Epic Real Estate Investing - Best Real Estate Investing Advice Ever with Joe Fairless | EREI 167

Episode Date: August 10, 2015

Today’s guest is a successful multi-family investor and fellow podcaster, Mr. Joe Fairless.  Joe went from making less than minimum wage to now controlling over $21,000,000 worth of real estate.  Listen in as he discusses the lessons he’s learned in lead generation, raising money, and self-development.  Enjoy! ------- The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? E ducation P roperties I ncome C oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey there, Matt here. Real quick. Recently, I held a brand new epic intensive live event where one of my really good buddies was on hand, Matt Andrews, to share his techniques on generating free, motivated seller leads using Facebook and YouTube. Now, this wasn't any ordinary social media training. In fact, it wasn't social media training at all. It's way beyond that. What he does is he leverages Facebook and YouTube to hack into search engine results. I didn't even know you could do this, but sure enough, I'm doing it and it's working. Matt calls this technique search engine hacking. Really ninja stuff.

And it's free to do too. So what I did is I pulled out a good clip of this training from the live events video and I put it up online so you could check it out, steal it, use it in your market, and make tons of money with it. You have our permission. And it's live right now. So go to search enginehacking.com and it's there waiting for you. I won't have it up there forever, but it's up there right now.

So go to search enginehacking.com. All righty. Now on with the show. It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so. Flipping houses can make you rich, but holding them will make you wealthy. Subscribe to a new real estate investing podcast. Hold That House with Matt Andrews and Matt Terrio.

Subscribe for free. Listen, learn, and earn. Hold that house. Subscribe today. This is Terrio Media. Broadcasting from Terrio Studios in Glendale, California. It's time for Epic Real Estate Investing with Matt Terrio. Hello and welcome.

Welcome back. Welcome to Epic Real Estate Investing, the place where I show people how to escape the rat race using real estate. Just got to shift your focus from making piles of money to making streams of money. Change that one thing, just one time, and you are on your way to financial freedom. Matt, is it really that simple? Yep, it's pretty much that simple. It's not the most exciting path. It's simple.

It ain't really easy. it's not that exciting but you know what? It is the fastest path and if financial freedom is what you're after and you'd rather have it sooner than later, then that's what you got to do. He's got to shift your mindset. Stop going to work, work, work, and save, save, save.

Now go to work, work, work, and create, create streams of income. All righty, so if you'd like to get started the same way that I did with no money, no credit, you can do that by following the free course that I created just for you. and that free course is available to you at free real estate investing course.com. Free real estate investing course.com. All right.

Got a great guest for you today on the phone. A fellow podcaster here in the world of Podlandia. He controls more than $7 million of real estate. He's an all-around cool guy. So let's just get into it. Please help me welcome to the show, Mr. Joe Fairless. Joe, welcome to Epic Real Estate Investing. Thanks a lot, Matt.

Excited about being here. Good. I'm glad to have you as well. You know, let's just get started where it's kind of our customary place to get started whenever we have a brand new guest. And I'm looking forward to just hearing about your background and how real estate became your thing. Yeah, so I'm from Texas, I live in New York City, although I'm also spending a whole lot

of time in Cincinnati right now where my real estate stuff is. And I'll get into that in a little bit. My background is I moved straight up from Texas Tech when I graduated in 2005 to New York City. I've been in New York for 10 years now. This May is 10 years. I was an advertising major, and I climbed a corporate ladder from working in advertising agencies.

Whenever I first started, I was making less than minimum wage whenever you factored in all the hours that I was working and ended up being the youngest vice president of award-winning ad agency on Madison Avenue. And what that taught me is that I definitely need to learn more about investing, because as I was progressing through my career from less a minimum wage to actually making some money, I needed to figure out how to invest it. And I read the book, Investing for Dummies. Then I read Rich Dad Poor Dad, and that really set me on my course for what I wanted to do with real estate.

I ended up buying some single-family homes in Dallas, Fort Worth, while living in New York, and then started studying multifamily investing and learned how to raise money and buy it. apartments and closed on my first syndicated deal about a year and a half ago and now, and that's in Cincinnati, it's 168 unit who I raised over a million bucks. And now I am focused on my next deal, which is a development deal that I've been working on for about a year and about to get it under contract, been working on a little bit too long before having it under contract, but it's an off-market deal, and that end of itself is a three-hour conversation about what's happened on that deal. But that's where I'm at right now and excited about what's ahead.

Super, super. I'd love to, we'll go ahead and we'll talk about your business and what you're doing. But I do have a question. You have a very successful podcast of your own, the best real estate investing advice ever. What was the inspiration behind the title? I, you know, my background is marketing and advertising. And similar to you, what you do really well is branding.

and I wanted to have something like that where it stands out. And, yeah, I started studying different podcasts and different shows, not only podcasts, but then also just very successful TV shows and movies and programs and followings. And I realized that it needed to be very, very clear in the title what I was talking about. And then there needed to be a tie-in so that I could call my community something that made sense. So the show, as you mentioned, is best real estate investing advice ever,

and the listeners are the best ever listeners. And best ever is a nice little hashtag I can include and everything. It just makes a lot of sense. Super. Super. Super. I like it. I thought you're going to call it besties. The besties. That's cool, too. I like you should give some awards. I like that. Yeah, the besties of the besties. I like it. Cool. So what is your real estate, I mean, I know you're working on a deal you've been working on for a long time. Is that just kind of your thing, like one big project at a time? Or what does your real estate investing business actually look like right now? Yeah, that's my business.

It's focusing on big projects. I'm not about quantity. I'm about quality. I want only to do one or two deals a year, but make them count. And so, you know, I have, like I mentioned, I have homes, and I have three homes in Dallas, Fort Worth. For those of you in Dallas, Fort Worth, one's in Duncanville, two, are in Fort Worth. And I realized that it just wasn't happening as fast as I wanted to.

You know, I make a couple hundred bucks on a home a month, but that's really it. So I wanted to do apartment investing, and what I realized with apartments is that you're buying multiple homes at once. So I basically what my business looks like is I underwrite and evaluate multi-family deals and I raise money and whenever I find one that makes sense, then I'm like a dog with a bone and I just stick with it until, you know, until that bone's all slobbery and worn out. But eventually I've closed on it and it makes a lot of sense and it makes money hopefully for everyone. Fantastic.

So what's your strategy then for finding your deals? Relationships, first and foremost. I mean, you know, you mentioned the podcast, and interestingly, I did not expect this, but the podcast has allowed me to make many friends along the way. And heck, I mean, I probably wouldn't be having this conversation with you and all of your wonderful audience members if I didn't have a podcast myself because I just wouldn't have known about podcasts and we wouldn't have connected. So the relationships are how I found my

deals. For example, this development deal I've been working on, it's through a broker who helped close on the first apartment community. His friend's friend is the seller. And they're in they invest in a deal together.

So I also do direct mail, but I realize that it's it's less, especially with multifamily whenever I want fewer deals, but more high-quality deals. Even if I do direct mail, it's about building the relationship with that person over time. It likely won't result in a deal immediately. It could, but it likely won't.

It's more about establishing myself, adding value in their life. So one of the things that I do with the direct mail is, I don't say I want to buy your apartment community, it's hey I'm familiar with this area I've found some ways that will help optimize the NOI on multifamily properties because I have one myself I'd love to share

with you some things I've learned and just get to know you and that's just a lot different and it's gotten me to more friendships that way and so whenever I look for deals I really look for relationships

first and then the deals kind of trickle up Right, right. No, I really believe that the relationship avenue is the best way to do this business. It's not always the fastest. It's not necessarily the most efficient. Sometimes it can't, it's not the most predictable. But it is the best way. It's, that's, so yeah, that's, what I'm trying to say is that's how I got started and then started looking at scaling up my business and creating some more predictability. And so how do you see that going forward? Is it just,

it's just going to be one deal at a time? Like, for example, why don't you take me back to what's after you purchased your properties and got those properties in Texas? What was your next big deal? And how is that going for you right now? Well, after I purchased the apartment community in Cincinnati,

the 168 units, I, my focus was on investor returns because that was the first syndicated deal that I did. and I needed and wanted, and it was my life to make sure that it is and continues to be successful. So that was my focus. I put things on hold. I put acquisitions on hold until I could focus on that. And then once I felt comfortable about this time last year, I started looking at other opportunities.

And where I see my business headed, you know, I've done a lot of these, a lot of podcasts, and I think I'm at 270 now because it's a daily show. And so I've interviewed a lot of success people. self-included. And what I've realized is that the top of the real estate mountain is raising money. Because when you have access to money, you become a deal magnet. Therefore, where I see myself headed is continuing to be that source for capital so that whenever I come across deals, that makes sense, we can invest that capital in those deals. Because one thing I've realized, you know, we all have different areas of strength and areas that we're not as interested in,

therefore we're not as good at because we're not interested in it. That's the only reason why. And I'm not as interested in the operations. I've realized that and I've learned that through this deal. So I'm going to be more focused on bringing the capital and having those relationships and then working with experienced partners on the ground who are investing, not only multifamily, but storage units, office, industrial, you know, anything. Mm-hmm. You know, I teach something a little bit differently that if you have the deals, then you're a money magnet.

So, and then for me, that's a really easy discussion to have if I have a deal to go out and find the money. So you do it a little bit differently. If you're a money, if you have the money, you're a deal magnet. So what is your approach to raising money when you don't necessarily have a deal to present? Yeah, and it's, you can do it both ways. And I, and quite frankly, I have. had the deal before I had the money with my 168 unit. And fortunately, I still have my sanity, but it almost took my sanity because I was up against the deadline, a very hard deadline of when I needed to get the money. And, you know, I'd never raised any money, but I'd never raised the penny before my life.

So it was an extreme, extreme learning curve. So how, to answer your question directly, how I get, raise the money before the deal. Well, I don't raise the money for a particular deal. I build anticipation, and I talk about what I'm up to. I learn about their investing goals. Then I ask them, well, based on your investing goals of XYZ, when I find something that meets your goals,

would you like me to share it with you? And they're going to say yes. They all say yes. Right. Everyone says yes. And then whenever I say, okay, and based on, you know, kind of your criteria for what the investment range you're looking at, what is that range, just so I have an idea of the type

of projects you might be interested in? Then, 50% of the time, they'll tell me what their range is, 25,000 to, you know, half a million, a million. Then I put them in a spreadsheet, and I know, okay, so this is verbally what they're looking for, the type of returns are looking for, based on their goals, and this is the investment range that they're in. I don't know if they're going to invest that or not, but at least I have, them, I know what their goals are, I know how to speak their language whenever I have a deal. Then I just simply go find the deal once I have more than 30% of verbal commitments for the total amount of the transactions I want to have. That way I can go to brokers, I can have those

conversations confidently, and I can say, hey, I've got this money waiting, waiting, verbally committed, I need to find a deal, let's make something happen. And by the way, whenever I build that anticipation with investors, they're chomping at the bit by the time the deal rolls around because they've, I've been keeping in contact with them on a regular basis talking about what we're up to and saying, nope, didn't qualify this one, didn't qualify this one, didn't qualify this one, and then when I do qualify one, it makes that much more impact. Got it. No, I like that approach.

It's my exact approach. And it's, it's whether, you know, whether you have a deal or not, probably the most effective way that I've found to raise money is don't try and close for that money on the, very first discussion about it saying, hey, if I come up with something, would you want me to get back in contact with you? And like you said, everybody says yes. So whether you have the dealer or not, it's actually a very effective approach. And then you can call back and say, you know, stay in touch and this one didn't work or this one does. And are you ready? I like it. Yes.

Super. So you've got 168 units in the book, Big Apartment Building in Cincinnati. Did you choose Cincinnati specifically? Or is that just where the deal? deal was. That's where the deal was then I qualified the market and I love the market now. Got it. I love the market too. Why do you like it? I like it because there are nine Fortune 500 companies headquartered there. So there's a lot of diversity, a lot of different industries from Proctor and Gamble to Macy's to Kroger to A.K. Steel. There's just a lot of different industries. And I like it because it's a cash flow market too. You can you can, you can get good properties that have the cash flow.

And I see what they're doing in downtown with the Banks project, and I see how the path of progress is kind of unfolding, and the type of investment they're putting into over the Rhine, which is just north of downtown right by the casino. And they're really revitalizing the area. And it's just like a textbook example of a market that has a solid fundamentals, but still has a lot of potential for growth. Right.

Nice. Super. We found the same thing. I've noticed a lot of the major cities in the Midwest are going through these types of revitalization. Have you looked into other markets? I haven't. Okay.

No, I've been primarily focused on Cincinnati, and I know a good amount about Dayton as well, but those are the two markets I've been focused on. Got it. Is that where your next project is? The next project's in northern Kentucky, just outside of the Cincinnati MSA. It's only about 20 minutes from downtown Cincinnati. So far.

Similar type deal, apartment building? Yeah, well, this puppy's a ground-up construction. So right now it's just dirt, and that's actually the main reason. Oh, hell, that's the only reason why it's taking me so long on this, because I have no development experience, therefore, in order to raise any other. money and bring capital a table, I had to have a partner who had development experience. And so I've been, I didn't run in the development circles before this. Now with my podcast and the people I've met through that plus, well, really the podcast,

the people I've met through that, I've established relationships and now I'm starting to understand it more, but at the end of the day, I still need a development partner. and so that's kind of why it's taking me so long because initially I didn't have a development partner and I was trying to figure it out myself and that sure it's all didn't work. So then I brought somebody on and we've been working through it

and getting it closer and closer to the closing table. Fantastic. How far away are you? Well, if you had asked me that question two months ago, I would have said one month, so I hesitate to answer that, but I would say I'll give it two months before we close well no three months before we close I'd say one month before we get it under contract I've got some pretty important meetings with the development partner coming up this weekend

so it's kind of a rolling fluid process but hopefully soon good good yeah let's not talk about it anymore I don't want to jinx it for you yeah you bet let's let's let's let's let's let's let's let's let's Let's go back a little bit. So when you're working on your 168 unit and you've built your business based off relationships, like I was saying, I think that is the best way, but it is a very slow way. If someone was listening right now and they're like, you know what, I don't really want to do this wholesaling thing. I don't want to do this three, four, five deal a month, wheeling and dealing for the $5,000, $15,000 here and there. I want to go for, I want to swing for the fences like Joe did.

As you're working on that first deal and you're building your business three, relationships, how are you supporting yourself in between zero and the first deal? Through the money I'd saved up in advertising. Okay. So you had your own personal savings. I had my own personal savings that was dwindling and dwindling and dwindling. But yes. Okay.

My personal savings. Super. That's like the big question people want is just when do they jump away from their job and how do they support themselves in between. Yeah. And what I'll say about that is, You know, I was, I guess I was making less a minimum wage, and then by the end of my advertising career, I'm making close $200,000 whenever you include the bonuses and my salary.

And I kept the same that I was renting in New York all of those years. I moved once, the very first year. I was living in the busiest police precinct in all the five boroughs. it's east flat, west, west Brooklyn. It's extremely dangerous. I was living there right out of Texas going to know any better. So I moved out of there, and then I lived in an apartment. So we're having this conversation with you right now,

and my fixed expenses stayed the same over those nine years. And I kept saving up money and putting it away knowing that, not knowing I was going to do my own thing, but just knowing I needed that was the prudent thing to do. So I did, my living expenses did not increase the entire time I was doubling, tripling, and quadrupling my salary. Awesome. Awesome. Cool.

So what's in your future right now? Maybe you've already said it, but what's in your future right now that you're most excited about? I would say the development deal and the podcast. You know, similar to you, we've got Barbara Corcoran on our show, and I just, she's just, I just want to hug her. I love her so much. Right. Just interviewed Robert Kiyosaki and then this development deal because ultimately I get my kicks out of connecting and building friendships and that's what my podcast allows me to do and helping others. And then, you know, continuing to scale my business through my own deals because I don't want to just talk about it.

I want to do it. Right. So it's the development deal I've been working on. Awesome. Awesome. Yeah, I was fortunate enough after reading the book so long ago to interview Robert Kiyosaki as well. What was your biggest takeaway from him during your interview? I'd say the question that he asks everybody who wants to invest or wants him to invest in their deal,

he asked them, when's the last time you invested in yourself and what you buy? And if they're like, what do you mean? He's like, well, what's the last book and what's the last class, last class you took? and if they say, well, last book was this, but I don't remember the last class. He's like, well, why would I invest in you if you don't invest in yourself? Good one. And, yeah, just continuing to learn, continuing to be educated. That was the main takeaway.

Not surprising that that would be its focus based on kind of what we all know about him, but just the way he put it in perspective was good. Awesome, awesome. I like it. Cool. Joe, let's do this again. It was a pleasure having you. Yeah, I love it. I love it. I'm excited and I'm very grateful to have another conversation with you this time on your show.

And thanks to everyone who's listening and looking forward to staying in touch. Super, super. The man is Mr. Joe Fairless. His podcast is the best real estate investing advice ever. If you're listening to this right now, you can find his exactly where you found mine. The best real estate investing advice ever. We'll be right back. Contrary to popular belief, a lack of funding is not the biggest barrier to starting a business. It's excuses. But don't let a lack of funding be your excuse. We are Epic Fast Funding, and we'd like to fund your business with up to $150,000 in revolving credit lines.

If you've got 60 seconds on a solid credit score, you could have access to your funds in as little as seven days. Go to Epicfastfunding.com to fill out our 60-second application. It's fast. It's simple, up to $150,000 in as little as seven days. Go to epicfastfunding.com. That's it for today. If you haven't done so already, subscribe to the new podcast with Matt Andrews and myself, Hold That House, new episodes each and every Thursday.

And I'll see you right here next week on another episode of Epic Real Estate Investing. I'm Matt Terrio, living the dream. You've been listening to Epic Real Estate Investing, the world's foremost authority on separating the fact. from the BS in real estate investing education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio.

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