#136: Raising Capital for Multi-Family Syndications – Part 1

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, guys, welcome back to Accelerated Investor. I’m really excited to share this episode with you. Today I interview Adam Adams, otherwise known as Triple A. Triple A Adam Adams is an educator. He has a coaching program. He’s got an amazing podcast. But check this out. He has invested in over seven large multifamily syndications. He owns over one thousand four hundred doors or units of apartments with a value of over one hundred million dollars.

Josh: And in today’s podcast, I ask Adam, first of all, what is he working on right now that he’s most excited about? Which he’s going to tell you about his event he’s hosting. Raising Money Summit, over a thousand people. I asked about his favorite asset that he’s ever owned. His favorite ways to raise money. And we also talk about specific steps to build a leadership platform to raise capital. We also broke this interview up into two parts. So this is part one. So hope you love and enjoy this episode with Josh Cantwell, Accelerated Investor and Adam Adams.

Josh: So, Adam, welcome. So happy to have you on. Hey, why don’t we jump in right away. And tell me a little bit more about some of the most exciting things that you’re working on right now? Obviously, we’re in the middle of this coronavirus stuff, this COVID stuff. So I always like to start with my guests and figure out, have my audience kind of learn what you’re doing, but learn in real time. What are you working on right now that you’re most excited about?

Adam: Right now we’re working on Raising Money Summit 2020. It’ll be our third annual Raising Money Summit. It’s all about attracting passive capital for bigger deals. And what’s really awesome about that or why I bring that up is because every other year, every other year, we host these conferences and it’s all me. I have to be the one that does everything. And what’s kind of cool is because of Coronavirus. Like you mentioned, my team is not closing deals for the next few months. And because of that, I’m able to get all of them to kind of help me out. So this is gonna be an epic Raising Money Summit. That’s kind of cool.

Adam: Also, it’s going to be our first virtual one. So we’re looking at all sorts of platforms that are going to help people be able to actually do.. You know how a lot of people say to them, say, when I’m going to go to a summit or a conference? The main thing that I want is just a network or the main reason why I bought a ticket is a network. So we have found a software that’s going to make it feel like you’re literally at a hotel. You’re walking the table to table sitting down with people.

Josh: That sounds really cool. So if people come, let’s say there are 500 people that sign up and you’re able to put them in groups of 10 like a virtual like round table or something?

Adam: Exactly. Yeah. We should have a little over a thousand people. There’s going to be all these different rooms, it’s going to really, really easy to network. And so when you ask what what’s the most exciting thing? It’s definitely that. Because it’s the first time we’ve done it this way and it’s the first time that I’ve had my whole team helping me because we’re not analyzing a bunch of deals over the next couple of months.

Josh:So I’m curious, you want to talk about hosting an event with a thousand people is big. You know, you have to have a big following. You gotta be in a lot of places. You’ve got to have an impact on a large community. So I wasn’t planning on going down this road, but help me understand what have you done? What are some of the logistics? Help our audience understand how you built such a following that you can attract a thousand people to a virtual summit?

Adam: Yeah. I feel really confident that we can do a thousand. Paying the prices that they pay. But if we just needed to get people for free, it would be easier because what we’ve done. But I’ll share it because I think it’ll be valuable to some people. For instance, if they are trying to attract capital, then then this definitely will relate back. Or if they had some type of coaching program, it would relate back. And what that is, is I think of three different pillars. And this is what we implement. And the people that I see that are really crushing it and able to pull a lot of people into a seats or virtually they do follow these three pillars. And so the first and main one is whatever you do on social media. And the reason I say that that’s the main one is because if you just have the other two without the social media, nobody is going to follow you at all anyway.

Adam: For instance, my podcast, right before I sold it just a few months ago, it was in the top one percent of all podcast on iTunes. And one of the things that I noticed is that nobody ever listened to my podcast until I told people what I was doing on social media. When I was able to share it on social media, be myself on social media, start to connect with people on social media. They said, oh, I’ll go and check out his podcast. But they weren’t like naturally, just kind of scrolling through podcasts and being like, oh, I really need to listen to this. So I got my listeners because I had my Facebook following and people started listening so they would share it and they would end up what we did as the algorithms of iTunes ended up being hacked into.

Adam:So the algorithms of iTunes said, oh, now he’s starting to kind of get this these people following. It was just because I was recording my episodes like this one, but I was recording it and importing it live on Facebook at the same time. And people are like, well, this is a cool show. How do I find out more? Right. And so that’s the main pillar is whatever you do on your social media. And I don’t mean a business page. I mean you who you are, the true authentic. You don’t be anyone that you’re not. Don’t pretend to do whatever if you love wine, talk about wine. If you love cross fitting or mountain biking, you talk about those things, right? And then people just start to say, I like this person. And then they start to say, oh, they’re in real estate.

Adam: They already want to be with somebody who is in real estate. But they’d rather be with somebody who they who has the same goals, the same objectives, the same hobbies as they do. Right. So social media, then there’s two more pieces, two more pillars. And one of them is a thought leadership platform for that. You could write a book or you could have a ghostwriter write a book for you, or you could focus on a podcast like we’re on right now, or you could have a YouTube channel, whatever it is, whatever the thought leadership platform that you have, the purpose of it is to have your potential followers talking about you when you’re not in the room. You want somebody to say, have you heard Adam Adams’s five episodes about raising money? Have you heard Adam Adams’s five episodes about how to start a Meetup group that really attracts people?

Adam: And you want them to talk about you when you’re not in the room. And so that’s what your thought leadership platform does. If you’ve got a book, people share your book. Hey, this is a good book. You should listen to it. Right? I listen to my books. It’s all audible. Obviously, I gave that out. Or you should read this book. And so that thought leadership platform is going to be important. It’s going to help people understand that you are who you say you are. It’s going to help people understand that there is some authenticity behind what you do. It’s going to also give us a little bit of credibility only based on the fact of if the only people that are saying talking about your book are saying good things, like there’s some thought leaders out there that have done bad things and their name gets blown out fast.

Adam: But if you are a thought leader and you don’t have that, it helps somebody have more confidence in working with you. So that thought leadership platforms have to be important. The third and final one is all about having live events. Now, you don’t have to get crazy. I’m not saying you have to host workshops or conferences like I do with a thousand people. That’s not the goal. Let’s just say you’re trying to attract capital. You’ve got to be able to sit down with somebody face to face. You’ve got to be able to connect with them because a lot of times people don’t really, truly trust you until they get to know you in person who’s face to face. So think of it like these three pillars. Think of it kind of like know like trust that maybe the know is the social media or the podcasting. The like is the podcasting or social media.

Adam: But the trust, the final step is that in-person event. Or let’s just say you just have dinner with them. It’s doesn’t have to be an event. It could just be getting together, you and your significant other them and their significant other. You’re going to connect so well in that way. You can also have book bootcamps. Let’s just say you have for some avatar. I call it an avatar. And let’s pretend you’re trying to raise money. Your avatar is a passive investor. And so you think, what does a pass investor what? And then you give it to them in a boot camp or a workshop. Maybe it’s a free workshop. Maybe it’s a two-day paid boot camp. Maybe it costs them three grand to be there. Who knows? Who cares? But having that in-person event is going to do several good things. But the biggest one is to allow them to really get to know you to the core.

Josh: No doubt and I agree with all that. So much good stuff there. Adam, that was fantastic. Way to kick this thing off with some fireworks. I appreciate that. And so much of what you said that I can relate to in that we used to do before coronavirus two big events a year was a lot of our students that would come into learning about residential. But as we built up our fund and then started buying apartments, them seeing us on stage, you know, that was really the ultimate platform because they already viewed us as a thought leader, viewed us with credibility and thought, hey, if I’m going to invest $250 grand in a deal, passive money, self-directed IRA, whatever. God, why wouldn’t I just do it with that guy? I’m learning from him. That’s kind of the ultimate situation. But there’s so many other ways.

Josh: I’ve raised tons of money just through go-to meetings, go-to webinars, sharing a webcam. You know, obviously, thanks to these dinners with significant others has always worked and then obviously kind of build that up. And then I love the use of scarcity. You have all these people that know, like, and trust you. Then you’ve got an apartment to offer. If it’s a 10-million-dollar deal, you’re raising two million bucks. You say, look, I’ve got 70 people on the line, but I’ve only got room for 20. I’ve got 20 units available at $100 grand a piece. And that scarcity factor jumps in. And they’re like, hey, I want a unit. I want a unit. I want two units. You know, when you can build it up to such a place where you have more capital than you need. Then you can drive even the offer to your investors down.

Josh: I know that’s a little bit of sin, but to drive it down because again, it’s supply and demand. You’ve got this deal. You get this much capital work with. Fantastic stuff, man. Hey, Adam, tell me about when you look at your portfolio, you’ve got over a thousand units, g.p and seven big projects, maybe more by now, you know, about 14, 31 or doors or more. Big podcast. What’s the favorite deal that you’ve worked on? Maybe a deal you’ve done yourself or maybe a deal with one of your students or a deal with one of your mentors or joint venture government that you just consulted on or just raise money? I don’t know what your favorite deal that you’ve done and why? Why does that one have a special place in your business?

Adam: When I first heard you ask the question, I was going to talk about my first syndication because, like, you learn so much on that first syndication. But I would have to say that when I really look at it, what my favorite deal is, it’s the one that we just walked away from. Coronavirus, came and hit us and scared us. And we thought maybe we might lose past investor money if we closed this deal. And it was a difficult thing because we had our earnest money on the line. Hundred eighty-five thousand. And then we stood to make a acquisition fee of three hundred and thirty thousand. So that’s five hundred and fifteen thousand dollars that if we went it, we would be that much richer. And if we didn’t, we’d be that much poorer. And we had raised it’s about six million dollars. So it’s a big project that we had raised about six million dollars. We were ready to close, and Corona virus started giving us the heebiejeebies and we weren’t sure.

Adam: And by the way, I own multi-family back in 2008. And I kind of pulled out. I lost a property in 2011 because there was aftermath to the crash. Several years of aftermath. And so I remember we at our company, we discussed we always talk about this thing called. We always do the right thing, even when it hurts. It’s one of our values. We say it every single Monday at our L-10 meetings. We do the right thing even when it hurts. And I remember. I gulped and I was like, I’m about to tell my partners that I think we should get rid of five hundred fifteen thousand. We should be that much poorer. Everything that we’ve been working on for the last eight months, I think we should give it up because that’s what we should do. It’s the right thing.

Adam: And I thought that they were gonna yell at me. I was like, my partners are gonna be so against this. They’re not going to want to do it. But I let them know and they truly believe in those values. And so us pulling out of that, I think it did a couple of things. The pass investors that we wrote the checks back and gave them their six million dollars back, they see us as more credible. They see us as more like, that we’re definitely gonna be doing the right thing. They’ll probably tell their friends. But what I like the most is this syndication business is a business for the next 30 years and or fourth lifetime. Right.

Adam: And so we don’t intend on just trying to get one deal and be rich. And so I really believe that ultimately that was the right decision, because if we ever would have lost pass investor money and I had that inkling that we possibly could. And we would have gone through with it, I would have felt horrible and I absolutely would have lost my credibility for the rest of our journey in syndication. So I would say it’s the one that we walked away from.

Josh:So you’re hearing the term, “Pencils down”, right? So multifamily transactions just in May of 2020 versus May of 2019. The total number of transactions are down 81 percent. So in that same month, a year ago, there were a hundred transactions across country, obviously, there were more. But to make it simple, hundred transactions in May of 2019, there were only 19 transactions in May of 2020. Pencils down. So obviously that’s an example, the pencils down deal. What about that deal made you feel like you might lose money? Did you think there was the tenant base was going to show some cracks because of losing jobs? Help me understand what was on your mind that all the sudden you said, let’s pull plug on this one?

Adam: It was I mean, we would have to compile a bunch of things. So I’m reading Malcolm Gladwell’s The Outlier. He was talking about how you’re not going to crash the airplane just because the pilot is tired. It’s going to be because the pilots tired, and this happened and lack of communication and the wrong person was in the seat and they were afraid to talk to the pilot and this other whatever it was. And it was raining. It wasn’t one thing. And it would take a long time to go through what, you know, really was pushing on us. But I would say the straw that broke the camel’s back was that the state of Oklahoma got into a financial crisis during the crisis where as the governor came out and said that he didn’t know if he had enough money in the bank to be able to withstand a storm.

Adam: If this storm lasted for two years, they would be screwed. So I just I remember it was like. I just thought to myself at that time, man it’s just one thing after another. It’s that it had two fires while we were under contract. It’s that the underwriting’s changing. It’s that. I mean, I could just go on, but I would have to spend some time to really show you every reason why.

Josh: I appreciate even those one or two. The straw that broke the camel’s back often is, hey, man, look, I’m done. You wake up, you’re like, I’m out. It’s not something that like you think about all day and you arrive at. When I make those kinds of decisions that I’ve had to make a couple really difficult ones. It’s literally something that just says. A lot of times it’s in the morning. Wake up, you’re like I’m out. And actually you feel like that monkey fall off your back. It actually feels good. I’m out of that one. I’m done. I’ve had to do that with a couple partnerships over the years. Actually feels good.

Josh: You kind of turn a Frankenstein them to keep them together. To the point where you’re like, Frankenstein is dead. And it feels good. Oh, and next question. Tell me about your favorite deal structure. A lot of people have a favorite deal structure. Whether they’re in residential, they own portfolios, fix and flips. Obviously in multi-family, there’s different structures. Value-Add. Is it ABC class? Is it big heavy Value-Add? How long’s your hold time? What’s your favorite type?

Adam: Yeah. So we usually like to look at markets that have a million or more people in the MSA. They call them. About a million or more people in the metropolitan plus the small areas around it, like the suburbs. And so we’d like to have a million or more. We’d like to see a market where it’s growing one percent year over year for a long period of time. At least three years is our goal. We like to see that the market is also growing in job growth. So we’d like to see two percent year over year for at least the last two years. These are all really good signs. We also like to make sure that there’s good job diversification. So what that means is that not any one industry takes up more than 25 percent of the job force. We like to see housing prices going up over time. There’s a few different pieces like that.

Adam: As far as the asset class itself, we prefer anything in the five to 10 million mark. That’s our sweet spot. Five to 10 million. Anything bigger than that, it just it feels a little bit overwhelming to us. And we also see that there’s a lot more competition with big money and big checks. And so that five to 10 is our sweet spot. We have been looking at C class only. However, sea class got hit a little bit with this crash. And so we are thinking we’ve always been that those people that said, like the other people who say B, C class, we always thought you’re a joke. B, C, like pick one, man. And so we’ve all been we’ve been C, C, C all the way. But what’s interesting is I feel like we might possibly drop Cs going forward and just move to Bs.

Adam: Because we’ve been doing it for a little while and we feel like that’s a really good market, so we’re still working on that. As far as the actual market during Corona virus we’re going to wait and we’re going to look. But just the fast-quick answer to your question, What is the favorite deal structure? I would just say syndication. That’s the answer. I like syndicating deals, raising other people’s money, giving them an opportunity to be passive, giving us an opportunity to make infinite returns, because it’s not just returns on our money, it’s returns on our time. And we’re using and utilizing other people’s money, helping them get involved. And so all around, I would say if the listener is interested in getting into something, think about syndication. It is a remarkable way to get involved into property.

Josh: No doubt. So I hope you enjoyed this first part of my interview with Adam Adams. We broke this up into two parts in the first part you just heard. I hope you enjoyed it. If you did, leave us a five-star rating in review in iTunes. Also, don’t forget to join our free Facebook group, which is called Accelerated Investor. Go to Facebook right now. Open it up and join our free Facebook group. You can also leave a rating and a review of the podcast inside the Facebook group and ask live questions of me and our team.

Josh: Also, in a few days, you’re going to hear part two of the interview with Adam. Where we kind of do a deep dive into how he jumped into real estate, how he got started? Also, some of his advice that he would give his younger former self and some personal hacks that he has for peak performance, for better investing and for being a better dad. I hope you enjoy it.

Hey, Josh here. And do you want to win a free Accelerated Investor T-shirt? All you have to do is give Accelerated Investor our podcasta rating and a review on iTunes. OK. Do that now then send us a screenshot on Facebook, Instagram or Twitter. What we’re going to do then is every week we’re gonna pick our favorite rating in review and we’re going to send that person a free T-shirt and maybe again, some other cool fun stuff as well from Accelerated Investor. So, again, don’t forget to take a screenshot, leave a rating review, take a screenshot, send it to us so we know exactly who you are. And then once a week, every week on the podcast, we will announce a new winner. Don’t forget to take a screenshot and send it to us so we know exactly who you are. We’ll announce a new winner every week.

You’ve been listening to Josh Cantwell and the Accelerated Investor Podcast. Leave a comment on our iTunes channel and let us know what you want to learn next, or who you’d like Josh to interview. While you’re there, give us some five-star rating and make sure to subscribe so you can be the first to hear new episodes. Follow Josh Cantwell and his companies, the Strategic Real Estate Coach and Freeland Ventures on all social media platforms now and stay up to date on new training and investment opportunities to start your journey toward the lifestyle you’ve always dreamed of. Apply for coaching at JoshCantwellCoaching.com.

A huge part about raising money for multi-family syndications is getting your name out there and building your presence. Adam Adams, or Triple A, is bringing major value today by telling you how to utilize social media as you raise capital.

With over $100 million in real estate assets, plus 7 syndications under his belt, Adam knows how to attract capital. Listen carefully to how he uses podcasts, Facebook groups and posts, and LinkedIn to bring value to his audience, and build his massive online following.

And no matter how amazing social media is, there really is no substitute for face-to-face interaction. Adam organizes the Raising Money Summit where over a thousand real estate investors have the chance to network with each other. This year, because of COVID, they’ve gone virtual, which gives even more people the opportunity to participate.

Syndication is an amazing way to get involved in property. But because it involves other people’s money, there’s a different level of risk. Adam is blunt and honest about a recent deal he pulled out on because of the Coronavirus. It can be hard to walk away from something, but sometimes the relief you feel more than makes up for it.

For Accelerated Investor listeners, Adam is offering discounted tickets to the Raising Money Summit 2020. Just text “AI” (like Artificial Intelligence) to 55444. Don’t miss out on your chance to network virtually with other real estate investors.

What’s Inside:

  • What Adam considers a really healthy market to invest in.
  • How to use social media to build your presence as you raise capital.
  • The three pillars in a thought leadership platform.
  • How to know when to pull out of a deal.

Mentioned in this episode​

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