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JC 007: How to Scale Fast and Connect Opportunity with Andrew Lanoie

April 19th, 2017 | no comments

How a music industry talent agent pivoted to a career as a fulltime real estate investor

The Real Estate Locker Room ShowAndrew Lanoie pops the hood on the business of investing in mobile home parks and manufactured homes. After leaving his job as a music industry talent agent, Andrew committed to a new career as a full time real estate investor. He quickly learned the importance of affordable housing, focused his attention on mobile home parks and worked on building his business Park Place Communities.

Diligent research led Andrew to the Dallas, Texas real estate market where he jumped into single family home investing. He quickly expanded his business to Memphis, Tennessee and then Atlanta, Georgia. Andrew shares his method for how he researches new markets, builds amazing teams and deals with the tight timelines associated within his niche market.

Five Key Points:

  • The overall competition, whether it’s on a sporting field or performing music on a stage, are both businesses and so is real estate.
  • Identify the market first and build your team second.
  • When you’re investing out of state the most critical player is your property manager
  • Choose what you’re going to do and become an expert in it. Then surround yourself with other people who are doing it successfully.
  • When working with other investors, you’re working with other people’s money, which adds an additional layer of pressure.

Favorite book: Scrum by Jeff Sutherland.

You can find out more about Park Place Communities at www.ParkPlaceCommunities.com and become even more informed mobile home park investing at their educational website, www.MobileHomeInvestors.com.

Thank you, Andrew, for taking the time to share your story with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at www.johncarneyonlie.com

POST GAME REPORT: Episode Transcript

The Real Estate Locker Room Show Podcast

PODCAST:            007 – How to Scale Fast and Connect Opportunity with Andrew Lanoie

Introduction:            Welcome to the Real Estate Locker Room Show with John Carney. Did you know that investing in real estate is a team sport? Join John and his guests as they explore the intersection of the business of real estate and athletic competition. The goal for this show is to grant you direct access to the real estate pros that are closing profitable deals and growing their businesses. On the Real Estate Locker Room Show we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve ongoing success. Now it’s time to kick off and level up with new ways to grow your real estate business.

 

John Carney:            Welcome back to the Real Estate Locker Room Show. I’m your host, John Carney, coming at you today with another exciting episode here in Cleveland, Ohio. Joining me from California and on the line in the locker room is Mr. Andrew Lanoie. He is the Principal and Chief Executive Officer of Park Place Communities. A little bit about Andrew here, is an expert in building teams and connecting people with opportunity. He was formerly a talent agent at William Morris for sixteen years, and Andrew represented some of the world’s biggest celebrities including Tim Allen, Sheryl Crow, Barry Manilow, and Peter Frampton. In 2009 Andrew began investing in single family residences. After acquiring over 100 houses in less than four years, Andrew made the decision to leave the agency and to focus his attention on investing in real estate full time. He discovered manufactured housing in early 2015 and realized the massive demand for affordable housing in America. Andrew created the vision for Park Place Communities and its other companies all to focus on the future of the housing market here in the USA. Since April of 2015, Andrew and his team have closed on fifteen manufactured housing communities across seven states with over 1,000 lots, quickly making Park Place Communities a Top 100 Owner / Operator in the US. Andrew focuses on scaling the company, day-to-day operations, and investor relations. Wow Andrew, you’ve been busy lately. Can’t wait to get into this story with you, welcome to the show and thank you so much for taking the time out to join us.

 

Andrew Lanoie:            Hey John, thanks so much for having me, and looking forward to spending some time with you today.

 

John Carney:            This is going to be a great locker room conversation here. To kick off the show, I usually ask our guests a sports-related question, keeping in line with the theme of the title. Who is your favorite all-time athlete?

 

Andrew Lanoie:            When I was a kid I definitely played some sports, I played a little bit of baseball, and soccer and things like that. I didn’t really follow sports as much as some of my other friends, and I really was a music guy playing music at a pretty young age, so I think there’s a lot of interesting comparisons with sports and music. I grew up on the East coast in New Hampshire, so we love the Patriots, and the Red Sox, and guys like Pete Rose, but I really kind of took more of the music angle when I was younger than got into the sports arena.

 

John Carney:            I will say that’s also a team sport. Who was your influence in music?

 

Andrew Lanoie:            I think it was pretty varied. I mean I definitely when I was in high school listened to all the classic rock stuff whether it was Jethro Tull, or Led Zeppelin, or Pink Floyd, and all of that stuff. When I was in early high school, my friends and I had put a band together and we ended up recording a twelve song demo, and this was still when cassettes were out. I don’t think CDs were ever really even out at this time. And young kid, sophomore in high school, and we ended up winning this rock wars contest which was a little regional contest in the area, and one radio station which was a 50,000 watt commercial radio station started playing one song from that ‘record,’ the twelve song demo, and we ended up selling about 100,000 cassettes in a relatively short period of time in the early nineties. With all the grunge, and Pearl Jam, and Nirvana, it was an interesting time. We were a little grungy so we kind of saw all those artists come up together, which was a pretty interesting thing to see.

 

John Carney:            So from high school you were passionate about music, and you turned that passion into a career, correct?

 

Andrew Lanoie:            Yes, it started in high school and that band really took off and that’s what I had done most of high school, and then got out. We had twelve major labels come to see us over time, and we were selling a lot of records. And I guess one of the interesting analogies with sports and being on a team is you’re in a band, you kind of have to make up some of the rules as you go along, but it’s really it’s you against the world, you against another team, you against whoever the competition is, you against the record label. So there’s a lot of bonding and I think that’s certainly a big part of when you’re on a team in a competitive sport. I mean you’re the one who sells the most records, the one who sells the most tickets, whatever that is, there’s a lot of comparisons to sports teams I think.

 

John Carney:            Are the bands keeping score?

 

Andrew Lanoie:            Well the band is definitely keeping score. They’re keeping score on who’s playing the bigger venues, and certainly ticket sales and record sales. I mean not as much anymore with record sales because everything is digital and distribution has kind of been turned on its ear, but certainly tickets in the market, absolutely.

 

John Carney:            Yes, so competition, the overall competition whether it’s on a sporting field or on a stage in music, both are businesses at the end of the day, and so is real estate. We talk about the business of real estate on this show, so I mean you had a lot of experience in that competitive world. I don’t know much about the music industry, but I’m assuming it’s some type of friendly competition amongst the bands, maybe sometimes not so friendly, but I mean then you get a record deal and you’ve got to- then you’re competing in the real world market for market share. And did that experience kind of rev you up and prepare you for sticking your toe into the real estate market back in ’09?

 

Andrew Lanoie:            Yes. There are so many things and skillsets that you learn as you’re growing up and you’re a young adult and you’re doing all that. You’re playing on a team and you have the comradery of the guys that you’re playing with, or whether you’re in a band. In the music industry, and I think that we’ve all seen it, there’s artists that are really talented but there may be things missing in their business whether it’s a bad manager or a record label. You and I were chatting a little bit about this before, but the marketing might be off, the timing might not be right, they may be five years past something that was bubbling up and was hot. So there’s so many things that can go wrong, it’s almost the same thing as being an actor or an actress. There are so many people that are trying to be in that world, and just don’t make it. It’s a crazy number like 1% that actually make money, never mind the U2s and the massive acts of the world. There are so many things that you can pull from it. You know you have someone in the band that’s not pulling their weight, or they’re drunk, or they’re whatever. They’re the weakest link, and that’s your downfall potentially.

 

John Carney:            Right, right, I’ve got you. It’s a good analogy and one that we haven’t discussed before on the show. I mean I would imagine that being in a band is- the good bands that really manage to stick around, I’m thinking of like the Rolling Stones. I mean these guys are still out there doing that, and then you’ve got Paul McCartney. Paul McCartney was just in town, and so my parents went and saw him and re-lived their younger days. But I mean these guys have been around, hitting the road, and creating new content, and in the business for so many years now, and they’ve had to adapt. It was just a different landscape when they started.

 

Andrew Lanoie:            Yes it’s that. McCartney is such a great example. I’m friendly with the guitar player in Def Leppard and those guys have been together forty years and 100-something million records sold, and there certainly is a common thread of there’s something creative that’s going on that they’re putting out that people resonate with. But they’re also, generally, like McCartney. He works a lot, he works really hard, and he’s a really smart guy. He’s also surrounded by very smart people on his team whether it’s a manager, or a label, or whoever it is. We can get into that a little bit later, but having the A team around you is a huge part of success in my opinion.

 

John Carney:            We believe in the A team. So let’s get into it right now about your real estate A team. You were working at an agency, you got into real estate, you bought a significant amount of single family homes, and then you saw a trend in the manufactured homes. Tell us a little bit about how you got started with home number one, how that turned into home number 101, and how did you get to where you are today?

 

Andrew Lanoie:            I was born and raised in New Hampshire, had moved out to Los Angeles. I wanted to work in the music industry, got the job at William Morris, ended up there for about a total of sixteen years. During the subprime crash, my folks had retired and moved to Fort Myers, my dad was a plumbing inspector, my mom was a nurse, raised three kids, lower-middle class, everything was great, put all their money into the market and did all the things that they ‘should have’ done as far as literally with financial advisors. Market crashes, they lose a significant amount of their portfolio, and here I am at arguably the largest talent agency in the world making a lot of money, and I didn’t understand what happened. So I started reading a lot of books, one of the books I read was ‘Rich Dad, Poor Dad’ by Robert Kiyosaki, and just went down this rabbit hole of reading books on economics. Ultimately it all pointed me towards real estate and I started going to events in town, I met a couple of guys who have a show called ‘The Real Estate Guys’ Radio Show,’ became good friends with them and just started surrounding myself with really smart people who have been doing real estate for a long time. I realized that I was really interested in cash flow as far as what my investment strategy was, so being in Los Angeles you typically start looking in your backyard. Even though it was after the crash, and crisis were an all-time low in certain markets, the deals in Los Angeles, in California in general just weren’t great. Didn’t cash flow, or didn’t cash flow very much. Because of that I started to look outside of Los Angeles and California, and I ended up landing on Dallas, Texas as a market and got in there pretty early, and the price points were great, and the strength of the market was good, and there were a lot of things that checked the boxes- the price to rent ratios and all those things that you look at as an investor when you’re looking for buy and hold real estate for cash flow. I wasn’t really looking to go in and flip. I had a very full time job, so Dallas was really the first market that I stumbled on and I ended up basically building a team there. I think what happens a lot of the time is someone will find a deal in some market that may or may not make sense, the deal may or may not make sense, but they kind of back into it the wrong way. I was taught that you find the market, that’s arguably one of the most important things, and that’s the first thing on your list, and the second thing is well build a really good team there. And that’s what you spend your initial time doing. It’s not even really looking at the deals necessarily, it’s market, and then it’s your team whether it’s your property manager, or insurance, or if you’re going to go build a rehab team yourself, or whatever it is. So that goes back to teamwork. That was absolutely crucial in all of the markets I went in— was having a really good core team on the ground.

 

John Carney:            Do you mind elaborating just a little bit? We’re in California. We’ve identified Dallas and it’s ticking all the boxes. Obviously, you can look up a lot of people and do a lot of research online, but I mean so you book a plane ticket, or you pick up the phone and start talking to property managers, and real estate agents, and accountants, and lawyers. Do you just make a decision based on who you feel you gel with, and who you wouldn’t mind watching a baseball game with type of thing?

 

Andrew Lanoie:            Yes there’s certainly part of that. When I went into the market for the first few times as far as real estate goes, there was a bus tour I went on with The Real Estate Guys, so there were property managers and people that were there, I found people who were already in that market through going to events and seminars and I got referrals, and I think that’s huge. Let’s say you’re looking at a property manager. Try to find five referrals, or three, or six, or whatever the number is and interview all of them, and try to have some consistency with questions you’re asking, and how they do business. Ultimately by meeting them and interviewing enough you’re going to find one or two that you feel you gel with, and if they’re referrals and if they have a successful company or a book of business or whatever it is, then that’s kind of how you weed through everything and land on one.

 

John Carney:            Am I correct in saying that Dallas was sort of your first out-of-town market, and then now with that experience you were able to kind of draw on that and replicate it. Let’s fast forward seven years or eight years and we’re looking at mobile home parks in different states and different areas, so you’ve got that kind of way of zeroing in on management and all the support that you’re going to need in a new market?

 

Andrew Lanoie:            Yes so Dallas was absolutely the first market, then I bought some property in Memphis, and that was another great cash flow market, checked all the boxes with jobs, and market drivers, and things like that, and then Atlanta was the third market that I invested in, and same thing across the board, you have to have a great team built in every single market. I knew a lot of people who were buying real estate in a lot more markets than that, so they either had more time to do it, or they just had different parameters, but as far as what I’m doing right now in the affordable housing space, there are some similarities but there’s definitely a lot of differences. When I was buying in those three market single families, it was very specific. Very specific zip codes, if it didn’t fit the box it was on to the next, if the ratios weren’t there or whatever it was, it was on to the next where now when I analyze markets it’s I still use some of those parameters but we’re in seven states now, we’re contracted on our eighth, we’ve got another fifteen parks that we’re looking at right now that are in another three or four states that we haven’t been in. It’s a different asset class and you have to put different filters on it, but certainly using a lot of the same ways to analyze markets that I did with single family.

 

John Carney:            Thatm is what’s interesting. I’m back after living in a foreign country for seven years, in the States and in my hometown where it’s easy to scale up and find that team. But it’s been awhile since I’ve had conversations with people and it’s almost if you know who to look for and what questions to ask, that just takes some time and testing I suppose. You really do develop the sense that you can go into any market with confidence, and if the numbers work out you can build a team alongside looking for the property. What would you say when you’re talking about single family homes, who the critical player is; the person that you put the most time and energy into finding that right person. Who is that?

 

Andrew Lanoie:            Well if you’re investing out of state it’s hands down got to be your property manager. Most states, certainly in the states that I’m investing in or was investing in for single family, the property managers are all brokers so they have sales folks in their office, that means they can help you on the sale, the acquisition, and also on the sale of it on the exit in addition to managing it. You find the right company, and that’s of course in addition to helping you put together a renovation team, or doing that themselves depending on the kind of company they are. But hands down, finding a property manager is probably your biggest part of your team. The insurance folks and things like that, I think that can be swapped out a little bit more easily, but property management is huge.

 

John Carney:            I agree with that sound advice, Andrew. So then a transition happens. Talk to me about what led to the transition. Now you’re buying multiple units in a park for the first time. Was that a little nerve-wracking, or did you have a mentor, a group of people that had done this before? How did you get into that?

 

Andrew Lanoie:            The further away we get from the crash and subprime, the prices have been going up, up, up. Dallas has seen this crazy appreciation in the market that’s almost unheard of. Obviously, California is up and down, up and down, up and down. But across the board since the subprime crash, real estate prices have been increasing in markets. So we were still looking for single family properties and I was also starting to look around at other projects to start working on. I was looking at multi-family, everyone was chasing multi-family, really hard to find good deals, and I had a friend who had been buying mobile home parks. We sat down and looked at numbers together and thought it was a good idea to put a partnership together, and that was the first quarter of 2015 was we kind of sat down and penciled out some ideas, and that’s really how it started. We had our first investors came in with a large amount of money through a 1031, and ultimately bought a lot of parks with them in a very short period of time. I don’t think there was as much apprehension about all of a sudden buying parks with 50 or 100 or 200 units as it was just- it became really busy very, very, very quickly, so I think it was just going through the growing pains of being right in the middle of companies that were scaling very, very, very fast.

 

John Carney:            So between your first mobile home park acquisition, am I right that they’re manufactured home parks? Before the first one, how many units was that? And then how much time did you have to figure out how this thing works before the next deal lands on your plate and you’re like, ‘Oh yeah, we want that too.’

 

Andrew Lanoie:            Well it was a 1031 so if you know how that process works, you have 45 days to identify a property or a short list of properties and you have X amount of time to close on them. I think that we closed on somewhere around ten parks in about four months. There wasn’t any time to sit and analyze anything other than just getting the acquisitions done. That was the first thing, we were building up processes a little bit, but when you’re doing that kind of volume in a very short period of time and looking in multiple states, that was playing to keep everyone busy and it was just really trying to be as hyper focused on is this a good deal, is there enough upside? We could put together an initial plan for each park but that wasn’t the best time spent, it was just making sure that the deals were going to be ones that we wanted to close on.

 

John Carney:            You guys were charging pretty hard but confidently.

 

Andrew Lanoie:            Absolutely, absolutely.

 

John Carney:            Was the 1031 exchange part of your existing portfolio of single family homes, or was that through another investor?

 

Andrew Lanoie:            That was through other investors.

 

John Carney:            Okay so you had a pool of funds, and you guys were looking to place that. So it’s not just your money. You’re working with other people’s money, and you’ve got to do that. That’s added pressure, right?

 

Andrew Lanoie:            Absolutely, yeah. Yeah there’s a lot of pressures and I guess what the point was to try to answer that question was there were so many moving pieces but the goal was to execute the 1031, which we did, and it wasn’t just one deal. It was a large investment that came in, and it would have been easy to say, “Let’s buy one massive park in wherever,” but that’s not what the market handed us. The market handed us whatever, almost ten parks, right? So that’s what we got, and it was just making sure that those were good deals.

 

John Carney:            So you’ve got a team. You and a couple people are analyzing the deal. You’ve got the clock running on you so to speak, and then you also have the added pressure to perform motivating you. And then at what point are you getting right into the management side and the system side of it to bring it right into Park Place Communities? You’re also building a brand and a business alongside all of this. The way I look at this, is that it’s amazing and it’s a job well done, but on the business side of it, that there’s a lot going on. So when did you sleep?

 

Andrew Lanoie:            Well I appreciate that, I really didn’t unfortunately, and I don’t sleep too much these days. But you know, looking at affordable housing, and looking at manufactured homes and this as an investment, I realized that if you’re going to be in multiple markets, you’re investing in single family, it’s easier to say, “Hey I’m going to go into this market, I’m going to find the best property manager,” and they’re going to be a huge part of your team. But managing multiple assets in multiple states, and most of the parks that we were purchasing were below 40% occupancy so they were just massive turnaround projects, I realized we needed to build out a construction company, we needed to build out a management company, we had our core investment company, and so all of those things were happening at once. You acquire a park, you figure out is the manager going to stay? Do we replace them? Who else do we need to staff up? And then it’s just putting a plan together about how to turn these parks around. And a lot of the things that you can do, you can do across all of the parks as far as systems, and processes, and property management software, and one person who oversees the managers, and all of those things. So the vision was how do we start from I guess nothing and build something where we can scale it using all of the functionality of the processes and the team that we’re putting together. Does that make sense?

 

John Carney:            Oh yeah it makes sense to me. I suppose for the listeners out there, this is a monumental. It’s a big project but it’s managed correctly, right? And I suppose that the core group that was helping you out were all focused on the goal, right? And it’s whatever it takes. Can you just shed a little bit more light on how many other people were helping you do this, and how did you guys all kind of come together, and with that driving determination? Because I mean it sounds like a lot of work in a short period of time, and I think it’s an amazing accomplishment and a great story to share with the listeners out there that might say, “I’m happy with fourplexes, and twelveplexes, but I’m really nervous about going after the hundred-unit building, or that hundred unit park because it’s just too big.”

 

Andrew Lanoie:            I’ll give another example. There’s a difference between someone who wants to open a restaurant and someone who wants to become a restauranteur, right? It’s a different psychology. The person who wants to open a restaurant may say, “Hey I’ve got one site, it’s a brick and mortar, it’s going to be this, here’s the cuisine, I’m going to staff it up, whatever, I’m going to market it.” But if you’re thinking, ‘How can I take this restaurant, and how can I franchise it, or how can I open other ones in different markets,’ it’s a different mindset because you have to start thinking six steps down the road of, ‘If I do this here can I do this everywhere? Or what are the moving pieces in that?’ As far as the team and everything, it’s literally one person at a time. You’re finding who’s going to do the day-to-day operations. You go find that person and you have to kiss a lot of frogs to get through until you’ve got a good staff. We grew as quickly as we could. We’ve had employees come and go, we’ve had people that have been here really from the beginning of all of this. I’m invested because I’m a principal, which is very different than someone coming in as a W2 employee, right? It’s a hard process but you’ve just got to keep looking for either people that you can partner with that share the same vision, or get what you’re doing, or can come in and add value in some other way, or it’s just getting through, “Hey I need to interview 25 people in order to find one person that’s going to fit the bill.”

 

John Carney:            That’s good advice on growth and scaling. So what one piece of advice do you have in addition to that for a newbie, rookie, real estate investor that is sitting there saying, “I just have to be a multi-family or mobile home park investor.” You’re a mobile home park guy, so there’s people out there listening that want to crack into this niche, what’s your one piece of advice for them?

 

Andrew Lanoie:            Well I guess the simplest thing is pick what you’re going to do and become an expert in it, or at least get yourself around other people that are doing it to some success. If you want to be a big multi-family investor, don’t spend time on things that take you away from that. Read every book you can on multi-family, go to every event you can on multi-family, make new friends who are in multi-family, find ways to get into relationships, and that’s how you find mentors, that’s how you find partners. If you can talk to someone and take someone out to lunch who’s got ten years of experience doing something, and that’s going to collapse some timeframes or give you one nugget that you take away that’s going to save you a year or save you a million dollars or whatever, but that’s priceless, right? So that to me is probably the number one thing.

 

John Carney:            Right you’ve got to be obsessed and always keep on learning. Look we’re going to get into our final quarter here, two-minute drill. Are you ready?

 

Andrew Lanoie:            I am ready.

 

John Carney:            Cool. Well we’ve been talking a lot about sports and music. Is there a favorite book on business, sports, music that you’ve read where you keep coming back to it time and time again and saying, “I’ve got to check in again and have a read of that”?

 

Andrew Lanoie:            Yes absolutely. One of my favorite book is called, ‘Scrum.’ It’s S-C-R-U-M and a guy named Jeff Sutherland wrote it. It’s really essential. He’s got a very corporate background but his whole theory is that the 9-5 corporate process is flawed and you’re not getting the most from your employees or how that’s structured, so he has a completely different mindset. It’s really great for companies that are scaling, and it’s just all systems and processes. I mean there’s a million really great takeaways from that, so that’s a really great read.

 

John Carney:            Thanks for recommending that. I will definitely make sure that that makes it to the show notes, and the link, and I’m going to check that out. Is there a motivational quote out there from the business world or entrepreneur world that keeps you motivated when you’re facing that- staring down that obstacle?

 

Andrew Lanoie:            I think one of the things as a real estate investor, is to become a connector and find ways of helping people. There’s a guy by the name of Zig Zigler, one of my favorite quotes, it’s on my computer, it’s the only quote that I have on my computer and it says, ‘You can have everything in life you want, if you will just help enough other people get what they want,’ and that’s Zig Zigler.

 

John Carney:            Perfect, he’s awesome. What’s your number one come from behind victory in the real estate game that you’d want to share with us?

 

Andrew Lanoie:            Well I think from being around very, very, very successful people and mentors that are in this business, there’s a common thread that you don’t have to start with any money or a lot of money. I grew up in New Hampshire, I came from a very just normal lower-middle class upbringing, my parents weren’t into real estate, they weren’t entrepreneurs really. You can really do anything you set your mind to. You just have to be very clear and focused on what that is. I think there’s a lot of people who may get frustrated and say, “Well I’m not sitting on a pile of cash,” or “I’ve never done that,” or whatever it is, and I think that you look at- especially you look at the profile of a lot of billionaires, and there’s that common thread too. They literally come from nothing and turn nothing into whatever their empire is.

 

John Carney:            Right motivation, focus will keep you ahead. Is there any practice that you participate in daily like a ritual that gets you into a flow state, or puts you in that zone so to speak that helps you train for success?

 

Andrew Lanoie:            Well I guess the best ritual is that I am up early. I tend to go to bed at [11:00] or [12:00]. I try to get up at [6:00], [7:00] and meditate and do a little bit of cardio. I try to get a few things knocked out early in the day along with time blocking. I’m trying to not do as many meetings in the mornings and I have time to work on big picture stuff or whatever and then I shove all my meetings towards the back end of the day, I think that there’s ways that you can control your calendar and your time so you can get these blocks to work on- you know this hour of the day I’m going to work on this. I’m going to re-write this or I’m going to put together my business plan for this, or whatever. Because you know it, and I’m sure a lot of people can relate. I mean time goes by really quick and you realize four hours will go by and you’re like, “Well what did I do? I took some calls, I did a bunch of emails, and I was looking at this with the Internet, and blah, blah, blah.” So having control of your blocks of time, and time blocking things are just so huge in my opinion.

 

John Carney:            Yes that is also really good. We find that that’s a common thread amongst a lot of successful entrepreneurs and investors; to stay focused you schedule your focus time and tweak and test and measure what works for you. Well Andrew, I want to thank you again for joining me today on the Locker Room Show. Where can our audience find you to carry on the conversation offline?

 

Andrew Lanoie:            Absolutely, I appreciate you having me on, John. I guess a few of the websites are kind of our core investment company is www.ParkPlaceCommunities.com and we also rolled out an education site on affordable housing, and specifically investing in mobile home parks, and that’s www.MobileHomeInvestors.com.

 

John Carney:            Perfect, there you have it folks. I truly hope that you picked up some actionable advice today from Andrew Lanoie, and it sounds like if you follow the links that we’ll post on the show notes, he’s got some information to help you connect with him, and his business, and help you get started if you want to be a mobile home park investor. Check out the Post Game Report on iTunes and while you’re there please subscribe to The Real Estate Locker Room Show to ensure that you never miss out on the pro tips from our guests. The mission here is to help you elevate your real estate game. And if you like what this show is about, I’d be grateful if you would leave a five-star review on iTunes so that other like-minded real estate investors can find us. That helps people know that we’re out there, and helps them find the show. So for the Post Game Report, check out www.JohnCarneyOnline.com and there you’ll see links to Andrew’s businesses and to the book ‘Scrum’ that he recommended for us all to have a look at. Remember to stay focused on your goals, have fun, and stay in the game. I am your host, John Carney. Until next week work hard, play hard, and profit hard. Thank you one more time, Mr. Andrew Lanoie.

 

Andrew Lanoie:            Thank you, John. Really appreciate you having me on, it’s been awesome.

 

John Carney:            Alright buddy, take care.

 

[End of Audio [00:39:15]

 

 

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
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© John Carney 2017

JC 005: How to reposition the Sleeping Giant with Nat Mundy

April 5th, 2017 | no comments

Learn how a Rolling Stones concert in London changed Nat Mundy’s life.

The Real Estate Locker Room ShowNat is an international entrepreneur who capitalized on his childhood passion for go-carts. Nat’s business plan received a D in business school but he was undeterred in pursuit of his goal.

Nat leveraged the skills that he learned on Wall Street to build an entertainment brand that started out by repositioning the “Sleeping Giant” – a massive industrial campus that was the perfect fit for his unique vision.

Nat credits his success to leaning strong work ethic from his father and having the right team of people onboard that believed in his vision.

Favorite athlete – Wayne Gretzky, “The Great one” – NHL Hockey player

Nat recommends reading all of Richard Branson’s books.

Must read – Losing My Virginity – How I survived, Had Fun and Made Fortune Doing It

Key Points:

  • Nat draws his inspiration from courage and loyalty
  • Lead by example, be willing to mob the bathroom floor
  • Make sure everybody is healthy and happy

 Thanks again Nat for taking the time to share your story with us.

You can connect with Nat online at Grand Prix New York, www.gpny.com or http://www.spinsbowl.com

 

POST GAME REPORT: Episode Transcript

The Real Estate Locker Room Show Podcast

JC 005: How to reposition the Sleeping Giant with Nat Mundy

Announcer: Welcome to the, “Real Estate Locker Room Show” with John Carney. Did you know investing in real estate is a team sport? Join John and his team as they explore the business of real estate and athletic competition. The goal for this show is to grant you direct access to the real estate pros that are closing profitable deals and growing their businesses. On the “Real Estate Locker Room Show” we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve on-going success. Now it’s time to kick-off and level up with new place to grow your real estate business.

 

John Carney: Hello and welcome back to the Real Estate Locker Room Show.

I’m your host, John Carney, coming at you from Cleveland Ohio. Joining me in the

Locker Room, on the line from West Chester County New York, is Nat Mundy. Nat is a

36-year-old entrepreneur and graduate of Hobart College, after a brief stint on Wall Street he decided to pivot and pursue his thesis project which is Grand Prix New York that he subsequently received a “D” on in school. But that was not a deterrent for Nat. He hit the ground running, raised the money and started build out in December 2006 and opened the doors to Grand Prix New York in February 2007. Nat grew the business by adding “Spin Bowl” in 2010 and an arcade in 2011. To grow he and his partners began acquiring bowling alleys and launched the multi-store brand “Spin Bowls” in 2015. How ya doing today Nat? We’re really interested in hearing how this entrepreneurial business turned into a real estate business so welcome to the show.

Nat Mundy: Yeah, thank you very much for having me, I appreciate it.

John Carney: No worries buddy. We’d like to start out with a little bit of

a sports related question here to kinda get the show kicked off and get the creative juices flowing. In all of the professional sports, who is your favorite athlete of all time?

Nat Mundy: I think my favorite athlete of all time, I’m going to go with The Great One, Wayne Gretzky.

John Carney: Nice, nice. Where you a hockey player growing up?

Nat Mundy : Hockey player growing up. Hockey fan my whole life. And just a guy that made a career and became untouchable. And to the point where rookies wouldn’t even touch him. And from what I can tell, decent family guy, attractive daughter, even more attractive family. And never got into any trouble, or did anything stupid, in elevators or night clubs. Ya, can’t hate him.

John Carney: No, not at all. He was a little guy. So, I mean, he had to adapt.

Nat Mundy: Right exactly. Wasn’t there when the 6ft 5in. mile 41 Saskatchewan players. So, when those guys came on the scene, he’d already been in the ice for 15 years, or something. So, he stayed and he ended up becoming “The Great One.” So why not?

John Carney: #99 folks. I had a poster of “The Great One” in his original Oilers uniform on my door when I was a kid growing up.

Nat Mundy: Awesome, great! That’s so good.

John Carney: Well,Nat you have an interesting story I’d like to jump into because you’re an entrepreneur, started a business, you started a business after a professor said it was no good, right? It was a rubbish idea and you had a little bit of a pivot, started a business and that business also became a real estate business. So, could you tell us the story. How did you get started?

Nat Mundy: Yeah. So basically I was at a “Rolling Stones” concert in Wembley Stadium, in the U.K. when I was I’d say, 18, 19 years old. And I went to an indoor go-kart track in London. And there was this very cool Honda powered go-karts, Italian chassis. And they were running in an old abandoned warehouse. I didn’t even look like a warehouse, which was like a Brooklyn New York warehouse. I though that we would have to have this in the states. I’m stupid, I’m sitting there, I’m watching corporate events do their thing there. In stead of playing golf or going to a big dinner, they were going go-karting, you know, why not? So, when I got back to the states, I had realized they had opened one in Boston, called, “F1 Boston.” I reached out to R.J. Valentine, who is a real estate insurance guy, who’s based out of Boston, owns F1 in Boston, and F1 Outdoor which are the two, first indoor-outdoor tracks that were served European inspired circuits in America. He wanted nothing to do with me so I said, “Fine.” I wrote this business plan based on the remaining places, reviewing DMV lists, looking for places where cost of rent would be low or obviously at the time couldn’t even think about buying a building to put on 125,000 sqft business into and that was the plan. And I consequently got a “D-” on it. And he told me that, I guess it wasn’t in line with the assignment as to thinking what he wanted. He wanted to talk more about franchises and he was focused more on. I still see it as a franchise and like I said, with multiple stores in the state thing it’s proven we can build something that’s high-end entertainment based, in multiple locations. But he gave me a “D” on it anyway. I was going to school for architecture and ended up getting a job on Wall Street. At the time they were hiring engineers and architects in the sales trading world. We were spreadsheet guys. Still got that whole thing but put models together. Got dragged into there for about 2 ½ – 3 years. I was doing private placement, straddling the wall to a degree. Everything from Shiriah funds to private placements, by backs of private companies, and just really didn’t like it to tell the truth. But the money was great. It was a fun career, fast paced, challenging, very transactional, I don’t think I was bad at it. I just don’t feel like I was going to love it. My father had been at Citibank for 35 years and went through a heart attack at age 60. And the bank retired him virtually 8 months, 9 months later. I then left the firm I was at. I just wanted to do my own thing and take the risk while I still could. So, I did one more private placement. We raised $6.8 million dollars on our first round, broke escrow signed a lease with Diamond Properties in 2006, September. Started construction, going for town approvals and this is a town that had a sleeping giant 36-acre campus that was the grand union distribution center, based in Westchester County. They were off of a railroad spur that was a slaughterhouse and banana ripening and avocado ripening, you name it. This 600,000 sqft. building on 36 acres, in Mt. Kisco. And we were the first tenant to move in. And Diamond went with us to town to go ahead and get it changed to multi-tenant zoning. And about a year later we opened to the public. And since then, the center has grown, our neighbors on this building are a high-end athletic club with a pool, as well as MMA Center, a training and trampoline park and numerous other, you know, tenants. So, it’s gone from a single tenant use building, to a

multi-use. We have really changed the overall campus provided a bunch of jobs to the area, etc…

In 2008, obviously, a rough year to start any business, especially a pipe dream and we saw some hardship. And with that the landlord Diamond Properties, Jim Diamond came on as a partner in the business. We then pushed to open Spin Bowl, which took part of our track space, for indoor go-kart track and built 18 bowling lanes. And bowling was a great feature, it actually made our restaurant food and beverage business profit. As opposed to lose money. So having this restaurant in a go-kart track indoors didn’t prove itself to be a place if you wanted to come and linger longer and drink beers but with bowling it gave us that sort of product. And then we extended it to all ages, which brought in a 3-track set-up, as opposed to a 2-track set-up when we first opened. So, ages 8 and up, or 40 inches with proper mental faculties could drive a go-kart and then we put the arcade in. So it ended up being this 7 day a week, Monday through Thursday corporate event venue. Friday, Saturday, social event venue and family fun, on Friday afternoon through Sunday night. And so far, so good. In 2015 the Diamonds, our partner bought the real estate that included 3 more bowling centers, one in Carmel New York, one in Poughkeepsie New York, and one in Wappingers Falls New York. And they have censured them as “Spin Centers” in those depending upon the site have assets accessories such as: Laser tag, arcade, and our marina properties will end up having outdoor climbing, indoor climbing, ropes courses, as well as shuffle board, and even a Captain Lawrence Brewery. So, it’s really you know, sort of expanded on it. Again, the only way to make a distinct business successful was to spread the call centers, establish a sales department, and the accounting department and all those things across a number of properties and come up with a hospitality brand as opposed to a stand-alone business. So, it’s one of those kinds of go big or go home situations. And the Diamonds were able to fund a lot of these projects on their own. So Grand Prix, the only one that has a bunch of partners in it because it was a private placement. But, the ones moving forward have just basically been themselves and have been for their real estate portfolio. They are a large company with half a billion-dollars worth of real estate that ranges from warehouses, to offices, to medical. So, they are pretty well diversified as well.

John Carney: Yeah, so that is a great entrepreneurial story. I mean, all of the good ones finally get to a point, a line in the sand where they say, go big or go home. And that’s how it generally works. It sounds like an incredible success that’s just going to be gaining momentum. You know, when you say, “Found a sleeping giant.” You basically re-position a dirty, old, I’m picturing a dirty old slaughter house, off the side of some railroad tracks with a bunch of overgrown, you know literally over grown weeds and the terrible parking lot and you know, signs falling down, and all that stuff?

Nat: Correct and an old water tower. I mean it became economically viable as well because it brought taxes back. Karl owned the property back when he owned TWA and the Diamonds had bought it from whoever bought it from him. And there it just sort of sat. And this was a major repurpose, I mean, we’re talking about a hundred bay loading depot turned into call it 15 mixed-use style tenants. A lot of them entertainment, and club based and membership based. So we can go ahead and get special use permits to do it. I went ahead and took it over. The nice part too is it’s got about 180 parking spots. And has two entrances, two, to three entrances. It has a town park, play field, ball field end of it. We do give back to the community. We all employ at this location alone just surround 120 people depending on the time of year. That’s pretty significant for the area considering the only other large employers in the area are Target and the hospital.

John Carney: So, yeah, I mean, just going back, just taking a step back. Because I’ve got a hundred questions? Now, that we’re into it. I mean, it’s for the listeners out there who are in the industrial space, I mean, have some vision. It’s about looking at these opportunities that people who have a headache and don’t want these industrial properties. That you know, it is, beauty is in the eye of the beholder, right.

Nat: Right.

John: But this is called the sleeping giant. But, you run across people that just say to themselves “Why did I buy this? Take it.” And you guys took it and turned it into something magical. So, that’s a great story.

Nat: Yeah, I looked around for two years for landlord that would let me ruin 3 acres of warehouse. And I couldn’t find one. I looked in Connecticut because I had demographics studies that were more promising and lower taxes per sqft. So, it was a better positioning. But I couldn’t find any in Connecticut people to do it. I saw this property in the New York Times and said let’s try it. And then when I approached them I was actually one of two people that had approached it for a go-kart track. And I had the private placement background and I had written to PPM already. And this gentleman, who I did this with was no longer a partner in it but I was part of it originally. He was still an equity shareholder of some sort but he’s no longer an operating partner. He had sort of the age appropriateness, he was 36 I was 25. So what landlord in there right mind was going to write 30 year, or 20 year lease with a 10 year option for a 120,000 sqft. And I was going to pave 65,000 sqft. of the interior space so you can never really reuse it for anything ever again in the warehouse world. So, it was a big leap for them. And the great part is they became essentially the managing partners of this business. And also the future ones for the expansion, so great timing. Especially because they were in the buying mode during this crisis we were all in. They were acquiring more space, and able to live through it and survive. There’s a lot of firms like that that did not based upon on their portfolios.

 

John Carney: Right, alright. Let’s go back and re-visit growing-up. Did you play team sports? Or what type of competitive athletic sports did you play?

 

Nat Mundy: Well, I grew-up hockey, football, lacrosse. Went to West Minster, I was never a varsity athlete when I went to boarding school. But just had a good time with it. And I really enjoyed it obviously. My closest friends were the ones I had on those teams, the boys that I lived with. And dorms basically age 15 on. And I’ve always been mechanical. I remember going to the dump and getting tube TV’s and old typewriters, and taking them apart and seeing how they worked. I’d say I was, probably 10, or so 11? My hockey coach Mr. Breckwald had gone to a Yankee game and won a Yankee go-kart with the Yankee F1 shell with stickers on it. And obviously he didn’t want a kid’s go-kart. So, I was one of the first people in the locker room that day and he said, you know, if you I want it, he just wanted the shell for his wall. So I could have the actual functioning go-kart portion. And he traded me two cases of Coors. And

Coors Banquet Long neck Bottles as payment. So, when I went out to the locker room and asked my dad after practice he went to Bedford Beverage, picked-up a cold case, a warm case and went to Mr. Brekwald’s house and parked outside a Peugeot station wagon and loaded up the go cart. And the nice part, he was on a cult-a-sac so I was wearing basically a hockey helmet and driving around his cult-a-sac with my go-kart. brand new go-kart while my dad finished probably half the case with Mr. Breckwald, while watching me do this. So everyone had a good time that afternoon. I rapidly modified the thing, had a great time with it. Every time I broke it, I made it better. And even went as far as crashing the go-kart into the back of my parents car while it was parked during brake failure. I broke my wrist and waited about 5 days to tell my parents I broke my wrist so they wouldn’t think it happened on the go-kart and take it away.

John Carney: There ya go, so like a hockey player you didn’t let that injury get in the way of a good time. So, the seed was really planted 8 years before the Rolling Stones concert, right?

Nat Mundy: Yeah, I’d say, that was my real eye-opener, that I could sort of obviously say I always loved watching racing things on TV. And we didn’t live in this part of the area, West Chester Town doesn’t have a go-kart track that kids are competing at. You know, it’s not near Lime Rock is the nearest track back then. And it wasn’t what was going on there either. And I think it got me the bug. And you know, the people like Paul Newman, for example, who he didn’t love acting as much as he loved racing. He spent time acting to pay for racing. And I wanted to find a way to basically break into this sport and enjoy it. But, had to turn it into a business to pay the mortgage, for me, that you could raise a family on. And you know, it took about 10 years for us to really, 8 years of the 10’s so far for us to really figure out how to position it and how to expand how to do it properly. We just opened the Carmel Spin’s Bowl location on Tuesday. And that’s 5 of the 9 that are completely up now and under the new Spins name tag.

John Carney: Congratulations for the new edition. So, it sounds like you’re scaling your business and the real estate, owning the real estate, I imagine is part of, is a segment of that overall operation, am I correct?

Nat Mundy: Yes, so the Diamonds will acquire the real estate and bowling alleys they essentially trade for what the building is worth. They don’t really trade for the business value or anything. These centers need some major rehab. So Jim and Bill will acquire a building that has a bowling alley in it and they will keep it as a bowling center.

And then our hospitality group. “Diamond Hospitality” comes in, post-renovation, some of our guys will be on the ground working on it. The ceiling tile this color, the paint this way, use the old lanes as bar tops, sub-tile here, you know, they really have a great D & A set-up. The centers all look similar because of that. Setting up a proper arcade with a redemption which is huge. The arcade is about 16-20% costs of goods sold, it’s amazing business. And go ahead and work with the new locations to figure out how to fill it 7 days a week. And for them, it’s about getting the four days after they’ve closed on a building, they’ve got a lease signed by their sister company that’s leasing out the space. And we set rent to where we know it can be an affordable thing for the center. And then go for it from there. And all it’s been so far is growth and knock on wood we’ll keep on going. We closed on a bowling center in Independence in Ohio. And then there’s one by Kent State also Ohio, that’s one. Hopefully, we’ll be wrapped up fairly soon, to open as a Spins Center location as well. So, we’re going as far as Ohio now, if you think about it.

John Carney: Wow, I mean, Independence, Kent State, that’s right around the corner from where I am.

Nat Mundy: Well, there ya go.

John Carney: You’re getting in the neighborhood. When you come out for a second inspection. We’ll have to have a…

Nat Mundy: Definitely.

John Carney: A cold beer.

Nat Mundy: I just met the gentleman manager for Independence via email yesterday. And that was our first contact. But, you know, it’s going to take a little bit of training. Get him up to speed. And at that point change their name tags and their shirts and then they become part of our team and we continue going.

John Carney: Right, and I mean, at the end of the day we are talking about real estate and business, they are both team sports. I like to say if you’re scaling up a real estate investment portfolio within any of the niches, that’s a team effort. Or you can be selling a doughnut, that’s a team effort with either one. When you are talking about your team, I mean, there’s obviously people in your team, that you could have, that have stuck with you a number of years now, over a decade. But is there one specifically, a specific advisor that you turn to for advice? Or when you were just starting out? Because this is about helping people start out and scale.

Nat Mundy: You know, I think a couple of great things. I grew up in an area where you know, a lot of people had sort of the last, my parent’s generation was the last of the generation that kept jobs for 35 years in the same place, right? And meanwhile, there was already some sort of movers and shakers in the area. I worked at a deli from the age of 12 and up folding newspapers and stocking shelves. And I actually drive my four-wheeler from my parent’s house to the deli. And that was back in the town, back in the day when no one cared. It wasn’t like it was rural America. This was West Chester County, its Bedford New York. But it was a lot less people then. I learned just sort of, I think from my father overall, you just had to have a work ethic and just go with it. And he was a lot more conservative in his approach to career and work. Whereas for me, this is sort of how I manage my ADHD. This is my self-medication. Where I focus my scatteredness onto a productive platform of opening a businesses and finding really great partners. You know, Jim Diamond, who founded Diamond Properties is a great guy as well. He typically can analyze what I’m showing him as long as it’s a spreadsheet or written down in a constructive manner and give some great points, very entrepreneurial as well. They didn’t start in real estate. They started in the technology world and then transitioned into real estate. So when their technology company, one of many sold and when the business sold, they were left standing with their real estate portfolio. They have partners like Princeton Realty, which was from an Albright family which was in the same office as us and that’s on the brokerage side. They are also partners in other building stuff. Again, they’ve also sort of filtered things into a real estate play. I mean we even have an auto storage, they have self-storage in a bunch of locations, currently three now, they got one out in Connecticut, one in Elmsford, and one in Mount Kisco. But at the Mount Kisco location we took the second floor of an old body shop that’s on this campus and turned it into an auto storage. And you know we’re talking about 6500 square feet of space that’s producing about $100,000 a year in revenue at very little cost. Just taxes and whatever debt service there is, There’s no employees for it. There’s just insurance for it and a very small utility bill. So, you know, that’s the kind of thing they are good about. And when I came to them with that idea they said, “Yeah, do it!” And we took about 3 years to fill it and now that it’s full, it’s full, and it’s an annuity. When they’ve had tenants in the past have any issues they’ve also been able to pull them in and use their, you know, so they have a HVAC company or an electrical supply company. You know, what landlord with you know 3 million square feet does not need one of those, you know, in their back pocket. So, they’ve been able to get through by being like wonderful over all landlords and expanding into other market segments because they own the real estate those market segments comes from. It’s a very dynamic group. I’d say, meeting them, sort of took my cowboy business person nature from Wall Street and really reformed it and shaped it into a more sustainable, entrepreneurial scenario where it’s just backed up by real estate. I mean, if cash is backed up by gold sitting in a box somewhere on this continent, if your business is at the end of the day backed up by a real estate play, I think that a you can have less issues going forward. Me, I’m a very small landlord. One of the hardest things, you know, I have to look at. Is that, if you go ahead and you look at the market, I watch my friend from the hedge fund world and we’ve all had separate jobs since college. I’ve had a friend who’s done everything from a FCC to Bridgewater Capital smaller funds and they have all bounced around and a lot of them spent a lot of money on grad school and business school and they necessarily didn’t need to, if they just sort of found the right partners early on, they sure could have avoided all of the skipping around. And it all goes back to real estate. I think in that we would never rent any space to then go ahead and put a go-kart track and a bowling alley into. The Diamond’s rule is they will buy and own this real estate and then we’ll create entertainment space within it. And that approach has worked for them over 9 centers by this time next year. They are already in the hopper purchased and then the goal will be closer to 20 in year 4 years from now.

John Carney: Yeah, I mean, I just love hearing stories like this. Like about the gritty start about the personalities that come together, about the team, I’m big on team, it’s about the team and the gels. I mean, I would say, the to the listeners out there if you have a fire in you, an entrepreneurial fire in you and you find people that you can partner with, that understand the vision and have the experience. I mean, that sounds like what you did Nat, what you did in the past. It’s a play it forward to, I mean, you get to a position where the young guns are going to come knocking on your door and you’ll get that opportunity. Well, that is truly a great story. You know, on the real estate side, re-positioning the industrial to fit this need and to scale up and move west, is cool. I’m looking forward to checking out your brand once it’s up and running here in Ohio. Let’s get into our “2-minute drill” here. Are there any sports you are still playing today?

Nat Mundy: Ah, yeah I still play pick-up hockey and I’m actually racing most every weekend, in one format or another, whether it be in a go-kart or a car. So, that’s sort of been my activity at this point. My boat has turned into a place to listen to music and drink beer.

John Carney: That’s good stuff. Are you a reader? Is there a favorite book related to an athlete or sports or business that you keep coming back to?

Nat: You know, it’s funny. I frequent, you know, you remember the movie “Cocktail” where Tom Cruise is the bartender? And there’s a success manual behind the bar?

John Carney: I do, I do.

Nat: So, my success manual has been reading and re-reading any of Richard Branson’s stuff.

John Carney: “Losing My Virginity” I would say, that book was an instrumental part in my decision to work for myself.

Nat Mundy: I mean, he’s had the ups and downs. But the specific thing about, he’s kinda stayed classy the entire time. You know where as we see a bunch of entrepreneurs that aren’t as good about their sort of public eye. You know, Richard Branson has worked the entire time for $4.9 billion and I believe every cent of it. You know, versus a lot of other billionaires out there that are supposedly self-made. Anyway, for him it was all about the hustle and I love reading how he changes with, one of his book, I forget which one, but some of the copyright laws and how some of those are changing and how he then figured out a way to make money still, you know, in that space in the music world. And then obviously on the phones, and airlines and you know the “Space X” project. I take it he’s just a very, an entrepreneurial hero. And the cool part is that he was able to do it in London as his kind of home base as opposed to I feel everyone else just runs to New York or L.A. to become an entrepreneur.

John Carney: Yeah, we like Richard. I mean I was living in Australia for 7 years, the Virgin brand is very present there. He’s in town promoting various, whether it’s the airlines, or something else you know, enough that he gets a lot of press outside of America. I agree he’s an entrepreneurial hero.

Is there a quote from someone that keeps you motivated in the morning? Because we all know that you’re running a real estate business or scaling up a franchise in go-karts that there’s too many obstacles that are going to knock you back and is there anything that you like, nope I’ve got to keep going?

Nat Mundy: I don’t think I have so much of an inspiration she won’t quote as much as just sort of. And I went to this summer camp and it was an all-boys camp for three years in the summer and they always talked about courage and loyalty. And that might sound a tad cliché and cheesy. But number one, you have to have the courage to step out and do something. I could have stayed at my firm and probably would have probably still been there today if I had never left Wall Street. Or I would have moved onto something else. I’d probably be a director of some level of this point. Sure, but I also have a lot less hair. I’d be a much bigger stress case I’d also be commuting via train. Have you ever see the zombies get on the train at [5:30] in the morning and come back at [7:30] in the morning. They give up a huge part of their life, their family life for that roll. And that’s why you’ll never hear me complain about a Wall Street executive getting paid millions in bonuses because they basically become, their family basically becomes the firm. Their priorities become their job over their families and they miss a lot. And then you know comes the loyalty. I think family comes first and if you can stay loyal to your family and friends, you have the best part of business for the rest of your life. I mean, money aside, really all businesses are doing is helping to create money. But, if it provides for your family the way you were brought up or better, I think that’s success. So my goal would be to be able to send my kids to good-schools and not have to struggle week to week to make ends meet. Have them with a good life style, to get good educations, and then enter into business one day or expand it for which one is better and newer. It’s not a phrase so much, two-traits; courage and loyalty. Step out, step in the way and keep the people that keep you going as close as possible. Make sure that everyone is healthy and happy.

John Carney: Yep, that’s good advice. And I just want to build on that a little bit. Is there a daily practice, how do you train for success, how do you personally train for success? Different people do it in different ways, they get into a flow state or they get into their own zone. Is there a ritual or habit that you have?

Nat Mundy: Yeah. I can’t live without a calendar in my phone. I mean, part of my learning disability are I need things to be very organized and everything has to be in writing. So I start my day by having to review the calendar the night before for the next day. So when I get up I know what time to set the alarm. So basically it starts at bed time and then when I get up in the morning I make coffee at home, I watch the news. I have an awareness of what’s going on in the world and clearly now a days there’s a myriad of news to watch. I feed my dog, take her outside and do a certain morning ritual of showering and get to work before anyone else. That way I don’t have to have any distractions and any loose ends that came up after I left work the day before I have completely tidied up for start of business officially for the rest of the office. And then because of that I can say to myself that when I leave for 4-5 days at a time because everything is tidied up and there’s overall communication. I have update email that I probably send out 3-4 times a day to keep the ball rolling. That could be anything from a last minute event being booked at one of our centers to a decision on furniture. But it’s a great chain email so all the ideas are in one place and I think the ritual there is to start that chain of creativity every single day and not forget a single day to do it because it keeps people in the know and it gets the cheering section going too.

John Carney: We’re running a little long but I wanted to just ask based on that, getting to the office, turning on the lights. Is the CEO per say, did you find that, that sets the precedent, you set the bar here and your employees coming in notice that and that expectation is set and you’re leading by example.

Nat Mundy: You know, I think what we really done is a great job of weeding out the rift-raft. And getting rid of sort of no department has a, it’s pretty linier company. Okay, so no department has crazy hierarchy, there is clear seniority at places in fact, there’s no feeling of animosity ever or like you’re not equal. I mean we all said the same table to lunch, there’s no crazy separation. But meanwhile, if I walk into the men’s room at one of those centers and it’s dirty, I’m mopping the floor. And you know, I expect them to do the same thing when they walk in. If the track marshal walks into a bathroom or sees like a cup on the ground while walking to get some food they should pick it up. They see me do it. As long as you’re willing to help set-up chairs you get the respect of other people that are there for a little bit.

John Carney: Yeah, that’s, that is powerful leading by example. Hey, look Nat I want to thank you very much for joining me today in the Locker Room. Where can the members of the audience find you if they want to carry on this conversation and learn more about the business.

Nat Mundy: I mean, www.gpny.com is the website for the indoor track at Mount Kisco which is the mother ship. And the rest of the locations are under www.spinsbowl.com.

And the real estate arm is – d-i-a-m-o-n-d-p-r-o-p-e-r-t-y-m-g-m-n-t dot com. And you know if anyone has any questions or wants to invest in centers or is looking for advice I’m always available for phone conversation or a quick email. Not a problem.

John Carney: Alright, perfect. There ya have it folks I truly hoped you picked up some actionable advice today from Nat Mundy. Make sure to check out The Post Game Report on iTunes and while you’re there please subscribe to the Real Estate Locker Room Show to ensure that you never miss out on the pro tips from our guests. The mission here is to help you elevate your real estate game and your business. If you like what this show is about I’d be grateful if you would leave us a 5 Star review here on iTunes and that way other like-minded people and investors like yourself will be able to find us when they search for “real estate.” You can visit John Carney online – www.johncarneyonline.com for links and additional content associated with today’s show. So we will post all of those links that Nat just mentioned there for you to click through so you guys can get connected. And while you’re there drop your email in to get your newsletter. This is so you don’t miss out on any insight, tips, tricks, hacks, and other great stuff. So, remember to stay focused on your goals everybody, have fun, and stay in the game, I’m your host-John Carney, until next week, work hard, play hard, and profit hard. Thanks Nat.

Nat Mundy: Thank you, be good bud.

End Audio.

[39:48]

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© John Carney 2017

 

JC 004: Reed Goossens is the Australian dominating the US multifamily market

April 3rd, 2017 | no comments

Meet the Australian real estate investor who’s living the American Dream

In 2012 Reed Goossens packed his bags and left Australia to pursue his dream of living in New York City. He hit the ground in the Big Apple hustling and networking.

Today Reed is living the American Dream and pursuing financial independence as real estate entrepreneur who syndicated multifamily deals across the county.

Learn how horse jumping, rugby and surfing provided the Reed the confidence and discipline to successfully pursue any goal.

Reed attributes his rapid success in the apartment syndication business to having a mentor, a coach and partnering with investors who already had a successful track record.

Now Reed helps investors get started in US multifamily real estate and hosts the podcast, “Investing in the U.S. – An Aussies Guide to U.S. Real Estate”

Favorite quote, “Don’t give up” – Winston Churchill

Reed’s recommended reading list;

  1. How to Win Friends and Influence People by Dale Carnegie
  2. Rich Dad, Poor Dad by Robert Kiyosaki – www.richdad.com
  3. The 4 Hour Work Week by Tim Ferris – http://www.fourhourworkweek.com

Favorite Athletes

  1. Favorite U.S. athlete – Michael Phelps – Swimmer, multiple world record holder
  2. Favorite Australian athlete – Steven Bradbury Speed Skater
  3. Favorite athlete – Usain Bolt – Sprinter

Reed’s #1 tip for success is to get a mentor and surround yourself with successful people.

Thank you Reed for taking the time to share your story with my audience.

Visit Reed’s website www.rsnpropertygroup.com  or email him direct Reed@rmspropertygroup.com

Follow Reed on Facebook and Twitter

 

POST GAME REPORT: Episode Transcript

The Real Estate Locker Room Show Podcast

JC 004: Reed Goossens is the Australian dominating the US multifamily market

Announcer: Welcome to the, “Real Estate Locker Room Show” with John Carney. Did you know investing in real estate is a team sport? Join John and his guests as they explore the business of real estate and athletic competition. The goal for this show is to grant you direct access to the real estate pros that are closing profitable deals and growing their businesses. On the “Real Estate Locker Room Show” we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve on-going success. Now it’s time to kick-off and level up with new ways to grow your real estate business.

John Carney: Welcome to the Real Estate Locker Room Show. I’m your host John Carney and today we have lined up another great episode. We’re talking to international real estate investor Reed Goossens. Reed is an Australian currently living in Los Angeles California. He’s going to tell us his story f
rom going from no American real estate ownership to an interest in over 866 doors. He’s a multi-family investor. He’s the host of the podcasts Investing In The U.S. and An Aussie’s Guide to U.S. Real Estate. and all around good bloke. Reed moved to the U.S. in 2012 to pursue a career in structural engineering. However, he discovered a passion for real estate investing. With limited funds, and zero credit Reed went from purchasing a small duplex to growing his own real estate investing firm, RSN Property Group. Since 2012 Reed has been involved in over $50 million worth of multi-family syndication. That is excellent. Reed lives up to a never say die Aussie attitude when it comes to being a successful entrepreneur. So, Reed you are sitting in the Real Estate Locker Room. Before we get into your awesome story we’re going to offer you up a stretching question. A sports related question of course. Who is your favorite American athlete?

Reed Goossens: Oooohhhh, that’s a good one. My favorite American athlete? I think I would have to go with Michael Phelps. I’m a pretty big swimmer myself, growing up in Australia. You know, as you know mate, we all like swim and get wet in the pool. And yeah, just incredible, what? Won 22 gold medals was it? I can even, I lost count. The last Olympics was pretty incredible to watch and get back in the pool. So, Michael Phelps would be my #1 U.S. athlete.

John Carney: Yep. He’s had an amazing career of ups and downs. He definitely has that never quit mentality that champions have.

Reed Goossens: Exactly, exactly.

John Carney: Just so, you know, I lived in Australia, as you know, for seven years. Just recently moved back to the U.S.A. and when I was over there I was introduced to all of your sports. The one guy that I fell in love with is Steven Brandary, Bradbury.
Only because for listeners out there. I’m going to put in the show notes. A note here to put in the show notes, is a link to who this guy is. But, I mean, he’s an Australian speed skater that is not a popular sport in Australia, by the way.

Reed Goossens: There’s a ton of ice in Australia right?

John Carney: Yeah, right, there’s no ice in Australia. Talk about being put in a position to be successful. It was the winter games back in 2012, if I’m correct? Hopefully. There was a Winter Games in 2012. But anyways, he was in the gold medal final round and I believe there were four other competitors. And the lead skater on the last lap beat it in. And took out the two trailing ones. So, the fourth-place guy, you know, was in it to win it. And he crossed the finish line first, gold medal. It’s an amazing success story. So, any comment on that Reed?

Reed Goossens: Right. He is. I remember watching it. I don’t think it was 2012? I think it was earlier. Because I was a little bit younger. And 2012 was the Olympic Game is London, I think it was? So the funny thing was, he did that, that same thing happened in the heats. If you read into the story like. It wasn’t just in the final, flipped over and he skated across the finish line. Coming dead last and then all of a sudden then coming in first. He did it in one of the heats as well. Which is, it’s incredible. He won the gold and a lot of people were not very happy about it. Well hey, you got to be in it to win it right?

John Carney: Absolutely. With that being said, let’s get into this interview. Let me ask ya, why real estate Reed? And how’d you get started?

Reed Goossens: Sure thing, and you know, I want to say, this is awesome and well done for putting on this show. The Real Estate Locker Room is a really, really, cool concept. And I think you’re going to get a lot of awesome listeners and the name is so catchy. So, well done to you. The reason why I got involved in real estate? Was two fold. One, was I just graduated from the University in 2007 and I’d been backpacking around the world for about 18 months I looked at myself and said, I can’t be sitting in this cubical for the rest of my life. I just can’t be 40 years, 50 years. Get a retirement package, and then retire. I felt like a very small cog, a part of a very big machine, which was corporate Australia at the time. So, I really was felt like I wanted to give, like I had more to give. I was very entrepreneurial. But I didn’t know where to place my energy. I remember attending a Amway pyramid scheme sort of thing and that just wasn’t for me. And it was my dad that said to me, you should try and place some capital in some real estate. You’re in engineering, you’re a civil engineer. You surround yourself with real estate every day. And that right there was the little trigger that got it started. Making me look at things a little differently from that point on. In 2009 I picked up a book, “Rich Dad, Poor Dad.” by Robert Kiyosaki. I’m sure a lot of your listeners will be influenced by that particular gentleman. He has influenced a lot of my guest on my show. And has had some huge success. In that book really, you know, materialized what it meant to be a real estate investor. And I just, you know, took that book with, you know, it was with both arms and went forward leaps and bounds I was attending as much real estate investing networking classes as I could. And it was really understanding the asset that is real estate investing. And for all our listeners out there the reason I love real estate is because there is no other investment across the world anywhere across the world that offers the four ways to make money. And that is, that real estate has cash flow. And amortization, which is the pay down of the principle in a particular property because your tenants are paying down the debt. You have appreciation, and there are five forms of appreciation, I won’t get into those. But, there are five forms. And you have the tax benefits. So comparing that to a stock investment, it just makes so much more sense. I have control over my asset. That really is the power to me and why I love investing in real estate.

John Carney: “Rich Dad, Poor Dad” obviously a book that I read and I keep it close by. Because it’s still has notes in it. I haven’t looked at it for a few years, but I mean, you know, it’s one of my. I’ve got a stack of books in my office sitting behind that I keep as references. They have notes and everything. You just never know when you’re going to have to return to that. Look, I like to draw the comparison between what it takes to be a professional elite athlete because there’s a certain amount of dedication. You touched on that, you were educating yourself, became dedicated to learning how to become a real estate investor. And so, on this show, we’re exploring that crossroads where we have the intersection, sports and real estate. Growing-up did you have an athletic background? Was there anything you learned playing sports as a kid or participating in any sports now as an adult that helps you? That helps you along the way in real estate?

Reed Goossens: Yeah, that’s actually quite a good question? And a lot of people don’t know, this about me, that when I was growing-up, I was hugely into horses. I was riding show jumping actually. My parents, who were actually teachers. I don’t know how they afforded it, but we had a team of horses, we went around the country. Being in show jumping, it’s a very, it takes a lot of dedication and time. Getting up at [5:30]AM every morning. Dealing with horses, mucking out stables, feedings, grooming, all that sort of stuff. And having an animal that is your responsibility to them essentially. If it’s not working at it’s peak you’re not going to be able to jump as best you can. Because the horse is whatever, feeling tired or lethargic. And so that there, for me, a young age it was very much instilled in me to have dedication, to have drive, to have passion, for what you do. And I think that if you put your mind to anything especially particularly real estate. And how does this related to real estate investing? Not everyone is born with ten years worth of credibility in real estate investing. I certainly wasn’t. But I actively was wanting a goal to achieve, and that was the financial freedom. And I wasn’t going to give up until I got there. And I actively pursued educating myself on real estate. In life with my show jumping you know, I was actively trying to become a better horse rider, every single day in and day out. And if you continue to put your mindset to that, and have a goal and you’re laser focused on that goal, that I think it’s very, very, likely that you’re going to achieve that goal. So sporting was definitely a huge part of my growing up. I played Rugby, I swam, I surfed. I went to Nippers. And for all of the Americans, out there who don’t know what Nippers is, it’s just sort of surf like savings for kids. Sports had a huge impact on me growing up and it has shaped me into the adult that I am today. And it has definitely shaped me into the person that is you very driven about what I do. And I thank God for the goals I set and how I achieve them.

John Carney: We have young children now. It’s really, really interesting watching them play and develop. I can’t wait until they fall into. We want to expose them to a lot of sports. Because I believe that, that does instill a certain amount of, discipline that’s required and you kinda carry through school and through life. So can you tell our audience what you’re working on right now that’s getting you out of bed in the morning excited and you are laser focused on. And bring us up to date. You arrived in the United States. You own no property, right. Now, you have an interest in a substantial portfolio. Can you give us a little bit of that story and the time line. You know, we kind of kick this off in 2012. You know, we’re ¾ of the way through 2016 now, close the gap for us.

Reed Goossens: Sure thing. So to rewind a little bit more than that. It was 2009 and I educating myself for a couple of years in Australia. Very, very, close to pulling the trigger in Australia. It was a flip or something in Aussie that I wanted to invest in, maybe split a block and I was very close to pulling the trigger and saved a bit of money. At the time, my girlfriend who was American, was studying in Australia. She had finished up her studies and I really, really, wanted to move to New York City. Because I felt New York City, is in terms of business, in terms of growth, it just had this feel to me when I was backpacking through there in ’08. That I just had to live in this particular city for a period of time. Early in 2012, we packed up all our stuff and we moved across the world. We rocked up in the United States and I didn’t have a job and I was on a tourist visa. And I just pounded the streets, untill I found one. I found one as a structural engineer and up until a year ago, 18 months ago I was a structural engineer. And within the first two weeks of me being boots on the ground in the United States in 2012 I was at my first real estate networking event. And John, I thought Australia had some awesome networking events! By gosh, the United States in the heart of New York City, in Time Square, it was like networking on steroids. I had not experienced anything like this before. And I was just so, you know, invigorated to go out and learn a lot about real estate here in the United States. You know, people don’t realize that in the U.S.A. when I first came to the United States, that the barriers to entry are a lot lower compared with Australia. You know, maybe is Aussie, I can pick-up 150 maybe 200 thousand dollar absolute heap, and try and flip it, and make a little bit of profit. Well, in the United States here, I saw that you can pick-up places for $50, 60 thousand dollars that would cashflow for you know, $200, $300, $400, dollars a month. Which was incredible. And I was just like, hang-on, this is something awesome here. And so, 2012, educating myself. And as I said, I picked up my book in ’09, and so I had been educating myself for a period of time now and I was very, very getting to the point where I was just chomping at the bit like there is only so much to learn, there’s only so much you can read. Actually get your feet wet in a deal. So, I think I had a little deal in Up State New York. It was within driving distance from New York City, Syracuse New York, is about 4 ½ hours. It was a duplex and the cash flow side of it. So, I went and purchased it. And I purchased it all in cash. When I first moved to the United States, I didn’t have any credit. You know, anyone who moves here will understand that credit is king in this country. And I couldn’t borrow. I had to pay for things all with my own cash. So, then I slowly over a period of time. I developed relationships with the local bank and I was able to refinance some money out of that deal and buy a second deal. And through that time when I bought the first deal I rearranged to the property. And we did, I spruced it up, nice new counter tops, and nothing crazy that you and I would approve of and appreciate. But something that was affordable for my tenants. And in doing so, I was able to increase the cash flow of that particular property and it was quite powerful. I increased the rent about $60-$70 bucks on the two individual units. So, it had a Gross over effect of $126.00 a month. Which was really nice, in terms of cash flow. I had done that deal and I did a second deal. I did a separate deal, it was a flip in Philadelphia and I was slowly, slowly building credit and building these little portfolios. Then it came to a point when I ran out of my own money. I just couldn’t do any more real estate. I had 3 or 4 properties. You know, very cheap properties under my belt. It in deed, maybe the portfolio was worth then $200,000 maybe $250,000. What I started to realize was hey, I need to up my game here. I saw the power of multi- family real estate. A buddy came down from Canada at the end of 2013, and we had dinner. Hey guess what I am doing? These duplexes in upstate New York. Look how good I’m Killin’ it! Reed, that’s awesome. I closed on a 70-unit apartment building in Canada. I was like, what?! How did you do that? What does that even mean? And he went on to explain the power of “The cap rate theory.” That if you force the net operating income, you can increase the cash flow for one unit. You can also force the value of the property. That was really, really, powerful for me. Because I started to see that on my smaller duplexes, even if I wasn’t forcing value, I was increasing cash flow. And the key was commercial real estate. You have to get involved in commercial real estate. But, you know, commercial real estate is a lot more expensive. Instead of buying two duplex, you might be buying a hundred units or 50 units, or whatever it might be? But I saw the economy as scale there. That if I could apply what I was doing on the duplexes to the large multi-families then I would be able to build a huge wealth and crate a lot of passive income, a lot of cash flow at the time. So, that was sort of started my journey from 2012 to 2013. In 2014 I started RSN Property Group and I got a coach/mentor, and we definitely were on personal branding. And getting into the day, people will invest in your deal because they invest in you. The deal might not necessarily matter than much. They actually invest in you because they trust you. You have credibility with them. So, how do you build credibility without being born with it? Well, there’s a number of ways. I know John, you’re an expert at it, as well, writing a book. Or being a key person of influence in your sphere. And there are those difficult things that you can do to brand yourself in a certain way that will attract real estate investors. And over a period of the last 18 months I’ve been able to get involved in I think 866 units and I have an equity stake in all those. And I’ve been able to raise a bunch of capital. And I’m slowly building towards something awesome. And you know, my journey is not over, by no means, it’s only just getting started. And I want to continue to grow my portfolio and continue to buy as many multi-family real estate properties as I possibly can. So, that’s caught everyone up to date a little. It’s a bit of a journey, but it’s certainly a lot of fun along the way.

John Carney: Yeah, that’s a great story. And I believe it’s common at least from my experience. In surrounding yourself with the right people, right? I mean, you’re the average of the people you meet and choose to hang out with. And with the common interest you’re with these real estate people now, through networking, right? And you’ve grown into the investor you are today and with the sights on growing more. You know, I talk to a lot of first time investors and help people get started in the game. I always start by recruiting the team when I go to new markets. I want to touch on your team. But, I think it’s an important to note what you just said, starting zero properties. That first rental which you had to drive 8 hours round trip to get to and then you just turn the clock forward a few years, all the blood, sweat, and tears turns into 866 doors. So, I mean, that’s just a great story. You know, that is the American dream isn’t it, Reed?

Reed Goossens: Right,

John Carney: you’re living it.

Reed Goossens: Exactly.

John: Leading by example. So, you know, I’m a big believer in growing into who you are today, it doesn’t happen overnight and if you set your sights, continue to set your sights higher and raise that bar you will continue to grow. So, awesome, thank you for sharing that part of your story. So, you know, I just moved back from Australia to Cleveland. I haven’t lived in Cleveland for 19 years. It’s a completely different city and we won’t go on about how expensive real estate is in Australia. I had to get the lay of the land here and I was able to do it pretty quickly. For the last 120 days I’ve really been figuring it out and running the numbers and doing the math to define where my next acquisition is going to be. But, you know, it also requires putting together the right team.

Reed Goossens: Exactly.

John Carney: So I want you to talk a little bit about how you went about assembling your team that supports you. What it means to you, and you know, aside from you who’s driving this, you’re the quarterback. Who’s the key-player?

Reed Goossens: Yeah, that’s a good question. I think, you know, I had you on my show, a while ago. I was very taken. Very impressed by what your show produced. Enjoying you book about real estate is a team sport. That really resonated with me, that is completely true. The key-players on my team are a couple of other syndicators. I can name, names, I don’t have to name, names, it doesn’t really matter. But, the power of understanding that you not, in real estate you can’t do it by yourself. And on particularly on large multi-family units you can’t go and raise all the capital. You can’t go and find the deal. You can’t do the PPM. You can’t go and do the financing all by yourself. So, splitting it up amongst people who are capable of raising the capital. Capable of getting financing. Capable of finding deals. That’s really, really, important. And you know, if yes, I have an equity stake in 866 units. But, we all do. And so without the team we wouldn’t have gotten to that amount of units so quickly. If it was just me, Reed Goossens doing it by myself, I wouldn’t have been able to scale as quickly. And that’s really important to the listeners out there. Surround yourself with the right credible people, get a mentor, get a coach. Then work on your personal brand and understand that you’re not going to be able to do this by yourself. And it’s okay to use other people and leverage other people’s skills and abilities to help you scale your portfolio. So, I think that is really important, in my investing career, having a coach and getting a mentor is, without them I was, first started leveraging their ability. They had done some deals. And I leveraged their experience to then go and show my investors. To say, “Hey, I’m partnering with these awesome guys. They’ve done “X,Y & Z” or have done a couple of deals and they’re looking to grow like I am And then all of a sudden I’ve got mentees who I mentor. And then they’re leveraging my ability to and they’re raising capital. Because I’ve been involved in 866 units in the 18 to 24 months. So the cycle goes around. I’ve got high hopes on that. I’m helping other people and continue to help other people where I can because the power of your team is very, very important.

John Carney: It definitely is and I suppose you just feel obligated, don’t ya to pay it forward, when someone comes to you. And you see the fire in their eyes and say, “Hey, you know, I’ve learned this, I can help you out.”

Reed Goossens: Sure.

John Carney: And it’s not always, you know, a lot of the times, you know, I’m always opened to directing people to the right advice. So, I mean, I think you’ve touched on it.
If you’re a rookie real estate investor who wants to break out, who wants to go, tapped out with cash and bank loans and wants to elevate their game to another level, you’re advising that they go out and find a mentor or a coach, and has the same vision as they do, and ask for help. Would you say that’s?

Reed Goossens: 100%, John. That is key, and as I touched on before, leverage a mentor or a coach helped me to get where I am today and I was able to leverage their skills and abilities. The number one thing that I like to talk about when you’re presenting a deal to an investor, a potential investor. They’re going to go say, “Well, how much experience do you have?” Well, then you’re not going to have any experience because you might not have done this before. So having a team, showing the investor that you have a team around you and that you have a great team, and a great package, and a great deal. And that goes to the core of, I trust you, I trust your credibility, I trust the team you’ve got established around you that you’re going to invest. And raising that first $100,000.00 or $150,000.00 or whatever it might be in syndication, that’s what I do, can be tough. And once you do that, it’s a little bit of a snowball effect. Like people start referring you to other clients. You start building a track record and things become a little easier. But it does take a little bit of time and effort to get that first deal done and I always like to say, that you don’t get to deal 15 without deal number 1. So, that’s my little motto.

John Carney: Right, loads of action in between. You’ve shared an incredible story. And before we get into the “2 minute drill” here. Think back really, quickly, certainly there’s a recent obstacle that had you banging your head against the locker door, so to speak. Can you share one of those stories with us?

Reed Goossens: Yeah,

John Carney: I always learn and so I’m listening with opened ears because, they are just obstacles in the way when you a real estate investor. I really enjoy learning from how others navigate those obstacles. To find their way to crush it.

Reed Goossens: Sure thing yeah so. I think the biggest one recently. And I’m going to get pretty in depth now. It’s a little bit more advanced. But, I don’t really care. Your listeners will learn a lot from this. On some recent deals that I was involved in I had raised a bunch of money and what had happened was that the deal sponsor, who was the person who comes along and essentially puts their neck on the debt, they sign on the dotted line,
didn’t want to have what was called “sophisticated investors.” And for all those people who are listening understand the FCC rules. Sophisticated investor means they are not accredited, non-credited means, you don’t earn $200,000.00 or more a year. Or you’re not worth a million bucks. So that meant a lot of my investors in the deal were walked off the table to leave a good portion of money. Like, I’m talking $500,000.00 to $600,000.00 off the table. Now, I didn’t know this till like D-Day, so it really frustrated me, that I couldn’t one, perform on what I was going to sell what I was going to do. And two, I, communication wasn’t there to say, okay, we’re only going to take accredited investors. Lesson learned. But, in saying that, I can’t then leave those investors out in the cold because you know there’s other rules in the FCC Laws that you can use on the sophisticated investors in your capital raising abilities it just meant for me as a business owner and RSN Property Group to start finding some smaller deals. I needed to start getting my other non accredited investors involved in some smaller deals and that’s why I went to Kansas City, just recently to check out a 48 unit, a 50 unit. I want to be in a place in my business where I can if someone comes to me and says, “Hey, Reed I really want to invest with you.” I love what you’re doing. I need to be able to put them in a deal and that’s just me as a business owner and to find the right deal to help them navigate the world of multi-family investing in the United States. So that’s definitely one thing that I recently had me banging my head against the wall. Lesson learned. I understood where the deal response was coming from. That meant I had to change my action in my own business and say, “hey” I need to start going out and increase my deal flow on some slightly smaller sized deals to get my sophisticated investors involved. So, that’s definitely one of them recently.

John Carney: Yeah, sounds like it’s one of those cases where you’re insanely frustrated in the moment but then it turns you’ve learned a lesson. You’ve built a system into your business and then almost, you know, the obstacle becomes the way, and you have almost come up with a solution to handle a different investor classes

Reed Goossens: Yeah, it’s definitely lesson learned as I said. I haven’t executed all on a smaller deal with my sophisticated investors yet. But I will be ready to go by the year’s end. I should have 4 or 5 or 6 of them involved in a sale of a smaller deal in the Mid-West somewhere? Just trying to find that deal right now.

John Carney: Right, you’re on a hunt. That’s the part I like.

Reed Goossens: Exactly.

John Carney: Before we wrap up the show here with a “Two-minute drill.” I’ve got ten questions and they are coming at ya starting right, now! What sport did you love playing as a kid, and the lesson, one lesson.

Reed Goossens: It probably would have been Rugby. I think the biggest lesson is that, I like my show jumping and then being in the equestrian world, that was a very individualist sport. I think being on the Rugby field, there’s 14 other guys out there slogging in the trenches. It’s a team sport, you know and that was really powerful.
My dad always said, “You got to be involved in team sports. It helps with leadership. It helps in just understanding the dynamics of other people at work.” And that is really powerful and that was a really good lesson learned over the years coming in now into my adult life.

John Carney: Number 2. What sport are you currently participating in today that you’re enjoying and lessons from that?

Reed Goossens: I still get out in the water for a surf every now and then. I really love surfing. It’s a great way to just, you know, life can be go, go, go, go and it’s just a great way to get out on a Saturday or Sunday, early before…as the sun is rising and just take a great big breath and let all the worries and stresses of the world just drift away. You know catch a few waves and just enjoy the morning. I love getting out and in particular a nice fresh still winter’s morning which is a bit more crisp and just get in the water and getting some nice waves. It always makes me feel good.

John Carney: Yeah, the cold salt water, love it and miss it. Other than Robert Kiyosaki’s “Rich Dad, Poor Dad”, do you have a favorite sports book or business book that you’ve just finished that’s on your list?

Reed Goossens: Yeah, I have one, by Dale Carnegie “How to Influence People” that one? I’ll have to send you to it? “How to talk and Influence People” something along those lines? I’ll have to send you to it? Dale Carnegie, very important book in my career. The other one I love is, “The Four Hour Work Week” by Tim Ferriss. Very, very good book. I really enjoy that book.

John Carney: What a great title.

Reed Goossens: It is, it is.

John Carney: What a way to sell books.

Reed Goossens: The four-hour work week. I mean, what I sign up?

John Carney: I know, I know. I read it. I can’t imagine that there’s an entrepreneur out there that has not read that book unless you’re well established before it was published. But, even then, I mean that is a great book. He does great work. I’m a big fan of Tim Ferris. One quote that keeps you motivated? And this can be something that doesn’t have to be from a person. It can be something that you came up with.

Reed Goossens: Yeah, one quote Winston Churchill says, “Never give up.” And that is just never, ever, give up. It doesn’t matter if the chips are down. Don’t give up, have belief in yourself as I said earlier in the show. If you continue to be laser focused on your goal, whatever that might be. It might be real estate investing or something completely different, then do it and don’t let anyone tell you otherwise until you achieve that goal. And anyone can literally achieve anything you put your mind it. So, I’m a huge believer in mindset. And if you are so motivated in it and dogged it about your approach, you’ll achieve those goals, you’ll get there.

John Carney: Thank you. What is your number one come from behind victory in real state and what did you learn from that?

Reed Goossens: Come from behind victory? I don’t know if I’ve had one yet? I had an issue with a flip in Philadelphia with the contractor. Definitely at one stage I thought the chips were down. I had done a couple of flips in Philly. I’m not going to get into the weeds but, it was some issues with the city and trying to get this thing on line and I was constantly just pouring money into it. And we did, we ended up getting it over the line. It was probably six months later than scheduled but we got it done and we got it sold for a small profit. We got our money back and I definitely thought six months earlier, geez this is going to you know, the explicit excrement is going to hit the fan. So, I definitely go to lesson’s learned on that. Flipping is not my business, it’s not my job, it was hard to manage from out of state and I definitely just needed to focus on my multi-family investments of which I have had lots of success in.

John Carney: Perfect. Alright, now we’re asking who’s your favorite athlete of all time is?

Reed Goossens: Favorite athlete of all time? I think, Usain Bolt, would have to be my favorite athlete of all time. I love his poses that he does that he does. Just the sort of grin as he’s running across the finish line, you know, ten yards in front of the next person. I think he’s a real inspirational guy. He comes from Jamaica, I just love his attitude. I just love the way he leads his life. So, really, really, inspirational for me.

John Carney: Yeah, you watch him run and blow everyone out of the water and it doesn’t even look like he’s breathing hard. I

Reed Goossens: Or he’s even trying hard. It’s like, this guy’s a freak.

John Carney: Yeah, he doesn’t sweat.

Reed Goossens: Yeah, exactly.

John Carney: What gets you into your flow state or if you need to get into the zone and focus on something? Do you have a practice that you can share?

Reed Goossens: Yeah, if I have to really focus on something and I’m sitting at home. I like to get out of my. If I have to really hit something on the head. As I say, eat the green frog” or whatever it is? You know, the first thing you don’t want to do is? First thing in the morning, I like to get up, go for an exercise and then have my breakfast and then get out of the house and go somewhere where you can concentrate. It might be a coffee shop, it might be the library and I get so much more work done when I get out of the house. Because being in the house can distract you a little bit. So, you can’t get work done as much. So, it’s just like turning off your phone, turning off your Internet and doing whatever you need to get done, done. And it’s surprising how quickly it does get done and then you’ve got that thing done and out of the way that you’re sort of regretting to do. So, it’s definitely one of those things that changing up your environment a little bit that way you’re working to be more productive.

John Carney: And would that lead into the next question? Which is, do you train for success?

Reed Goossens: Yeah. definitely, I’m a huge believer of in meditation. I love going and trying to do yoga once a week. Just to try and it’s very much like surfing, it’s therapeutic. Just like to get away from everything for a little bit and I also like to work out a lot as well because it’s another way that I can go and just a great way to start the day. It’s a great way to be energized. But it’s also a great way to keep your mind set focused, keep focused. People, there have been studies shown other people that workout live longer, they’re more healthy, they are more active and have better mindset. Being an entrepreneur you want to have all those things and you want to continue to do what you do, which is the business of real estate investing.

John Carney: Yeah, I agree with you on the working out part. My wife will see if I haven’t been to the gym in a couple of days tell me to go lift something heavy. That’s why I love her so much. All right, finally, what is your number one tip for winning more?

Reed Goossens: The number one tip for winning more? I think it would have to be is taking a page out of your book mate and as you said earlier in the show already you are only as successful as the people you surround yourself with. So, going back to what I the underlining theme of this particular episode was, get a mentor, surround yourself with successful people. That’s all, that’s my number one tip for winning.

John Carney: Awesome, can you tell me how our guest can find you if they want to continue the conversation?

Reed Goossens: Let’s do it. So, you can hit me up at – Reed@rmspropertygroup.com, or you can hit me up at my, I’m also have a Podcast, which is, as John mentioned, Investing in the U.S. Aussie. U.S. Guide to Real Estate. Educating international investors about the awesomeness of the investing in and cash flow property here in the United States. Check it out on iTunes and if you’re ever coming through L.A. please hit me up. I love hanging out for beer, or coffee, or going out for lunch. Whatever it might be, just hit me up at – Reed@rmspropertygroup.com.

John Carney: Awesome. Well there ya have it folks. I truly hope that you picked up some useful tips by tuning into today’s show. Thank you, Reed it was a pleasure having you on the show today. And I’m sure our listeners have some actionable tips that they can implement immediately. You can check out the show notes on iTunes and while you’re there, please subscribe to the podcast and we will continue to deliver awesome guests like Reed, who are crushing it, and hitting home runs here in the real estate game. You can also visit – www.johncarneyonline.com for a more comprehensive review of today’s show, in the show notes. And we look forward to bringing you another episode next week. I’m your host – John Carney and tune in next week, until then, work hard, play hard, and profit hard, thank you Reed.

Reed Goossens: Thanks mate.

John: Alright, have a good one.

[38:37]

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