The executive Real estate investing Show
Finding Success After Failure in Multifamily Syndication with Josh Ferrari
This week on the show, host Michael Holman talks with Josh Ferrari. His name implies speed, and Josh has lived up to it. In just over three years, Josh and his partners have raised over $7 million dollars in private equity, and currently own more than 300 properties. Josh started his career as an aircraft technician, with an eye toward flying acrobatic planes. But when his work kept leaving him frustrated and grounded, he began to look for other opportunities to build wealth. After a few unsuccessful attempts at wholesaling and house-hacking, and a lot of research, he steered toward multifamily syndication investments.
While still working toward his goal of pulling off somersaults in the sky, Josh still finds the time to mentor new investors at his website, https://ferraricapital.com/
Listen now to hear from Josh Ferrari on how he got started, the potholes he hit along the way, and the importance of taking risks.
Focus On The Most Important Thing
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Note: Audio transcription has been automatically transcribed
Welcome to The Executive Real Estate Investing Show. This podcast is for you, the busy business owner or executive looking to create generational wealth. Here, we’re going to show you how to do that through real estate investing from multifamily to industrial and everything in between. You will become a real estate investing expert. And now, here’s your host, Michael Holman.
Michael Holman: Hello everyone and welcome to another episode of The Executive Real Estate Investing Show. I’m your host, Michael Holman. Thank you for being here with us this week. We are very excited about the episode today. We have a great guest, Josh Ferrari. He has done a lot of amazing things and he has taken off very quickly in a short period of time.
So I’m really excited to bring him on here in just a second, first things first. So, if you have not yet subscribed to the podcast, go ahead and do that right now. Whether you’re listening to Apple Podcast, Spotify, Stitcher, no matter what, you’re listening to go hit subscribe. If you’re liking what you’re listening to, or if you’re on YouTube and you want to hit subscribe there, whatever it is, hit subscribe.
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We want to hear from you also, if you haven’t checked out the website yet, www.ExecutiveREIShow.com you can get on all, look at all the resources. You can look at all the YouTube videos. I know we’ve done some podcasts where we write all over a whiteboard and we show you exactly what we’re doing.
If you haven’t seen those yet, you can go to once again, www.ExecutiveREIShow.com and see all of that. And last but not least before we get into today’s episode, we are going to start with the executive tip. So, the executive tip for today is you need to learn to focus on the most important thing. Right.
Like the number one priority, and honestly you can almost start checklists, you know, out the window for a little bit, but if you learn to focus on the thing, that’s the most important in your business, whether that’s real estate investing or anything else, go ahead and you need to schedule out focus on the one thing.
That’s the most important thing that you could be doing and let everything else. Go by the wayside if you have to. But if you focus on that one thing, you’ll find that everything becomes better. Everything can become easier, and you can actually get a lot more done. So, we’re going to get into today’s episode.
I’m here today with Josh. He is awesome, I’ve been talking to him before this. He’s really fun to talk to really exciting. He has a really cool story, actually, a pretty cool journey on how he’s growing a business, how he’s into real estate investing. And we’re going to get into all of that. Really excited to have him on just a little bit about Josh.
He’s actually raised over $7 million in private equity. He went from zero to 239 units in months, and he’s has over 75,000 podcast downloads in just over 12 months. All amazing things, Josh, welcome to the show. And we’re, we’re glad to have you, so Josh, tell us, tell us a little about yourself, who you are personally and what you’re doing in your business.
Josh Ferrari: Well, who I am is Josh Ferrari living down here in Southern Alabama. I don’t know if you can tell by my accent. I never feel like I have an accent, but every time I have a conversation with someone, they’re like, oh, you’re definitely from the south. I guess I’ve got an accent. So yeah, so in Alabama came move at, moved down here, actually from Memphis, Tennessee lower four years ago to start what I thought was going to be a longstanding career as an aircraft technician.
What I currently am now full time. But then roughly about six months later, I found real estate from my dad. And then I just, I got the bug, you know, I got the, the intrigued passion behind. Let me learn more about this. Let me learn what this is all about and all of the different ways that you can actually create.
Through real estate, because it starts slowly getting into it. You learn, oh wait, there’s another way over here. Oh, wait, look. It’s like shiny objects. Look at all these cool things you can do. And so, I just had to get to a point where I just picked one and I dabbled in wholesaling for six months. Didn’t like it.
Then we tried house hacking. That was the worst financial mistake we’ve ever made. Not because house hacking is a bad idea. House sacking, I think is a great idea, but the specific deal we bought and just everything else that went along with it, it was, it was bad. It was bad for us. So, we say, okay, we don’t want to do this either.
So what do we want to do? So, we ended up roughly about two years. 10 months from now, or almost three years ago. At this point, I decided that multifamily and not just small multi’s, but bigger multis is what I really wanted to get into. I remember stumbling upon syndication, went by going to reading some books and listening to podcasts and going to a couple of different local real estate meetups.
There was a guest speaker that came over from Pensacola one time to talk specifically about multifamily syndication. And that was right after I had read that Joe Fairless, his book, the big red. Yes, different apartments, indication, advice or something that was like, well, this is very intriguing, but I still feel like, I don’t know any of the details, any of the intricacies.
This is just high level, basic bullet points of what the. So, I go to the meetup, and it was almost like another high-level conversation, but he did, I did get a couple of things out of it that I didn’t previously know from reading a book. And I just remember thinking, oh my gosh, this is it. Like I already thought it was kind of its reading the book and I already was kind of interested, but like a hundred percent.
Why have I, did I start doing this? When I first got in here? And so, I ended up going up to the speaker afterwards, found out we both had aviation in common, ended up taking him out to lunch that next week he kind of became somewhat of a mentor. Immediately after that. And he’s been somewhat of a mentor ever since.
So fast forward to today, we now have two business partners and we’ve since closed over 239 units, we’ve got another 88 under contract. We’re really trying to hit a thousand units this year. It’s looking like that’ll trickle over into next year. And our goal, our three-year vivid vision. Secondly, I have her on my wall right now.
If you’re watching awesome is to hit a hundred million dollars assets under management by the end of 2023. And we can do that, all three of us can get out of our W2’s, which we all currently work right now, go full-time in the industry and grow this business the way we truly want to grow it. And so that’s a little bit about.
Michael Holman: That is, that is a great story. And there’s like a hundred things in there that I want to talk about. But just going off to the first one, I mean, you talked about aircraft technician and that’s what you’re currently doing. Full-time what, what got you into that? That’s pretty it’s a fairly unique, job. I feel like you don’t hear about many aircraft technicians.
Josh Ferrari: I’m an AT, you know, by trade. And so, everyone asking how you get into aircraft. That couldn’t be the case. I feel like being in the aviation industry, I know just too many people that are in it, you know, it’s kind of, it’s kind of a small world, just like how real estate is you meet one person, you kind of know everyone.
Because they know the next person who knows the next person kind of thing. That’s kind of how it feels like it is in aviation. But what got me into it is that I always loved aviation since I was like five years old. I always wanted to be a fighter pilot in the Navy. My dad was in the Navy, he served for 30 years.
And so I always thought, well, Navy sounds cool because I get to fly off the aircraft carriers and I get to travel the world. So, it was like, heck yeah, fly these awesome freaking fighter pilots got like mock to let me just. I just do that. That just sounds like not even a job. Sounds like just so much fun.
Well, as I progressed further and further into actually starting to do this, like once I graduated high school, I got approved. I guess it’s approved. I don’t know I was ready, like accepted that’s the word I was accepted to go into the university of Memphis to start the ROTC program. I was going to be an opposite of basically going to be in there for four years, become an officer when I got out.
And I would almost immediately roll over into becoming a fighter pilot in the Navy as well as I was going to become a mechanical engineer. I was ready to go. It’s just going to be four more years of my life spent doing the college thing and hopefully having the military pay for my college. So, I didn’t have to pay for it.
But one month before I started, or I was scheduled to see. Really before that I had been doing a lot of thinking, but one month before I’d finally made the decision. Nope. Not doing it, not going to become a fighter pilot. I just, I want it to be more. And at this point I didn’t even have, I mean, I like was talking to a chick, but I wasn’t really, like, we weren’t really like dating. I didn’t really have a relationship. I was still fairly single, and I just knew that I wanted to be a family, man. It’s like, whenever I do get a family who I do end up marrying, I feel like I want to come home every day. I want to see my wife and kids.
I want to be able to hang out with them. Play with them, whatever. And so, it’s like being gone six months, nine months, 12 months out of the year that it’s not going to cut it. And then I also did some research about like the divorce rate of folks in the military. And I was like, granted, I could be the other percentage of this.
And I could not be the one divorced, but it’s like 50 or 60% of people in the military get a divorce. I was like, I just don’t want that to be so, let’s do something else. And I thought, all right, well, I’ll fly airplanes, you know, fly commercially. That’ll be better. I’ve got two uncles that fly commercially since I was talking to them about it.
And they’re like, well, yeah, we’re gone like 17, 20 days out of the month. Flying here and there, you know, we just sleep in hotels everywhere. And I’m like, that also sounds horrible. So how about I just fix the plane? What does that look like? And so, it was just kind of a trickledown effect and I had actually never done any maintenance whatsoever up to this point.
I’d never did my own oil change. I didn’t ever replace anything on my car. It didn’t work on lawn mowers. Didn’t do any of that stuff. And then. I get into a and P school airframe and powerplant, which is the trade school I had to go to, to become a licensed aircraft technician. And I just was, I was super green, didn’t know anything.
And two years later I felt like I knew a whole lot, a whole heck of a lot more than I actually got into the industry. Got my first job realized I still didn’t really know anything, but that was like, that’s a little over four. Four and a half years ago at this point. So, I’ve definitely learned a lot since then.
Your airplane is safe in my hands, I promise. So, I got into that’s.
Michael Holman: That’s awesome. And, you know, it’s funny, cause you’re talking about all these different twists and turns thinking, isn’t that funny? Just that’s how life and business, and, you know, even real estate just goes right. You have to find the path that works for you.
So funny, I laugh because a lot of the people that listen to the show, right? They are business owners and people who’ve gone against the grain of what everybody says you’re supposed to do. This is what you’re supposed to do. And, and I’m like the poster child, right. For what I was supposed to do, I, you know, you a little bit different, but I actually have a very similar experience where I kind of went through everything and, you know, I, I got a four-year degree.
I ended up getting a master’s degree in accounting, I went to a major accounting firm, I got my CPA. And then all of a sudden, like right after that, I was like, nah, you know what? This, this really isn’t necessarily my life path. Right. And here I am, all of a sudden, I pivot I’m going to real estate development.
I go from a company that 220,000 employees to less than 20 employees. And everybody’s looking at me like, what are you, what are you. You know, this, this doesn’t make any sense. Right. And it’s so funny though. Cause I talked to so many people that, that experienced that same transformation over and over and over again.
So that’s, that’s fantastic. I love hearing that. So, what’s, what’s the plan for you, Josh? Are you planning on, I know you’re into real estate? You, you know, you talk about, you’ve gone really quickly from zero to 239 units is your plan to stay. As an aircraft technician, or is your plan, are you trying to go full-time into real estate? What is, what is your plan?
Josh Ferrari: Let me first preface it with, I know that we had the bullet point in the beginning that it was zero to 239 units in six months. And from a, from a high level. Factual, it only took six months to get that many units. However, it took three years to build the foundation before day one started when we got our first unit to then 239 years.
So it was not literally just out of the sky blue. I get into the industry, and I’ve got 239 units that didn’t.
Michael Holman: Well, I have to, I have to stop you right there and say, thank you for saying that because you know, people who start listening to these real estate podcasts and people who started doing it, oftentimes everybody’s putting their best foot forward.
You get on there and you just see people, it’s like, you know, 5 billion assets under management. And you’re like, oh my gosh, you know, how am I ever going to. How has that ever attainable for me in my situation kind of thing you hear about? Yeah. You know, I, I made, I remember even watching like HGTV back in the day.
Right. And it’s like, I flipped this home and I made 120 grand off this one home flip in eight weeks. And I’m like, It’s like three times what I’m going to make on my salary after I graduated from, with a master’s degree, you know, like, and, and you hear about all these stories, but you don’t necessarily hear about the struggle that led up to the beginning of the story.
Everybody starts at where things got successful. Nobody’s really talking about those struggles. So, I want to, I still want to hear your conversation, but can we kind of preface that with, you know, what was, what would talk about those three? I mean, what was that like? What was, what was the difficulties?
Were there failures or was its analysis paralysis? What talk about those three years? Well, there’s definitely failures.
Josh Ferrari: But to go back to your previous question before I forget, because I will forget, I do not want to be an aircraft technician forever. I eventually want to get out of it and go full-time in this business because I want that passive lifestyle.
I want to be able to travel. I want to be able to live the life that I want to live and that I want to be able to live with my family. Awesome. Yeah, but I still love aviation. So, what I want, what I really, really want to do, what’s on my bucket list. So, to say, is that I want to get to my private pilot’s license.
I want to eventually have my own airplane. And I also want to have an aerobatic airplane and I’d love for one of my hobbies to be just flying erratically in the sky, doing barrel rolls and going to air shows and. That would be so much freaking fun. Grand that’s really expensive, which is why real estate is going to have to fund it, but it wouldn’t be so much fun.
So that is, that is the intent of like keeping aviation in my life. But I do eventually want to go full time into multifamily and kind of remove my W2 from the picture. Now, as far as the three years goes, the three years was. It was chaos to say, to just put it in one simple word. It was chaos. Like I said, we started out with wholesaling.
We did that for about six weeks, didn’t close a single deal. We probably spent like five is thousand dollars on marketing over the course of that six months to try to find leads. And we’ve had a ton of leads and we got like seven or eight deals under contract on the sell side, but I just couldn’t ever get any buyer to want to buy it.
And I was like, maybe I’m not marketing to my buyers. You know, maybe these deals are really crummy. I felt like they were good deals. One deal had like a $200,000 spread on it. It wasn’t just me pie in the sky, not knowing what I was talking about. Literally, you could have made $200,000, but nobody wanted to buy it.
And I guess it was too heavy of a lift for the investors. I just don’t know I was dumbfounded. So, I was like, all right, I can keep wasting my time. I say wasting my time. I can keep spending my time trying to get deeper and deeper into wholesaling, or I can do something else because wholesale at the end of the day, the only reason I got into wholesaling was because I wanted to grow the capital stack and get a baseline level of experience.
Transactional real estate, actually closing deals and what the whole process looks like from start to finish. And I gained either I’d lost five grand and never got to close the deal. So, let’s pivot again and I, we really wanted the benefits of owning real estate at the end of the day. So, I was like, Let’s buy something, and we thought, well, we’re renting now.
So we can’t really afford rent and a mortgage to buy something. So, then I remember stumbling upon house hacking and I was like, well, this might be really cool. Let’s look into this. So, I start looking at single family houses, cause I’m thinking that’s all we can really afford and all that’s really going to make sense for us financially.
And my wife is like, absolutely not, not doing it, not living like bedrooms away from random strangers. Like I back to the drawing board, the heck am I going to do now? Am I even going to be able to invest? And then I found, you know, small Maltese and started talking to her about that and how it’s kind of like a, a mini apartment complex.
We’d basically be having our own unit and they would have their own unit separated by a wall or whatever. And she said, well, it’s not ideal, but if it’s really something you want to like get into and you really feel like we can be. You know, better off or, you know, wealthier by doing something like this, then, you know, I’ll support you kind of thing.
Like, all right, cool. So now I got to find the right deal. So, I ended up finding a fourplex. That was not off-market. It was. And it had been listed for like a week, which at the time wasn’t really that long. So, I’m thinking this is going to be is this back in 2018, thinking this is going to be the grand slams the most dilapidated house in the nicest neighborhood, all types of ugly.
And that’s what everyone told me I needed to get. They were like, you need the ugliest house in the nicest neighborhood. Cause you’re going to be able to add the most value and make the most amount of money. Like, man, I could use the most amount of money. I couldn’t really use it. So, if we go out to this fourplex and I’m immediately like, well, I don’t even have money for the down payment.
Hey, we’re going to do about that. So, I ended up talking to my dad who got me interested in real estate in the first place. He ended up helping me out with the down payment. So that was how we actually closed it, we closed fourplex. Now we are official owners of real estate investors, and I am just exuberant, just super excited to get into this thing.
And our contractor starts work. We go by three, four months in and they have now tripled the timeline that they initially gave us and doubled the budget that we gave them on just one unit, because none of the units were livable. Mind you, we were living in one of the units that was not livable. The reason I say it was not livable was because the AC didn’t work and it’s a hundred-year-old house.
So it’s not like installation. Anyway, we’re in Southern Alabama. It’s the heat of the summer. We bought this in August so, AC doesn’t work. That’s one thing, the shower didn’t work because the plumbing was busted. So, all we had was a bath. So, we took, we took what we call Bowers, where you just, you fail the bath up.
Then you just get a red solo cup and stand up in the bath, like dump it over your head. It goes great. Then it was cockroach infested. So just picture my, my newlywed wife walking around with cockroaches everywhere. She she’s a trooper.
Michael Holman: I was going to say you, your wife is the Saint of this as this whole scenario, I think so.
Josh Ferrari: Anyway, I won’t continue to go on it for too long, but basically the, that contractor had to get fired. We had to hire a new contractor and it took five months to do that. Cause we did a two or three K FHA loan paperwork nightmare. So, during five months I wasn’t just going to let nothing happen. So, I had to start taking out credit card debt and personal loans to buy the materials myself.
Rehab fight finances we’re inside of the loan. And they said they weren’t going to pay us anything until we had the new contractor, and we would finish up paperwork. So, I was like, oh, we ended up going about $50,000 over budget, all in all. And I’m taking a year and a half to finish what was only supposed to take six months.
And then after we finished everything, we had it fully leased. We were all excited, got renters in there. And then of course all the problems started occurring. Even after we had just dumped like just too much money into it in the first place, because it was a hundred-year-old house. So then fast forward, six months after that, Two hurricanes at the property.
And there’s just no way that I had the money to even fix anything with my massive deductible, because of course it was hurricane damage and hurricanes down here are bad and they usually charge you like one to 2% of what the coverage is on the property in order to fix it. The coverage I had on the asset, I think was like 500,000 or something.
And I can promise you right now, I did not have 2% of $500,000. So, the roof was not getting replaced and I just had to get out from underneath it. So, we got out from underneath it. I lost a bunch of money. I am. We actually sold the deal in January of this. 2021 and we are still digging ourselves out of the hole.
Did that thing put us in? So, if that tells you how bad that deal was for us, or if that doesn’t tell you, then I don’t know what will, but we learned a lot from it. I’ll tell you what. There was a lot that we learned about what we didn’t want to do, like the house hacking. And I didn’t want to deal with the property management myself and I didn’t want to do all the work myself.
I wanted to hire all that stuff out. I really didn’t want to. We didn’t really want a house hack. I didn’t really want to buy small multis because it was going to take too long to get us where we wanted to be. So, we found out a lot of what we did want, which helped guide us to what we did want. And I think really kind of propelled me into the larger stuff, which is where I’m at now.
Michael Holman: That is so I, I love hearing that story because it, you know, for better, for worse, that’s not an uncommon story, right. It, especially as you’re starting like real estate investing, your stories are. Happens quite frequently. Sometimes it looks differently, right? It was a house act. It was a flip, it was this sort of that, they, they kind of went south, but, but here you are right.
Still doing it. Talk to me, you know, what was your mindset through that? I mean, cause obviously you have this, you have this terrible experience, you’re losing tens of thousands of dollars everything’s taking longer. Right? I mean, what, what kind of frame of mind were you in and how did you overcome that to say I’m going to keep going.
Josh Ferrari: The frame of mind that I was in was. I had to prove myself. I’ve always been someone that has been very driven, especially if it’s something that I wanted to do. Like, I’m a, I’m a drummer as well. And when I started learning how to play drums back when I was 10, I told my parents that I wanted to learn.
And they didn’t believe me. They didn’t want to get me lessons. They didn’t want to pay for a drum set because they thought it was going to be just like a phase where I just tried it for a little bit and then didn’t nothing ended up coming of it. So, I grabbed a couple of wooden spoons, some pots and pans, and was like watching YouTube videos, trying to learn how to play.
Of course I sucked but after about four or five, six months of doing that almost every day, they realized, okay, he really wants to learn. So, then they ended up getting me lessons and now I’ve been playing 15 years. So that is just one little side scenario or example of the persistence that I feel like I’ve always had just in life.
And so my wife, I think one thing is I wanted to prove it to myself, but also, I really wanted to prove it to my wife because she was very hesitant to believe in this whole thing in the first place. She’s not very involved in the business much at all. She’s just very much a supporter. So, all of her supporting of me throughout the wholesaling, losing 5k and then getting into the.
House hack, which lost us even more money than that. And there’s like everything that I was saying, it was going to make us, you know, more financially better off. And we’re going to be able to spend more time together, more vacations, you know, all this stuff. It was all the polar opposite because everything was going chaotic.
And it was like, I wasn’t, I don’t know, I can’t articulate what I’m thinking. I wasn’t committing or providing exactly what I said that it would be like. And so, I felt like I was letting myself down. I felt like I was letting her down to see. Continue to decline for like two years, we were just on the bad decline.
And so I’m like, I just can’t we just walk away from this, say that it was all like, I was all in for two years and they’d be like, Nope, don’t want to do it anymore. It’s not going to work, obviously. So I kept persistent at it to prove to myself and to prove to her that it actually works. And then over the last nine, 10 months, I’ve started to be able to prove that this stuff actually works by finally closing some large deals and actually making some money in real estate investing.
So that was, that was part of it. But I feel like also what really kept me going. Was hearing other people’s success stories that had similar backgrounds to mine, not just any old success story of, of a 50-year-old saying he got his triple master’s PhD, X, Y, Z, and been in the, been in some like synopsis or industry that’s directly correlated to real estate. Suddenly he decided to get into it and made billions. That is not the story that would relate whatsoever. It was those that came from nothing like me had seen a lot of failure. Like me were very young, like me and were still driven and seeing success.
When I heard those stories of folks. I remember hearing one podcast; dude was like 20 years old. I think I was 23 at the time. And he had just closed like a hundred-unit complex and got like a hundred-thousand-dollar acquisition fee or something. And I was like, wow, what a hundred K wouldn’t do for me right now.
But I was like, if he can do it, then I know I can do it. So that I feel like that kept me motivated as well as continuing to stay networking with those that were also in the industry. Because if I hadn’t been continuing to talk to folks. If I just isolated myself, I probably would’ve given up.
Michael Holman: Right. So honestly, I, we could almost like end the show right there and just be like, all right, everybody goes home. Take what you just heard from. Implement in your life and you’ll be infinitely better than you were before you for you listened to this episode. I mean, that, that understanding, and oftentimes you find right, and even like Tony Robinson, a lot of people, talk about this, entrepreneurs, people who succeed in life, they often view failure differently, right?
I mean, failure for an entrepreneur failure for you know, and which, which most real estate investors are, are entrepreneurs. They don’t view failure as, okay It’s time to quit and hang it up, right? No, it’s time to pivot. It’s time to change this. Isn’t the end of the road, right? This is just something like you said, that helps me understand what to do and what not to do now, going forward.
Right. And, and those stories are all over the place. And so, I really appreciate you sharing this with that and letting us kind of get into the mindset of where you are at, because, I’ve been there too, right? I’ve been at my company for the last four years. And for three of those years, we were kind of on we were on life support, to be honest.
It’s like four years ago we had $10 million in development, which sounds like a lot. But when you’re a development company, you know, it’s like one storage unit. All of a sudden, now we struggled through God two or three years, just fighting scrimping, saving, trying to figure out, you know, establishing partnerships.
And, and now every what happens is everybody sees the huge success right now. All of a sudden, we’re at $200 million plus in the development pipeline, it was like, oh wow, you’re an overnight success. And it’s like, yeah, but not really. Right? Like you’re seeing all of this now, but you didn’t see. Three four years ago when it was like, Hey, we’ve got to sell assets.
Because we’ve got to pay payroll. Or, Hey, we, we need to, we need to downsize we need to change offices. We need to do all these things because we’re, we’re living here and we’re spending here. Right. And we got to readjust all of this. And so, and so I really appreciate you sharing that because I think it’s really relatable to the people that are listening.
So, so Josh, one thing before we start. Heavily into the real estate, and an interesting topic that you and I were actually talking about right before we started recording. Right? You felt like you were kind of to the place where it’s like, Hey, I might be needing to hire somebody. I might not be needed.
You know, I’m kind of looking at it, really interested. A lot of people that are listening are dealing with this, right. The hiring and thinking about. Oftentimes, you know, they might be doing their own thing as a, as a plumber. And it’s like is now the right time to hire someone, you know, where are you at in that process?
Are you thinking about, about expanding your operations, and expanding your team?
Josh Ferrari: We’re definitely thinking about it. So, as I briefly mentioned earlier, our, our vivid vision that I’ve got here up on my wall, it it’s very vivid as per the, the wording. And it goes into detail about where we’re actually going to be.
At the end of 2023, what our business is going to look like, feel like, smell like a, what the company culture is going to be like, how many people we have working for us, how much money we’re going to be making, what the revenue’s going to be. Whether or not we’re working 40 hours a week, 30 hours a week taking a bunch of vacation, how much PTO to folks get?
What kind of an impact are we going to be making, you know, literally everything. Do we go into in that? And so, one thing that. Go into is how many employees we’re going to have. And we say that we’re going to have roughly about six or the end of 2023 with the right at the end of 2023 with a goal of hiring, probably another two to three.
Currently we just have three and that’s just myself and my two business partners. And technically we’re not even employees yet because we’re still working full-time and our other jobs while working. So, we’re at the point now where we’ve grown so quickly because not an overnight success, again, like we’ve been talking about, but we weren’t, we had no idea what to expect, kind of a thing.
We just were hustling and grinding and making the broker phone calls, building the relationships, and trying to network and learn and just get a deal closed so we can get up off the ground and start seeing some success behind. Get some momentum going well, we got momentum going very quickly. And now we have like over just literally the last nine months, we’ve closed as many units as we have now.
And we’ve even done a single-family luxury flip somewhere in there, which is crazy and something I never thought we do, but just flip, flipping a beach house while we’ve got all these other multifamily units. Then the process probably about a week from today when we’re actually recording this, we should be closing on our 88-unit complex.
And then we’re trying to close on another deal in Q4 of this year, kind of rock the end of the year out and big pat big pow-wow. So, we grew from nothing to almost over 300 units in like a 10-month timeframe, or we’ll be over 300 units. Once we close on this one. So, we hit a point in our business where there we were having new issues that we never thought were issues before when we were first starting, the issue was okay.
We just need to find a deal. You know, we just have to be a good deal that we can close and then we’ve got to get the investors and, you know, we’re kind of working the investors and the deal kind of at the same time. And we were finally able to find the deal, mesh the investors with the deal and then close on it.
And it was like, okay. Yeah, it’s repeated, you know, let’s do it again. Meanwhile, we’re trying to repeat that process while we now have something inside of our portfolio and we’re having to operate and manage the business plan on and fully executed because that property got hit by two hurricanes, similar to my asset because it’s all down here and we’ll beetle, and all the roofs got blown off.
All the siding got blown off. It was a deal that we weren’t sure we were going to be able to close. But it ended up being a blessing in disguise cause we got more money back from the insurance company than we thought. And we ended up being able to put more money in cap ex into the property than we had initially planned.
So awesome, glad we ended up closing on that one, but to go back to what I’m saying, I continue to get on a rabbit trails. We went from nothing to almost to over 300 units in a 10-month timeframes, our new issue became asset management. It became, okay, we’ve got all these units in our portfolio. Now, how do we manage the property?
How do we actually effectively execute on the business plan? Do we never thought that we were going to property manage in house anyway? So, we had already started the process of outsourcing all the property management all along the way. But we were starting to find out as there’ve been a couple of months going on some of these assets that the property managers that we had, we didn’t lock.
So we needed to exonerate these individuals and get a new company and that we already had a pre-existing relationship. And some of the single-family stuff that I had done, and my partners had done, and he was in the, he had already been in the process of getting into multifamily as well. So, we’re kind of all growing together.
It was really cool actually. So, we partnered with him. He’s our property manager now, and a lot of our assets and. We were like, okay, now we’ve got property management taken care of, but asset management is still a problem. And then now we have to actually manage the property manager to make sure that they know what our goals are, and our intentions are, and make sure that they’re actually effectively executing and not just lollygagging around, not doing anything.
But we had no systems, no processes, nothing for any of that. It was just like, all right, let’s just pick up the phone, make the call or visit the property, drop in, do this. And so we’ve slowly started building some systems around these things, because without it, I promise you it’d be chaos. And even though we’ve got some of the systems now, and we’ve added all this investor relation stuff now, because we’ve got all these investors and we added basically a lot of various aspects of the business that we didn’t have before, because we didn’t have any actual deals that we.
And so all of these new pieces of the business that we’re finding are crucial. We’re like, okay, we need to focus our efforts on this. So, we’re focusing our efforts on what’s critical and now some other parts of the business are like falling behind a little bit, like, like act like acquisitions, like, okay, we’re effectively operating what we have now.
We need to keep looking for more because we want to grow. We want to get to where we want to be. So having to balance that, and I say balance, but you, you talked about hiring people. I am still in the mindset of thinking that we need to start bringing people in to help us out, whether that looks like an intern or a mentee or a legitimate assistant or someone that’s straight up, we just hire on to handle all of our acquisitions.
Whatever that looks like. We’re not entirely sure yet, but we’re in the process now of all sitting down together, reviewing what we’re actually needing in order to achieve this vivid vision up here and get to where we want to be. And then once we fully comprehend what that looks like and where we want to go, I think we’re just going to execute.
I don’t think we’re going to sit around and wait for someone. Come to us, we’re either going to start the hiring process or start looking for the interns or whatever the case is. But we as of now, we have not been actively looking for anybody, but I’m starting to think that it’s necessary.
Michael Holman: Yeah, that’s, that’s awesome. And I obviously, you know, all entrepreneurs, all real estate investors, as you grow, you kind of get to that point. I want to, I want to talk just for a second about that vivid vision where, you know, you talked about it’s, it’s super detailed, obviously. Where did, where did you guys come up with?
Josh Ferrari: The vivid vision came from a book called vivid vision by Cameron Herold. And I actually heard about it from Bigger Pockets. Brandon Turner was talking about it, and I heard about it a little over a year and a half ago. And he said that he did it, just like read the whole book on a plane and then wrote it on the next plane.
And then he was done, and I was like, dang dude did it less than 24 hours. I just was not. A copywriter. I was, I didn’t have the ability to do something like that. So, I, I just, at first, when the episode ended, I just wanted to read the book. I wanted to see what it was all about and see if it was something I actually wanted to incorporate.
And I read it and I was all fired up, excited, ready to go. But again, I was not a copywriter and I kept sitting down and getting writer’s block and not knowing what the heck to even where to even begin to write. So, year and a half ago, I settled for bullet points. I know bullet points. I was like, this is good enough.
You know, maybe it’s not as vivid as someone else’s, but it’s still, it’s still my vision and the direction I went ahead in just like, Hey, we want this many, this many assets under management one makes this much money. I want to be out of my W2 at this point. I want to start having kids at this point.
Like literally everything just kind of include that all in there. Then a, you know, a year is goes by and I didn’t really move the needle. I put here, this stuff, I had written the bullet points on. So, I thought, well maybe either I just don’t care or. This just wasn’t effective enough to like to motivate me.
So I actually ended up hearing another episode on the exact same podcast, Bigger Pockets, where they brought Cameron Harold on again, and he taught it. It was supposed to be about something else, but of course they ended up talking about the vivid vision. 40 minutes. And I was like, I have got to sit down and write this thing.
So I just took me about a month to sit down and like either sit down or I was like walking on the beach or I was gone for a walk or taking the dog on a walk or just like in the shower, you know, just trying to take time at different intervals in the day. Or throughout that month to really think about what I wanted it to look like, and then actually sit down and write it all out.
So it took me about a month, a month to write out. And then send it over to my partners and it was like, Hey guys, this is what I’ve been working on for the last like month. This is why this, like, you know, this is why I think it’s important. You know, here’s the podcast interview because Cameron, Harold is going to explain this way better than I’m ever going to explain it.
And then just gave him detail and also high-level information about it and then sent them the actual vivid vision I had wrote. And it was just kind of like, what do you guys think? You know, if you’ve got anything you want to edit or add or take away, if you think I’m being outlandish by any of these goals, or you don’t think it even sounds something like something cool that you even want to accomplish?
You know, let’s, let’s talk. So, they took a couple of days, read it over and they were like, dude, this is awesome. Like, I don’t want to change. Like, I don’t want to change anything, let’s do this. This is exactly where we want to go. And I was like, well, okay, cool. So that was kind of, I just like took the initiative to actually sit down and write the thing.
And then after creating it, send it to them and us all kind of came to. The unanimous agreement that this is exactly the direction we went ahead in, and it’s kind of helped us zero in, on, on our vision. And then also kind of reverse engineer, what we need to do today in order to get there. Whereas before it was like, we’re just want to grow.
We just want to make a lot of money. We want to go full time, that’s just what we want to do. But now it’s like, okay, no, this is actually what we want it to look like. Like give them giving money to charity and all the bells and whistles of what we want. So, we’re starting to have, have deeper conversations about what it’s going to look like, how we’re going to get there and the steps we need to take today. To make it happen.
Michael Holman: Love it, that is amazing. A and D and it sounds like, do you feel like.
Josh Ferrari: I feel like it’s definitely helped me. We haven’t the purpose of the vivid vision of actually like creating a drafting. It is to actually give it not only internally, but also externally and send it out to all of your investors or your clients or you.
Your lender, you know, for me in real estate and the lender, the broker, the property manager, like everybody needs to see it so they can all get on the same page and understand where you’re headed, because it’s going to motivate them to want to get on your level and then help you get to exactly where you want to go.
Whereas if I had just written bullet points and said, hey, I want a hundred million dollars assets let’s get there. Everyone’s got their own different way of what that’s going to look like and how we’re going to get there. Whereas this tells everyone the exact way that we’re all thinking and how exactly we want to get there.
So that was the, or that is the intent of it. Granted we’ve only really used it internally. We haven’t really like externalized it a whole lot by sending it out to a whole bunch of people, just really some close-knit investors or friends and family that we’ve told about it. So maybe we need to start making it more external, but I think it’s definitely helped us internally.
Michael Holman: That’s awesome. Well, as we kind of start to kind of wrap things up, I want to get into why you talked about all this evolution of your real estate investing. Why multi-family, why multifamily single question.
Josh Ferrari: It was trial and error. Honestly, it was painful financially draining trial and error, figuring out what I exactly wanted to do.
And then with the fourplex that we had, the house tech, it was a small multi, and I liked the concept of having the different revenue streams underneath the one roof with the one loan, even though it really wasn’t panning out for us, I liked the concept of it. So, I always thought, at that point, after we had bought that fourplex.
Dove deeper into that, that I was going to do what Brandon Turner calls the stack, where you buy like a four-unit eight unit, 16 unit 32 units, so on and so forth till you get to where you want to be. But I thought that it was always going to be with my money. And I thought that I was the one that was going to have to do the refinance or the sale to get the money, to buy the next one that I would probably have to house hack and just kind of continue to go down that road.
And I was going to be the one that had all of the net worth and liquidity that approved me for it. And it was just going to be my wife and I until the end. And then I came across that book we were talking about earlier, the big red book. And it talked about how you can like raise money from other people.
And I had heard like using other people’s money and I kind of did use other people’s money when my dad helped me out with closing the fourplex, but it wasn’t like it was an investor, you know what I mean? Didn’t like to get a preferred return or anything crazy, like. So, I just thought that that was different, but at the end of the day, it really was the same thing.
And so after finding out that I could use other people’s money and then not only finding that out, because you hear about it, I’m sure you probably hear about that a lot. It’s probably one of the number one things you hear about like, yeah, you can buy real estate, other people’s money. You don’t even have to like to pay for it.
And you’re just the heck, how do you even do that? Yeah, that sounds ridiculous. So, then it was actually figuring out how to do that, what that extra looked like. And that helped me stumble upon syndication, which then I had to learn about all this. You see laws and rules and regulations and learn from folks that had actually raised money before.
How do you even raise money? And what does that look like? Diving into all of that. And then once I you know, of course all that came later, but actually finding out that it was possible for me to get to where I wanted to be like, A decade sooner than what I thought it was like, how long it’s going to take me.
I was like, this is it. You know, I don’t know that I want to be in aviation for another 10 years. I don’t know that I want to be here or that I want to move somewhere else just to move somewhere else later. Like I’m tired of moving. We probably moved like 10 times over a four-year timeframe just in Southern Alabama can literally just everywhere until the Alabama.
I’m so tired of moving. There’s a moving box right here cause we’re getting ready to move. I am ready to not be moving anymore and live wherever I want. You know, when I want, how I want with who I want. And so, I finding out that multifamily syndication was going to be able to get me there much faster, and not only that, but I also really liked the idea of partnering because another huge mistake I made in this fourplex, which there was many was that I tried to tackle the whole thing by myself.
No experience never even owned real estate before never bought a single-family house, nothing. And, I thought that it was a genius idea for me to take down 4,100 square feet, four units, most dilapidated house. I don’t know what I was thinking. Honestly don’t know what I was thinking, but I dove into that all by myself and there was a mistake had I had someone else.
If nothing else, just their experience and their knowledge to like bounce ideas off of and be like, Hey, do you think this deal is even a good idea? Or even if I had closed the deal, but I had a partner, I could, I could lean on them from a financial perspective or from like the connections that they have with contractors or the cheaper materials they can get somewhere, or they could help me do the work.
So it would be two of us doing the work. If that ended up being the case, instead of just me, it just is so much better with other people. Getting like learning that all that was possible inside a multifamily I’m like, wow, the passive lifestyle that I’ve been striving for, that I’ve literally been going in the opposite direction of is this is like, this is how I actually get to that point where I can work 10, 15, 20 hours a week if I want or less, you know, just whatever I actually want to do.
It’ll truly be a legitimately free lifestyle, true freedom. And that was what I was after. So, finding out that multi-family was what was going to take me there. That that’s all it took for me.
Michael Holman: That’s awesome. And that’s, you know, that’s a, that’s a great journey. Well, we’re going to start wrapping things up here.
Josh, I got, I got two questions that we ask every single guest. And I’m going to go ahead and ask that to you right now. What is the best business advice you were ever given?
Josh Ferrari: Best business advice I was ever given. I’m going to have to say. Yeah. I don’t even, I don’t even remember what he said.
Honestly, I just remember the fact that I was there having that conversation. It was with that mentor I was telling you about during that lunch that I took him out to, because this was right on the cusp of me deciding that multi-family syndication was the route I wanted to go. So really this was the turning point of going from continuing to house hack or do the stack to acquiring partners and going the route of multifamily. And I met with them, and I thought I knew so much. I thought I was ready. The conversation. I was just like, I had read so much and listened to all these podcasts, and I was a genius, you know? And that was far from the case after having a conversation with them and sitting down, looking, looking him, face-to-face eating barbecue, went to a barbecue place.
Hey, just basically told me that I knew nothing. Like, bro, you have so much to learn. You need to just go read this book, go read this book, go do this. And then come back to me. And we’ll kind of, we’ll kind of take it from there. So, him telling me that I didn’t know anything, it was hurtful. I’m not going to lie.
I felt like, dang. He’s like, how are you going to tell me? I don’t know anything, you know. But it was true when it came to multifamily. He, the one that, he’s the one that had been in the industry over a decade and had like thousands of units worth of experience. He knew what he was talking about. And I did, and I was thankful that he was there to one, tell me that I didn’t know a whole lot of anything, but also to motivate me to go and read, read books and actually do some of the work like, Hey, go analyze some deals or go talk to a couple of brokers.
Then come back to me, we’ll review what you’ve learned or what you’ve done. And we’ll kind of go from there and I’ll help guide you along the way. He was never really a mentor that was very. Pushy, I guess is the word I want to use. Like when you, when you pay for a mentor and it’s like $50,000 and something outlandish there, they give you all of their, their deals.
They help you, like they basically raise money for you, and they let you be a part of it. They’re introducing you to brokers, they’re introducing you to investors. They’re giving you all their courses. They’re doing all this stuff. He literally did none of that. All he did, he was there for Q and a. So, I had to go out and I had to do all the work, myself, meet all the brokers, all the investors find my own deals.
He was doing deals left and right. No problem for him but I was like, dang, I wish I could like do one of these deals, but he didn’t want to bring me in because he didn’t, he wasn’t, he didn’t feel like I was ready yet. He didn’t feel like I had earned. My keep so to say and putting in on one of these opportunities.
And I felt like, I feel like that helped me because it had. Helped me actually learn it the hard way. And I don’t know if maybe that’s the right way or not. I didn’t have any money to pay, to buy a mentor, which maybe that’s the way you want to go. But for me, organic was the only way I had, so him continuously being there for me when I had questions and helping just guide me in the right direction when I was like, Hey, what about this over here?
And he’s like, heck no, steer all the way clear that come over here. It was like, all right. See, I wouldn’t have known that. If that’s just a long-winded way of saying that that, that one conversation was probably the best business advice, because it was truly the turning point in my journey. That’s awesome.
And sometimes, you know, you just need to be told to your face and get some of that constructive criticism, because that can be a light bulb moment. That can be a changing point, for your path going forward. And that’s exactly what you experienced.
Michael Holman: So. Awesome. So last question. What real estate investing advice would you give to say other business owners or business executives?
Josh Ferrari: There’s so much real estate investing advice out there, honestly. And I don’t know if this is a cliche or not, but I would say just get started. I don’t, I don’t know what that looks like for you and don’t listen to other people when they tell you, you have to do one specific thing. And if you don’t, you’re going to fail or whatever, it’s different for every person.
Like I tried wholesaling and failed miserably, but I know a lot of people that make seven figures a year. Running a wholesaling business, it’s not that wholesaling doesn’t work. It just didn’t work for me. So, figure out what works for you and just get started. Don’t get stuck in the, the analysis paralysis we were talking about earlier.
Don’t just continuously think what could go wrong. Think what could go, right? Or what is the what’s the worst-case scenario? If you don’t do it, don’t think worst case scenario. If you, do it, like I’m going to lose a bunch of money. If you don’t do it, what’s the worst-case scenario. You’re going to be stuck in your day job forever.
Like stuck working 60-hour weeks climbing up the corporate ladder never have enough money to send your kids to college or to go on that Disney trip you’ve been dying to go on. Just get started, I promise baby steps. That is that’s awesome, and you know what? I kind of have to laugh to myself because I would say of the last, you know, maybe four or five podcasts that we’ve done with other people, at least half of them have said almost the exact same thing. Right, you just have to get started.
Michael Holman: So that was fantastic. Well, Josh, thank you so much for coming. How can people get in touch with you?
Josh Ferrari: Just go to our firstname.lastname@example.org. All of our social media links are there. You can check out our portfolios on there, the type of deals that we buy, what we’re actually focused on our podcast is there.
If you want to listen to our podcast, creative capital newsletters there, the whole gamut is there. Just go to the website and learn more. Fantastic. And then that will definitely be on the show notes for everybody. Josh, thank you for your wisdom and thank you for your experiences and letting us get into your mind, you know, for the last 40, 50 minutes. Yeah. Thanks for having me, man. I enjoyed it.
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