Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast.
Josh: So, hey, welcome back to Accelerated Investor. I’m so excited that you could be here with me no matter where we’re at in the world. Listening to this while you’re traveling in your car, wherever you’re headed, I’m so excited and grateful to be part of your journey in real estate and in life as an entrepreneur. Today, I have a very special guest. His name is Frank McKinney. He’s a mega developer. He takes tremendous amounts of risk. He’s built 44 ocean front properties, maybe even more than that now, but 44 ocean front properties that have sold for an average of over $14 million and he started with his first fix and flip at $50,000 bucks. We’re going to talk today not only about taking risk, but we’re going to talk about discovering your life’s passion, your professional passion, and your spiritual passion and how to kind of blend it all together to be an entrepreneur that’s absolutely having an immense happy, exciting life. Frank is a living and breathing embodiment of exactly that. Frank McKinney, thanks for jumping on Accelerated Investor with me today.
Frank: It was really cool when I got the invitation. You know, I’ve been on a few podcasts and my secretary sent it through that you’ve been invited to be on the AI podcast. I’m like artificial intelligence? Wow. We’re going to get into some fun stuff, but the more I researched you, there’s nothing artificial about the intelligence that you deliver to your listeners. It’s a killer podcast. I’m honored to be on it. One correction on the bio though I want to set the stage for everybody listening. I am not a real estate developer. I am in real estate artists. Creating sun drenched, creating artistry on sundridge canvas known as the Atlantic ocean, which I, you’ll see me look up every now and then because the ocean is literally right behind my face.
Josh: Oh, I love it. Love it. So Frank, let’s jump in and talk. You’ve been featured on all kinds of places. Oprah, Discovery Channel, Fox, CNN, you’ve been all over the place. I’m so excited to have you on. And today what I really want to jump into is passion. I don’t know when I see you on Facebook and see on Instagram and living your life. The first thing that just pops out is passion. So where does your passion for life and for real estate come from? When you look back at the root of it and just living a highly optimized life, ultra marathoning taking substantial risks, but having passion for your faith and your family, you just seem to exude passion for all the things that you do. Where does that come from?
Frank: You know, it’s really like a drilling for oil or if you’re on a dry place, drilling to find water. I mean it doesn’t come naturally. I will tell you that it took, I’m an older guy. It took me a long time to find both my professional and my spiritual highest calling and something that I had a passion for. Passion is kind of a word that’s tossed around, I think a little too much. I mean, passion is fine, but passion without purpose is fleeting. And I think that I have experimented with different forms of passion where I didn’t feel the purpose behind it and it eventually fades like a spark in a fireplace that goes out. And so for me, here’s a simple little takeaway. If we’re done today or any of your future guests are done today and we’ve motivated your listener, we failed because motivation washes off and it goes down the drain with the soap at night.
Frank: When you take a shower, off it comes. What about inspiration Frank? This is a great program you inspired me. But inspiration will wear off. Like the effects of a bad sunburn, which I have a little bit of one today/ a week later inspiration is gone, but listeners and Josh, it’s aspiration that were alter your DNA. Who do you aspire to emulate? What legacy do you aspire to leave behind? And in my case, I can answer really on one hand, five things I’ve aspired to do, I have aspired to do or become. That to me is passion with purpose, aspiration.
Josh: Aspiration. So tell me these things. When were you at in your development, your real estate career, your life process, your growth? When did you realize that that was the case? Because most people are maybe a little bit less mature than you don’t have your experience, maybe don’t think as deep as you do. They think motivation, inspiration. When did you get beyond that to think more aspiration legacy. Where did that come from? How long ago did you discover it and do you remember the moment when you thought this, that’s where it’s at. It’s not about motivation, it’s not about inspiration, it’s about aspiration, legacy, impact.
Frank: I’m hoping that people are tuning in because I can save you about 20 years of heartache and aggravation. It took me a long time, Josh. It’s almost like, you know, I’m at the back end of my career now and if I do a postmortem on my career, I didn’t tap in to the aspirational element. I didn’t know I had tapped into it until maybe five or six years ago. And here’s how it went. So I look back and I can say, as I corrected you at the beginning, I don’t want to be a developer, a builder. I always fancied myself an artist. It’s just that I can’t sing, I can’t play an instrument. I decided to devote my time to it. I can’t sculpt. I’m starting to paint, but my art is three dimensional. I have taken an artist approach to what I do for a living.
Frank: So aspiring to be a real estate artist has now come true with an overnight success taking 20 years. I aspired to finish the toughest foot race in the world. This 135 mile race across Death Valley according to National Geographic, toughest foot race in the world. It took me a long time to get there. I aspire to be a six time bestselling author, although I graduated from high school with a 1.8 grade point average. So these are things like, here’s the short answer. While motivation washes off and inspiration goes down the drain with the soap inspiration wears off like a sunburn. I can put an aspirational endeavor up on a shelf, for example, running 135 miles across the desert in 125 degree heat in a time limit of 48 hours. That’s an aspiration I have. Am I motivated everyday Josh to do that? No. Am I aspired everyday to roll out of bed? No, but I don’t lose the aspiration to finish that race. That’s what I suggest that you identify. So being a real estate artist, I aspire to do that. There are many days I failed, but I never let that loose my subconscious lose sight of that aspirational goal.
Josh: So how can someone maybe who is maybe in the beginning stages of their real estate career or their professional career, even if they’re outside of real estate or maybe in the middle, how can they find more of that aspiration? How do they develop it? How do they purposely create it instead of just kind of floating through the world? Like most people do, like Diam Niagara Falls and the current just kind of takes them through life as opposed to being more purposeful and having this like is there a specific tactic? Is there a question that you ask yourself? Is there a ritual or a habit that you have to make them become more of a reality?
Frank: There is, and this is getting maybe a little deep, a little esoteric, but it begins with what is your personal brand? What is Josh’s personal brand? What is Frank’s personal brand? You know what the brand of water, Coca-Cola and you know that kind of thing is Kleenex, Apple. Everybody has a personal brand and personal branding is nothing more than the art of amplifying your essence. What sets you apart from everybody else to the point where your customers either current or future becomes subliminally intoxicated with you first, then your product and service. Josh, let’s face it, there’s a million podcasts out there. What sets yours apart? What sets Josh’s apart? By the end of this interview and other interviews, people listening, they know what sets yours apart. So once I identified the personal brand that I wanted to not wanted, it’s kind of how I came out of the womb, then that helped me aspire to only a handful of things that were very big picture stuff, not a to do list. So I ask yourself, you know, when you hang up, I asked you to ask yourself or ask the mirror what is my personal brand? And once you start to answer that, these aspirational endeavors and ideas will start to clarify for you.
Josh: Got it. So what is your personal brand starts with that. Once you kind of identify that and really Frank, I think that’s about setting your ego aside. What I hear you saying is I’m setting my ego aside to say like, I don’t need to feel the fame, the fortune of everybody else’s approval. What I need to create my own personal brand is to do and be whoever the frick I really want to be, regardless of what everybody else thinks. And typically it’s a little bit backwards or a little bit of thought that people don’t think of. It’s, hey, if I am who I am and people know what I am, I might push away 90% of the audience, but the 10% that really love me, they’re going to love me. I’m going to have my niche. I’m going to have my place. Many people are maybe not comfortable pushing other people aside because their personal brand comes out and people might not like that, right? So how do help people understand that creating a brand, being yourself, being your authentic self, setting your ego aside, you may not get everybody’s approval because so many of us want approval from everyone.
Frank: Okay, so let’s break that into two pieces. Let’s go with the ego then the approval. The first part I want to clarify or correct, but help people understand their, it’s not a good idea to put ego aside and I’ll tell you why. There’s healthy ego, Josh, and there’s unhealthy ego. Healthy ego to me says I’m one of the best in the world at what I do. That’s part one. One of the best. So you can say to your listeners and to the mirror, I’m one of the best podcasters in the world. If you said to me, I’m the best, I would say you’re egotistical. I am one of the best developers of ocean artistry on the ocean. I am one of the best. I’m not the best. I’m one of the best. Second part of healthy ego is not being afraid to tell the world about it.
Frank: If you’re one of the best and you’re afraid to tell the world about it, nobody will ever know but your mind. So I listened. There’s 50,000 in the world that can afford what I do for a living. You better believe I get the word out there that I’m one of the best at creating something that only 0.0 and then 6 zeros and a seven and a percent sign, can afford. So I, some people mistake that for ego narcissism, so what. I’m not in this business to glorify myself. I’m in the business to sell these houses. I don’t love them. I’m not attached to them. I’m in to put money in my bank after I sell it.
Frank: The other part we got healthy ego. We don’t want unhealthy ego is you’ve met people with healthy ego. You’ve also met people with an unhealthy ego. You know the difference, subconsciously you know difference approval. Now today with social media and all the different forms of staying connected, our need to feel approval is higher than it’s ever been. It’s causing depression and anxiety and all of this stuff. So now I happened to be a man of faith and I could simply look. I can, I can look at my Bible and say, is what I am doing? Is it something that would receive approval from the only person I care that passes judgment on me? I don’t know if this is audio or video to. You take a look at me. He doesn’t look like a businessman.
Frank: I have people all the time saying, where’s your suit, where’s your tie? I could, this is the way I was in high school. Listen to many, and especially men, co-op themselves to be like everybody else down the block. As an artist, I get to express myself both the way that I choose to look and in my craft. So I am not going to look for approval. I am not. And by the way, I’m a sensitive individual. I am very, I’m highly sensitive to what people say or think. But the difference is even though I’m sensitive to it, I’m not going to let it change the way I behave. It almost, if we could jump into something that is really important. That really is the difference between success and failure. If I was to be asked to give you one thing and our podcast was five minutes long and that is fear.
Frank: Fear, fear. When we feel fear, so I’m afraid everyday of my life, Josh, I feel fear, the sensation of fear every day of my life. The difference between me and most is I don’t let it stop me. So here’s the thing. Fear is always associated with the thought of taking a risk. Not with the actual taking of the risk, but the thought of taking a risk. A simple example would be you’re on a rollercoaster going up the Hill, getting ready to go down the first drop. You’re terrified with the thought of what’s about to happen. Once the rollercoaster drops, it’s thrilling, it’s exciting. And that thought of taking a risk, Josh is always associated with a big change or challenge in our life. Financial, relational, spiritual, dietary. The thought of taking a risk, a big change or challenge in our life. The next four letter word that is excreted is fear. I feel it, I recognize it, but I don’t let it stop me. That’s the difference between my level of success and most people’s, I’m less educated. I had no connections. I had no money but I didn’t let fear stop me.
Josh: So Frank, that thought of fear getting through that because most people, the thought of fear, the thought of the pain, the thought of the going backwards, progress stopping the thought of change. How do you actually get through that? The way I get through it is I think about what is going to happen on the other side and that the positivity or the progress or the future has to be more powerful, stronger than the potential pain that I might feel, right? So if it’s the exhilaration of a roller coaster, it’s the happiness, the joy of, hey, I was on this roller coaster and I was scared out of my mind. No different than real estate.
Josh: I might be afraid to do my next flip or do my next development or buy my next apartment building or talk to my next investor. Might be afraid out of my, I mean, I was scared, frankly, when I did my first big podcast with Kevin O’Leary from Shark Tank, and I was like, oh my God, I’m going to sound like a fool. I’m going to sound like an idiot. But I kept thinking, what about the positives of I get to meet Kevin O’Leary, we have an awesome discussion. We’re going to stay connected. He might come to my live event. You know, all the positives that happiness has to overwhelm the fear. So what are your thoughts on that, of blasting through fear?
Frank: Okay, so let’s dumb it down just a little bit. So fear. First of all, fear is not a thought it’s a sensation. You can’t think fear. You’re the fear is a result of the thought of taking a risk of the thought of doing your first podcast. You can’t think fear. You have to think a thought first and then fear maybe or maybe not shows up. So recognize that. It’s not the fear that should be driving you. It’s the thought process is going to be driving you. So when I think about doing a $15 million ocean front spec house in a neighborhood that maybe isn’t your typical Palm Beach or something that’s recognized, I believe in making a market instead of following a market. Certainly there’s fear associated with that thought. And most often the fear is a result of me having to hear again from the naysayers that you’re building a house not in the perfect place and you’re not falling location, location, location.
Frank: Okay. I mean, I just, there’s a reason I work from a tree house, Josh. My office is in a freaking tree house because I need the negativity out of my life. Today I’m not I’m actually at one of my houses I just finished. I work from the office of the $14 million house. We finished. We were in my tree house. I’d spin the camera around and you’d see that we’re, you know, I’m on the ocean.
Josh: Yeah I’d love to see that. Maybe I’ll interview again another time from the tree house. I’d love to see that.
Frank: You got to create your own reality. You got to create your reality and because of the access to spreadsheets and Google information, the subconscious says to us when we’re thinking about taking a risk, whatever it could be, and again, it doesn’t have, you can listen to this and not be into real estate. It can be another financial risk, a spiritual risk, a dietary risk, a relational risk, you name it. We confront with them every day. What do we do when we think about taking a risk? Most often we research it.
Frank: What that is, and that’s fine. I say research it, but be careful the brain doesn’t subconsciously switch off to, I’m looking for a reason to say no. I am looking for reason to validate my friend or my mom or my brother who said, this is a bad idea. You’ll find it. If you Google or spreadsheet long enough, you’ll find the reason. And that’s what happens, Josh. Most people have that fear of, you know, not pursuing something validated by the subconscious mind researching until they get the answer that they want.
Josh: Unbelievable and love it. So Frank, as we think about what I mean, the whole reason why I do this podcast, whole reason why invest in real estate, the whole reason why we raise capital. The only reason why I love to connect with new people, the excitement, but it’s all about really becoming the highest and best version of ourselves, right? So I want to accomplish amazing things. Every single listener on this podcast wants to accomplish amazing things you want, accomplish amazing things. Everybody has maybe a different vision for themselves. Yours is different than mine, different than everybody else’s. But we all, at the end of the day when we’re taking our last breath, want to look back and say we’ve lived an absolutely full life professionally, relationship wise, spiritually, an absolutely full life, completely optimized. You appear to a lot of people to be much more along that path, living a full life.
Josh: Living, you know, from a professional perspective, from a spiritual perspective, and maybe a lot of other people are like, man, I wish I was more like him. And so what are some tips or thoughts that you have about, again, professional optimization, spiritual optimization, living a full life, and where does it start? Like your why, what you wanted to become had to be so big to overcome all the typical fears that might slow people down. The fear of looking different, the fear of acting different, the fear of building these amazing properties, the fear of getting in front of people and speaking in front of audiences. You’re overcoming all those fears, but really it’s to accomplish and live an extraordinary life. And most people I think are held back by fear. They’re held back by judgment. They’re held back by all these sensations that they have that say, oh man, that’s just too much. I can’t go there. But what they really want is to be different, to have amazing things, a lot of the things that you’ve accomplished. So take us down that path. What does that look like? How do people get there?
Frank: You know what’s fun about your podcast and I’m really enjoying it, is that, you know, a lot of times I’m invited because we do these mega houses and all they want to talk about is how to make the million dollars in real estate. How did you go from a $50,000 fixer upper to, you know, I actually sold a $50 million spec house, you know, about 10 years ago. And that’s fine. I can teach you how to make a lot of money real estate. But here’s, here’s a very simple six word statement. Get the mind right and the money will follow. You notice the whole time we’re talking about mindset here, we’re not talking about the nuts and bolts of real estate. Get the mind right and in my case of ultra running, get the mind right and the miles will follow. I mean make it running 135 miles through Death Valley desert in July is all about the mind.
Frank: I can only train my body so much. I’m actually not a gifted ultra runner, but getting the mind right, the miles will follow. So remember that if you can spend a little time each day getting the mind right by listening to podcasts like yours, Josh, reading, you know, reading a little bit, I’m more of a writer because I am a writer, but I believe writing is more proactive, readings more reactive. So I liked, I have two separate journals I journal in every single day. So that’s the first thing. Get the mind right the money will follow and it takes exercise it takes, you know, takes time. You’ve got to exercise. First of all, the other thing about risk, I want to tell you, if you are going to the gym and you want a bigger muscles, you would exercise those muscles. Your risk tolerance is nothing more than a muscle.
Frank: So if you exercise, I don’t know if the camera, you can see I’ve got little muscles, but if you exercise your risk tolerance like a muscle, eventually it becomes stronger and it’s able to withstand greater pressure. So to me, the biggest risk I ever took was that $50,000 fixer upper almost 30 years ago because I had a good job as a tennis instructor. So I continue to exercise my risk tolerance like a muscle. The other thing I think that will help people break through is you, when you, you referenced about living, you know, living this full life and we all want to feel alive like how many people do you know that are alive, but they’re really not living? In my case that you feel, you listener, you, Josh, and you Frank feel most alive when you experience extremes, whatever those are. My extremes may be different than yours, but put yourself in the position to experience some form of extreme.
Frank: And that can come in all sorts of forms. Again, relational, dietary, physical, spiritual. And when I’m experiencing an extreme, I feel like I’m most alive and the thing that keeps people back, getting back to that fear is, well, what if I fail? What if I look stupid doing it? I ran that race in the Death Valley desert 12 times. I failed five times. I don’t think I’ve, I don’t think anybody’s ever failed in that race more than me. One guy, one of the guys failed five, but I’ve made it seven and it doesn’t scare me that I could maybe fail again. You then me listener, we’re going to die and are we going to die with or without regrets? I would rather the answer is we are all going to have regrets because I do, but I would rather regret what I did, not what I didn’t do. And there’s plenty of times I’ve regretted it. Maybe I shouldn’t have bought that property and maybe I should’ve put in that water floor and maybe I should’ve put it in that jellyfish tank. I went a little too far here, but I did it. I regretted doing it, not, not doing it.
Josh: And Frank, when you look at regret or you look at again fear back to I didn’t try that. I never did it. I never went there. What do you think has been maybe some of those core things that have just pushed you and said, I’m going to do it even if I do fail? What is that belief that you have that backs that up, that action? Because you have to have some really strong belief in yourself, your faith, your whatever it is to say, I’m not, I’m going to. It’s like when you’re in high school or grade school and you want to go talk to that pretty girl that you’re afraid to go talk to and all of a sudden now you’re 35 years old and you’re like, darn it, why didn’t I go talk to her?
Josh: It’s no different than I want to build this $5 million or $50 million spec home and you never did it and you think, you know what? I had the talent I had. I could put it together. I had the capacity, I had the relationships, I had the money, but I never did it versus I did it. And then there’s the potential for failure. There’s got to be something that makes you a little different. They’ve got to be some thing that you rely on. It’s a little different to take those larger risks to be an ultra marathoner that maybe you know other people, they’re not comfortable taking those risks. What stands behind you, I guess, that allows you to do that?
Frank: Well, personally, and this is being a little, I’m going to give you an acronym that I hope everybody takes to their daily life and marketing and business and what have you. You know what an all terrain vehicle is and I’m sure you all know what an all terrain vehicle is.
Josh: Oh yeah. You bet.
Frank: Okay. So the acronym for an all terrain vehicle is what? All terrain? Authenticity, transparency, vulnerability. Approach your life like that. You know, my case, I don’t put myself on a pedestal. I’m going to tell you some very vulnerable. I have an addiction to excitement as diagnosed by my therapist like five years ago. I never knew, when I was a kid. Now, this is very important because everybody has demons in their closet. Everybody has a demon in their life or demons, and in my case, when I was younger, as a teenager, I was incarcerated in juvenile detention seven times.
Frank: And then when I got out of school, when I came to Florida at first when I was 18 never having gone to college and having a horrible GPA, I got the excitement from getting speeding tickets on this really fast motorcycle and never paying them because it was exciting to see how many I could home with them. Now here’s the thing, I am, Freud says, and other noted psychiatrist say, we are who we are past the age of four. Freud says for the oldest, the most noted psychiatrist says, you are who you are, listener past the age of 12 so I had a self-destructive outlet for a tendency for being addicted to excitement. That is never going to change. I’m 56 I was talking to my wife this morning. It ain’t never changed. I’m not going to try to change it.
Frank: What I did with it at an early age, I realize it was self-destructive and Josh, I redirected it into something constructive. I give a lot of speeches at graduating ceremonies from treatment centers. I’ve never been to treatment and I read a drug problem, an alcohol problem. I had an excitement problem. That’s all those people have. They have a snaps issue in the brain just like I do. It gets them excited to something that’s very destructive. Well, what if you said you ain’t going to change out a treatment by the way, what you can do is redirect that behavior into something constructive. I found the outlet, guess what it was building mega mansions on speculation, not knowing whether I’m going to eat out of a dumpster tonight or at the Ritz Carlton. That’s freaking exciting to me.
Frank: So that’s the personal answer. I needed to find a constructive outlet for destructive tendency, needing to feel excited almost all the time I found it. If you happen to suffer from that, well, there you go. If you don’t suffer from that, which most people aren’t addicted to excitement or they like excitement. Here’s a simple philosophy that I wish I could take credit for this, but it’s not my philosophy. A very obscure philosopher by the name of Anthony de Mello, Anthony de Mello, any book by Anthony de Mello I strongly recommend he was a Jesuit that died in 1987 but he went from Jesuit to being a philosopher. He says to us, and now listener, focus in if you’re not addicted to excitement and neither to construct about liquid destructive tendency. We’ve been told our entire life we fear the unknown. And from a little being a little child, we’re taught that that’s a natural reaction to fear the, I’m afraid of doing a podcast because it’s unknown to me.
Frank: I’m afraid of doing my first million dollar house because what I knew was $100,000 dollar house. You know what Anthony de Mello taught me? How is it possible to fear something you don’t know what you fear is leaving the known. You Frank McKinney feared leaving the tennis court because you knew what it was to you. You fear doing a $100,000 thousand dollar houses because you knew what it was. You can’t fear something you don’t know. It’s like if you and I were face to face Josh and I had Tourette’s, you would know I had Tourette’s until I reached down and struck you and punched you in the nose because I couldn’t control myself. You can’t fear something. Please focus in on that. Listeners, if you’re afraid of something or making a move in your life with your relationships, with your diet, with your spiritual side, with your financial side, you’re afraid of leaving where you are. You’re not afraid to go to somewhere. You don’t know. It’s not possible.
Josh: That is fantastic because if you look at real estate, whether it’s relationships, whether it’s meeting somebody new, going new places, if what I’m hearing you say is you had a fear of the excitement to do the new thing because of the excitement that it gave you, the happiness, the potential progress that it created for you. You pursued that actively doing new things that other people would say, no, no, no, no, no. I’m not going to go there I’m afraid of that. And Anthony de Mello taught you, it’s not really possible. The fear of something that you’re not even sure of. You don’t even know what’s there yet. You flipped that on a script and created strength from that positivity from that and man, if more people could live that life, how many more things would they go after? Try, you know, going new places, traveling to new places like you know, you donate and build villages in Tahiti, right? That had to be a little bit scary, a little bit different. But the excitement of taking care of those kids overwhelmed the well I’m going to stay here in my happy, comfortable place.
Frank: That’s a whole, I mean what we do in Haiti, which is the poorest country in the Western hemisphere is a different discussion. We’ll get to it in the end, but we can’t even get to that. Or the listener can’t even fathom talking about your spiritual highest calling and your professional highest calling if they can’t get past this fear issue. We’re spending a lot of the time on this podcast deconstructing fear in a bunch of different ways. You can’t fear something you don’t know, exercise your risk tolerance, like a muscle, blah, blah, blah. This is what holds people back in life. Josh, I’m telling you. Now when I feel fear and remember, it’s not a thought, it’s a sensation. When I feel the fear, I know something big is about to happen. Some big change or challenge in my life now, it might not work out it my fail. I mean, there’s been times I have failed after not heating the fear and going for it afterwards. So what the F like I want to live, I’m going to fail anyway, so let’s go for it. You know, I’m going to be laying in the box someday. I want to regret what I did, not what I didn’t do.
Josh: Yeah, I think people are so many people that you meet that I would say are not yet in real estate or not yet pursuing their dreams and they’re afraid of that first portfolio of rental properties or their first apartment deal. It’s all about, well, I’ve got a box in the fear box in the downside and that’s sure that’s important. Doing research, you’re running your numbers. And so Frank, discuss that for a minute because it’s like you’re overcoming your fear by this addiction of the unknown, the addiction of excitement. But you’re not doing it in a reckless way, right? When you build a spec home, a $30 million spec home, you’re still doing all the research on the area, the land, the cost of materials, the cost of labor, the decorations, the artistry that goes around it, everything that goes into it. So talk about that for a minute, because we’re not discounting, we’re not saying be reckless here, but we’re saying do your research and then pursue the unknown because of the fun, the excitement, the happiness, the joy. Tell us a little bit more about how do you manage that.
Frank: So I’m so used to kind of delivering some of this message that it’s embedded in me for your listeners to hear real estate artists. And if you look at my, you know, go to my webpage, it’s all about artistry. It’s all about you know, there’s showmanship, there’s bombast, there’s chivalry, there’s, you know, there’s all sorts of excitement. But behind all of that, I’m a businessman first and an artist a distant second. If I spent the whole time talking about my businessman, your listeners would tune out. Sure. But so you better believe I am a businessman first and the research that I do before I take a $30 million, in the case of the house I’m sitting in now, $14 million risk. I, the difference though is I’m looking for a way to do it, not looking for a way not to do it. And that if I look hard enough now, Josh, I’ve walked away from plenty of deals. Believe me. I mean, there’s certain things that just don’t, some of the best deals I’ve made are ones I didn’t make, right. So I’m not a fool that way, but I always go into it looking for a way to say yes more than no.
Josh: Wow. I love that. That’s so like you say that it sounds so basic, but most like they’re doing research online. They’re doing research on Facebook, they’re listening to podcasts with the intention and the mindset of saying, as you mentioned a few minutes ago, this is the second time you’re saying it. I’m looking for a way to basically not do this. I’m looking for a way out. I’m looking for a way, an excuse or a testimonial or a negative review that says, don’t do this. And your mindset of, I’m looking for a way for this to check all the boxes to go forward. I really want to go forward. Of course, there’s lots of times when you get the replies or the research tells you don’t go forward and you don’t do that deal. Very, very important to not do those deals, but a lot of my students, my subscribers are raising money.
Josh: You know, they’re raising capital for their real estate transactions and they’re like, well, I’m afraid to ask people for money or I’m not sure how to do it. Again, it’s the mindset of there’s hundreds of billions of dollars in real estate and people are recruiting and raising that capital from all walks of life, from all corners of the earth. It’s happening for everybody else. You need to go into it with the mindset of, yes, I’m going to find a way to do this because everyone else is already successfully doing it. As opposed to saying, I’ll never raise any money. It’s not legal. I don’t know how to do it. You’re looking for an excuse to not take the step, right. It’s a big part of it, big part of it.
Frank: So before we leave that. I’m going to give you a Bible passage that sums this up really simply.
Josh: Yeah, please. Love to hear it.
Frank: Whether or not you’re in the Bible or not, if you’re not into religion or the Bible, just consider this a great life mantra. If you’re into the Bible, it’s a great life mantra that’s in the Bible, so it doesn’t matter. It’s from two Timothy verses three or chapter three verse seven always learning but never able to come to a knowledge of the truth, meaning be forever learning, but don’t be a prisoner to the classroom of the mind. There’s too many people that over study. Like for example, my theme for all of 2020 by the way, I do this every year. I’ve done it for over 20 years. Identify a big picture theme. I’ve taken that Bible passage and I’ve modified it, always learning, but now able to come to a knowledge of the truth, so people that are constantly studying and researching, I mean, I’ve got sisters that graduated from Stanford and Notre Dame and they haven’t done anything with that because they’re just like lifelong students.
Frank: There’s a difference between a lifelong student, a lifelong learner, and those lifelong students are perpetually stuck in that classroom in the mind they’re in prison. In that classroom of the mind. I’d rather get out there and try some of this stuff so that’s the difference I think between us being people that think the way I think and which I’ve experienced success. Not because I had anything more special as far as leading up to this. I said 1.8 GPA, no college, no money, no connections more of an introvert at the beginning. The other point people will excuse that they make Frank, I’m a creative. I need to find somebody who knows the numbers or, I mean I’m really good with spreadsheets and I understand business plans, but I am not creative in the least. That’s bullshit. You got two lobes of the brain for two purposes and I will tell you, when I came into this business, I was a spreadsheet numbers.
Frank: Like I didn’t wear a tie, but I thought like a banker, because I’m a third generation banker. When I was told I wasn’t a creative, I said, oh you’re telling me I’m not a creative. I spent a decade exercising the right side of my brain. Go to my website and see that some of the stuff I designed, I wasn’t born that way. I was made a creative. So don’t buy the article, the argument that you are creative or you are a business mind, you can be both. And in business you got to be both.
Josh: That’s fantastic. Frank, I do want to ask you a specific question business-wise about real estate and about market cycles. You talk about bubble proofing in many of your books on your website, many videos, many keynote speeches that you’ve delivered. You’ve talked about how real estate, if done properly, is essentially bubble proof. A lot of people are talking about right now in today’s market, the beginning of 2020 real estate has been on a trend now upwards for about 10 years. And everyone’s talking about potentially a forthcoming recession. Tell us about your theory about real estate being bubble proof and how do you bubble proof your investments?
Frank: Okay. First of all, you create your own bubble. Nobody creates it for you. The fed didn’t create it before with lax lending rules. The mortgage industry didn’t create it because they gave out 125% mortgages. You created your own bubble. Don’t blame it on anybody. So I in my book Burst This, which is my newest real estate book. I went back and I studied six different real estate cycles dating back to the mid seventies to see really what brought them on because they are cyclical. Nobody’s going to argue with that. It’s just how, how long do they typically last? What to look for when they’re peaking. In other words, it’s time to trough and what to look for when they’re troughing, when it’s time to buy and what I have found I, A don’t try to time cycles.
Frank: Yes, Josh is correct. We are at the top of a cycle any day now, any month now, any year now it’s going to happen and they’ve been saying that for the last three years, by the way. It’ll happen eventually. You know, predictions are always right. What I take remember, let’s strip it down to me being a simpleton, 1.8 GPA guy, I have a formula that I stick to in real estate? Now I’m a buy and sell guy. I’m not a buy and hold guy. So I mean I can speak to it, but this for me I’m going to share with you is more buy and sell. Acquisition basis. So in other words, what does it cost you to buy? The opportunity could be a fixer upper, it could be a vacant lot, it could be an apartment.
Frank: Acquisition basis plus improvement basis. What does it cost to fix it up or build from the ground or what have you should never equal more than 65% of a RV of market value. If you stick to something like that, you can bubble proof your real estate investment and you just cost me a sale of my book. You don’t need to read. It’s that simple. And I’ve adhered to that. Now do I vary up, you know, in a really strong market where you’ve got to spend a little bit more, you know, in a sellers market. Yeah, I got to go up to maybe 70% and in a recessionary market, I won’t pay more than 60% but more or less, that number works.
Josh: That’s fantastic, Frank. What’s interesting about that is that’s the same formula that can be used on a $50,000 fixer-upper. It’s the same formula that you can use on a half a million dollar fixer upper or a new build. It’s the same formula Frank uses on a $20 million spec home that he’s building out with his artistry on the ocean. It just flat out works. It leaves you 35% of equity or profit for a potential downside cycle. Or if you’re building or renovating in the middle of an upside cycle, you’ll eventually have more profit by the time you’re done and ready to sell it.
Frank: Let me tell you what you what the person listening to this is going to say is missing from that formula because I hear it all the time and there’s a reason. Here’s why it’s missing. So let’s say that the little negative guy on your left shoulder, you’ve got the devil and the angel and the devil saying, but Frank, what happens if you go over budget? But Frank, what happens if you carry it a little bit too long? But Frank, what happens if you have to negotiate a little bit longer? But Frank, okay, so guess what happened? My margin just compressed from 35% to 25% or even 20%. I’m okay with that because if I sit back and I see a deal where there’s the possibility of a 35% spread and I think about it too long, guess what? Somebody’s going to jump in front of me. No, I’m going to lose the opportunity. So somebody else said, Frank, you’re procrastinating. You’re doing and see ya. I just jumped in front of you. So if it meets that 35% with all these other variables that I could give a shit about figuring out until the end, then I do it.
Josh: Got it. Love it. And look listen, I tell my subscribers all the time in my listeners, good deals go fast, right? So you’ve got to be able to jump on that thing. Do your research, not be silly, not be, you know, manage the risk as best you can do the research, but you’ve got to execute. You’ve got to write the letter of intent. You got to write the purchase agreement. You’ve got to get in the game and make it happen. If the deal makes sense, do it. Look, money, private money, hard money, bank financing, whatever you use. If it’s a good deal, it’s going to get funded. If you go tell enough people about it, go ask enough bankers. Go talk to enough private lenders, enough hard money lenders. They’re going to be like, hey, it’s a great deal. We’re going to fund it. And if you are not bankable to my subscribers, again, if you’re not bankable, find a partner who is, bring somebody in who can help you get that deal financed. Frank, listen…
Frank: Money will never hold back a good deal. It never does. You’re right. Money will never stop a good deal.
Josh: Frank, listen, I want to know, um, as we kind of round third here and kind of head for home, two things. I want to learn more about your, when I watch you on Facebook, Instagram, your posts, you often talk about your faith, your spiritual faith, your, the power that it gives you, the strength that it gives you to be out there to be different. It gives you confidence. Talk to me a little bit more about that. Being a Christian, it’s not necessarily always popular to talk about your faith or your spirituality, whether people believe in Jesus or some other religion or higher power, the universe, whatever it is for you. I know you’re a Christian, believe in Jesus Christ. How has that impacted and how do you bring that to the forefront?
Josh: The reason why I’m asking is for longest time my father was a business owner. He is now 73 years old, has advanced Parkinson’s. It’s taken over his mind and his body. But the ultimate lesson I learned from my father was that he tried to bring the message of Christ, bring the message of goodwill, bring the message of positivity to his employees and to the world through his business. He tried to bring it, we used to belong to a group called Fellowship of Companies For Christ International. I used to love to go to these conferences because they were business owners and all different walks of life who tried to use their business as a platform to talk about their faith. You’ve done that in a lot of different ways. Talk about why that’s so meaningful for you. How do you do it? If my subscribers want to incorporate that more into their life, they don’t know how to do it in their business. What are some thoughts around that?
Frank: So first of all, you mentioned Instagram. I’m starting to use Instagram more. If you listen to this is The Frank McKinney just to The Frank McKinney go there. Because I really think that, you know, there’s some of the photos that we put up over the beautiful houses that we’re building or what we’re doing in Haiti. It’s, I mean on Facebook you can find me there too. But Instagram is a, I like the platform. Anyway, to your question. I’m going to, so if you’re not into religion, organized religion, I don’t want you to tune this out because this approach works regardless if you’re Muslim, Hindu, Christian, or Jew or Agnostic or Atheist or any other, any other belief. God, my God and your God wants to reward responsible stewards. There another passage from the gospel of Luke chapter 12 verse 48 I’m going to paraphrase it very simple.
Frank: To whom much is entrusted, much is required to whom much is given, much as requested. And it goes even further to say to whom more is given even more is required. So isn’t that a great life mantra God has given you and me? So I realized that he’s given me so much with that track record of juvenile detention and horrible GPA and just no hope to have to have found my professional highest calling. And really, when I say professional, highest calling, I define that as being a gift God gave you the listener to do something a little bit better than most. Not better than everybody. Just a little bit better than most, okay. That’s the gift. That’s your professional highest calling. Josh is one of the best, not the best, but little bit better at podcasting and all these investments in most, what’s your spiritual highest calling Frank?
Frank: I say to the mirror, we had a very low point in my life in the late eighties or late nineties I was very wealthy, doing very well, but I had lost all heart and my soul. I was depressed. It was all about putting more cars in my garage, closing my closet and food in my pantry. And I did not put any soul back in my heart in decades or in a decade. So I got back to reading the Bible and that passage, I wrote a whole book titled The Tap and The Tap, it’s a step beyond the secret. I’ve always said you can’t learn the secret until you’ve been tapped and the part about being tapped as God comes down and taps you on the shoulder many times in life. And if you look, you look up the tap on the internet, you’ll see an image from the Sistine chapel, the hand of God going down and touching.
Frank: I took out Adam. I actually I had to pay a royalty to the Vatican to take out Adam from that painting for my image so that I could put you the reader. And if you see the finger of God is touching you on the shoulder, he’s tapping you on the shoulder so the book, teaches you how to recognize life’s great tap moments. They’re happening to you every year and you just don’t recognize it. Or if you do, folks, what you’re doing is that tap is like an annoyance. You take your finger, you’re rubbing it off saying, I don’t have time for this. Well, I was tapped in the late nineties when I was depressed. Why am I feeling like this when I’m on top of the world? I’m providing housing to the world’s most wealthy. You really don’t need another house.
Frank: What are you doing, Frank, for the world’s most desperately poor and homeless that don’t have shelter? It came to me and I went, I started volunteering at a soup kitchen, feeding the homeless one hour a week. Had I not answer that tap Josh, I wouldn’t have now built 28 self-sufficient villages in the poorest country in the Western hemisphere. That being Haiti, 12,400 children, what were eating dirt flavored with bullion. Yes, mud patties that look like hamburgers flavored with bullion and lemon juice. 12,400 kids now have a self sustaining existence plus their family because of me saying yes to this tap moment. Frank, you’ve been entrusted with a lot. It’s, that’s a big responsibility. Take it seriously. I’ve given it to you. Act on it.
Frank: Now for the negative thinker listening this, they’re going to say, well, that’s easy for you to say, Frank you’ve got a bunch of money. You can go and build villages. Stop right there. Before I had the treasure and before I even had the talent, I had the time to share with the homeless people one hour a week. That’s what I did. I shared, one hour a week I just went out, passed out homeless meals to the homeless. So that concept of God rewards responsible stewards. How responsible are you being today with the blessings you’ve been given? And if you say, it’s easy for you to Frank view you’ve got a bunch of money. Untrue, come to Haiti with me you will feel like the richest person in the world. Once in my belief that it’s clear to our God that you are responsible steward for the blessings that you have. Now the more that you’re praying for will be opened up to you because if you inventory your prayers at night, even if you’re mildly religious, if you look inside your prayer, there’s some form of more inside that prayer, more health, more love, more peace, more happiness, whatever. God wants to give you that more, but what are you doing with the more you already have?
Josh: Love it. Wow, Frank, that is a powerful, powerful message. Thank you so much for that. Frank. Let’s tap on home plate here. Tell us a little bit more about Haiti. You just mentioned it, we mentioned it a little bit earlier, but it’s such an amazing thing. 12,400 children, 28 villages. How can people participate in that with you? What’s the mission? They’re the poorest country in the Western hemisphere and if any of my subscribers want to donate or go to Haiti or just participate in some way, where can they get more information?
Frank: I might, my first suggestion to your listeners is put down the remote for your X affinity account or Netflix. Go to my website. It’s Frank- McKinney.com it’s Frank- McKinney.com. Make sure you put the hyphen between my first and last name or your go to a dentist site. And it’s thoroughly entertaining. I’m sure you went there, Josh, where you can see some of these beautiful mansions that I’ve built. You can see the villages in Haiti I’ve built. You can read sample chapters from all my books. You can see my journey through the desert and so I would encourage you and on The Caring House page, which is the name of our charity that builds in Haiti, your 78 different donation options that range from a poor range, from a $4 and 75 cent chicken, which is the cost of the latte you bought from Starbucks today, all the way up to an entire village for 285,000 anywhere in between there, there’s 78 options that you can help us by building these self-sufficient villages.
Frank: And I want to make sure you understand charity exacerbates poverty. It does not solve the problem. We are not a charity. We’re in the self-sufficiency business. So you’ve heard of a return on investment. We coined the phrase ROD, return on donation. I’m able to stretch my dollars all whole village for $285,000 that’s 40 concrete houses, a school, a community center, a clinic, renewable food, clean drinking water for $285,000 grand and for those of you have a couple bucks, you can help me build one of those villages by building a single family house for a family of eight for $4,800 made out of concrete. That’s a single-family house. It’s not big. It’s probably as big as your living room at home, but it’s concrete, it’s hurricane resistant, it’s earthquake resistant and it’s a fantastic self sufficient way for you to help us through The Caring House Project. So Frank-McKinney.com.
Josh: Fantastic. Frank, listen, this has been an hour that I will never forget. Thank you so much for being on Accelerated investor.
Frank: Thanks for having me to the AI show. It was great fun.
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I love talking with people about their “why”, or what makes them strive for success. Each and every one of us has a story and a deep personal reason for working so hard. I talk with Frank McKinney, a real estate artist and Renaissance man, about how his passion and faith shape his real estate business, and he gives some great advice for how you can find your passion and faith too.
When you’re ready to dive deep into your aspiration, Frank suggests you begin by asking yourself, “What’s my personal brand?”. And once you start doing that, aspirational endeavors and ideas will start coming to you. Finding your brand and your authentic self may mean pushing away 90% of your audience, but the 10% that remain are going to love you.
A lot of people never even take that first step in their journey because they’re afraid. Fear is always associated with the thought of taking a risk. And risk is always associated with a big change or challenge in our life. But you cannot let fear stop you.
As an ultra-marathoner who’s run the Death Valley race 12 times and failed 5 times, Frank knows about failure. But that’s not what concerns him. He doesn’t want to feel regret for the things he didn’t do. He says you should take the ATV approach to life: Authenticity, Transparency, and Vulnerability.
Even though Frank was incredibly successful from building million dollar houses, he woke up one day and realized that he was depressed. He started reading the Bible and he had an epiphany. He realized that he was building houses for the world’s wealthy, but there were so many people without any home, and that’s when he decided to build houses in Haiti.
If you’d like to be a part of Frank’s Caring House ministry, he would love for you to join him. He truly believes in giving back because he’s been given so much, and his passion and faith shape his life.
- How to create your own bubble in the market.
- Why you should never equal more than 65% of RV of market value.
- A mantra for overcoming fear.
- Frank shares the scriptures that are at the heart of his charity work.
- How Frank uses his addiction to excitement in a positive way.