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David: Hey guys welcome back to the discount property investor podcast, this is your host David Dodge and today I got a special guest coming on today, Josh Cantwell, and Josh is gonna talk about a couple different things with us. He's gonna talk about some strategies to buy properties at discounts, he's also going to talk about apartment syndication which is awesome and I'm super excited to learn more about that. And then Josh also has a special treat for us today, he's gonna talk about 9 traits that entrepreneurs use to- well Josh help me out with that, 9 traits that go-

Josh: 9 traits of elite entrepreneurs yeah.

David: Okay nice. Well Josh welcome to the show my friend, how are you doing today buddy?

Josh: I'm great man, I couldn't have a bigger smile on my face today meeting and hanging out with you. I also just yesterday, literally just yesterday, closed on a $16.3 million apartment complex.

David: Wow.

Josh: 18th syndication, it puts us over 4300 doors and it was- most excited about that one David because we were battling with a major institution for that deal, major private equity fund, it was us versus them, David and Goliath, and we were definitely not Goliath in that- on that deal, and so we're excited that we were able to get that deal under contract about 60 days ago and we actually closed a few days early so we're excited to take that one over.

David: Man that sounds awesome. I love it man. Well congrats on getting that deal and man you got all kinds of stuff to add value to this audience today so I'm really really happy to have you here. Josh before we jump into any of that give us a you know 2-3 minute explanation or history of you know, who you are and how you got into real estate.

Josh: Sure. Yeah listen I got started going all the way back when I graduated from college, I got a very expensive degree and my dad almost lost it David when I went into financial planning and worked for 100% commission. He thought geez why did I just spend four years and all this money getting you an education and you're not even gonna have a salary? Well I'm proud to say now after 24 years I've never had a boss, I've only been an entrepreneur, I've only been working for profits and commissions and equity my entire life and my dad shouldn't have been surprised because I watched him, my dad was an entrepreneur, my dad owned an insurance employee benefits company and so I watched him and I went into financial services. But what I noticed David with my financial planning clients is my most wealthiest clients did not have all their money in the stock markets. They owned apartment buildings, they owned rental properties, they owned strip centers and they lease those out to commercial tenants. I took notice and three years into my financial planning career, I bought my first duplex. I moved into it, I bought a duplex, I rented out the upstairs for 600 bucks, I rented out one of the rooms on my side of the duplex to one of my buddies for 300 bucks and I lived in that apartment, that little duplex for $100 a month and I fell in love with real estate at 24 years old. Fast forward about two years later I actually quit my job in the financial planning services because I fell in love with real estate. I started flipping properties doing some wholesaling on the side, I went to all the weekend warrior bootcamps. And from 2005 to 2010, we were a nationwide expert. We spoke at home investor conferences, we had major conferences in Dallas and New York and Vegas on short sales and pre foreclosures and then in 2011 I got sick, I was diagnosed with pancreatic cancer.

David: Oh my goodness man, I'm so glad that you're here with us today. That's crazy.

Josh: Yeah, pretty crazy, pretty crazy man. Long story but real real short version: pancreatic cancer had at that time just a 6% survival rate.

David: I'm aware.

Josh: So yeah I was up against it man and I was the same exact diagnosis as Steve Jobs from Apple computer right, so he didn't get a surgery he went with a very kind of organic type of treatment, didn't work then it started to spread, obviously it took his life. I had surgery, surgeon basically saved my life on the operating table but I had this epiphany David that much like a lot of investors who are very transactional, I realized that I made a major mistake. I was ripped away from my work for 6 months between the treatments up front and the recovery afterwards and I wasn't making any money for over 6 months. I owned a brokerage, I had a flipping business, a wholesaling business, and a coaching business, all of that basically came to a screeching halt and I realized I made a huge mistake but I did have some experience raising and deploying private money and so right after my recovery from surgery, some of those deals that I had invested in with private money and I recruited private money, those paid off with major profits. So I was like look I just made a ton of money and really kind of controlled the deal by controlling the funding and I fell in love with private money and I fell in love with controlling the debt, I fell in love with controlling the equity, not necessarily being the operator on the ground but controlling the deals. So what I tell these audiences now and your audience is look funding equals freedom, funding, because if you control the funding, you can control a lot of the movement of a deal, a lot of the levers, a lot of the purse strings, and you take that fast forward we created a private equity fund in 2014-15, we raised and deployed over $45 million in that fund and then COVID hit. And when COVID hit we decided to wind that down and just focus on our apartment investments. Long story short, today we've syndicated 18 apartment deals, 4300 units, last year we sold off about 3000 units, I'm sorry we've sold off 1300 units last year which leaves us at 3000 today. So we've done over a thousand resi-deals but really my focus now was investing for cash flow, it's ultimately why all of us got in this business to begin with is cash flow, cash flow, cash flow, financial freedom. And finally after lots of mistakes, we're finally there so that's our journey in a nutshell.

David: Holy cow that was awesome and Josh man I'm so happy to hear that you're still here with us today 'cause I've known several people that have been diagnosed with what you had pancreatic cancer and it's very unfortunate that you know, most of those people that I knew are no longer with us today so it's amazing to hear that story and I'm so glad that you know everything worked out and holy cow 18 apartment syndications, 4300 total units and you still own 3000 plus of them today. Holy cow that is amazing and I agree with what you said about the funding, you know if you control the funding and you know, you're gonna be able to essentially control the deal and create some freedom for yourself both financially and time freedom. I think a lot of people, they discount the time, you know like if you go ask 100 people hey what's your goal? Like the main goal, the end goal, not just today's goal or tomorrow's goal, what's the end goal? Most people won't even say time freedom but if you ask them what the answer like why they're choosing the goal that they are choosing and you keep asking why why why, you'd typically get to well I want to be able to do what I want to do when I wanna do it so most people don't even know that their goal at the end of the day is time freedom even though it is and that's amazing.

Josh: Yeah my goal is to be a full time volleyball coach, I actually fell in love with volleyball. I grew up playing football, basketball, and baseball. I played college football and today my two daughters, 8th grade & 6th grade, play very competitive club volleyball, they travel all over the country. We've been to Orlando, we've been to Indianapolis, Louisville, Philly, Chicago, we've been in Saint Louis, all over the place for volleyball and it is the most exciting sport and I've coached club volleyball for several years and I just find that there's so many young kids that aren't getting this well rounded both athletic coaching but life coaching, financial coaching, and so I have a passion for delivering that to young people and trying to give them some pointers on life, money, motivation, but doing it on the volleyball court and I've been very fortunate to be able to decide if and when I wanna do that so we have that time freedom and David we've structured our business now, I have two business partners, I'm the CEO and the majority owner but we've structured it that all three of us have the time freedom to come and go when we want and ultimately I see all three of us, we all live in Ohio, all three of us have houses in Florida, buying houses in Florida, we've structured in such a way that whenever we wanna do it, all three of us could move, we could do that today and we structured it that once a month one of us would fly back, stay in Ohio for a week, walk our properties, meet with our property managers and then the next month the next guy flies back-

David: That's awesome.

Josh: -walks the properties, meets with the property manager and then the next month the next guy comes back. And so we've set it up that we could be wherever we wanna be and we could still manage a 3000 unit portfolio in Ohio, Atlanta, Houston, and Oklahoma. And so really your point is dead on, it's all about freedom of time because look everybody that's ever died will tell you the money doesn't matter, the money just allows you the luxury to do fun stuff but it's the time to walk the beach with your kids, grandkids, and go to the gym be healthy, experience new things, that's all that matters. And being a pancreatic cancer survivor where that time for me was almost cut really really short at 35 years old, I can tell you that would have been my only regret. If I had died at 35 or 36 years old, my only regret would have been no time with my young kids. Now I've been granted a second chance, I have more time but I'm not gonna make that mistake again.

David: I love it man, I love it. Everything you said I agree with and I'm happy to have you on the show today Josh, this is awesome. So Josh let's jump into some of these you know, let's talk about syndication. So let's you know, give me the quick you know 1-2 minute syndication 101. What is it? You know I'm familiar but I think a lot of the audience here you know, could use a refresher.

Josh: Sure. So syndication just simply means that you're gonna buy an apartment and let's take the deal I bought yesterday, $16.3 million purchase price, banks coming in with about $12 million downstroke at closing, that's what they're advancing at closing and you need about 4,000,000 bucks to close, so where do you get the four million? You could put it down yourself if you got $4 million in cash or you could quote unquote syndicate it which just means that you're gonna bring in a group of investors that put down the four million for you. And so we did that, we raised actually $5.1 million from investors, we had 51 units at 100,000 apiece and we bought that deal yesterday with no money out of our own pocket, I didn't put a single dollar of my own money into that deal. That is essentially syndication, it's just like buying a single family home but doing it with one private investor that funds the whole deal for you, you buy it with no money, or having a motivated seller that gives you a seller financing and maybe you bring in a passive investor to fund your down payment, that's a mini form of syndication. On the apartment world, it's just buying a property with none of your own money using bank debt for the first mortgage and bringing investors in for the rest and you give those investors a piece of the equity, that's syndication 101.

David: I love it man. So when you do this- and I have two questions that come to mind probably more but so number one, who's getting the loan? Is it you and your partners or I mean is any of these investors that you're syndicating that roughly $4 million or $5 million to put down and then the bank brings in you know 70 to 80%, the banks giving a loan to somebody.

Josh: Right.

David: Are they giving that loan to you and your business and then I would assume that they're aware that all of the money that's being put down is being syndicated right? I mean there's a level of transparency there I'd assume.

Josh: Absolutely absolutely. So we have a big enough balance sheet and a big enough net worth to what's called sponsor alone. Sponsor alone just means that you have to have a net worth equal to the loan amount so at least a $12 million net worth and you have to have liquidity of roughly 10% of the loan amount, again $12 million loan so $1.2 million liquid. So I have that so I can sponsor the loan, that doesn't mean I'm guaranteeing the loan-

David: -these are nonrecourse?

Josh: Yeah, oh yeah.

David: Oh man, that's cool.

Josh: If David, if the property is quote unquote stable.

David: Yeah.

Josh: Meaning at least 90% occupied, so when we buy properties-

David: When you buy it?

Josh: When we buy it if it's at least 90% occupied, we can get a nonrecourse loan. That is the magic number, the magic percentage 90%. If it's below that then a bank loan or a bridge loan, they're gonna want some sort of recourse. It doesn't have to be full recourse, it could be partial recourse. It's called what's called a partial guarantee or a 25% guarantee. So depends on the property when you buy it. So a lot of properties we buy are 90% occupied or better so those become nonrecourse. Now the property I bought yesterday, unfortunately the seller allowed that property to go 87% occupied so I didn't want to guarantee the loan but I had to partially guarantee it because it had dipped below 90%. To me there's not a lot of risk there because that loan is only 12 million, the property appraised for 16.9 million, we bought it for 16.3, so there's plenty of equity there that that deal if it were to default like I've got investors, the 5 million from investors, I don't want them to lose money but the chances of the bank losing is almost zero right? There's almost no chance that that 12 million doesn't get paid off. So me personally guaranteeing that loan, super low risk, super low chance of that so I'm not worried about that so that means anybody who's a loan sponsor is a general partner okay? All the 5 million that we raised from private investors, they're limited partners so they do not sign for the loan, they do not have any liability. If the deal gets sued, they don't have to, they're not gonna be named in the lawsuit, personally they have none of that's at risk for them. The general partner me, I'm signing for that risk, I'm signing for that liability on the loan and I'm signing if there's ever a lawsuit so that's the big difference.

David: I love it, okay. So you and two partners so there's three general partners.

Josh: Correct.

David: And there could be anywhere from 1 to what? 50 or 100 limited partners or-

Josh: Yeah, you bet. Usually 99 is your kind of top end number just because it's more state law than federal law but you know most private placement memorandums and syndications really allow for unlimited number of investors, some states 99 investors in one LLC but again we have 51 units that we syndicated that ended up being about 30 to 35 investors, I don't remember the final number off the top of my head-

David: Sure sure.

Josh: -32, the investors that put in the 5.1 million.

David: Man I love it. Okay so you don't have a dollar in the deal, that is freaking amazing, love it. You got all of these limited partners that put up the- I mean what is that roughly? 20 or 30% that you guys had to bring to the table.

Josh: Yup, the bank funded 73% of the purchase price right? So 73 but it's weird in commercial 'cause sometimes-

David: So 27% was either needed to put down or just needed 'cause I would imagine you guys are borrowing more than what's needed to go down to cover rehab right?

Josh: Right, so there's another $2.5 million at the bank has in a construction draw.

David: Okay cool got it. So that was actually borrowed then.

Josh: Yeah, so with $400,000 we're putting into a capex account that we're going to use to turn the units and improve the building, the interior, the exterior. We'll spend that 400,000 then we'll get reimbursed through the construction draw then we'll spend the 400,000 again and get reimbursed. We also had about $400,000 in closing costs which was you know, pre paying for the insurance, prepaying some of the interest, you know the broker fee, the lender fee, title, blah blah blah, and then we also took a 2% acquisition fee. So not only did we put no money down but we also are gonna get paid about $330,000 upfront through an acquisition fee when we buy it. That's one of the reasons why I love commercial real estate is there's lots of different income streams but acquisition fees are actually the norm in commercial real estate. So we're gonna make about 300 grand up front when we buy it and that fee is only paid to the general partners, it's only paid to me and my two partners so we're excited to get paid upfront and to put no money out of our own pocket.

David: Yeah both of those sound like huge wins. So that money that you guys get paid upfront, is that just going to your guys' pockets as profit or is that used towards rehab? I mean that's probably just-

Josh: Nope.

David: You guys already have the rehab funds set aside it sounds like.

Josh: It sure- that's correct, yeah we have set aside, we have another 20,000 it's sitting in the operating account for any kind of cash burn or any kind of operating expenses from the property management of the building, and the $300,000 is you know it's pretty much all profit. We're gonna pay some bonuses to our people you know and reimburse ourselves for just some of their time for due diligence but that wasn't $330,000 right? It was a very small amount so it's mostly profit.

David: Man I love it, this is amazing. So the other question that I had was what's the split? You know, you have general partners and then you have the limited partners, how does the pie get divided up?

Josh: Yeah great question.

David: Let me say one more thing real quick Josh because I'd imagine that these limited partners aren't in this for 30 years right? I mean you guys probably pitch them like hey we need to you know, syndicate or raise money and put it in a pot so then we can have the money to put down and we're gonna get bank financing and I would imagine, correct me if I'm wrong, that the goal would be three to five maybe seven years to either refinance or sell at a profit to pay them back with you know, all their principle plus a nice healthy return. Yes, no?

Josh: Exactly, you're exactly right. You're exactly right. So the split on most syndications is that the general partnership takes 30% and-

David: Roughly a third.

Josh: Yep, and the limited partners take roughly 2/3. And in a normal syndication, the general partner also charges a bunch of fees. They charge a construction fee, they charge a loan sponsorship fee.

David: Acquisition fee, said that one.

Josh: Acquisition fee, asset management fee, disposition fee, blah blah blah, fee, fee, fee, fee, fee. So we've done that on some deals that makes more sense to do it that way.

David: And not have 30% or still have 30%?

Josh: 30% plus fee.

David: Plus fees got it, okay.

Josh: That's the normal syndication for most guys.

David: Okay.

Josh: So and then you know, we have three general partners so each guy maybe is keeping 10% of the deal, actually a very small slice. What we do, we've done this- but we do something very different. We actually own the construction company that does the construction work and what we do is we do a no fee model other than the acq fee upfront and our goal is to do heavy construction meaning heavy unit turns, big construction on the units, big construction on the exteriors, and really force the appreciation just like you would force the appreciation of a single family home.

David: Yep.

Josh: So you can rent it out. And we do that but we don't charge any fees so in exchange we get a lot more equity. So in this particular deal we bought yesterday, it was actually a 60-40 split, we got to keep 60% of the equity.

David: Holy cow.

Josh: And we gave up 40% to the limited partners. Limited partners are getting a 10% preferred return, there's enough cash flow to pay the expenses, to pay the debt service and to pay a 10% PRF.

David: And do they get that weekly, monthly, quarterly, annually?

Josh: Quarterly.

David: Quarterly, okay. I figured that was the case but you know, just figured I'd ask.

Josh: Yeah sure. 10% annualized so somebody puts in 100 grand, they get 10 grand a year or 2500 bucks a quarter, pretty simple, and then they also get a piece of the equity. So out of those 51 investors, 51 units, they split up roughly 40% of the equity so-

David: Their equity won't come to them until an exit which could be a refi or a sale or something like that right?

Josh: Exactly, that's exactly right.

David: Okay cool.

Josh: A 10% PRF is almost like getting- you know if you're a private lender 10% interest out of your money.

David: But you also have that equity on the back end which is like triple bonus you know, that's amazing.

Josh: Big time. So your total return by the time the refi happens in this particular deal, it's about 3 1/2 years is what we penciled, they're gonna end up with about a 24 to 25% annualized return so they love it, we love it, and we're kind of in the same boat rolling the same direction David because now it's all about getting the stabilization like we take our upfront fee, they get the PRF return, so that's an equal kind of value exchange and then now nobody's really making any extra money until we hit that stabilization so we're very motivated to turn the units, raise the rents, increase the value of the building to get to stabilization 'cause then we can sell it or refi and now everybody in the money.

David: Man that is awesome, I love it. So syndication is definitely something I want to get into and I love talking to guys like you, I've had a couple other guys you know similar to you in terms of you know, using syndication as their strategy to acquire big apartment buildings and then you know do it very similar so I just I think it's such a cool strategy and I love- I love learning more about it man. This is really really cool. So 3000 units today this sounds like this was your 18th syndication so you've obviously been in the game for quite some time doing these type of deals and man it's such a win win. The investors make a rate of return plus a bonus at the end and you guys get you know, get into the deal and don't have to have any money invested and you're making fees along the way, I mean it's just such a win win. You're also doing such great things by you know forcing the appreciation which you know is one way to look at it but another way to look at it is you guys are fixing buildings and making the neighborhood nicer and you're also increasing rents which is gonna increase you know revenues for the taxes and all that type of stuff so there's so many different moving parts that benefit from your guys efforts. I think it's awesome, it's amazing, very very cool.

Josh: And David I would say you look like any investor who's doing single family, right? I know you do a lot of coaching and you're really good with wholesale coaching, fix and flip, BRRRR method. Buying your first apartment is not- it's not this big mystery that a lot of people think it is. There's a lot of deals out there that are 30 unit, 50 unit, 80 unit apartment deals where the bigger players are going after 100 unit, 200 unit, 500 unit deals and there's a lot more of these apartments where you have these I would say mom and pop type of operators where you know, they need that apartment building to spit out cash so they could take the cash out and that's their form of their return. Well they get to the point where they need the cash so much they're not reinvesting in the building.

David: Yeah

Josh: So the building has this deferred maintenance that is building up and at some point they gotta exit the building because they're just not able to raise the rent anymore, they're not able to do anything with the building, they can get a windfall of cash, they've got a lot of equity, they sell it to someone who's maybe kind of an intermediate to advanced residential investor who's doing their first or their second or their third apartment deal and frankly buying a 50 unit apartment is way easier than trying to buy you know 50 single family homes.

David: Oh yeah absolutely.

Josh: Cuz it's all under one roof, you got one roof to worry about, you got one boiler to worry about, you got one you know AC or chiller system to worry about instead of 50. And frankly getting into that first deal you could still sponsor that loan right? A good resi investor that's built up some net worth, that's built up some rental properties, that has a balance sheet, maybe worth a million or five million bucks or 2.5 million, they could go sponsor a loan then for two and a half million to 5,000,000 bucks and then just go back to the same private investors that went and were doing the residential private lending and just pivot them over into a syndication. That's what we did, we were very successful resi investors, very successful at running a private lending fund and we kind of stumbled into apartments because our investors said hey Josh these residential investments are great but what else do you have?

David: Yeah yeah.

Josh: I wasn't good at apartments, I didn't know a lot of apartments in 2017 when we started this so I actually went to my buddies who were already doing apartments and we partnered with them. They knew how to buy the property, they knew how to do the operations but they needed more equity to buy and expand their portfolio. So that's a very easy way for some of your audience to say okay what am I good at? Can I go you know be an acquisitions manager and find properties? Can I raise- am I good at raising money? There's always people that will partner with you that are buying an apartment that need more equity, there's a lot of ways to get in the game without having to do everything.

David: Man I love it, absolutely love it. Josh what is- what's the name of your company?

Josh: So our company's called Freeland Ventures, freelandventures.com is our main website, people can see our portfolio there.

David: Okay awesome. Well I'll put that in the show notes here. Alright well Josh let's jump into the nine traits of successful entrepreneurs, I'm super curious to hear this because we don't talk about this type of stuff enough and I think this is going to be really valuable for the audience.

Josh: Got it yeah. I'm gonna go through a couple of these really fast and then I'll hunker down on a couple of them that I think are really important.

David: Yeah.

Josh: So I've had the luxury of coaching thousands of people over the last 15 years, I've had the luxury of building a great residential investing business and then I got sick with cancer then I built a great you know private lending company and then COVID hit and then I've also built this you know this apartment portfolio. I've seen and been around a lot of elite entrepreneurs and a lot of elite real estate investors and we've obviously had some success ourselves so I've observed what they've done and I've kind of broken this down into nine things that I think that they have in common. Number one is they invest for cash flow now. They don't invest for profit, they don't invest for equity, they invest for cash flow now. So we talked earlier about time freedom that comes with you know freedom of- freedom of time comes with cash flow to pay the bills right? So I want to encourage all of your audience okay whatever income you wanna make, invest for cash flow now and replace your current income with cash flow. We make about 13 to 14 hundred dollars per year per unit we own. So if somebody has a $400,000 income which I had a call with one of my consulting clients yesterday, he's like I wanna replace my income, I said okay great you make $400,000 a year now in your W2 job, divide that by about $1400 and that's how many units you need to buy, okay? So he did the math real quick and it turned out to be about 280 units that he had to buy. I said look if you could buy 280 units over the next 5 years, you would be completely financially independent 5 years from now you know all the time freedom that you would ever want. So I made the mistake of flipping over 1000 properties from 2004 to 2011, I didn't keep very many of them and then I got sick with cancer so invest for cash flow now instead of flipping every property that you get under contract. Buy them at a discount, keep some of them. Number two, this is important: no one is coming to your rescue, okay? When I got sick with cancer I realized there was nobody that was gonna show up and just put money in my bank account, there was nobody that was gonna show up and run my business for me, there was nobody that was gonna show up and fix me overnight so I realized I was 100% accountable. My decisions leading up to that diagnosis, my decisions were 100% mine and led me to the position I was in at that point. Nobody was gonna come to my rescue and fix everything for me. I had to realize that I had to build and design my own life and rebuild it in the second half of my life after I recovered. So realize nobody's coming to help you right now and the beautiful thing about it is it's so freeing to know mentally that you can create whatever life you want, right? I thought residential was the path and it served me well, I thought running a private equity fund was gonna be the path, that served me well but it all really led me to ultimately this commercial investing which has set me free, but each step of the way I made some good decisions and some bad decisions but you're 100% responsible for your own life.

David: That's so true man, that's so true. No matter how much you pray, at the end of the day you're the one that's responsible.

Josh: Yeah and I think unfortunately we're breeding this new generation of people that all they care about is how they feel, they're feelings, right? Nobody gives a shit about your feelings, right? What you should care about is you setting up your life. You're gonna get bruised, you're gonna have your feelings hurt, people are gonna get mad at you, you're gonna lose some friends. Nobody is coming to your rescue though, ultimately it's your decision.

David: That's true.

Josh: The most successful entrepreneurs I know, they realize they're 100% responsible for their life. Number three, to be successful- this is gonna sound basic but you have to have super time management skills and I would submit to you that you have to have what I call an executive coordinator i.e. kind of like an assistant. That executive coordinator helps manage the executive branch of the business. So I'm pretty good with my time management skills but I also have an executive coordinator, her name is Jen, and Jen helps me be super efficient with my time. Jen set up this podcast recording, Jen setups time with investors on my calendar, I set aside time to go see properties in the field and walk my buildings. Every elite entrepreneur doesn't just fly by the seat of their pants, they have super time management skills, okay? So for me, every Tuesday and every Friday is what I call a buffer day, that's where I'm at my home office, I'm heading my meetings, the non revenue production, and then Monday Wednesday and Thursday is all about producing revenue, it's all about finding deals and finding money, okay? So you break it up into a focus day which is for me Monday Wednesday Thursday and a buffer day which is Tuesday and Friday so I can set aside certain skills on certain days and every elite entrepreneur that I've been around has some sort of schedule, some sort of habit that they're really good at to manage their time, nobody just wings it, nobody wings it.

David: I agree 100%. I love the focus days and the buffer days, that goes back to strategic coach where he talks about you know having buffer days and you know on days and yeah love it, that's amazing.

Josh: Dan Sullivan, I learned and studied Dan Sullivan 20 years ago, I still use this concepts today.

David: Yeah he's amazing.

Josh: Yeah. Number four, refuse- this one's so hard even for me I have to admit this but refuse or avoid what I call the screen sucking OCD loop, okay? So imagine this.

David: Loop, you said loop?

Josh: Loop, loop.

David: Refuse or avoid the screen sucking OCD loop.

Josh: Yeah check this out so David you're probably guilty of this, we all are, when you wake up in the morning you check your phone, you get into your email, your Gmail, you get into Facebook, Instagram, Twitter, LinkedIn, and then all of a sudden you check another email and then all of a sudden you're watching Hulu then you check Yahoo or ESPN and then there's some crazy video on TikTok or Facebook you're watching that and all of a sudden you wake up and it's been like 45 minutes and you just- this time has past and the screen, the computer screen, the cell phone screen is just gobbling up your time and you don't even realize how much time you're wasting on your device.

David: That's right.

Josh: And not only the screen but I would say also the people, the places, the things that are sucking your energy that are negative, that are toxic, that are leeches. You have to get rid of those loops, right? My dad at one time was on a board of a high school and he said Josh I was on this board for two years, they didn't do anything significant in two years so I quit. He's like I like the purpose of being on a board but it became something that didn't provide any value in my life. So we all have friends, we all have maybe organizations that we're a part of or we all have our screens that we just are kind of addicted to the habit of these people, places and screens and they're all this OCD loop that we're just used to. Well guys, elite entrepreneurs they recognize the loop and they break the loop. They break the bad habit and do something different, okay? If you want to be elite, you have to recognize when you're in a bad zone and get out of it as fast as possible, okay? Number five, this is a huge one. Every elite entrepreneur that I've ever been around uses technology as a weapon, okay? We tell our team if it's not in software, it didn't freaking happen, okay? So many people are running a business off of yellow pads and post it notes and old files. Look huge companies, Fortune 500 companies, if it's not in- a lot of them use Salesforce or they use you know, all these major softwares. If it's not in the software, it didn't happen. It's the only way you can scale. So we use major software, we use a program called Buildertrend for all of our apartment capital improvements. We use a program called HappyCo for all of our due diligence, that's a software specifically for apartment due diligence. We use AppFolio for all of our property management and we use Yardi as well. We use Infusionsoft for our coaching business and for you know new opt ins, new subscribers and for email marketing. But if it's not in the software, it didn't happen. If you wanna have a $250 million portfolio like we do, the only way to do that is by adopting technology and using it as a weapon in your business. You're never going to be a successful entrepreneur if you're doing things the old archaic manual way. So everybody that I know is successful uses technology as a weapon. David, number six and I'm kind of hustling through this.

David: No this is amazing, keep it going. I love it, I agree with everything you're saying here.

Josh: Great great. So the next one right is what I call the ACER exercise. Elite entrepreneurs realize that they're going after a specific end result so I started kind of writing down and being absolutely clear of the end result that I wanted so I created this exercise over 10 years ago called ACER, A-C-E-R, absolute clarity of the end result, and it was being super granular detailed about what I wanted for my life: the house, the car, the land, the team, the business, the freedom, the time freedom, you know, the type of relationship I wanted with my wife and my kids, and coaching volleyball today. The elite entrepreneurs have a very granular written detailed end result that they're going after and I would submit to you David that in this world where everybody else is stuck in the OCD you know, screen sucking loop that we just- we talked about earlier, that everybody else is gonna pull your time from you, everybody else is going to- they're trying to get your attention.

David: Yeah that's why social media platforms are worth billions of dollars because they have your attention.

Josh: Yes.

David: And they have monetized your attention.

Josh: Yes and most of us David we have no clue what is our end result that we're going for so we allow them to steal our attention-

David: That's right.

Josh: -cause we don't know where to put our attention. Well elite entrepreneurs, guys like you David, you know where the frick you're going. You wake up with a purpose, you know what you're trying to accomplish that day, you know what you're long term objectives are and you know where you're trying to go. And so lead entrepreneurs aren't just winging it every day, they're not stuck in the OCD loop, they know exactly what the end result is, the type of house, the type of car, the type of business, the type of relationships, the kind of money, the passive income, that's all written down and they look at it everyday. Look, right back here on my screen on my thing is buy another 950 units, I look at it every day. My goal this year, every year is buy 950 units. The reason why 950 David is because that represents $1.2 million of net free cash flow, it's 100,000 a month. So I don't have goals and I don't wanna own 50,000 units or 10,000 units, I just wanna buy 950 units a year because it gives me an extra 100,000 a month of net free distributable cash flow, right?

David: That's awesome.

Josh: That's what's it's all about to be. Number seven-

David: So be clear of the end result and you have an acronym called ACER which stands for absolute clarity of the end result. I love it.

Josh: Exactly. ACER. Number seven, look guys and we're doing this right now number seven which I'm about to describe is what I call you need to scale- elite entrepreneurs scale the one to many concept, one to many. And what that means is that you do work one time that allows you one person to get in front of many many people. David's podcast, perfect example. He records a podcast one time, his one person, his one hour, goes out to many many many many people which allows him to have more private lenders, get more deal flow, have more coaching students, have more eyeballs, have more attention. Elite entrepreneurs do not meet with people one on one, they do not go to lunch and have coffee and pick each other's brains, they don't do that. Elite entrepreneurs realize they have a message and they do things to get lots of eyeballs so they do social media posts, it could be a video Facebook video, could be YouTube, could be a podcast like this, a blog post, they always- coaching students, they always to have many people paying attention to their one person. Elite entrepreneurs are not out doing onesie twosie meetings, it's the one to many okay? It's critically important scaling your business.

David: I love it, I agree absolutely.

Josh: I was - from this five years ago when you started your podcast right?

David: That's right.

Josh: Which has been hugely important. Number eight, and I'll zip through this guys, service trumps price all day. Look I buy lots of apartment complexes where we're constantly fighting for deals with other operators and I know these other operators they're buying the building and they don't do anything to it. They just keep it, they cash flow it and then they wanna raise the rent. Well guess what happens? People move out.

David: People move out yeah if you're going to raise the rent, you have to have a value for that new rent so you need to update the units or provide new amenities or whatever it maybe but yeah just raising the rents without adding any value is going to lead to people shopping for somewhere- a better deal basically.

Josh: That's right. Service is gonna trump price so so many apartment operators are still believe it or not, not using technology as a weapon. They're not updating their units, they're not allowing their residents to pay online or submit you know maintenance tickets online, they don't have office hours, they don't respond to maintenance tickets or inbound phone calls. So service trumps price. If we provide a great service, we can charge more, okay? So we adopt software, we wear- my team wears a uniform so they know who's the staff on our sites, we seal and stripe the driveways, we improve the common spaces so people know even if they wanna live in a- excuse my French, a shithole, they wanna- their own unit they wanna trash it and they wanna live and you know they don't wanna clean their dishes or do their laundry, everything else in those apartment complexes is going to look amazing so that I know I can charge a premium price for everybody else service. So when I take over a building, the first thing we think about is how can we create a better experience for our residents? Same thing with your private investors, how can we create a better communication platform for private investors? Because private investors, they want to know that their principle is secured and they want to get their return, they don't really want to be bugging you for updates, right? Service trumps price. Every elite entrepreneur, big real estate investor that I know has that in their mission, to have great service for their residents, for their staff and for their private investors. Finally David number nine, I learned this a long time ago and Dan Sullivan again, referenced him so I'll reference him again, the business of business, the business that we're in is a people business. The business of business is people, okay? The new book Dan Sullivan came out with is called 'Who not how".

David: I love that book I've read it 3 times, 3 times.

Josh: Right David? So you bought into it and you realize when you're more mature in business that somebody already knows what you need to know so don't worry about learning it yourself, worry about going finding the person who already knows what you need to know or knows what you're missing. Give you an example, we have a huge CapEx budget, we got about $8 million of improvements going on right now in our buildings. My CFO is kind of in underwater like in Q1 taxes that are due, there's all this financial reporting that's due and you know what? He's busy and so we realized look we really need a separate person who can just do contractor invoicing, contractor payments, logging everything in, basically an accounts payable, accounts receivable type of person. Well we could go ask our CFO to learn that skill or have him do it but he's you know, he's way operating in the clouds, he kind of already knows how to do it but it's really more the regular day-to-day stuff. I could bring somebody else in and teach him how to do it or I could go hire somebody who already knows how to do it. So that's what we did, we brought in a girl named Stephanie, she's already got 20 years of experience working with contractors. She comes into our company, completely fixes all the accounts payable, accounts receivable process and she makes things easier for Roberto our CFO, for all of our investors, for our property management company. One person can be the fix, the plug if you have a hole in your business, so focus on people not necessarily just on fixing every problem. Bring in the people to fix the problem, don't necessarily fix the problem yourself. And the last thing I'll say about people is there's so many opportunities today, so many places people could go work, you've got to create a business where people feel like it's family, right? Kevin O'Leary, I've met Kevin, I've talked to him many times, Kevin would tell you business is war, right? Don't fall in love with your staff. I disagree with that. Kevin can say that because he's an angel investor and for him it's all about return, I have one business that I care about which is our apartments, I don't care about every other business. So I want to create a business where everybody feels like this is family, this is home, I care about this company, I care about it's success, I don't wanna leave. One of my most important employees just got another offer to work at another company, she almost took it, probably making more money than when I was paying her but she said you know what Josh? This is home for me, this is family, you let me work from home so I wanna stay, right? You create a culture that people wanna stay for. Our culture is not right for everybody but it's right for the people in our business, on our bus, on our boat, that's all that matters. So last thing lead entrepreneurs do is they realize that their business is all about the people. It's not about process, process and systems are important, it's all about the people that run the process, that's what elite entrepreneurs focus on.

David: Man you nailed it. I'm going to recap. The nine traits of successful entrepreneurs: number one, they invest in cash flow now. Love that. Number two, no one is coming to rescue you and that is so incredibly true. Number three, to be successful you have to have super time management skills. You have to time- ideally you have a time coordinator you know or an assistant and you're going to set aside focus days and buffer days so your focus days aren't constantly getting- or interrupted. Love that, that's amazing. Number four, refuse or avoid the screen sucking OCD loop, you know instead of getting stuck in that loop focus on trying to move the needle you know, don't just be sucked in, right? Your attention is your energy and it's your brain power so you know don't waste it. Number five, use technology as a weapon. If it's not in a CRM, it didn't happen. I love that, I'm taking notes over here Josh.

Josh: Nice.

David: Number six, be clear of the end result so absolute clarity of end result, ACER was your acronym. You know be detailed, be granular with that end result and wake up every day focused on that result not just trying to be efficient, you know, be effective. Number seven, scale the one to many concept. So do work that will allows you to get in front of many people and your example there was you know, most elite entrepreneurs are not going and getting coffee, you know, they are focused on reaching the masses not just trying to go get in front of one person and I agree with all this stuff. Number 8, service trumps price so adopt software, you had mentioned a couple examples, wear uniforms, have office hours. You know the way I look at that is how you do something is how you do everything so you know, put service as you know, your number one focus when you're in business and people will notice and they'll take- and they will treat you like a professional because that's how you are acting, I love it. And then number 9, the business of business is a people business right? It's all about the people that run the process. So the process matters but without good people to operate and run and use that process, the process is going to break, so focus on the people and one great example was a book that Dan Sullivan just released a couple months ago called 'Who not how'. Definitely recommend that book, we're gonna throw that in the show notes here. The nine traits of successful entrepreneurs, wow what a great list, agreed with every single thing you said not only in that list here but since we started the podcast. Josh you are awesome and obviously have a ton of value to give so I'm so incredibly grateful for your time today and I'm so grateful for you know, you coming on the show and providing this value to our audience. I know I took a lot away from it and I'm confident that anybody that listens to this episode is going to find value in it as well. Josh, any parting words for the audience?

Josh: Look man I think the last thing is there's a whole- there's a whole long story behind this but at the end of the day you've got to be daring, you've gotta be daring. My surgeon saved my life on the operating table, he was daring pulling off one of the most difficult surgeries ever. I wouldn't be here unless my surgeon was daring. You have to be daring to be an entrepreneur, you gotta take calculated risk, that's very very important. And so I would leave you with that like if you really wanna make it happen, you could be an elite entrepreneur but at the end of the day you gotta take some risk, calculated risk, you gotta be daring, gotta go try new things. And I just wanna say David thanks for having me on, I love sharing this message, I think it resonates with a lot of people and I just really appreciate you inviting me on the show.

David: Hey Josh I'm super happy you're here. Josh how can people get in touch with you? Do you- do you have a- do you prefer social media? Do you have a website? Where would we, you know, for anybody that's listening, I'm sure there's gonna be quite a few people that are like wow man this guy is great, I wanna learn more, I wanna connect with them, you know. What do you have for us here?

Josh: Yeah two things, if people are looking to invest passively, we have an investor portal freelandventures.com/passive and then for people who are-

David: That's freelend, F-R-E-E-L-E-N-D ventures.

Josh: Freeland, freeland. F-R-E-E-L-A-N-D.

David: L-A-N-D, freelandventures.com

Josh: .com/passive.

David: Okay.

Josh: Yep, and then we run a mastermind it's all I do from a coaching perspective running really high level mastermind for people who are kind of intermediate to advanced investors looking to scale into apartments and they could check that out at joshcantwellcoaching.com.

David: Josh Cant- C-A-N-T-W-E-L-L coaching.com. So freelandventures.com if you're looking to invest passively in apartment units and a high level mastermind at joshcantwellcoaching.com. Amazing. Josh, thank you so much for coming on the show today. Guys don't forget check out Josh's mastermind joshcantwellcoaching.com and/or if you're looking to invest passively, he's constantly looking to raise capital to go do more syndications to make and create more wealth not only for himself but for you. You would be a fool not to at least check these websites out. Josh, thank you so much for coming on today and guys don't forget: you make your money when you buy, you get paid when you sell. So focus your efforts on finding deals and it doesn't necessarily have to be a small single family, it can be a multi family or a commercial or maybe it's just land, right? But you make your money when you buy, you get paid when you sell, don't forget it and with that, Josh thanks again for coming on. Signing off.

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