Like whatever.
112000:49:15,220 --> 00:49:16,140Yeah.
112100:49:16,140 --> 00:49:19,540So, yeah, so no, I didn't get any investors that the first time,
112200:49:19,540 --> 00:49:21,900especially, and then my, like, mentors, they tell me,
112300:49:21,900 --> 00:49:23,580do you need to come back?
112400:49:23,580 --> 00:49:25,740So I have to be in there for three months, I came back.
112500:49:25,740 --> 00:49:29,860And this is after you had invested your money to get it started.
112600:49:29,860 --> 00:49:30,700Exactly.
112700:49:30,700 --> 00:49:34,940After I invested my 15, 12,000 to 15,000 dollars to get started.
112800:49:34,940 --> 00:49:35,460Okay.
112900:49:35,460 --> 00:49:37,100I need you make a return yet.
113000:49:37,100 --> 00:49:42,500So 12 to 15,000 is how much you need to pretty much set it all up.
113100:49:42,500 --> 00:49:43,180Exactly.
113200:49:43,180 --> 00:49:49,740You said they all look plus any extra money because attorneys, they might add extra money for stuff.
113300:49:49,740 --> 00:49:50,740Okay.
113400:49:50,740 --> 00:49:57,700So, just for context, I know that he mentioned wholesaling, but it doesn't have to be wholesaling
113500:49:57,700 --> 00:49:59,420that gets you that money.
113600:49:59,420 --> 00:50:01,860It can be any business you do.
113700:50:01,860 --> 00:50:03,860It can be commissioning, and making business.
113800:50:03,860 --> 00:50:04,860It can be any business you do.
113900:50:04,860 --> 00:50:05,860It can be any business you do.
114000:50:05,860 --> 00:50:06,860It can be commissioning.
114100:50:06,860 --> 00:50:07,860It can be any business you do.
114200:50:07,860 --> 00:50:08,860It can be commissioning, and making business you do.
114300:50:08,860 --> 00:50:09,860It can be any business you do.
114400:50:09,860 --> 00:50:10,860It can be commissioning, and making business you do.
114500:50:10,860 --> 00:50:11,860And then the business, 12 to 15,000 plus whatever any other attorneys, yeah, 20 fees.
114600:50:11,860 --> 00:50:12,860Okay.
114700:50:12,860 --> 00:50:13,860Next step.
114800:50:13,860 --> 00:50:16,940Next step, you just a backtrack on that.
114900:50:16,940 --> 00:50:17,940Okay.
115000:50:17,940 --> 00:50:23,620I actually didn't even put the 12,500 up myself.
115100:50:23,620 --> 00:50:24,620Check this out.
115200:50:24,620 --> 00:50:26,420Don't tell me you use other people's money.
115300:50:26,420 --> 00:50:27,420I didn't use OPM.
115400:50:27,420 --> 00:50:28,420Okay.
115500:50:28,420 --> 00:50:33,260When I met my mentors and they saw what I was doing in real estate, they just like do it
115600:50:33,260 --> 00:50:34,260is no big deal.
115700:50:34,260 --> 00:50:38,820We'll write the check for you as a gift or as a loan as a loan, just say, pick it back
115800:50:38,820 --> 00:50:39,820later.
115900:50:39,820 --> 00:50:40,820Yeah.
116000:50:40,820 --> 00:50:41,820So I picked them back and cash later.
116100:50:41,820 --> 00:50:42,820And I had cash on hand.
116200:50:42,820 --> 00:50:45,380There's like, we believe in you so much.
116300:50:45,380 --> 00:50:49,780You like, we don't even want you to put the money up front.
116400:50:49,780 --> 00:50:50,780Networking.
116500:50:50,780 --> 00:50:51,780Networking.
116600:50:51,780 --> 00:50:52,780Networking.
116700:50:52,780 --> 00:50:53,780Networking.
116800:50:53,780 --> 00:50:54,780Okay.
116900:50:54,780 --> 00:50:58,980So you got the funds set up now, or you can use OPM.
117000:50:58,980 --> 00:51:00,780Or you can use OPM.
117100:51:00,780 --> 00:51:02,220You got the funds set up.
117200:51:02,220 --> 00:51:03,220What comes after that?
117300:51:03,220 --> 00:51:04,980What comes after that?
117400:51:04,980 --> 00:51:10,020Once you used the waiting period really two to three months, once the fund is fully
117500:51:10,020 --> 00:51:16,220up and they say you can accept funds starting this day, that's when the hustle starts.
117600:51:16,220 --> 00:51:19,380You got to get in front of investors.
117700:51:19,380 --> 00:51:22,980So once you get in front of these investors, now you're raising this capital.
117800:51:22,980 --> 00:51:26,820Every time somebody invests in your fund, there's a payment to the attorney for that too,
117900:51:26,820 --> 00:51:27,820by the way.
118000:51:27,820 --> 00:51:29,660Because they got to drop the documents.
118100:51:29,660 --> 00:51:30,980They have to drop documents.
118200:51:30,980 --> 00:51:35,420They have to like report to the state, hey, this person is an investor.
118300:51:35,420 --> 00:51:37,460So yeah, as a fund manager, you pay for that.
118400:51:37,460 --> 00:51:39,820Pay for that out of the fund expenses.
118500:51:39,820 --> 00:51:46,420Wait, but before you're approaching these people, do you have properties yet?
118600:51:46,420 --> 00:51:49,660No, that's even if you don't have properties.
118700:51:49,660 --> 00:51:52,140You're trying to sell a blind pool fund.
118800:51:52,140 --> 00:51:54,860Yeah, that sounds a little difficult.
118900:51:54,860 --> 00:51:56,620That is very difficult.
119000:51:56,620 --> 00:52:00,140So it became much easier after I acquired my first building.
119100:52:00,140 --> 00:52:03,540But in the beginning, when you just trying to sell a blind pool fund, you like, look, I
119200:52:03,540 --> 00:52:06,700don't have anything yet, but this is what we're going for.
119300:52:06,700 --> 00:52:10,140Three few people are willing to give you the money for that.
119400:52:10,140 --> 00:52:15,540It takes a lot of sales skills to get that first $100,000 investor off of not even having
119500:52:15,540 --> 00:52:16,540a property.
119600:52:16,540 --> 00:52:17,540Right.
119700:52:17,540 --> 00:52:18,540Right.
119800:52:18,540 --> 00:52:19,540Yeah.
119900:52:19,540 --> 00:52:20,540Okay.
120000:52:20,540 --> 00:52:21,540Yeah.
120100:52:21,540 --> 00:52:22,540Okay.
120200:52:22,540 --> 00:52:28,740So once you get this in, well, once you get these investments, well, even before that, are
120300:52:28,740 --> 00:52:34,300you looking for, are you going out doing your activities based on a certain amount that
120400:52:34,300 --> 00:52:38,780you need or is it just whatever you can get?
120500:52:38,780 --> 00:52:41,940It's based off of how much do I need to raise for the fund?
120600:52:41,940 --> 00:52:43,820So let's say I sit up a $10 million fund.
120700:52:43,820 --> 00:52:45,620I know I need to raise $10 million.
120800:52:45,620 --> 00:52:46,620Oh.
120900:52:46,620 --> 00:52:47,620Yes.
121000:52:47,620 --> 00:52:48,620Okay.
121100:52:48,620 --> 00:52:49,620Okay.
121200:52:49,620 --> 00:52:50,620So it's pretty sick.
121300:52:50,620 --> 00:52:51,620You already know what you're going to raise.
121400:52:51,620 --> 00:52:54,260So the fund has a set amount that you got to raise.
121500:52:54,260 --> 00:52:55,260Exactly.
121600:52:55,260 --> 00:52:56,260Oh.
121700:52:56,260 --> 00:52:57,260Okay.
121800:52:57,260 --> 00:52:59,620And you can invest in properties as you're raising that money.
121900:52:59,620 --> 00:53:06,620So for example, I sit up a $5 million fund and I'm going to raise that up to a $10 million
122000:53:06,620 --> 00:53:11,380fund and sit up a simultaneous $10 million fund next to it.
122100:53:11,380 --> 00:53:14,620Oh, she's got $20 million.
122200:53:14,620 --> 00:53:15,620Yeah.
122300:53:15,620 --> 00:53:16,620Yes.
122400:53:16,620 --> 00:53:17,620Huh.
122500:53:17,620 --> 00:53:20,620So you know that you're raising these funds.
122600:53:20,620 --> 00:53:22,300Now you're getting it from the investors.
122700:53:22,300 --> 00:53:24,180Now you think about it like this here.
122800:53:24,180 --> 00:53:29,700If I need to raise $5 million, let's say everybody does $100,000.
122900:53:29,700 --> 00:53:31,620How many people do I need to talk to?
123000:53:31,620 --> 00:53:32,62050.
123100:53:32,620 --> 00:53:33,620Right.
123200:53:33,620 --> 00:53:37,180Or I can talk to 10 people that can give me half a million each.
123300:53:37,180 --> 00:53:41,780So now you're just constantly trying to get in front of the higher caliber investors.
123400:53:41,780 --> 00:53:44,860So you always try to get into the better room.
123500:53:44,860 --> 00:53:49,580You know what this is reminding me of that movie billionaire's boys club.
123600:53:49,580 --> 00:53:50,580Yeah.
123700:53:50,580 --> 00:53:51,580Yeah.
123800:53:51,580 --> 00:53:52,580Yeah.
123900:53:52,580 --> 00:53:55,020So this is that.
124000:53:55,020 --> 00:53:56,020Okay.
124100:53:56,020 --> 00:54:04,900So once you had mentioned that as you're collecting investments, you can still invest the
124200:54:04,900 --> 00:54:08,180funds into stuff or exactly as you collect it.
124300:54:08,180 --> 00:54:11,700So let's say you get in half a million dollars into your account.
124400:54:11,700 --> 00:54:15,060You could take that half a million and move it right into a property.
124500:54:15,060 --> 00:54:17,260And now you put the account back down to zero.
124600:54:17,260 --> 00:54:18,260You go raise more money.
124700:54:18,260 --> 00:54:20,060You put that into another property.
124800:54:20,060 --> 00:54:24,860You just repeat, repeat, like for example, right now with the three properties, I'm looking
124900:54:24,860 --> 00:54:27,860at acquiring that's $2 million.
125000:54:27,860 --> 00:54:31,300I'll be moving in like two months.
125100:54:31,300 --> 00:54:32,300Mm-hmm.
125200:54:32,300 --> 00:54:34,300Right.
125300:54:34,300 --> 00:54:39,700So yeah, two to three million dollars, I've been moving in two months.
125400:54:39,700 --> 00:54:40,700So yeah.
125500:54:40,700 --> 00:54:46,740Let's just say I invested with you 100k today, right?
125600:54:46,740 --> 00:54:53,580Because my money just sit there until you get what you need from other people to do something
125700:54:53,580 --> 00:54:54,580with it.
125800:54:54,580 --> 00:54:55,580No, it goes in.
125900:54:55,580 --> 00:54:56,580Like I can move it into a property.
126000:54:56,580 --> 00:54:57,580You immediately put it in.
126100:54:57,580 --> 00:54:58,580Yeah.
126200:54:58,580 --> 00:54:59,580Move it into a property.
126300:54:59,580 --> 00:55:03,500And then that's based on diversified automatically as soon as it touches the fund account,
126400:55:03,500 --> 00:55:07,340it's already diversified into the properties that I already have.
126500:55:07,340 --> 00:55:08,340Gotcha.
126600:55:08,340 --> 00:55:11,340And you're getting distributions from those.
126700:55:11,340 --> 00:55:12,340Okay.
126800:55:12,340 --> 00:55:13,300So let's talk about that a little bit.
126900:55:13,300 --> 00:55:17,380So distributions, are they on a schedule or?
127000:55:17,380 --> 00:55:18,380Yes.
127100:55:18,380 --> 00:55:19,380Okay.
127200:55:19,380 --> 00:55:22,940So distributions, I'll pay quarterly with one operator.
127300:55:22,940 --> 00:55:27,620Well, two of the operators I work with, quarterly distributions, another operator I work
127400:55:27,620 --> 00:55:28,620with.
127500:55:28,620 --> 00:55:34,780And yeah, the other operator is monthly distributions.
127600:55:34,780 --> 00:55:36,300Okay.
127700:55:36,300 --> 00:55:43,260And so what about if there's not like, I don't know, profit or is there any profit?
127800:55:43,260 --> 00:55:45,340There's always profit.
127900:55:45,340 --> 00:55:47,220So that can happen.
128000:55:47,220 --> 00:55:53,180Let's say a property, you and I invest into a property in the property, doesn't pay out,
128100:55:53,180 --> 00:55:55,980it's going to be a year, year and a half before we can pay out.
128200:55:55,980 --> 00:55:58,620Then no, there's no profit with that.
128300:55:58,620 --> 00:56:00,020So that is a downside.
128400:56:00,020 --> 00:56:03,860But you get different percentages.
128500:56:03,860 --> 00:56:05,780You can get preferred returns.
128600:56:05,780 --> 00:56:10,940And what a preferred return means, it's no matter what, the investors have to get paid
128700:56:10,940 --> 00:56:15,960X amount for that year, whether there was a profit or not.
128800:56:15,960 --> 00:56:21,980So let's say someone comes to me and says, hey, I'm giving you a 8% preferred return.
128900:56:21,980 --> 00:56:27,180Whether they make money or not, they have to pay you 8% of your money that year.
129000:56:27,180 --> 00:56:29,780And so what does that just come off of a balance sheet?
129100:56:29,780 --> 00:56:32,620It's like, you know, negative on there.
129200:56:32,620 --> 00:56:34,740On their end, they didn't make money.
129300:56:34,740 --> 00:56:36,660They didn't get to eat off that property.
129400:56:36,660 --> 00:56:39,300But you, their investor is taking care of.
129500:56:39,300 --> 00:56:40,900And that's the most important thing.
129600:56:40,900 --> 00:56:42,660You take care of your investors.
129700:56:42,660 --> 00:56:43,660Right.
129800:56:43,660 --> 00:56:44,660Over yourself.
129900:56:44,660 --> 00:56:48,820It seems like there's no downside to it.
130000:56:48,820 --> 00:56:51,140I mean, I'm sure there is.
130100:56:51,140 --> 00:56:53,580With any investment, it's a risk.
130200:56:53,580 --> 00:56:54,740There's a downside.
130300:56:54,740 --> 00:57:01,780But, you know, real estate, real estate, like I always say, if there's any investment, like
130400:57:01,780 --> 00:57:09,100investing real estate and this, this seems like it's great for that person who doesn't
130500:57:09,100 --> 00:57:11,540necessarily want to be hands on.
130600:57:11,540 --> 00:57:12,540Exactly.
130700:57:12,540 --> 00:57:16,700Doesn't necessarily want to do all the whole flipping and rental properties.
130800:57:16,700 --> 00:57:19,860You know, I know people out there preach rental properties and stuff.
130900:57:19,860 --> 00:57:25,540But, man, when you really run the numbers of how many rental properties you need to make
131000:57:25,540 --> 00:57:30,180a significant increase to your income, like, it's a lot.
131100:57:30,180 --> 00:57:31,180It's a lot.
131200:57:31,180 --> 00:57:36,060And I know people, literally, that do these rental properties, I put it like this here.
131300:57:36,060 --> 00:57:42,380When I was a wholesaler, you will buy a list called a Tired Landlord List.
131400:57:42,380 --> 00:57:48,180There's a reason why there's a Tired Landlord List because people are tired of being a landlord.
131500:57:48,180 --> 00:57:49,180Yeah.
131600:57:49,180 --> 00:57:50,180So, why pitch people?
131700:57:50,180 --> 00:57:55,500I say, look, you can have all the benefits of a landlord investing with me.
131800:57:55,500 --> 00:57:56,500None of the headache.
131900:57:56,500 --> 00:57:57,500Yeah.
132000:57:57,500 --> 00:57:58,500It's a no-brainer.
132100:57:58,500 --> 00:57:59,500I can see that.
132200:57:59,500 --> 00:58:04,340I mean, even when you're evaluating, do I want to flip, do I want to hold?
132300:58:04,340 --> 00:58:05,340I mean, heck.
132400:58:05,340 --> 00:58:13,260Let's say you hold a property and you make $12,000 a year on it.
132500:58:13,260 --> 00:58:20,860But on the flipping side, you can make $36,000 exactly in that same year, like, heck, just flip
132600:58:20,860 --> 00:58:22,180a property every year.
132700:58:22,180 --> 00:58:27,220Now, of course, you won't have those net worth benefits and have that big portfolio, but
132800:58:27,220 --> 00:58:29,620that's where something like this could come in.
132900:58:29,620 --> 00:58:30,620Exactly.
133000:58:30,620 --> 00:58:31,620Yeah.
133100:58:31,620 --> 00:58:35,140Plus, if you're flipping houses and you're making a bunch of money flipping houses, so you
133200:58:35,140 --> 00:58:39,940are making a bunch of money as a realtor, if you have to then go be a landlord, guess what?
133300:58:39,940 --> 00:58:41,820Something's going to suffer.
133400:58:41,820 --> 00:58:45,620Because now your attention is over here trying to be play landlord.
133500:58:45,620 --> 00:58:46,940Well, why do that?
133600:58:46,940 --> 00:58:51,540Park that money into a fund or syndication, whichever one.
133700:58:51,540 --> 00:58:53,820Let them handle that for you.
133800:58:53,820 --> 00:58:55,260Focus on what you're good at.
133900:58:55,260 --> 00:58:57,300You're focused on generating money as a realtor.
134000:58:57,300 --> 00:59:00,900You're focused on generating money as a house flipper, a wholesaler.
134100:59:00,900 --> 00:59:01,900Yeah.
134200:59:01,900 --> 00:59:02,900Build on that.
134300:59:02,900 --> 00:59:03,900Scale that up.
134400:59:03,900 --> 00:59:06,020That gives you more money to build your pacifink.
134500:59:06,020 --> 00:59:07,500Come over here.
134600:59:07,500 --> 00:59:08,500Okay.
134700:59:08,500 --> 00:59:10,300I have one more question then.
134800:59:10,300 --> 00:59:11,820We have to wrap up.
134900:59:11,820 --> 00:59:15,420What is exiting like?
135000:59:15,420 --> 00:59:19,420So say, investors, good, they're done.
135100:59:19,420 --> 00:59:23,820They've made a bunch of money and then they're ready to get out.
135200:59:23,820 --> 00:59:24,820How does that look?
135300:59:24,820 --> 00:59:25,820Yeah.
135400:59:25,820 --> 00:59:30,540So, after we sell all these different properties and stuff within the fund, and you have
135500:59:30,540 --> 00:59:33,860this lump sum of cash, you can either.
135600:59:33,860 --> 00:59:38,260Or choose to reinvest it or you could just pocket it.
135700:59:38,260 --> 00:59:39,740Go buy a car, do what you want.
135800:59:39,740 --> 00:59:41,780But you're going to pay taxes if you take it out.
135900:59:41,780 --> 00:59:44,620Well, so is that tax like normal capital gain?
136000:59:44,620 --> 00:59:45,620No, long term.
136100:59:45,620 --> 00:59:46,620Okay.
136200:59:46,620 --> 00:59:47,620Long term capital gain.
136300:59:47,620 --> 00:59:48,620So it's less.
136400:59:48,620 --> 00:59:49,620Okay.
136500:59:49,620 --> 00:59:50,620Okay.
136600:59:50,620 --> 00:59:52,620Your tax significantly less by investing.
136700:59:52,620 --> 00:59:53,620Sheesh y'all.
136800:59:53,620 --> 01:00:01,060Man, I can sit here and talk about this for like hours, but we got to wrap up.
136901:00:01,060 --> 01:00:02,060Yeah.
137001:00:02,060 --> 01:00:10,180So, if you, if, if our listeners and people watching this podcast do want more information
137101:00:10,180 --> 01:00:13,980about this or even want to connect with you, how can we make that happen?
137201:00:13,980 --> 01:00:14,980Yeah.
137301:00:14,980 --> 01:00:16,660So they can reach out to me.
137401:00:16,660 --> 01:00:20,340Text me at 4.6 9.458 9.295.
137501:00:20,340 --> 01:00:21,820You did not just give your phone number.
137601:00:21,820 --> 01:00:23,300It's not my actual phone number.
137701:00:23,300 --> 01:00:24,300Okay.
137801:00:24,300 --> 01:00:25,780It's not business number.
137901:00:25,780 --> 01:00:26,780Okay.
138001:00:26,780 --> 01:00:27,780Okay.
138101:00:27,780 --> 01:00:34,980I would say you can, but preferably follow me on Instagram at Joseph Kimbrough J.O.S.E.
138201:00:34,980 --> 01:00:36,980pH K.I.M.
138301:00:36,980 --> 01:00:38,980B R O U.D.H.
138401:00:38,980 --> 01:00:39,980Yes.
138501:00:39,980 --> 01:00:43,540And, and Joseph does not have course.
138601:00:43,540 --> 01:00:46,300He's not selling you anything.
138701:00:46,300 --> 01:00:50,220Even though maybe 30 more minutes of talking with me, I'm going to have you put together
138801:00:50,220 --> 01:00:55,420a course because people don't need to abuse your time and knowledge.
138901:00:55,420 --> 01:01:01,140You're a wealth of information when it comes to this and I think it would be beneficial
139001:01:01,140 --> 01:01:07,500to have you back where or maybe even, you know what?
139101:01:07,500 --> 01:01:09,260I do a conference every year.
139201:01:09,260 --> 01:01:10,260Okay.
139301:01:10,260 --> 01:01:12,460It's called the Do The Most Conference.
139401:01:12,460 --> 01:01:16,980Our next one is going to be in April and it's normally here locally.
139501:01:16,980 --> 01:01:17,980Awesome.
139601:01:17,980 --> 01:01:20,100Can you be a speaker at the Do The Most Conference?
139701:01:20,100 --> 01:01:21,100Definitely.
139801:01:21,100 --> 01:01:22,100I will.
139901:01:22,100 --> 01:01:28,060I'm going to be a speaker at the Next Do The Most Conference, which, you know what?
140001:01:28,060 --> 01:01:30,900As of this podcast, tickets are launched.
140101:01:30,900 --> 01:01:35,340You can get a ticket to the, to the, to the event.
140201:01:35,340 --> 01:01:40,820Y'all know it sells out every single year, but yes, because I would love for you to really
140301:01:40,820 --> 01:01:47,860just put this out there because yeah, more people who look like us, think like us, do
140401:01:47,860 --> 01:01:51,380what we do need to be doing things like business.
140501:01:51,380 --> 01:01:53,900Yes, absolutely.
140601:01:53,900 --> 01:01:55,500Thank you, man, for being here.
140701:01:55,500 --> 01:01:56,940Be sure to follow him on Instagram.
140801:01:56,940 --> 01:01:59,660You can put any questions you have in the comments.
140901:01:59,660 --> 01:02:06,380He's going to see him, but yeah, man, thank you for being so open and just sharing.
141001:02:06,380 --> 01:02:08,140There's any last words you want to say?
141101:02:08,140 --> 01:02:12,980Feel free to take it away, but yeah, I would just say thank you for having me on and then
141201:02:12,980 --> 01:02:19,820also really just have to just believe in yourself to do stuff like this.
141301:02:19,820 --> 01:02:28,900It takes a lot of, I would say, a lot of confidence to ask somebody for $100,000, $250,000,000,
141401:02:28,900 --> 01:02:35,260to a park in your fund, but you have to develop that.
141501:02:35,260 --> 01:02:38,100Thank you for listening to the Power Unit Success Casp.
141601:02:38,100 --> 01:02:41,980If you're excited about what you just experienced, make sure to subscribe.
141701:02:41,980 --> 01:02:46,380Also, leave us a rating if something you heard resonated with me and feel free to share
141801:02:46,380 --> 01:02:49,220your thoughts about this episode on Instagram.
141901:02:49,220 --> 01:02:50,220See you next week.
142001:02:50,220 --> 01:02:52,800(upbeat music)
142101:02:52,800 --> 01:02:55,380(upbeat music)
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