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Apartment Investing Success Through Consistency And Discipline With Joe Fairless [EP083]

January 11, 2022

Apartment Investing Success Through Consistency And Discipline With Joe Fairless [EP083]

Joe Fairless is an outright leader in the multifamily syndication industry. He's a General Partner in over 8,500 units, purchased over 30 properties for over $1.5 Billion. He hosts the longest running daily real estate podcast in the world called The Best Ever Show. He has a best selling book called the Best Ever Apartment Syndication Book and he hosts an annual conference attended by seasoned real estate investors from around the country who are interested in learning about apartment investing and how to grow their business with proven strategies that work time after time again. The conference is called the Best Ever Conference being held this year in Keystone CO February 24-26, 2022.

In this episode, Joe talks about how consistency and discipline lead to success. He also talks about tripling down on your strengths, paying attention to your priorities, and shares his view that apartments will do well for the next five+ years.

Table of Contents:

Five-Step Process For Passively Investing In Real Estate
Five-Step Process For Passively Investing In Real Estate

Joe Leads the Way in Apartment Investing

Joe Leads the Way in Apartment Investing
Photographer: Brendan Church | Source: Unsplash

Darin: Joe Fairless leads the way in the multifamily syndication business. He has a podcast, has written a bestselling book, and hosts an annual multifamily conference. He's purchased over 1.5 billion in multifamily properties. All this, and he continues to share how he did it, so others like you can achieve success just like he has.

Anybody that's in the multifamily syndication space knows Joe. He is a leader in the space. When I was getting started about four years ago, I listened to three podcasts. Mainly one was Joe's, one was Rod Khleif and the other was Old Capital. Also, when I started to invest passively, I invested in one of Joe's deals in South Dallas. It was actually the first deal that had a pref on it. So it was nice every month, getting that check or the electronic payment. How many properties and how many units are you up to now?

Joe: On the general partnership side, we have over 8,500 units. We just purchased two deals in the last seven days. We just sold a property this week. I don't have the numbers right in front of me. We have around 30 properties. We're over $1.5 billion worth of apartment communities. I also invest passively on deals for many reasons. On the passive side, I am almost at 100 deals, invested in both ours and other people's deals.

Darin: You are a leader in the space. You started with having a daily podcast, then you have a conference. Actually you have that conference coming up here in Denver, in February. Is that correct?

People Who Are Doing It

Joe: Yes, Best Ever Conference. It's the fourth or fifth year we've done it in a row. It is a great way to speak and meet with other people who are in commercial real estate and experienced in doing deals. I'm fortunate that the conference tends to attract experienced commercial real estate investors. They’re not people who are just thinking about it, but rather doing it. It's a really sophisticated group from an experience standpoint. Certainly, the maturity level is all over the board with myself included in that mix. But from an experience standpoint, that box is checked.

Darin: That's exactly what I've heard about your conference. I have yet to attend. But I've heard that it really attracts experienced syndicators, experienced people. It's not for the first-timer that's thinking about it. The caliber of people at that conference I heard is top-notch. With that, having a podcast, you also wrote a book. I read your syndication book.

It was great to have the outline steps. I've recommended that book to other people. Maybe they've purchased a single family and they're looking to get into multifamily or into syndication. I've pointed them to that book. You also have a mentorship group. My understanding is that you helped some folks learn how to do it as well.

Joe: I'm very proud of the syndication book. I am not proud of the two other books that I've published, it’s my very first book and the second book, volume two. It wasn't as much of a love project as the syndication book. The syndication book is something that's my life's work from a general partnership standpoint.

Mentoring Program on Apartment Investing

Joe: It is how I got to the point where I was at in the business when I wrote it. It's sharing all the stuff that I knew to help others accomplish similar or even greater goals that I had accomplished at that time. The mentoring program is not really a thing for me anymore from bringing in new people. Certainly, the people who are currently in the program, I'm there to serve them. We've got a dynamic group. But, it's just not a focus of mine anymore as I've shifted from that to other things.

Darin: You were in the advertising space and now you have 1.5 billion in assets under management. I would imagine that you would characterize yourself as rich. There's a lot of people chasing that, that's why they get into this space. There are many other fantastic things about it in terms of helping others, building community, providing great returns for investors, and serving all those people. But a lot of people do get into the space because they want to get rich. So how do you get rich doing this?

Joe: We’re just talking about money?

Darin: Yes.

Joe: Obviously, there's a conversation that could take place regarding having wealth and being rich. Rich money, wealth, having a fulfilled life, and other things.

Darin: I value all those things. We're just talking money because a lot of people that's the way they start out. They don't realize that there's all these other facets to begin with.

Joe: The question is, how do you become rich?

Darin: You have 1.5 billion in assets. You have to have significant wealth. People talk about wealth versus being rich.

How To Be the Person People Want To Go To

Joe: The first thing would be to create. Identify how you're going to be the person in your immediate circle that others want to go to. Are we talking just about apartment syndication?

Darin: Yes. I'm assuming that that would be your answer because that's how you got rich. So if they're asking you how to get rich, you'd be, "Buy a lot of apartments."

Joe: I'm not going to say crypto because I don't know crypto.

The first thing, tactically speaking, is to identify a way that others will know how to reach out to you because you are the person to talk to them about apartment investing. In order to do that, depending on your experience level, you'll need to either talk about your own experiences or interview others about their experiences. You need to have a platform and you need to do it consistently.

I was listening to Joe Rogan today, in one of his YouTube videos while I was running on the treadmill. He was talking about how he thinks about discipline. Discipline helps him accomplish things. He would be one of the fattest people in the world if he only worked out the days he wanted to work out.

But instead, he got discipline and he makes himself workout. He views discipline as something that allows him to accomplish things. The one huge part of how I got rich was by having a consistent, methodical approach to learning and connecting with others. And becoming someone that others look to for answers, as it relates to apartment investing. So nobody in the world has done a daily, real estate investing podcast for as long as I have.

Leadership Platform

Leadership Platform
Photographer: Markus Spiske | Source: Unsplash

Joe: Now, I don't do all the interviews anymore. In fact, pretty soon I'll be doing about four to five interviews a month. But the show continues to do daily episodes and continues to have daily guests. It's an interview-based platform because when we interview one person, they then share it right out with their audience.

Let's say they have an audience of 10 people. Those 10 people are likely interested in what this person is saying on the podcast and one or two of them will become listeners. Now, if they have more than 10 people, you can scale that out. So that's the first thing.

Darin: On that piece, you're basically saying, have some kind of leadership platform.

Joe: Consistently and frequently. People want to do it weekly. That's not enough. It is, if you want to accomplish your goals in 20 years. If you want to compress decades into a year or two or three, you've got to just do a lot more. Take a massive action, like Tony Robbins talks about.

It's the platform, but it's doing it consistently. It is developing those relationships every time you interview someone and you're learning. There's another thing within that that's really key to success. That is engaging in activities that have multiple benefits.

When you interview someone, we're connecting right now. We're getting to know each other a little bit. Let's talk about the benefits here. We're connecting. So I'm getting to know you, you're getting to know me. You are getting a podcast that's going to be produced. My audience will then hear about it because I promote it. My team promotes whatever podcast I'm on. So there are multiple benefits for both you and I, for this.

Actions With Great Rewards

Joe: I'll give you another example, when you post on Bigger Pockets, you're getting multiple benefits. You're learning because you're engaging with others. You are networking with others, perhaps that results in a conversation outside of Bigger Pockets, and the relationship. Maybe a business relationship. So you're learning, you're engaging. You’re sending people to your website if you have a link in the signature part of your post. So there's all sorts of benefits.

An example of not doing that would be people writing a blog post about some thoughts that they have. Well, you're not interviewing anyone, so you're not building a relationship with people. You are posting it, which is great. But you're just sharing it with your audience. There's no other audience to share. No one else is involved in it. Instead, you do a blog post where you quote some people. Maybe quote a couple of friends of yours who are in the industry, and then involve them, then they'll share it out.

Just think about the actions that you take that can reward you in multiple ways. Because then you've got a compounding effect. The opposite of that is, you're just linearly getting some things done, but you don't have multiple things working on your behalf with every action that you take.

Darin: Going down the path of getting rich and buying a lot of apartments and forming a leadership platform and doing it consistently. Then there are multiple benefits, there's passive investors that will come along and partner with you or with the syndicator that's building that platform. It benefits both people. They then tell other people. There's learning that happens from both sides.

There’s Endless Learning in Apartment Investing

Darin: I don't know if you remember this, but I ended up emailing you a while back. I said, start a podcast, start a meet-up group, or write a book. You emailed me back and said, "Start a podcast, then do a meet-up group, then write a book.'' So I started the podcast about a year and a half ago, and I would reiterate exactly what you said. It's like I've told some people, "Look, some people listen to four or five episodes. But I'm on episode 80 something. I've listened to all 80 and I've learned from everybody who comes on."

Joe: First would be that. Then I added in doing things that have multiple benefits to make the best use of your time. Once you have that established, then it's looking in the mirror and identifying what skillsets you have that you can compete with the best of the best in apartment syndication. That would require you to know what skillsets are needed in order to compete with the best of the best in apartment syndication.

There are three components to our business – money, deals, and execution. So think about, "Am I really good at attracting investors and having conversations? Am I really good at finding deals, networking with brokers and others? And am I really good at the execution part, the asset management?" If you don't know which bucket you would be in, then talk to others. Learn what it takes to have success in each those three categories.

The Key in Apartment Investing

The Key in Apartment Investing
Photographer: Chris Barbalis | Source: Unsplash

Joe: Ultimately from my experience, the key is to focus and double down and triple down on your strengths. Then bring in partners or find partners who can help you with other aspects of the business. But the cautionary warning here is, I've seen groups that have five to seven partners on a deal. That's just a train wreck waiting to happen. Too many cooks in the kitchen.

From a partnership standpoint, it's necessary to have one, maybe two other partners in the business. Past that, it's just going to be too hard to coordinate things and too hard to divide and conquer things. So that's another major component of how to have success.

I switch it to success versus rich because I'm dreading, if you titled this episode, Joe's keys on how to get rich in real estate. I'm like, "No." That is the opposite of how I approach life and business. Please be friendly with this title. I followed your lead on this line of question, but these are ways to build a business that will grow. To make money for both your passive investors and also you as a general partner.

Darin: I completely get it. It's that humble piece, like, "How do you say I'm rich?" It just seems like, money in your face. Rather than just trying to help people build a business, build success and go after their dreams, their passions, and have the freedom of time and freedom of money. That's what most people are chasing. So why do you think that some people succeed and some people don't?

Joe: The people who don’t succeed, don't prioritize in their life, having whatever quantifiable goal that they were seeking. They change priorities and life changes.

Priorities

Joe: Maybe they wanted to accomplish something, maybe they wanted to become financially free in three years. But then they got a boyfriend or girlfriend, and their priorities changed. So whatever, that's up to them.

But if we keep the goals as a priority for us, and we have already committed publicly and privately to doing the platform on a consistent basis. Yes, personal stuff comes up, but you've committed already and you're doing it. So the show must go on and that's what happens. You mentioned my consulting program and I mentioned that I'm not looking for new people.

Darin: You're not looking to grow it.

Joe: I'm not bringing up for that reason to bring people in. I want to bring it up because not everyone has success, has had success in my consulting program. The people who have not generally are the ones who sign up, it's a shiny object. Everything is awesome. And then they're MIA and why are they MIA? Jim Rohn would say, "The birds got them."

There's an awesome YouTube video with Jim Rohn where he talks about that. He gives a speech about what happens to those people who were supposed to accomplish things. And then they just didn't show up to a meeting that was so easy to show up to. "Well, I don't know. The birds got them. Who knows?" Well, it's a way of saying priority shift.

So how do you solve that? You solve it the same way someone who's trying to lose weight solves by doing more exercise. That is before you go to bed at night, you put your shoes and your workout outfit right there by the foot of your bed.

The Role of Systems and Routines in Apartment Investing

Joe: As soon as you wake up, you put those clothes on and you go do whatever exercise.

You create routines and you build systems that compel you and really help you manufacture progress. It compels you to do those actions that you know you need to take, even when you're not feeling like it. Again, going back to the discipline part. Sure, you have to have a compelling vision and these other things. I would say a key part of it also is personal development.

I've mentioned three or four people that I listened to on YouTube, just in this conversation. I'm huge into personal development. When times are hard in business and personal life, I go back. That's my baseline of, "Okay, now I'm going to talk or I'm going to consume more personal development stuff. The stuff I've learned throughout the years and just being obsessed over it." That helps me and that pushes me forward.

Be a student of personal development and listen to Jim Rohn, listen to Tony Robbins and Zig Ziglar. Listen to Les Brown, and other individuals like Oprah. These individuals have some great insightful things to say.

Darin: You mentioned that shiny object. I'm part of a mentorship group in the Dallas area, Brad Sumrok group. Three times a year, he has a weekend event where new people come in. All of a sudden you see all these new people signing up. My experience, and this is what I tell people that reach out to me on Instagram, it's the 80/20 rule.

The Top 20% Who Will Rise Up

Darin: It's like, "If you believe that you are part of the top 20% that will rise up, then you will figure out a way to make it happen. That you have all the support and all the tools you need to be successful. But if you think that stroking a big check, that somebody's going to come knock on your door and hand you a deal, then don't sign up." You're still going to have to fight, kick and scratch for it.

Joe: If you don't and someone does hand you a deal, then the deal's going to go south quickly. You'll lose more money than you could possibly ever want to lose. But even if the deal happens to go really well, then there's going to be disaster right around the corner. Just like when people win the lottery and they are dirt poor. They’ve made terrible financial decisions prior to that, then they're going to end up in a bad spot.

Darin: We're in a super hot market. I'm sure you're buying and selling. But are you still bullish on apartments right now in this market? Do you see a crash coming and everybody's questioning? Then, this is a different topic. You shifted from doing kind of one-off syndications to the fund model. What's your take on that?

Joe: I believe apartment investing will do very well for the next five-plus years. One reason for that is because there's simply not enough housing around right now. I don’t believe there will be a crash because the people who have the homes, who have been getting approved to purchase homes right now, they have really good credit scores.

Highly Qualified To Do Apartment Investing

Highly Qualified To Do Apartment Investing
Photographer: Luke van Zyl | Source: Unsplash

Joe: The lenders have been very judicious with who they give loans to. So we're in a different spot than we were leading up to 2008. We've got highly qualified individuals who have these loans on the single family front. But then, there’s the gap between what is needed and what is currently the inventory that's currently there.

I watched the video recently where they were citing a report that stated there are four to five million households that wanted to buy. But there's just not enough inventory and the rate of construction that we're on right now. The pace is going to take another eight years just to catch up to that. There’s a lot of factors, I'm just cherry-picking two things.

There are many other components to this, but I think we're buying properties that make money day one. We're enhancing the revenue stream through a value-add business plan. Now, should a correction take place, then we'll scale back the renovation or discontinue them all together.

We might not profit as much as we like, but I believe it's still a conservative investment. As far as a fund goes, I'd say that, it's a no-brainer for me as an operator. It's wonderful as a limited partner, in my opinion. The general partner side, we bought eight deals and we put all eight deals into the fund.

We bought eight deals last year for our first fund. If I had to raise eight times, for eight individual deals outside of a fund, it's annoying to be honest. You have to hit a certain equity amount for every deal. As you know, you shouldn't go under, you shouldn't go over. You've got to hit a certain amount.

A Helicopter on Top of a Mountain

Joe: I compare it to landing a helicopter on the top of a mountain on a windy day. It’s really challenging. In the last two weeks prior to closing, you'll have investors who are MIA. You'll have some investors who want to get in the deal. But we don't know if we can get them in because other investors have committed. But the birds got them, so it's just challenging.

With the fund, we only have to do that once at the very end of the year. There are other benefits too. From a GP standpoint, it's just so much easier. You can commingle funds with the fund. So if one deal, the CapEx is doing really well, it means we're not spending as much then. On the eighth deal, we don't need to raise as much for that deal because we can compensate with dollars that were raised for the first deal for CapEx. So it's great.

On the LP side, I'm investing in a deal and in multiple deals. The downside from an LP standpoint, is that there's probably less likelihood of hitting a home run with a fund, because it's an average of the returns. But I believe it's also more conservative. Since you asked me about Ashcroft stuff, we've got a chief compliance officer.

She said to make sure I said the following, "The views and opinions are mine, not Ashcroft or its employees. Any ideas and strategies discussed should never be used without first assessing your own personal financial situation with and/or without consulting a financial professional."

Darin: There you go, compliance and legal getting to you.

Why More People Are Getting Into Apartment Investing

Joe: That's the world we live in, but I chose to be in this spot. I'm grateful to have this conversation with you.

Darin: You've put out a lot of good support stuff between the podcast, the book, and the conference, to help people get into the space. More people are getting into the space and you're a leader in that space. So I appreciate you taking the time. If people want to reach out to you and get to know you better, what's the best way for them to do that?

Joe: Come to besteverconference.com. I’m looking forward to meeting you. Just mention, just grab my arm, pull me aside and say, "You heard me on this podcast and love to shake your hand.'' I’ll give you a hug and be introduced to you.

Darin: So Best Ever Conference, and then Ashcroft has a website also.

Joe: We've got ashcroftcapital.com. Our first fund closed out, but we are launching our second fund in mid-January. You'll be able see all that information on ashcroftcapital.com.

Darin: Thanks again for coming on the show. Listeners, I hope you enjoyed that one. I don't know who you listen to, but he’s one of the first ones that I listened to over and over again. I could picture myself at different locations, doing student tours with my daughter, sitting there, getting up early, and listening to these podcasts. I’ve learned a ton from you and your guests. I’m very appreciative.

Joe: I enjoyed this conversation. You've got a unique format, free-flowing and asking questions. I don't do many of these interviews anymore. When I do, I love it when a host has a fresh approach to interviewing as you do. I appreciate that.

How To Reach Joe Fairless

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Darin Batchelder


Wealth creation through real estate provided me with a new passion to get the word out and let others know that they have an alternative to investing in the stock market.

If I can inspire and educate just one person to take action that results in life changing wealth creation then the work to launch and grow this podcast is well worth the effort.

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