Josh Cantwell: So, hey, there, everybody. Welcome back to Accelerated Real Estate Investor with Josh Cantwell. Hey, I have a great, great interview in store for you today. It’s my friend Hunter Thompson. Hunter is a full-time real estate investor and entrepreneur. He founded a company and a podcast called Cash Flow Connections. He also founded and started a private equity firm based out of Los Angeles, California. He’s helped over 250 investors allocate their capital over a hundred different properties and investments. He’s personally raised more than $25 million and controls almost $100 million worth of commercial real estate. He’s been featured in Forbes, Globe, Inside Self-Storage, and a variety of other media outlets. He’s also the host of the Cash Flow Connections Real Estate podcast, which I was a guest on a few months ago. And he is the author of a book called Raising Capital for Real Estate.

In this interview, you’re going to hear about a few things. Number 1, we’re going to talk about economic indicators, and you’re going to hear a very specific story about the growth in Arizona, specifically job growth, population growth, rent growth, and why those growth numbers are creating a demand issue. There’s not enough supply, there’s too much demand, and obviously, the market’s going up. Number 2, we’re going to talk specifically and most of the interview today around Hunter is what’s called AENC System that stands for attract, educate, nurture, and closed system. We’re also going to talk a lot about speed and the speed of business and why it’s so important for real estate entrepreneurs to go fast. You’re going to love this interview on Accelerated Real Estate Investor with Hunter Thompson. Here we go.

[INTERVIEW]

Josh Cantwell: So, hey, Hunter, listen, been so excited to have you on the show, been looking forward to this for a long time since I was on your show a while back, and looking forward to recording this and having you on, so thanks for making a few minutes. How are you?

Hunter Thompson: Really doing well, and thanks again for the opportunity.

Josh Cantwell: Absolutely. So, Hunter is an active investor in the commercial space and has done millions of dollars’ worth of transactions. Hunter, I’m always curious, you have an amazing book Raising Capital for Real Estate. We’re going to talk more about that, but I’m always curious from my guests to hear mostly like, what are they working on right now? Like, they’re getting to the end of the year, we’re getting into the fourth quarter. This has been a weird year. I don’t know what you’ve seen in your markets, but I’m seeing a lot of deal flow right now because of the threat of the Biden tax increases next year. And obviously, last year, COVID pencils down, not a lot of transactions happening last year. So, I don’t know about you. I just walked a 170-unit building. There’s a lot of crazy stuff going on. Prices are going up. What are you working on right now? What are you excited about? And what are you seeing in the marketplace?

Hunter Thompson: So, I’ll tell you one that I think probably people would be a little bit more sympathetic to, and I’ll tell you my kind of ace in the hole strategy I’ve been implementing recently. So, just toward a property in Phoenix that, oh my gosh, what’s going on in that market there is just absolutely incredible. We’ve got a great team on the ground, just for context about, we pulled the data from the year-over-year growth in terms of rental income from June to June, and it was 15% increases for that year. And then we pulled it again in July, and it was 20% year over year. Like that is what it’s like to have a really hot market.

And I think when people hear that, they might think, okay, so clearly there is a bubble, it’s going to pop, etc. And we hear numbers like that, you should be thinking like that. However, when it comes to market, some of these really powerful and already robust growth markets, it’s just a matter of supply and demand. If hundreds of thousands or millions of people are moving there, and there’s a constrained amount of supply due to, there’s a lack of development and workforce housing, for example, B class apartments, the prices are just going to go up. Now, is that going to go on forever? No, of course not, but it’s not going to do what a lot of people think it might do, which is like this volatile thing. Rent growth, that’s not volatile. Population growth, that’s not volatile. Income growth, personal income, etc., job growth, these are nonvolatile, slow, and steady. They move like barges, these economic indicators, not like speedboats.

So, if you see a trend going that direction, you can be late to the party and still enjoy incredible benefits in markets like Phoenix and Houston, etc. So, we anticipate doing it. And I said I was going to give you two. The other one, though, is an ATM fund that we’re working on. And I know maybe a lot of your listeners who possibly uses ATMs, we have a very interesting strategy here with the demographic play focused on the unbanked and underbanked, and there are transaction volumes, at least in this particular demographic, continue to increase, and a lot of people steer away from it because the challenges with Venmo, PayPal, etc., that all of those technologies require a bank account. It’s a really interesting demographic play.

Josh Cantwell: Nice. I love it. Exciting stuff. I appreciate you sharing a little bit there. Now, Hunter, I wanted to jump in with you. You wrote a book Raising Capital for Real Estate. It’s wildly popular. I see your ads and your posts on Facebook about it. We talked a little bit about it when I was on your podcast. And you have a specific system that you teach in the book about raising capital for both residential and commercial deals, I’d love to peel back the onion on that. I know we’ve talked about a little bit about the AENC System, you’ve taught this to hundreds, if not thousands of people. So, I’m curious to peel back the onion on that, give our audience a little bit of a flavor of what that system looks like, how you’ve perfected it. And then guys, of course, as we talk about this, you’re going to want to get this in his book Raising Capital for Real Estate so we’ll mention where to get the book as well. But Hunter, what is this system? What is it? Where did it come from? Let’s start to just teach our audience a little bit about it.

Hunter Thompson: Well, I’ll tell you this, man, like many of the great lessons we learn in life, you have to go through some challenging times to kind of get lessons, right? Like you don’t really figure out who you are if you win all the games, you know what I mean? You figure out when you have those down moments and you’re at the back of the game, and your dad comes over, he’s like, “Hey, man, you played hard, you got in there.” That’s exactly my story with raising capital. I got completely blindsided because I fell for a myth that everyone’s fallen for it sometime in their career, which is that if you have a good enough deal, the money just shows up. And that’s perpetuated by people who already have some version of the system that actually works, which is this AENC system.

So, my story with this is basically back in the 2010s or so, the mobile home park business was trading at around 10% cap rates, and that was, I mean, trailing 12, you didn’t have to do anything. You just bought the property. If you bought it in cash, you’re producing 10% cash flow, year one. It sounds like a myth right now, but I’m telling you it was the reality. So, I kind of uncovered this through mentors and such and was like, this is incredible. I got to share this with my friends and family, and they’re going to be so eager to invest. They’ve got money in CDs and bonds.

And so, I did a luncheon, kind of a presentation to some accredited investors, friends and family, plus one, plus two. I got 30 people in a room that was only supposed to hold 20 people. So, I thought it was on, you know what I mean? Walked in there, gave a PowerPoint presentation that I’d given today about the industry, the incredible cap rates, the supply and demand disequilibrium. We had an excellent strategic partner and even answered some buying questions. What’s the minimum investment? What’s your track record, etc.? And it came time to close, and I handed out a piece of paper to everyone that was at this lunch, and I said, “Just write down what you’re interested in investing, fold it up, write your name, I’ll keep it confidential.” I didn’t want anyone to know this person over here is investing $300,000, etc.

And I went to a private room afterward, unfolded the pieces of paper, and I had raised a total of zero dollars. Nothing, not a dollar, and I had committed to raise a half-million for this strategic partner. And first of all, I mean, look, from the financial standpoint, that hurts, of course, but this was just embarrassing. Like, this was my first real attempt at becoming a real estate entrepreneur. And so, it took me some time. And I’m not just saying this to be dramatic. I mean, it took me months to recover from that emotionally.

So. if you’ve been through that or you’re going through that right now, I mean, you’ve got to learn those lessons, you’ve got to go through those things, but it’s important not to just feel that pain, but to try to figure out, what went wrong? What’s the difference between what I’m doing and what people who are successful that are doing this, etc.? And I spent a lot of time kind of quietly contemplating that and eventually, recognized, I don’t want to ever try to convince anyone to invest with me again. I don’t want to sit up in front of a group of people that have never invested in real estate before. I thought that was exactly the reason I thought they were going to be so excited about it, right? Oh my gosh, 1% CDs, well, 10% cap rates, and nothing can be further from the truth.

I want to find a system, especially an automated system to, you mentioned, the AENC System, the attract, educate, nurture, closed. And so, instead of thinking of myself, like at the center of the circle and going out to try to convince people to invest with me, which, by the way, you can do brute force, you take enough time like I get my mom to invest with me, but it took 35 years to build that relationship. It’s not scalable, right? So, you got to find a way to invert– say it again.

Josh Cantwell: It’s his mom. She sort of birthed you, so…

Hunter Thompson: Yeah, exactly. You can’t scale that relationship, right? So, as opposed to looking at it like that, I think of it kind of as an inverted triangle where at the top or the funnel, people use that terminology, where I’m trying to get as many eyeballs, attention, attention, attention, attracting attention to myself, and then using supplemental, especially online, reusable, repurposable pieces of educational content to get them so excited and so nurtured about the investment thesis or the investment itself that by the time I send out a deal, you can basically snap your fingers and oversubscribed it. And it sounds like an infomercial, but we’ve done this over and over and over again through that system, which is really the way to get anything done. It’s just that I really like the real estate business because there are more zeroes and more commas.

Josh Cantwell: Yeah, right, right. So, this system starts when you have this kind of embarrassing luncheon with a bunch of friends and family, plus one accredited folks, you think you’re going to crush it, it fails. You’re embarrassed. You kind of tucked your tail between your legs for a few months to come back. When does this become reality? Like help me understand because I’m sure there’s a lot of people and our audience that are thinking, well, I would do the same thing. I would hold a lunch with my friends, my family. I would pitch them, oh my God, now, what if that failed for me because that was probably their first strategy, right?

So, you have this epiphany to say, okay, I’m going to do it a different way. How do you psychologically recover from the failure? And what did you learn to say, well? and what were these kind of examples of these little pieces of maybe information, these experiences that say actually, the way I should do it is this to attract people, to educate them and nurture that process and do a lot of it online and automated? Tell us, I know you’re going to tell us how to execute the AENC System, but I’m curious, mostly how it unfolded.

Hunter Thompson: Totally. So, I mean, first of all, it’s like I could literally do eight hours on this right now. That’s my whole book of this. As you’re asking these questions, I’m getting so excited because there are so many lessons to learn. I mean, first of all, what I did was I looked around and without a trained eye, you don’t really know how to model even what works. So, you can see what other people are doing, but you don’t really know what’s working. You don’t know what is the X factor that’s getting them the results. So, I’ll give you an example.

At the time, single-family houses were kind of all the rage, 2010, etc. And so, I basically modeled a lot of people’s websites and started to get some traction. And the most challenging thing about it was that it did work, kind of, which is so crippling as an entrepreneur because we are entrepreneurs and we’re incurring this risk because we want quantum leaps. We don’t want linear growth. We don’t want kind of works. We could easily go get a W-2 and get a 5% raise every year. So, what systems and processes can I make those quantum leaps? But it’s challenging when it kind of works because you kind of get stuck. Okay, just a little bit more, a little bit more, a little bit more. So, I built out a website, I created a blog, I started writing and doing these things I saw other people doing, and I eventually got my first $25,000 investor exclusively from online mechanisms. And I was like, okay, there’s a heat there. I want to go towards the heat.

Now, I’m having a conversation with them. How did you find out? Of course, I got to act like they’re not my first investor, but I’m thinking, like, how do I engage with them? How did you find out about me? What was the article that I wrote that really resonated with you? I’m using their exact terminology to repurpose it for future clients because I don’t know exactly what it was, but like, I’ll give you a perfect example. Some people may say that the stock market isn’t for them because they’re worried that the valuations are too high. Other people may say the stock market’s not for them because the cash flow is not high enough. Those are two very different personalities.

So, if I can create some piece of content that’s like the person’s looking directly in a mirror, speaking directly to their fears, their concerns, their goals, their wishes, etc., the more close I can use their exact terminology, speak to exactly what they most want, the better the results will be. And the AENC System is a result of that, right? So, I started around 2011 or 2012 and just continued to modify and adapt. And as I’ve been able to do it, I figured out exactly what works from my dream clients, and you can do the same thing for yours, by the way, if you’re listening to this. You just have to be super dialed into recognizing that your dream clients do exist, they are out there, and you want to be super focused on building your whole business, your whole online infrastructure, specifically, to attract them.

Josh Cantwell: Love it. I love it, And Hunter, I would love for you to comment on when you create a piece of content, create a blog post, a podcast about the subject matter, I think, because many people make the mistake of recording something and trying to keep, to a record one long piece of content that covers every base, every little question versus crafting micro pieces of content that specifically answer one question for one investor, like you just discussed, one challenge, one objection, and putting that out there so that one people can find it organically or virally. And secondly, when you do have an investor that you’re speaking to, and they have a specific question, you can say, “Oh, you know what? I wrote a piece about six months ago that specifically addressed that question. Go read it.” And then they’re like, it’s kind of that hole punched him in the face before they punch you concept. So, just talk to our audience about your content creation strategy of answering questions more on a micro basis versus a macro basis.

Hunter Thompson: So, a really great point, And for the listeners, you’re in such good hands. Josh is just the man. So, just pay attention and go that direction and go all the way down the Josh rabbit hole, and you’re going to get results pretty quickly. So, he’s absolutely right. So, like a couple of things there, number 1, sometimes we feel like we want to be smart, sometimes we feel like we want to be right, and sometimes we feel like we want to get results. It’s very difficult to do all three, but sometimes you can choose two, but you definitely want to choose one. So, intuitively, I want to come off as, oh, I know everything. Oh, I know about economics, I know about ATMs and multifamily and Phoenix and the market dynamics and raising money. I’m just kind of a generalist that’s good at everything. Ehh, wrong, because all of a sudden you’ve got everyone as your competitor and you’ve got no speciality and you’ve got no thing that every time someone brings it up, you’re the guy 100% of the time.

So, I would love to go on this podcast and talk about all the things I know to try to come off as smart, but guess what? You’ll never have me back on because you’ve already done that whole podcast. Just the same thing with article drafting and content creation. So, I want to have very specific to the point, pieces of content that will address whatever their specific concern is, but the really powerful thing is if you create that and you can weave that into a conversation, especially during introductory calls, where the whole point is to establish whether or not you’re credible, if I can later say, and by the way, I wrote an article about why I think interest rates are going to be lower in two years as opposed to higher. I’ll send you a link in just a moment. That is so powerful from a credibility standpoint because it means that you’ve had this conversation so many times that you want to create a scalable piece of content around it.

So, just boosting the credibility, and then by the way, of course, when they do listen to it, you’re going to be able to nurture that relationship far more quickly. And this is just so important because whoever can take someone from ice cold never heard of you to here’s the $100,000 the fastest wins. This is why the conversation about my mom investing with me is actually quite relevant. And it’s a joke, of course, but whoever can do it quicker can scale faster, meaning the portfolio of your dreams can be accomplished more quickly. And I always say great pronouncement of this, everyone listening to this podcast right now is going to make a million dollars, but it takes 30 years, nobody’s going to care. We want to expedite to get to those goals.

Josh Cantwell: That’s fantastic stuff. So, just walk us through real quick the AENC System and talk about attraction for just a minute, like, what do you do to attract people? Then go to the E, what do you do to educate? What do you do to nurture? What do you do to close? I know, again, it’s in the book, it’s hundreds of pages, it’s an eight-hour conversation, but give our audiences a little piece of each of the acronym part of the acronym and maybe some of your highlights about attraction. Like what’s your favorite way to attract? What’s your favorite way to educate? Help us understand that piece.

Hunter Thompson: So, first of all, it’s really important to take about 90 to 180 minutes and really dial in on who you want to work with for the rest of your life, especially for the whole period of the investment, which would be seven or ten years. So, the reason I say that is that during the attraction phase, different strategies and different terminologies are going to attract different clientele. So, for example, if I wrote a book called How to Make Money in Real Estate with no money, it can be a very different client based on who I’m actually trying to cater to at my private equity company, which is savvy, sophisticated real estate investors who are probably making their 10th real estate investment and working with their fourth sponsor. That’s my ideal client. That’s not everyone’s ideal client. That’s not BiggerPockets’ ideal client. It’s not a shot at them. They’re building a business on a very different demographic.

So, when I create content, I may have it as, like I said, a debate about interest rates, for example. I may say why it’s really important to invest in depreciating assets. That’s one of the reasons the ATM business is so compelling. The entirety of your investment goes to a depreciating asset. So, from ultra-high net worth earners and high-income earners, that’s very, very compelling, but to someone who doesn’t have any money, that doesn’t matter at all. So, like, what I’m trying to do is, number 1, get as much attention as possible, but I’m going to get it through hooks that would be most enticing through my dream clients. So, I can go on and on, but I think that’s probably– I’ll give you just the inside there.

Josh Cantwell: Love it. Then the education piece?

Hunter Thompson: Yep.

Josh Cantwell: This really comes from, if I can imagine, I’ve never seen your funnel, and I’m not in your funnel, I’m not in your education, but I imagine you’re using things like you’ve talked about blog posts, podcast content, YouTube videos, putting this on some sort of autoresponder or maybe something on email broadcasts or doing both to educate people in an automated way and educate people in this kind of one too many scenarios where you can educate hundreds or thousands or tens of thousands of people from one podcast or one brand or one platform. So, talk a little bit about the education process, just what’s your favorite thing to create? And talk a little bit more about how you’ve automated the process so that you’re touching so many people, while you might be on vacation or might be at the beach or might be doing a podcast with me, you’re touching people, you’re educating people in an automated, scalable way.

Hunter Thompson: So, happy to do that, but before I do, I got to make a really important point. So, if you’ve ever kind of– especially if you made a big purchase and you kind of didn’t even feel like you were being sold, those are the best purchases, where you’re just like, man, I just want this thing, and the salesman is just there to take my order. Well, the salesman is really good at what he does because it made…

Josh Cantwell: This sounded brilliant, like you’re happy to work with them, you’re happy to give him your money. You think he’s the greatest guy ever versus the pushy salesman that’s like pushing to you a sale.

Hunter Thompson: That’s exactly right, but so, I got to turn it around because you just mentioned that you haven’t seen my funnel that you’re not part of it. Nothing can be further from the truth. Like you got this really successful show. You’re inviting me to be a guest. You said you saw my Facebook ads. So, what I’m doing is working, but it’s working so well he doesn’t even know it. He’s just like, I just like this guy. I don’t know what it is about him. I just want to have him on my program. So, I’m trying to do the best I can, to attract people such as yourself, obviously, and make it feel organic and authentic that you actually seek it out in some way. So, as far as the educational piece of this, I’m a big fan of, I don’t want to ever present in front of 30 people again. I want to get in front of the biggest audience possible and then I want to record it and repurpose it over and over again to touch different audiences.

So, if I create an executive summary, which is an offering memorandum, which a lot of people use that terminology for real estate deal, I want to then take that same exact offering and turn it into a PowerPoint with animations and simply read the presentation because I’m already knowledgeable about it. That’s a webinar, right? So, now, I’ve taken an offering memorandum, turned it into a webinar, and it can be sent out over and over again. And I also do an interview, let’s say, I work with multiple sponsors, so I’ll do an interview on my podcast with the CEO. And now, I’m touching auditorium, I’m touching a reading, I’m touching a video presentation. And in a couple of months, we have our annual conference. I’m just giving different weekly, monthly, quarterly, annual ways to touch people with different touchpoints so that the education and the nurture component is just very, very robust across multiple senses. So, hopefully, that helps there.

Josh Cantwell: Yeah, that’s fantastic. So, you’ve educated them through this webinar, broken down your offering memorandum into a webinar, recorded it, again, so they can go on replay, many people can watch it, showing some interest. They’ve learned a little bit about the deal or about you. What’s your favorite way to nurture them now, to be able to see the client reach out and say, I’m in, and you’re like, I barely even know who you are, but that’s the true way? Because I used to be a financial advisor, Hunter, so I know we talked about this a little bit before on your podcast, but I was a financial advisor. It was very one-to-one. I would sit down in somebody’s kitchen table or at their business, we put together a financial plan or a business plan or an estate plan. They would buy products and then I would get to go to the next client.

And one of the reasons why I got out of it is the very linear growth you talked about in the intro, and I realized, I might be on a nice income, but it’s still a job versus like when I have somebody invest in my deals now, and they’re like, yeah, I was on your webinar last week. I listened to a bunch of your podcasts. How much is the minimum? Oh, the minimum is 200. Okay, I’m in. It’s like, oh dude, that worked. With your people, what’s that follow-up process, that nurturing process, like for you?

Hunter Thompson: So, some people may hear what you just outlined and think, well, that guy must be an idiot. You’re going to send $200,000 to someone he met on the internet, basically. And I understand why you may feel like that, but I bet that person is not an idiot. They’ve got $200,000 to invest. And we’ve had people, I recently had an investor send $600,000 wire without a phone call, and three months before that, he sent another $600,000 wire before a phone call. And he is certainly a very intelligent, very successful person.

And here’s the thing, though, the name of my company is Asym Capital, short for asymmetric, right? So, these relationships can be so nurtured that they know more about me than some of my best friends, especially on some of these topics, but it’s asymmetric. It’s one-sided. I may not know their first name, but trust me, they have done their due diligence. It just didn’t take my time on a one-on-one basis. So, anything I can do to do that, anything that’s super scalable, I do do the in-person conference because it gives an opportunity for a lot of our investors to come and join it. By the way, the name of the conference is the Intelligent Investors Real Estate Conference. By the way, that’s intentional, right? The Intelligent Investors Real Estate Conference. I’m not trying to pat them on the back. They know they’re intelligent. That’s the type of clientele that I like to work with. I’ve got other competitors that they want to work with investors that have never invested with anyone else besides them. And trust me, that’s a very cool way to build your business, but it’s not the way I set up my portfolio, so I don’t try to attract that type of client. You know what I mean? So, it’s, yeah…

Josh Cantwell: So, what I’m hearing, Hunter, about what you’re talking about, that’s a little bit different than I’ve heard from other guests is you’re very intentional about who your specific investor is and then you’re doing things through your education, your event, your book, your nurturing sequence to find those people. And I want to remind my audience that being niched is rich. Niche is rich. Go find who are your people. Some of my favorite guys to work with and raise money and raise capital with are guys that own e-commerce businesses. My favorite events to go to are e-comm events. My favorite events to attend online and my favorite groups to be a part of, our Facebook groups, our e-commerce groups, because guys that sell stuff, I’ve got one client that sells crafts, yarn like they sell all kinds of stuff, but it’s e-commerce business. It’s online, they sell crafting stuff. He’s wildly successful. He has a huge profit margin, and then he takes his income, the remaining income from his business, pays his bills. He’s got much, much, much, much cash left over and he puts it into real estate and other passive investments outside.

So, he makes his profit from his e-comm business and he invests passively in real estate. That is my ideal client because the guy’s already convinced to do real estate. He just got to find the right sponsor. So, if I’m in the right place talking to those guys, now, I’m going to conferences to say, I am a real estate entrepreneur in multifamily, in real estate, and my favorite client, and I have lots of clients in the e-commerce space. By the way, you’re in e-commerce. Do you know him? Do you know them? How about this guy? What about this guy online? And they’re like, oh, he works with you? So, now, again, through the guilt of association, he’s now already convinced himself. Well, that guy’s working with Josh, and that guy’s working with Josh, and he’s in the e-commerce just like me. That’s where the niche comes in that Hunter is talking about. Now, I’m not perfect at it. I’ve got lots of investors in all kinds of niches, but that’s my favorite one.

Hunter Thompson: Yep, love it. So, let me make a quick comment about that. So, the thing is, and this is a mistake people make when it comes to email marketing and just marketing, in general, people think that others care what they say, and the reality is others don’t know who they are. So, the thing we got to solve is, who knows who we are? Who is even in a position to listen to us? Who is even in a position to open our emails? And then, how can we increase the likelihood that all those things are going to happen and be meaningful?

So, as an example, Josh has a lot of clients that are not e-comm guys, but if he says, I’m the guy that helps e-comm guys invest in real estate. Number 1, a lot of the e-comm guys are going to be interested. And number 2, a lot of people that aren’t in e-comm might go, oh, I remember that guy, that’s the e-comm guy. And the key there is that they remembered him. So, going back to my conversation about economics and such, I’m a huge– like I love learning about economics, a lot of my podcasts are about economics. And there was a time in my career where I kind of made a decision. Do I want to be the passive real estate investor economics guru, the person who’s known for my views on economics? Or do I want to be the book about raising capital, the Mastermind program with a raising capital component? And I decided to go that route. Does that mean I can never talk about economics? No. What it means is that people are going to listen when I do because I’ve been able to get some notoriety. It sounds interesting, but it goes back to our natural human inclination. We don’t want to be one-sided. We don’t want to think all that guy talks about is raising money, but if I can get your attention just for a minute and I can get that sweet, sweet email address, then I can maybe get you to start listening to my podcast and recognize how deep the rabbit hole will go and how not one-dimensional my business is.

Josh Cantwell: Love it. Fantastic stuff, Hunter. I was going to ask you a little bit more about your start. However, you told that amazing story about what you thought of raising capital and how it didn’t work out. So, I wanted to ask you and kind of skip forward to advice, like looking back at that experience of failing there and then looking forward to what you’ve accomplished now, raising tens of millions of dollars, investing in tens of millions, $100 million worth of assets, what advice would you give our audience? What advice would you give your younger former self about the lessons that you’ve learned along the way, the good, the bad, and the ugly? What do you think you would do differently? What did you think you did well?

Hunter Thompson: Oh, man, if you’re just getting started and you don’t have a ton of, like, if you’re not super confident in your ability to underwrite deals and such, I’m a big proponent of telling everybody to find a mentor or a firm that you want to work with, particularly a small firm, and go work for them for around one to two years. The reason I have no problem telling anyone that is that the pure-bred entrepreneurs aren’t going to listen to me anyway so they can go about their business, but it’s probably the best way to get your results faster. And that’s just the nature of my personality. People told me that, and I didn’t listen to them, and it probably costs me four years of my growth curve. That’s okay, that’s how it’s going to be.

But if you’re listening to this and you’re feeling like, man, I would love to get some infrastructure, some knowledge about what it means to work at a company, go and do it. And everyone that’s not going to listen to me isn’t going to listen to me anyway. That’s totally fine, too, but the key here is that speed beats everything. If you can overcome challenges faster than your competitors, you can make moves faster than your competitors, you’re going to have a lot of success. And similar to that, money follows speed, simplicity, not complexity and perfection. And I would always just want to get the more results faster. That’s the whole goal.

Josh Cantwell: Love it. Love it, man. Speed is amazing in business, not just because of the discussion or the concept to make money faster, do more deals, but it’s also the lessons that you learn, right? Just like you said, you can make a million dollars over the next 30 years or you can make a million dollars this year. Everyone’s going to make a million dollars.

Hunter Thompson: Yeah.

Josh Cantwell: To the opposite is everyone’s probably going to make 100 mistakes, like you make those mistakes over the next 30 years, it’s a slow bleed versus you make 100 mistakes now by taking action, doing things, making offers, underwriting deals, trying to raise capital, going fast, you’re probably going to have and make more mistakes, but those mistakes are also going to be lessons learned you implement on the next deal, right?

Hunter Thompson: Yes, and even the nature of those mistakes will change, even the nature of those mistakes. So, like, I made a mistake recently, sent an email out to the wrong group of investors, and it’s not consequential, but it happened, right? There was a moment where that would be the biggest mistake I made of my year. Similarly, we just did a deal recently where we completely underestimated the legal fees and had to come out of pocket to pay out. We didn’t bother investors, they don’t even know about it. We just paid it out of our pocket. That was a six-figure mistake. And I called my director of investments and said, “Look, man, if we do what I think we’re going to do, there’s going to be a time when we wish we had a six-figure mistake. So, let’s just keep going and making sure we have the appropriate resources to solve these problems and we grow in proportion with our mistakes,” but there’s going to be a time where you look back and go, what I was doing back then, that’s nothing compared to what we’re dealing with now. That means you’re doing it right?

Josh Cantwell: Yeah, I love it. That’s fantastic stuff. So, Hunter, let’s wrap up with what we call our final five, five quick questions, five quick answers. I’d love to hear your take on these. Are you ready?

Hunter Thompson: Let’s do it.

Josh Cantwell: Alright. So, favorite way to find deals? Tell us about your favorite way to find deals.

Hunter Thompson: We’re positioned in a unique way. I’ll keep it brief because I know we’ve got to wrap up soon, but our firm is a capital placement agent for other operators. So, we have strategic partners that we work within various niches. So, the way that we find deals is we find best-in-class operators in the senior living business, in the ATM business, in the multifamily sector, and the deals kind of come to us through a curated lens that we’ve kind of discussed with our strategic partners. So, I don’t really interact with brokers, for example. I rely on best-in-class operators.

Josh Cantwell: Love it. That’s fantastic. I would ask you your favorite way to find capital, but I know it’s the AENC System, so…

Hunter Thompson: That’s right.

Josh Cantwell:  Question asked, question answered. Hunter, you mentioned mentors. You mentioned having people that have already been there. Who’s been maybe the biggest mentor that you’ve had in your life? Or maybe not the biggest mentor, maybe the most recent mentor that’s had a huge impact, and tell us why.

Hunter Thompson: So, I got to mention Jeremy Roll, who is a very influential investor, passive, kind of owner-operator in the real estate sector. If you haven’t had him as a guest, he’s a great guest, very, very intelligent, Wharton grad kind of person. He had a huge impact on my investment thesis from a passive approach, which later I turned my passive approach into my career because we identify operators. That’s exactly what we do.

Recently, from a marketing standpoint, from my perspective, probably, the greatest marketer and the most influential marketer in the history of the world is alive right now. Russell Brunson, who’s the founder of ClickFunnels. I can justify what I just said, especially like given the time that we’re currently living in and the fact that the internet exists and the fact that Russell Brunson’s whole income is tied to other people implementing his marketing strategies, it’s just a very interesting time to be alive. They’ve hacked the process for getting people getting attention, so he’s a very influential person in my life as well.

Josh Cantwell: Love it. Love it. Fantastic stuff. Hunter, what do you think’s been the greatest piece of advice that you’ve been given, whether it’s in business, whether your personal life, whether it’s wellness, fitness? What do you think that has been?

Hunter Thompson: And this is such a good tip for people who want to cater to savvy investors is respect debt. It’s the majority of the capital stack, and it’s usually the causer of 99% of the horror stories in real estate.

Josh Cantwell: Absolutely.

Hunter Thompson:  So, I don’t hear people talk enough about that in the sense of we’re always talking about adding value and raising rents and all these things. Let’s talk about the debt service coverage ratio. Let’s talk about the break-even occupancy. Let’s talk about the interest rate cap, for example. Who is the lender, by the way? Have you worked with them before? Can you get supplemental financing? Are there fees? These are really important questions that experienced operators know, but inexperienced operators think, well, we got this loan, it’s 3%. I’m sure it’s good, it’s good to go. The whole thesis of protecting investor capital is in the hands of the debt piece, so.

Josh Cantwell: No doubt, it’s the only way to lose a deal, right?

Hunter Thompson: That’s right.

Josh Cantwell: Have the loan call due. I actually was just touring 170-unit this morning. We wrote an offer on it this morning and an LOI, and the broker asked me, walking out, are you going to finance a bridge loan? I said, “Oh, hell no,” because we have an abundance of investor capital. I would rather lock in, it’s 93% occupied. I’d rather lock in like a Freddie Mac loan with the opportunity to put supplemental debt on it, but to lock in my loan upfront so that I have almost zero option to ever lose the building by having that loan call due. Interest rate risk and refi risk to me is the biggest risk, which is exactly what you said, respect that, very much in line with what you said.

Hunter, last question. What do you like to do to decompress? Obviously, you’re very intelligent, very, very intelligent answers. I can tell you really think about your business, about liabilities and options to grow, speed, all these things that you’ve talked about, but you’ve got to be able to do that in a way where you can get away from your business and intentionally, think about it. How do you do that for your own life, in your life, and in your business world?

Hunter Thompson: Oh man, gosh, I want to do– this is why I like hanging out with you, dude. We could do so many of these podcasts, like on just various topics. One thing I’d say is that you’re absolutely right, I learned a lot this year about burnout myself. For a long time, I thought it didn’t apply to me, part of that is because I set up a business that was truly scalable, replicated. Like it works really well, is potentially very lucrative without a lot of manual labor, but I kind of took that to the nth degree and said, “Okay, well, how far can we push this thing?” Like if the systems work, let’s just go, go, go. And I really did have to take some time and kind of come back to reality.

But the way that I did it, I was very fortunate, I moved out of LA into the ‘burbs of LA right when COVID happened. The moment I got the notice from Equinox that said, “Hey, here are the new rules.” I said, “We got to get our own gym, basically.” And so, I moved out to the ‘burbs and probably for around $15,000, built out a gym that like if I had another $150 million, my gym would look exactly the same. So, like, that is exactly, that’s my place to go and kind of decompress. And then I do meditation in the morning as well.

Josh Cantwell: Nice.

Hunter Thompson: Fifteen thousand dollars goes a long way on Rogue.com. You can get a full jungle gym in there.

Josh Cantwell: That is fantastic. I love it. I love being in the gym and spending time to think and meditate. It’s the only way to do it. To me, I have an exercise that I call my ideal average day and I’m not going to go down that rabbit hole, but it always starts in the gym. Like every ideal average day starts in the gym. Love it. Hunter, this has been a fantastic interview. I’ve had an absolute blast with you, again. Hunter, tell our audience again, where can they get your book Raising Capital for Real Estate? Where can they learn more about your podcast and just engage with you going forward?

Hunter Thompson: Sure. So, yeah, so Raising Capital for Real Estate, it’s not fluff, it’s like my whole life’s work, and you can get it for eight bucks. You just got to pay for the shipping. I already got the book, it’s sitting there waiting for you to pick it up. So, it’s RaisingCapitalforRealEstate.com. And if you’re interested in kind of investing passively or learning more about that side of the business, it’s AsymCapital.com, that’s where you have, like I just mentioned, those ATM funds and the Phoenix deal, etc.

Josh Cantwell: Love it. Hunter, thank you so much for joining us today on Accelerated Real Estate Investor.

Hunter Thompson: Thanks again.

[CLOSING]

Josh Cantwell: Well, hey, there, I hope you enjoyed that interview on Accelerated Real Estate Investor with me and Hunter Thompson, just a wealth of knowledge and information. Just wanted to remind you before we sign off to subscribe, hit the Subscribe button on your phone wherever you get your podcasts, Spotify, iTunes, wherever you get it, YouTube. Make sure you subscribe so you never miss another episode of Accelerated Real Estate Investor.

And also, as Hunter mentioned, everybody needs a mentor. Everybody needs a Mastermind group in order to grow, to share ideas, to share best practices. If you’re interested in learning more about my coaching program, which is called Forever Passive Income in our Mastermind program, Forever Passive Income, go to JoshCantwellCoaching.com, you can apply there. We’re actually hosting our next Mastermind just in the next month or so. And I would love to have you there. Check out JoshCantwellCoaching.com.

If you enjoyed this interview also, finally, don’t forget to hit the five-star, like and review this podcast, please. Let us know how we did. Tell us about the good, the bad, and the ugly, but leave us a review. It would mean so much to us to share the word around Accelerated Real Estate Investor. Thanks a lot for being here, and we’ll talk to you next time. Take care.

[END]