Are you curious about what it takes to invest in multifamily properties? Reed Goossens is a real estate investor invested in 15 multifamily properties for over 3,000 units. He's also an author and speaker. Reed Goossens left Australia and came to New York City without a job, without a big stash of cash and without a support system in the US. What he did have was a belief in himself. That's one of his sayings "betting on yourself." He is also a big believer in leveraging your internal curiosity to take action! If you want to learn what it takes, then listen to this episode!
Table of Contents:
- Where To Listen To The Podcast
- Build a Sizable Multifamily Portfolio by Betting on Yourself
- Taking Opportunities While Betting on Yourself
- Aussies With Stories of Why It’s Worth Betting on Yourself
- People Worth Spending On
- Curiosity and Persistence
- If You’re Not Betting on Yourself, Real Estate Is Not for You
- Betting on Yourself to Be a Better Person Requires Work
- How to Reach Reed Goossens
Build a Sizable Multifamily Portfolio by Betting on Yourself
Darin: Reed Goossens came to the US from Australia with nothing more than a bet on himself. He worked hard, took risks, and leveraged his curiosity. Then found a way to build a sizable multifamily real estate portfolio. He started a podcast and wrote two books. He's a speaker, attends masterminds, and helps others learn how to invest in multifamily.
This is actually the first time that Reed and I are getting a chance to talk to each other. We run in the same circles and I see him all over the place on social media. He's got a podcast, and we'll talk about that. He is also the author of two books. Huge accomplishment. He's from Australia. Typically, the first question I ask is, how many properties and how many units are you currently invested in?
Reed: I currently control 15 properties as of this Friday. So, probably 3,200 units right now in the portfolio. We're closing on about a $100 million deal this coming Friday, which is going to be pretty exciting.
Darin: You live in LA, but you're originally from Australia. How did you even decide to come over? Why did you decide to come over? Talk about that whole story.
Reed: It's really the love of two different things. That's the love for New York City and the love for my then girlfriend, now wife, Erica. So, I chased a girl out here. Really just came out here in 2012 just to move out here to be an expat. I wanted to live in New York City for a period of time.
What Got Me Here
Reed: There was a really great visa with Australia and the United States if you have a white-collar job. My background is instructional engineering. If you get a job offer, you can come, you can get the job, you get the visa and you can stay indefinitely. I was really infatuated with Erica at the time. And I was like, "Do you want to move to New York City together?" She said yes. She's American. "Let's move in together and start a relationship." That's essentially what got me here. Through curiosity and wanting to do more with my life, I started stumbling across real estate.
For those people out there that don't realize it, America does have a lot more lower barriers to entry than my home country. Think of high-appreciation markets like LA, San Francisco, and New York. That's what my entire country is like. When I first moved to the United States, I realized pretty quickly just the incredible power of population, and then also bringing up these secondary and tertiary markets, which I could get investing in. So I started investing for as little as $40,000 or $50,000.
I bought my first property all cash, probably six months being fresh off the boat back in 2012. It’s in Upstate New York in a little town called Syracuse. That's the coming to America story. Obviously, there's a lot that's happened in the last nine years. I can't even believe it's going to be 10 years as of next year. It's just absolutely insane. I honestly talk about this story a lot and I'm thinking, "This was like the other day." It's like, "No, it's 10 years ago."
Working for the Mega Wealthy People of the World
Darin: How did you meet your wife? Is she American, or is she Australian also?
Reed: She's American. We actually met in 2009, I was backpacking in Europe. I was living in the south of France. If you've ever seen the show Below Deck on cable, it's a show about deckhands working for mega-wealthy people of the world. I was doing that before it was cool. I just happened to meet her galavanting around the south of France and continued doing that for 2009.
We stayed in touch and then she ended up moving out to Australia in late 2010 to do her master's degree. Just coincidentally, met me while traveling, and we kept in touch. She came out. She's like, "I'm coming out." It's like, "Awesome." We started a relationship from there, so then the rest is history as they say.
Darin: South of France, where exactly?
Reed: I was based in Antibes, which is near Nice. It’s the hub for all yachties who want day work.
Darin: The reason why I ask is because my mom is actually from Nice. She came to the US, met my father and then they got married. When I was growing up, we would spend summers at my grandparents in Nice for a week. Then we would go to Saint-Tropez for three weeks. Life was tough spending time in Nice and Saint-Tropez. Not bad as a kid to be able to grow up that way.
Reed: Are you fluent in French?
Darin: No, I understand more than I would speak. You know how the Europeans are, they go to a cafe, sit out for hours and just talk while having a cup of coffee.
Bitten by the Real Estate Bug
Darin: So, I would understand a lot, but I didn't speak it that much. I knew enough to get by. You're in New York. Did you buy a single family in Upstate New York?
Reed: It was a triplex for $38,000.
Darin: 38k triplex in 2012 in Syracuse. Were you scared?
Reed: 100%. Here's the thing, moving to the US was the hard part. Buying the property, I had already been bitten by the real estate bug prior to moving to the US. I picked up the book, Rich Dad Poor Dad. I'm sure a lot of the people in the show know about this book. If you've been living under a rock, you have to read it.
When I got back from gallivanting around the world in Australia, I read this book because I was in a cubicle. I was a structural engineer. So I was like, "There's more to life than just sitting here in this cubicle being a small cog in a big machine." That's when I started being curious about certain things and investing and all that sort of stuff. But I didn't even know what the word entrepreneurship meant.
Going back to being scared, I already pre-educated myself for a couple of years before buying that property. One of the stories I tell a lot on these shows is that Americans don't realize how much access to information they have. Particularly in 2012, when I first rocked up in New York, I remember two weeks fresh off the boat, I was at a Real Estate Investment Association meet up. 300 other people are all there, learning about real estate. I'm like, "Oh my god, this is incredible. I didn't have any of this in Australia."
Taking Opportunities While Betting on Yourself
Reed: It was really just taking opportunities with two hands and knowing that I needed to change my mindset about the way Americans invest. I didn't know anything about cap rates, EIN numbers, bank accounts, credit scores, but I had to learn it. Once I learnt it, I was like, "Well, let's go get started. What have I got to spend?" I've saved $40,000 for my corporate gig at the time. Let's go use that. All I could buy at the time was all cash because no one was going to lend to me. I didn't have any credit, I just moved here.
So, it was about the process of elimination of what could I buy, where could I buy and how close was it to my location at the time, which is New York City, to get me going. My big thing is that you don't get to deal number 10 without doing deal number one. Regardless if you hit it out of the park or not, you gotta get going. For me, it was years at that point in 2012. It was probably two and a half years of self-education.
I knew I was just getting to the point of analysis paralysis and I needed to take action. So many people talk about action taking, but it is important. It's the most important thing we do in building any business. You sit on your hands and you sit on your butt. Nothing is going to walk through the door and present you with an opportunity to move your business forward. You have to take action. It may have been imperfect in the beginning, but it's still taking action towards moving the needle to where you want to go.
Betting on Yourself Always Come With Some Fear
Darin: I asked if you were scared because I've interviewed a lot of people, a lot of syndicators on the show that own thousands of units. Many times that first deal was the scariest. You said you were scared of doing a 38k deal, but now you're closing on a $100 million deal this week. It's a big deal. You probably have some nervousness, but you're confident because you've done it so many times now. It's different from that first time when you had it unknown. I had it similar where I did a duplex and it was a new construction duplex. And I had the capital.
It wasn't like it was going to change my life if things went sideways. But it was the first time doing it, and I was scared of doing it. I was able to push past that fear and took action anyway. I'm invested in over 4,000 units. That first one is scary, and that's what I want the listeners to understand. Like, "Look, Reed is very accomplished. He's doing a $100 million deal this week, but he started with a $38,000 deal. So, you have to do something to get going."
Reed: There's so much social media out there and people in podcasting, and boasting. Don't get me wrong listeners. It's been a lot of hard work getting to where we are today. There's been a lot of scary moments along the way, and pushing your boundaries. Even moving to the United States for me was a scary thought at the time, and trying to get a job in the United States. I literally quit my job in Australia to move here and didn't have anything lined up.
What Pushes Us to Do Bigger and Better Things
Reed: I had a tourist visa and I went knocking on every single engineering door in New York City until someone said yes. So, it's all about these little increments pushing your comfort zone. Whether it be finding that job, putting an offer on that property, upsizing, or upscaling, or upleveling, whatever you want to call it. Guess what, things are going to continue to be scary. That's what helps push us forward to do bigger and better things. I can sit here today 10 years later and talk about that stuff. Well, in 10 years' time, I'm going to hopefully do something really cool again.
Darin: Totally different.
Reed: It's all about pushing your boundaries and being uncomfortable. That's really important.
The other thing that's really important is betting on yourself. Like you mentioned before, you had the capital. It wasn't going to take the shirt off your back. I was in the same position. It was my capital to risk $38,000. If I stuffed it up, it was my fault. I still had a job. I’ve weighed up all the failure scenarios and I got comfortable with, "Okay, this is how I'm going to take that next step."
I wasn't gambling, it was a calculated risk because I had spent time educating. It wasn't just me throwing money against the wall. But I knew I had protected my downside because even if it did go bad, I had insurance. Or the house burnt down, or whatever, I still had a roof over me. I still had a day job, I could still keep the bills paid. I'm sure that's what a lot of listeners, including yourself, would have been thinking as you do that first deal.
When You Start Betting on Yourself, You’re Pushing Boundaries
Darin: I love that you said it's layers, it's pushing boundaries. You don't see it at first, but by taking that first step, once you do that, all of a sudden, you start thinking differently. You’re looking for the next layer on top, the next step to get a little uncomfortable. But if you didn't take that first step, you can't layer those things on top.
Not only have you grown the business to 3,100 units, but you've also started a podcast. You've also written two books. Talk about those two things, starting a podcast and writing two books. What are those books about, and what is your goal for those books?
Reed: The podcast was the tail to wag the dog. I had done a few deals in 2012 and '13. Prior to moving to Los Angeles, I knew I was getting to a point where I needed to do more. I started to hit that ceiling and I was only earning a certain amount of money. I’ve had three little deals that I purchased by myself, but I knew I needed to do more. I wasn't going to just create financial freedom overnight.
Through a conversation with a very good friend of mine from Canada who came down in New York City, we're having a beer at the pub and he's sort of boasting. I was boasting to him. I was like, "I got these seven little units in Upstate New York. I'm crushing it." He goes on to tell me about how he just pulled together a 70 unit deal. And I said, "70 units, like seven-zero?" He's like, "Yes, 70." And I was like, "Why did you do that?"
Setting the Bar at a New Height
Reed: That's so far removed from what I was even thinking, and he went into all of it. Seller carryback financing, other people's money, getting a mentor, all these things. I had been to seminars and people spout on stage and you read it in a book. But here's a guy, a good friend of mine, who had no idea. He's now set the bar at a new height. That was the impetus to go, "Okay, I need to take this, and do, and double down. What do I need to do?"
The first thing he mentioned was a mentor. I went out and got a mentor. A very cheap mentor at the time. He's not cheap anymore. Through that mentor, he encouraged me to go, "You should start a podcast because you have a story." I'm an engineer. I am black and white brain. I’m very mathematical. I had no idea about talking about stories and brand building. But it was like, "Well, maybe someone else would find this interesting."
I started in 2014, the podcast called Investing In The US. It was really just about my story, coming here, learning about EIN numbers, and LLCs. Setting bank accounts up and foreign exchange accounts, and how to then go look for deals and build your team on the ground. All the things that every single American wants to do when you're investing out of state. So do foreign investors when they come to the US.
I started really niching towards the international investment community. Over time, that has grown. Now, the majority of my investors are actually Americans, but it was through my story that I started the podcast. Then from the podcast, I created these two books.
Aussies With Stories of Why It’s Worth Betting on Yourself
Reed: One of the books is called Investing In The US. It's just literally taking audio into written form. The second book I wrote is called 10000 Miles to the American Dream: Our Story of Financial Freedom. It was a congregation of Aussies. We've all come across the ditch and created successful real estate businesses here in the United States all through different facets or different asset classes, technology, self-storage, mobile home parks. We said, "We've got a story to tell, and we all wrote a chapter about that." It was launched about a year and a half ago, here in the US.
Again, it was all through story building. It was all through trying to share a story with someone else to build the brand, to build the investor database. I started the podcast before I actually did my first syndication. That was all about trying to raise capital in and around being vulnerable. It’s sharing a story, sharing a commonality with people to attract people into my sphere who ultimately want to do business with me. That's how that got started from one conversation at a pub with a friend from Canada telling me about his 70 unit deal.
Darin: You took action. When you started a podcast, did you know how to start a podcast?
Reed: No. My mom and maybe my dog were the only two people listening to it. No idea. The goal is not to be the next Tony Robbins or the next Tim Ferriss. My goal is to be a key person of influence in my sphere. If I have 1,000 accredited investors, I'm going to be able to do a lot of deals.
Building a Brand
Reed: I don't need 100,000 investors. I'd love to have 100,000 investors. We build towards that. But in the beginning, when you're building a brand, you're talking about a podcast. You're trying to build a platform. It's just about being a key personal influence in the sphere that you currently run. Having a podcast, using platforms like YouTube, iTunes, and SoundCloud.
All these things elevate and project your story and your message helps them attract more business to you. That's really important for other people listening to that. They think, "Oh, there's so many podcasts out there." Yes, there are so many podcasts out there. But the goal wasn't to be an Oprah Winfrey, or a Tim Ferriss, or Tony Robbins. It was just to build a brand for myself in order to get me started and start raising capital.
Darin: It's a win-win. One of your side goals is to develop an investor database and have more capital to do bigger deals. On the flip side, I've been involved with a lot of nice country clubs and been around a lot of wealthy people. But until I got involved with real estate, went to conferences, met people in this space, I had never even been offered an opportunity to invest until four years ago. It's a win for the passive investor.
I had a deal where I put in 100 grand three years ago and I got back my 100 grand plus another 120 in three years. And I wouldn't have done that in the stock market. Had I not gone and got educated and met other syndicators like yourself, and took action, and invested with them, I wouldn't have had that return.
Betting on Yourself Makes Great Returns
Darin: It's not just about the podcaster getting more investors, it's also helping the people that actually invest make great returns. And then out of that 1,000 that you're influencing, there may be five or 10 that start their own podcast and build their own influence. There's a ripple effect, and people don't realize that.
Reed: Here's a dirty secret. I don't make a lot of money off my podcast, if anything. It's been going for seven years now, but it also acts like a mentor. I get to speak to and interview some of the best minds in the real estate industry here in the United States and learn stuff from them. And I learn all the time. I'm learning right now from you.
That's the benefit of producing a platform, to share the knowledge with other people who may not be as educated. It also helps educate yourself as the presenter. I started it with very little experience and I just started interviewing people who had more experience than I. Thus, that's upleveling, trying to be better, assimilate with people, and surround myself with people who I aspired to be.
Darin: I say the same thing. Some people will listen to maybe two, three, four, five episodes. But I say, I listen to every single one of them and I learn from every guest. So I benefit that much more. You mentioned a mentorship group. I joined a mentorship group in Dallas, the Brad Sumrok Group. There are plenty of great mentorship groups around the country. Some people outside looking in, they're like, "Is it worth the money?" I'm like, "It taught me all the steps I had to do. But the bigger thing was getting plugged into a network."
You Are Worth It
Darin: I met my business partner there, and I met the attorney that I used for my syndications. I’ve met a property management company. All these things that I would have had to try to figure out on my own. In addition, you look around the room and you see all these people doing 100 unit, 200 unit, 300 unit deals. You're like, "They're smart. They're nice people. If they can do it, I can do it." But if you surround yourself with only your friends and family that have never done it, it's very hard. Talk about immersing yourself in the industry and the mentorship group and people in the industry.
Reed: One more important step with a mentor, and I didn't go to a group. It was one-on-one coaching at the time. 2014 was probably very early in the day. I was able to take a bet on myself. The money I spent looking back at the time, it was very much, "Is it worth it?" For me, it's, "No, you are worth it, and here's a check for X amount of money. I'm going to take this seriously."
It has that subconscious effect on you. For me, at least, it was like, "All right." I've just said to myself, "I'm betting on Reed Goossens because I can do this." To your point, if someone else can do it, so can I. Why can't I go do what these other people are doing? Yes, you get the benefits of immersing yourself with people in the industry. That's some of the benefits that people immediately see. But I still think the most important one is that you're taking a bet on yourself.
Why You Need to Invest in Yourself
Reed: People look over that too quickly. That money you pay is an investment in yourself. That's just one of the most important things as you get going. I go to seminars and conferences all the time. Actually, I was just at the IMN Conference here in Santa Monica speaking on stage. The beauty about going to these things and hanging around is that you realize the industry is pretty small.
As a foreigner coming to the United States, the outsider would think, "God, the multifamily real estate industry in the US must be massive." It is. But once you start hanging around all the same people, you start to know you're maybe two degrees of separation at max in this industry. Most times, it's just one. It's a cool industry to be in. Everyone knows each other. For the better part, everyone gets on pretty well.
There's not many people I haven't met that don't love to do real estate and want to talk shop. For me, getting a mentor is really influential. I will say, it wasn't the silver bullet. It helped me get to that next stepping stone. The mentor I have today, the business coach I have today is different from that person who I first started with. My mentor in 10 years' time is going to be even different from where I am today.
As I evolve as an entrepreneur, my coaches and the people in my corner will evolve with me in terms of the needs and the blind spots that I have. When you're getting started, you need to see the roadmap laid out in front of you. You need to see how to build the business, the mechanics of it.
People Worth Spending On
Reed: Once you get to a certain point like today, I have a business coach that doesn't have anything to do with real estate. It all has to do with the mindset of a CEO business coach, and that's important for me today. In 10 years' time, something else is going to be even more important.
Having people in your corner to show you where your blind spots are is worth every penny you spend on. It will make you a better human being, a better person, a better leader, a better investor, a better entrepreneur. That is what will help propel the business forward.
Darin: It blows my mind. I'll interview people that have a huge net worth and they're still paying. They're paying out of pocket to be part of masterminds, to be part of other groups. They are still trying to level up to the next level. There's always somebody above you, somebody below you. Life is a never ending thing where you just continually try to push yourself.
After getting the first syndication done, okay, well then I know how to do it. But then no. Somebody is like, "Oh, you got to start a platform, do a podcast." Then it's like, "Look, you've written two books. Did you know how to write a book?"
Reed: No, it was arduous. I could tell you that.
Darin: It was hard work. Completely new. I want to hear the difficulty. You were already doing deals. You’ve started a podcast. You were already building your investor database. You’re already building your wealth. You didn't have to write two books, but it was the next uncomfortable thing to layer on top. So, talk about how difficult that was.
Investing in the US
Reed: The difficulty became easier when I realized I was already creating one platform. I started the podcast and said to myself, "I'm not a great writer." Well, I know that. I'm going to put my hand up, but I've already created content through the podcast. Why can't I extract that content and put it into written form, then have an editor help me craft the story around it. That's what I did.
I remember the first version of the book, Investing In The US. Back to my mathematical brain, it read like a textbook. I had to bring in people to help me make it sound softer. Also, I know that I didn't write the New York Times best-seller but it's a portfolio-building exercise. I'm probably going to write four or five more books in my lifetime. I'll have experiences to share with other people and I enjoy sharing.
There’s a saying, the best book you read is the one you write. It teaches you so much about yourself and what you've learned in the industry. That's helping someone else move forward. The struggle of writing and getting the words on the page, and getting to the 90,000 words was a long process. I did it knowing that the end goal would help me be an extension of my business card, extension of what I know. It helps me solidify my experience with other people in the industry.
That's all you can ask from it. I'm not trying to become a millionaire from my book. It's just a collection of thoughts to share with someone who can help get to know me in a shorter period of time whilst also learning at the same time. That's very important.
What’s Important to People
Darin: Somebody is going to invest $100,000 or $250,000 in one of your deals. It's an opportunity for them to get, "Who is this guy, Reed?" I want to get to know him a little better by listening to his podcast. I'm going to read his book. All of a sudden, I get a little sense of who the person is, not just what the returns have been on some of his other deals. That's important to a lot of people.
In addition, you probably don't realize it, but your kids are going to read that book at some point. Not when they're young. They'll listen to anybody but their dad, once they're teenagers. Then there's other people that may read it and it may inspire them to go do something. You may not even hear about it. I applaud you for doing that because anybody who's written a book, I applaud. It's a difficult thing and you're giving back. So, good for you. You talk about getting uncomfortable, and starting a podcast, writing the books. Why should people get uncomfortable?
Reed: Looking back, uncomfortable is the result. But it starts with curiosity. Being curious about something helps drive us to get out of bed every morning. For the longest period of time, I didn't know what that was. My North Star, when I first started, was to quit my day job. I've got to get out of the rat race. That's just what it is and took me a decade. It took me eight years to finally quit my day job once. Well, I picked that book, the Rich Dad Poor Dad.
Start Betting on Yourself to Achieve the New North Star
Reed: It took me eight years later to get to that point where I was like, "I'm ready to leave. I have enough money in the bank to go try this on my own." As I grow, now that I've achieved that North Star, what's the new North Star? Well, that's where I now start to realize as a human and in myself that I'm just really curious about stuff. If you continue to be curious, you will continue to push your boundaries.
Again, when I moved to the United States, I was curious just to live in the United States. My whole thing was if it doesn't work out, I'll move back to Australia. I keep asking myself, will my 65-year-old or 70-year-old self regret the decision I make today? Nine times out of 10, the answer is no. Because it's through that curiosity that fuels us to get uncomfortable. To put ourselves into positions that we don't realize we get into like buying the first deal, trying to get the job, doing your first syndication, or pivoting.
I know there's going to be a ton more curiosity things that I'm going to achieve for the rest of my life that will make me more uncomfortable. But I just know that I'm a curious human being and that's okay. That's what we've got to get comfortable with. When you get comfortable with being curious, there's got to be side effects. It means you're going to have to push the boundaries. Otherwise, you're never going to jump, or you're never going to take that next step.
How Betting on Yourself Makes All the Difference in Your Success
Reed: So many people are curious. There’s so many people who are like, "Hey, what's this real estate thing about? Let's go to a couple of seminars, let's do this." They feel good about themselves, but then they stop there. There's not a big enough desire and drive to take that leap of faith.
The difference is with people who are "successful," versus people who stick to their lane is that curiosity. It’s so strong within someone that it makes them jump. They get to that point. "Okay, I learned it, I'm going to jump. Hopefully, something is going to catch me. The net will appear as they say." For me, being uncomfortable is a side effect of being curious.
Darin: I love that curiosity. When I feel the juice is flowing the most is when I'm going after something I haven't done. Even though it's uncomfortable and it's a risk that you may fail, you may fail in front of your family, in front of your friends. It's not the safe thing, but I feel most alive when I'm going after something that I haven't done before. I love that you talk about curiosity. Because I do believe you have to have curiosity, persistence, and determination to get there to the other side.
The other thing you said, you start thinking about what could happen. I've heard from a lot of big-time real estate investors. I'd ask them, "Look, are you scared doing that deal?" I heard a number of investors say, "Yes. But I think to myself, what's the worst thing that can happen if I take action? Can I live with that? Then what's the upside? Which one has a higher probability of happening?"
Curiosity and Persistence
Darin: So many people are so focused on never having the downside, they don't want to lose. They don't want to fail. They're not willing to look at the upside.
Reed: It comes from a lot of interference about judgment, judgment on themselves, judgment from others. I do like what you said that curiosity needs to be coupled with persistence. You can't just be constantly looking for shiny objects, otherwise you never get anything done. That's what helps start the ball.
So many people don't ever take the leap of faith, because they're so worried about the downside. All I can say is it's back to betting on yourself. Once I assess that if I move to the United States, and it didn't work, well, I'd have a three-month vacation in New York City. Try to get a job, and go back to Australia. That's the worst thing.
Darin: You're hanging out with a girl that you're very interested in.
Reed: I'll go back and get another job. The chasing of the deal, the chasing of putting that first deal under contract. Well, I remember like, "It was my money." The same with you, you weren't going to lose the shirt off your back. I was okay to take that leap of faith. It just all comes down to what's the worst thing that can happen and how to protect my downside.
You don't have to jump and try to put a 100 unit deal on the contract, there's a big jump there. There are a lot of stepping stones. I'm sure you could write a whole book about yourself on getting those little stepping stones.
Reed: The example of moving to America, finding the job, getting that first deal under contract, they're all little stepping stones to get you to all the 100 units, or the 300 units, or the 10,000 units. Do something. It happens through small stepping stones, not the, "Oh, 10 years later, I got to this." The overnight success, it's taken 15 years to get to that type of analogy. It's all just about being self-aware.
Being self-aware is really important. I knew at the time when I wanted to get that first deal done, there's just something inside me. Like, "I don't need to go spend $30,000 on a mentor. I need to spend $30,000 buying a house." I'd rather do that than a mentor, because I'd be in the deep end swimming. I'd get off the starting block.
We all get to that point. As an individual, you should be in tune with your body enough to say, "I'm ready to take that next level." Whatever that might be and wherever you are in life. I'm at a crossroads right now personally on a business and we don't have to get into it. There's an element there of still being curious to say, "There's this other path I could go down."
It’s what gives me those juices you spoke about earlier. It gives me the challenge of being more and living up to my full potential. But it goes back to the question I asked myself earlier. It's like, "Will I be satisfied at 70 years of age if I don't make the decision today? Will I regret not making that decision 30, 40 years ago?"
Why Betting on Yourself Is a Decision You’ll Never Regret
Reed: Nine times out of 10, most people I interview in my show will say, "Yes, I don't regret the decision to quit the job, chase the dream, chase the girl, and get after those deals." All of it comes down to perspective.
Darin: We're mainly talking about real estate, but we'll go off on the business tangent. Somebody takes a chance on going after a business idea. A lot of businesses, not all, go after something. All of a sudden, it's not working, but they're hearing that there's another need and they pivot. That's successful. They never would have gotten to that point had they not gone out and done that. It comes down to action.
You mentioned Rich Dad Poor Dad. I had Sharon Lechter who was the co-author of that. There’s an interesting story she told when they developed that book, Rich Dad Poor Dad. This was before lead magnets and having internet websites, grab emails, and funnels, and all that. They developed that book and had a contact page in it.
That was going to be a lead generator for their education program. The book ended up changing so many people's lives. It wasn't the intent, but that's the result. You've done a lot of deals now. Talk about a deal where a challenge came up. What was that and how did you guys solve it?
Reed: I'm going to talk about two different challenges. One was early on and there have been a few early on ones. The second is in the syndication space. The first real challenge I faced was actually on that first property I purchased in Syracuse, New York. I had a really quick learning curve of Section 8 housing.
A Learning Curve
Reed: There was a drive-by shooting at the property within six months of me buying it. You had moved to Australia and you did the same thing. You'd be questioning everything that you'd ever think of. "I've just spent this money. Oh my God, there's a drive-by shooting. What the hell?" I quickly realized that this was a learning curve. The second deal I did was the first flip I did in Philadelphia. I ended up losing money personally.
It was the first time I brought money in from my friends and family, and the contractor stole from me. The contractor stole materials from me. I had to fire him. I was using my own credit card to go into Home Depot and buy stuff. The project took an extra six months to sell. That eats into interest. Interest eats in your pocket. This is all before I've done a big multifamily syndication.
In the syndication space, I had a really great deal at a 1980s vintage in San Antonio, nine-foot ceilings. You don't find many 1980s vintage with nine-foot ceilings. Had a $150,000 water leak that took us three months to locate. It actually comes down to the pressure valve coming off the street. We were looking all over the property and it was like, "This has got to be gushing out somewhere." There it was, we went to the pressure valve, and it was gushing back into the stormwater drain. The pressure valve was screwed. So, we're hunting around for all this stuff.
These are the little instances that life happens. You will not have it perfect. I'm never going to have it perfect ever. The thing is you have to be resilient enough to work through and problem solve.
How Do We Solve This?
Reed: What happens if X goes wrong? Well, I'm going to have to go out and fix it. I'm going to communicate with my investors. We might have to do a few things in order to preserve their capital. But I'm making the ultimate right decision for the asset and for their investment.
There's a sense of calm when you say that out loud that things may go wrong, and will probably more than likely will go wrong. When you say that out loud, oh, yes. Okay. So, when it happens, it's not a panic situation. It's, "How do we solve this? How do we make sure we're doing the right thing by not only the asset, but also on investor's capital?" Making sure the banks are aware of it and really bring it down to ground and just problem-solving. Nine times out of 10, what happens on deals is about trying to solve a problem. When something rises up, you've got to go out and solve it.
Being the engineer that I am, I just love solving problems. That is what investment is about. You're going to come over some speed bumps every now and then. You will get through the other side as long as you are level headed and you have that resilience to get through it.
Darin: I'm glad that you brought up that problem-solving. My business partner told me that when we were getting into the first deal. He said, "The real estate business is all about problem solving. There's going to be issues on every deal, and how you handle it, and how you manage through that. Whether you like doing that is going to tell you whether you want to stay in this business."
If You’re Not Betting on Yourself, Real Estate Is Not for You
Darin: Some people, those problems come and they're like, "Oh, I don't want to ever deal with any problems." Well, real estate may not be for you because there are problems that happen. You need to be able to solve those. Another thing that's interesting and may go along with the curiosity. I don't know if you've read Sam Zell's book. Sam Zell is probably the top real estate guy in the country, in Chicago. He talks about being creative.
I was like, "Creative. I'm a business guy. I don't really think of real estate as being creative." But when you think about it, it very much can be, because there's problems that some people look at. Like, "Well, I can't finance this with agency money." So, it's not 90% occupied. How can you make it work for the seller and for the buyer? All different scenarios on how to make it work, how to make it a win-win when most people look at it and it doesn't fit in a box. So they just go on to the next one.
Reed: Creativity is probably the pairing of curiosity. Once you're curious about an issue, you get into it, then you gotta go create the solution to fix it. Whether it be raising capital, or getting a deal done, or having a water leak. These things come up and you have to get creative around solving that problem.
Darin: I had somebody on that said he was looking at a $75 million deal. They looked at the two bedrooms and they were large. But they realized that they could chop them up into one bedroom and make that much more income. They were able to bid higher on that.
The Difference Between Winning and Not Winning
Darin: The broker wasn't mentioning that at all. It was just their team's creativity and they ended up winning the deal. I don't know if the deal is performing to business plan or not, but those types of things, just to think a little bit outside the box. They can make a difference between winning a deal and not winning a deal. Talk about the opposite. You're on it. You've got a bunch of deals. On one property, all of a sudden, something really good happens that really juices the returns. What happened to help that?
Reed: COVID. I will say that I don't have gray hair. I'm in my mid-30s, but COVID, it was a double-edged sword. For those people who started post-2008 like myself, this was our 2008, we had to navigate through uncertain times. We didn't know what was going to happen but we came through that with flying colors in our personal portfolio. And we learned a lot about ourselves as operators, as fund managers, as investors. It boils down to people.
We are in the people business. We’re providing housing. We don't have tenants, we don't have income, we can't pay the bills, we can't pay our mortgage, we can't pay investors. When I realized that and led with the people first mentality, that helped us build bridges with our tenants with any potential issues or with our lenders, with our investors. You're just communicating what we're seeing on the front line during COVID. We came through that with flying colors, we passed the test. I can say that we passed the test with flying colors. Now, we're on the other side of it.
Supply and Demand
Reed: Most multifamily asset classes did really well. That's the reason there's so much liquidity in the market to buy multifamily. It did so much better than retail, or hospitality, or whatever that might be.
Reed: People always need a place to live. Now, coming out on the other side, you're also coupling that with inflation. You are coupling that with the mass migration around the United States. You're seeing coastal rental prices start to be implemented into secondary and tertiary markets where you live in Dallas. I'm seeing massive rent growth, which is also coupling with massive price increases on our assets.
So, as an existing owner, buying at $80,000, $90,000 a door in a secondary market like Austin, or now it's a primary market, or San Antonio. Things are now trading for 150, 170 a door, I look pretty freaking good now. I didn't expect that to happen, but the fundamentals are there to support it. Supply and demand.
COVID was a really awesome litmus test for operators who are worth their salt, who could navigate challenges and problems and become creative to get through COVID. On the other side, we're now reaping the reward of having a portfolio. Having an environment where our investors are going to make a fantastic return across many deals. That has been a blessing in disguise. It’s a lesson learned for me as a non-gray haired person going through a "recession" for the first time. It is good to take stock of how we got here and what that means for the next 10 years as we keep growing the portfolio.
How the A and C Properties Performed During COVID
Darin: If you don't own anything, if you don't have equity in anything, you don't have the opportunity for that growth. If you don't own stock, or if you don't own real estate, if you don't own a business, there's no opportunity for it to see those gains. That's important in itself. COVID, I'll share a little bit about what I saw. The A properties seem to do collections almost the same. People weren't going to the office, but they were staying at home in their apartments. But they had the money to pay the rent, and so they paid the rent.
C properties struggled a bit. People that worked in restaurants and retail either lost their job or had their hours cut. They don't have a lot of savings. They're paycheck to paycheck. In the year of 2020, collections in those C properties were not stellar. A lot of people didn't raise their hand to admit that. But what happened was, as long as they had the cash to sustain through that time period, then when all the economic stimulus came out from the government, now all of a sudden, they're paying back rent and future rent.
The owners are starting to get repaid for that slow payment or no payment. Then interest rates went down, and cap rates went down, and valuations went up. So, it ended up being a blessing in disguise. For many in that initial period, it was a little scary. Then as long as they were able to hold on and work through that, they saw the benefit on the other side.
Betting on Yourself to Be Financially Free
Reed: We were not immune to that either. We had proxy properties that had those issues, but did not have as many issues as office, or retail. At max, we had 10% delinquency at one stage in the height of COVID in one of our more blue-collar properties. Yes, we saw exactly the same thing.
Darin: Talk about freedom. Time freedom and financial freedom. Everybody is chasing, "I want to be financially free. I want time freedom." You came here in 2012 from Australia and you figured out how to make it work. I'm assuming you've done pretty well for yourself.
Reed: I definitely wouldn't have achieved what I achieved here in the States at home. I have a different type of freedom now. I'm now building a business. I work probably more than what I did in my day job, but I'm building wealth. It's wealth creation. I don't pay myself a paycheck, I get paid through equity and when deals sell. So, I'm building massive amounts of wealth that I'm starting to see the benefits of all these years later.
Because my first deal that I ever bought as a syndication is about to sell. These are when the waterfalls start to happen and the cascade of money. It's now, where do I put that in to continue for my family, for their kids in the future? The act of building takes time. It doesn't just happen overnight, and I'll continue to work really hard, but I love what I do. I love building stuff. That engineering brand in me loves it.
Darin: That's the difference right there. You're working a lot harder, more than you may have been working before, but you love what you do.
Betting on Yourself to Be a Better Person Requires Work
Reed: I continue to be curious about what I do and I continue to push myself and be involved. I try to be a better entrepreneur, leader, husband, and future father, and all that sort of stuff. In the journey of financial freedom, so many people get caught up. Like, "I'm just going to get there and then I'm going to sit on the beach."
Well, the reality is you won't actually sit on a beach. The reality is you may go for a week and be like, "I'm bored." The curious thing is that you want to keep building. You want to keep building, but enjoying the journey. That’s the real peace of mind that has come while looking back is that I can enjoy where I'm at in my life.
That old saying of Tony Robbins. "As you overestimate what you can achieve in a year, you underestimate what you can achieve in a decade." I'm 35, I moved to this country when I was 26. I have no idea I'd be sitting here talking about a podcast and 3,100 units. When I'm 45, it's going to be something even better. I'm not stressed about the next 10 years. Where maybe my 26-year-old self would be stressed because I hadn't got it figured out.
Darin: So, what's the next big stretch goal for you?
Reed: It's going to be an evolution of the company. I'd be lying if I said I didn't want to do some deals back in Australia. Take what I've learned here and go back there, and do some stuff. But I'm always going to have my portfolio here in the United States.
Creating an Ecosystem of Businesses
Reed: There are opportunities everywhere. That's the best thing about what I've learned about chasing financial freedom. Opportunities can really present themselves not just in real estate, but in businesses. You mentioned businesses earlier, about vertically integrating, about creating an ecosystem of businesses that support one another, so you could step away.
Someone told me the other day, when you start, you're on a tricycle. You're pedaling not very far, then you upgrade to a bike and you're going. You are pedaling, but you're going a lot faster. Then you upgrade to a car. It's got a bit of a dashboard. You're probably driving, but it's a lot more efficient. Then you've got to upgrade to a Porsche. You're going to upgrade to a jet and all these things over time. I'm not in the jet yet, but you start to look back and think, "Well, that's how I become more effective with what I'm building." Now, you're going faster.
If you crash, things can happen and be more catastrophic. It's in that analogy of transitioning from car to jet, having the right people onboard to make sure we're flying safely and going in the right direction. That's what's really important to me now, building a legacy for my family.
I will always be curious about new things. Different asset classes, how I can push myself as an investor to look at the next new, cool thing coming in housing, or real estate, and just be humble enough to know that I don't know everything. That's okay, and I love to be a student of the investment world. That is exciting right now. It's truly exciting to keep learning about what I'm doing as I evolve, as I grow, and try to build the jet one day.
Driven and Humble
Darin: Being driven but still humble. There are people that are completely driven, but they're arrogant. You can keep leveling up, but still be humble and curious. What do you like to do outside of work for fun?
Reed: I love surfing. The reason I don't live in Central Texas is because I'm a big surfer. I live in Los Angeles.
Darin: How many days a week do you surf?
Reed: It's all condition-based. It's like fishing, it's like anything on the water, you have to have good swell. I surf at least twice a week, usually on weekends. I’m a rugby union fan. I've grown up playing it all my life. Surfing and rugby are big to me. I'm really into fitness and love the outdoors. In nature, there's no phone, there's no email. Surfing is really my flow state, my zen. I love doing it. I know I'll never be Kelly Slater, but I just enjoy getting out in the water, having a chat with a few mates, talking some rubbish and catching a few waves.
Darin: If somebody wants to reach out to you and get to know you better, what's the best way for them to contact you?
Reed: Easiest way is to go to reedgoossens.com. If you're ever coming through Los Angeles, you want to hit me up, go out for a coffee or a beer and talk, you can hit me up at firstname.lastname@example.org. Just give me a heads up when you come through town and we'll make it happen.
Darin: I look forward to doing that. I'll take you up on a beer. I hope that you guys enjoyed that one. Reed, I really appreciate you coming on the show. Until next week. Signing off.