Listen to hear Adam Adams talk about how he pushed past his fear to create thought leadership platforms to include a very successful meetup group, a highly recognized podcast, a capital raising conference, and now he is working on growing a multifamily YouTube show. These platforms have helped educate and impact so many!
Table of Contents:
- Where To Listen To The Podcast
- The Man Behind Thought Leadership Platforms
- The Triple-A of Thought Leadership Platforms
- Learn From Other People’s Experience
- Starting Very Humbly
- A Visionary in the Making
- Building the Right Crowd
- Thought Leadership Platforms Requires Focus
- Adam Outside of Thought Leadership Platforms
- How to Reach Adam Adams
The Man Behind Thought Leadership Platforms
Darin: Adam lives in the Denver, Colorado area. He's an investor in over 1,400 units. With his podcast and social media presence, he's become extremely well-known and highly recognized among industry insiders. This is a guy that is focused, determined, and committed to whatever he puts his mind to.
Just a little bit on how I know Adam. I got into the multifamily space about three years ago. I've watched a lot of podcasts and read a lot of books and networked with a lot of other people in the industry and connected with Adam through social media.
Over the last several years, I've just seen him continue to grow his presence, both through his podcast. He's got a very strong meetup in his local market. At one point, he came into town into the Dallas market and set up a happy hour. For some reason, I had a conflict and I couldn't go, but I couldn't believe the number of people that showed up to see this guy. So he's become a little bit of a celebrity in the multifamily space.
Just from a pure ownership standpoint, how many properties, how many units are you currently invested in?
Adam: Right now, I'm passive in about 1,100 and we're operating about 380.
Darin: So where do you live?
Adam: I live in Denver.
Darin: So you're in the Colorado market. And what markets do you focus on?
Adam: We've been all over. Right now, where we own is DFW, Big Spring, Texas, up in Bridgeport, Connecticut, Branson, Missouri, and Georgia. So we're all over. I think it's important to share with the listener that I don't suggest that. I did it and it's tough and I'm not trying to suggest that others go all over.
Dealing With Multiple Markets
Darin: Why is that?
Adam: Mainly, because when you go to travel out to a place. I can only really go see one property. My team, if we're going to fly out, we can only really see one property. We have one property that's in Connecticut, which is pretty far, even for a flight. We can't get there and back in a day, especially because there are no direct flights to Bridgeport. Yes, we can go out and around there, but we're still going to have to drive an hour and a half to get to the property.
There's a lot of stress, extra work, and pressure that goes on by trying to understand that many different markets and keep your pulse on everything and go and check out all your properties. So I'd recommend just focusing on only one market. But if the listener doesn't want to focus on one, I'll let you focus on two max.
Darin: You heard it right there. These are all deals that you're GP on, the one that you mentioned or not?
Adam: In DFW and Georgia, those are LP programs.
Darin: Why not Colorado? I love Colorado. It's expensive there and maybe that's the reason why, but why aren't you investing in your backyard?
Adam: When we took our education for multifamily syndication, we learned something called Holy Trinity. That's what they call it, at the place where we learned. They call it 8, 12, and 1.6. 8, 12, 16 is an easy way to remember it. What that means is they won't let us purchase anything that's not at least an eight cap and can give at least 12% cash on cash in the first year and is at a minimum of 1.6 per DSCR.
The Holy Trinity in Thought Leadership Platforms
Adam: We honestly couldn't find anything like that in a decent market like DFW or right here in Denver. And so we started chasing stuff in markets like Big Spring, Texas, Bridgeport, Connecticut, and Branson, Missouri, where we found three different properties that hit that Holy Trinity. And actually, I feel like I would have rather not done the Holy Trinity. I would have rather just purchased in an area that had a million people that live in the MSA, and maybe the cap rates are typically five and a half or something like that. It would have probably made more money, especially in the long run.
Darin: I'm going to hit upon something you mentioned in terms of the cap rate. I've had people reach out to me on Instagram. They talk about, "I want to buy at this cap rate. What cap rates are you buying now?" What are the things trading at DFW?" I've only been in the real estate space for three years, but I've been trading multifamily commercial real estate loans, residential since 2002. I know the lingo and everything from the loan trading space.
But I guess having been around the value-add, BC space in the last three years, I've looked at it a little differently when people ask me that question. I'm like, "It's so different because you could buy at a five cap and then really not have much to be able to do with that property to increase the NOI". You're buying at a five cap and if you bought it for cash, you're getting a 5% rate. But you could buy something at a five cap or even lower.
The Big Mindset Shift
Darin: If there's a ton of value that you can bring and rents are significantly below market, then what matters is what you can bring it to in my mind versus just the blanket statement of what the cap rate is right now. What's your thought on that?
Adam: I completely agree. After purchasing a couple of properties and mostly chasing cap rates, we had a big epiphany, a big mindset shift. And what we start focusing on is what can we do to this property in five years? If we're able to get around a hundred-ish percent after five years, then we feel really good about that. That's usually like a 17% IRR. In general, we feel like if we're able to do that in two, three, four, or five years. Basically make twenty-ish percent annualized returns for our passive investors, then that's a great deal to us.
And so we've noticed, just as you said, we can do that by purchasing at a five and a half cap and adding value to the property in exiting – where that cap rate is still low because the small things that you do to a property that has a low cap rate, it adds more value to the property. I think that's what you were getting at is every dollar goes farther because the cap rate makes it double faster.
Darin: Absolutely. I don't want to dig into each component but when I was researching for this interview, I'm like, "What's Adam involved with?" First of all, I was like, "Where does he get his name, Triple-A Adam Adams?" And then I saw your middle initial is A. Is that where it comes from?
Adam: Yes, exactly. My middle name is Abel.
The Triple-A of Thought Leadership Platforms
Adam: I got my mom's maiden name when I was four years old. I wasn't originally named Adam Adams. My mom and biological father got separated. And my mom wanted me to make it more sense when I was going to kindergarten to have her last name. She was nervous about it. And she just asked me, "What would you think if your name was Adam Adams?" I was like, "That sounds awesome."
Darin: You won't forget it, which is awesome. So I'm going to list off many things that I found that you do. One, you're a multifamily syndicator, two, you've got to a very successful podcast. Do you want to share the name of that podcast?
Adam: I sold a podcast called Creative Real Estate Podcast. You'll still hear my voice on there, but I don't own it any longer. I'm starting a new podcast called the Apartment Investing Show. And so that's on YouTube as we're recording. But as we're recording, I'm gearing up to launch it next month. And so my goal is to follow what you've done because you've launched an amazing podcast, tons of reviews, tons of downloads, and listeners. So I'm trying to follow your footsteps and have a great podcast.
Darin: Well, I'm just trying to learn from people like yourself. You've been in it for a long time. That podcast that I didn't realize you had sold. But I think you were going on almost 500 episodes. So you've been doing it for a long time. You're a leader in the space and when you started, there weren't probably a lot of people to learn from and to watch. I was able to learn from you and others. So I'm just fortunate from that perspective.
Imposter Syndrome in Thought Leadership Platforms
Darin: You're doing the YouTube show, you also started up a significant Meetup group in the Denver area. Is that correct?
Adam: Yes. I started the meetup before the podcast as it seemed more tangible. For the listener, if they are planning on becoming a thought leader in thought leadership platforms, it's good to hear that other people have thought the same thing. We all have imposter syndrome. That happens when we're trying to decide if we're going to have influence and create some type of platform. And the podcast was more nerve-wracking for me. It put me into a place where I just really felt like I couldn't do that, or I wasn't meant for that. So I started a meetup which seemed a little easier because then I could just connect with local people. If you don't mind me sharing a little story.
In the beginning, what I did is I had properties all over, I had properties in Florida and Ohio and Tennessee and I traveled a lot. I was doing flips in multiple states and I had rentals in multiple states. As I did that, I'd tried to go to different meetups and connect with people. And I found a few things that I liked about meetups and a few things that turned me off about going to them. Some of those are I wanted there to be a few people there so I could connect. So when they weren't very popular, I just stopped going. Another one was being able to have the opportunity to introduce myself. I always thought that that added so much value because you wouldn't guess it. After all, I have a thought leadership platform, but I'm fairly shy. That's my normal personality.
Why Your Network Is Your Net Worth
Darin: Funny to hear because you are the leader of a meetup group, you're a podcast host, and you're on YouTube. You were a rock star when you came to DFW and held that happy hour. And to hear that you're shy, that doesn't jive.
Adam: That's my normal personality. I remember going to meetups where if they didn't give us a chance to introduce ourselves, then I would be a little reluctant to go in and shake somebody's hand. And I was like, "Well, everybody else here knows each other and I'm the out-of-towner. I don't want to interrupt." Many different thoughts. But I remember a couple of different meetups allowed us to say who we are and where we're from. I would say I live in Denver, I've got properties all over in your state and that's why I'm here. I'm just traveling.
Then what would happen is I'd have the ability to share my story with everybody. I'd be highlighted and on the spot. And then people would come to me and I wouldn't have to worry about that nervous feeling when shaking other people's hands. I remember thinking if I ever start a meetup that this is one of the main things that I want.
So when I came into town, I was fairly new to Denver as I grew up in Utah. I said to myself, "I want to grow influence." And the best way to do that is to just host this meetup. Your network is your net worth. And the big aha moment was a little lesson that my dad taught me. In Utah, we owned a tree farm. We had real estate investments and a tree farm. Because agricultural taxes were great for his business, he could offset a lot of taxes.
Finishing What You've Started
Adam: I used to water plants for $1 an hour when I was young. One day, it was hot. It was in July. So I came home after only watering a few plants. My step-dad asked me, "How did you finish so fast?" I said, "Well, I didn't finish." He reamed me. He's like, "Adam, if you start a job, you're going to finish it." And that's always stuck with me. I decided I'm going to start this meetup in thought leadership platforms and I'm going to give it a full year, no matter what.
I'm going to do it every single week for at least 12 months, every Thursday. That's where I started. But the very first meetup, and you can go and look at this on the almanac or whatever, it was the second Thursday in November of 2016. We had a giant snowstorm.
It snowed like 10 inches in just a couple of hours. And there were accidents all over. The car that I had, a Honda Pilot, was a two-wheel-drive Honda Pilot. You probably don't even know those exist, but here I was trying to get to the meetup and just having a tough time. I remember I was trying to give myself a reason to not go and to protect myself and to protect other people. It wouldn't be good of me to expect people to drive in this. But I just remember that lesson from my dad, "If you start something, you just got to be there."
I just showed up and there were about six total people: me, my business partner, and four others. I think that started something where people knew that I was never going to cancel. Like if I said I was going to be there, I would be there.
Consistency & Commitment
Adam: It showed integrity for me and my partner, and we grew this to where it started. It became so well known that in April 2018, about a year and a half later, meetup headquarters flew me out. There were four things that they told me why I was one of the keynote speakers in thought leadership platforms, and one was the consistency of the group.
Darin: When you were telling that story, from reading books, listening to other people, interviewing people and listening to podcasts, two words came to my mind in your story. One was consistency and the other one was commitment. I think you need those two things in pretty much any endeavor if you're going to be successful and you proved it.
You proved it to yourself, which is probably the biggest thing. If you say that you're shy and you can push past that fear and start something, and then even though it's uncomfortable, continue to go, and then all of a sudden you see it start growing and you see success, it builds a level of confidence in yourself. And then that ends up showing to all the other attendees as well.
Another thing that I thought about was being shy. I've tried to tell my kids this, that, "Look, the first day of school, who am I going to sit next to in class, or I'm going to walk by somebody and I don't know if they know me. And so I'm going to look the other way." Be the first person to smile at the other person, or be the first person to say hello because the other person most likely is thinking the same thing as you. They're nervous.
Courage Is King in Thought Leadership Platforms
Darin: If there are listeners that haven't been to a meetup and they're anxious about it, look, when you get there, you may feel like Adam felt when he first went to some meetups, you feel like everybody knows each other. But just push past that fear and introduce yourself to one, two, three people. You'll be amazed at how welcoming other people will be and how much they're interested in your story. And if they can help you, they're most likely going to help you. If they can't, they're most likely going to introduce you to somebody that can. So it's pushing past that fear. In that snowstorm, if you didn't show up that day, who knows what would've happened? That's awesome.
You also have a mastermind group. You have a capital raising conference, you mentor students, and you have a "how to launch a podcast" service. How do you do all these things?
Adam: We run our properties and it's my business partner who's the asset manager. When we're in full acquisition mode, we've got 13 people. Right now, 9 because the acquisitions are turned off until Q2 of 2021. But that company pretty much runs itself. My main involvement is hosting the podcast and just staying in front of other investors, adding content.
For acquisitions, there's a whole acquisition team. As for underwriting, there's an underwriting team. We have two people on asset management and everything. I don't have to do a lot in the multifamily company, just host my podcast. As for helping people launch podcasts, that is individual consulting and it doesn't take a lot of time. I don't have a ton of clients. So I've helped about six people launch podcasts. Got all of them into the top 1% on iTunes, which makes me happy.
The Team Behind Thought Leadership Platforms
Adam: It's not much, but it's a skill that I've learned. I started my podcast wrong. So the first person that I helped, I tried to fix everything. I've just been learning from there. I don't call that a whole company, it's just consulting. Our BlueSpruce Holdings, the company that runs the properties, we have a small mastermind. It's capital raising called Raising Money Boardroom. Our inner circle's just got about 30 people. We meet once a week, add content to them about raising money. Once a month, we do more like a mastermind, where we dive into each other's business. So that's easy. There's not a lot to it. And what's great is that we all learn from each other, we all connect, do business with each other. So I don't think that that's difficult.
Darin: Well, there's a lot there. Like for me, I thought like, "Man, this guy's got to be doing it all." But you said something that a lot of other successful people that I've talked to have said that you've partnered with people that have complementary skills. So your business partner is the asset manager. And then underneath that, you have people that underwrite deals and manage those deals. So you're the face and you take one role and then you complement it by partnering with other people. The other thing you said was you learn from others, and I'm a big believer in that, in learning from others.
I joined a multifamily mentorship group. Even though I knew a lot about multifamily from my loan trading days, I didn't know how to buy an apartment community. So the biggest value I got was plugging in with a network of like-minded people and seeing if they can do it, I can do it.
Learn From Other People’s Experience
Darin: I may not know everything, but I'm going to ask them how they did it. Then I'm gonna go to social media, I didn't know what I was doing. I wasn't even on Facebook three years ago. So I went to a conference and said, "I'm going to find somebody that knows Instagram." I thought it was a kid's app, and helped me figure out how to do it. And so I hired him to help.
Then podcasting, I went to a podcast conference and learned from people that want to start a podcast, I didn't even know you offered that. My business partner, Raj Gupta, had told me about your service and we exchanged some text messages back and forth. But I had already engaged another third party consultant that I had met at a podcast conference. But that's critical, it's like whatever you want to do in life, don't just go and do all the mistakes. Learn from other people and you'll be able to shorten that time window dramatically.
So what did you do before you got into multifamily? What was the kind of career path?
Adam: I've only done three things my entire life. I've only been in real estate.
Darin: You used to water plants.
Adam: Yes. Real estate, construction, and restaurants. So as I was going to college, I would work with my dad landscaping during the summer. But during the school year, I would just work at a restaurant. I did that in high school, I did that in college. It was about 2005, I did my first land deal. I was in college and I had just a cabin lot that I took a little time to flip.
History of Getting Into Multifamily
Adam: That money, I ended up putting it into a multifamily after. In 2007, when I sold that property, I decided that I needed to finally read Rich Dad Poor Dad and learned that multifamily is where I wanted to go. So, 2007, I started managing properties, 2008 I bought my first multifamily.
Darin: What do you mean by managing properties?
Adam: I called a few different apartment communities that had for rent. I don't remember if it was like the newspaper or something. But I remember just calling, calling, and calling and my pitch was terrible. I just said, "Hey, my name's Adam. I've never managed property, but one day I want to be an investor. And so I want to live for free at your apartment. And in exchange, I want to be the property manager." I got a lot of no's, but this guy named Reed Quinn, he had me move into his 18 unit. I started managing that property and it started doing well. So I ended up taking over his fourplex and his condo as well. So that's what I was doing for property management.
I lived at one of his properties, managed all 23 units. I was trying to add value and learning how to increase the rents and lower expenses. He bought it for 1 million but sold it for 2 million. It only took a year, from 2007 to 2008. He sold it, made $1 million. And I remember thinking, "He's going to give me like 10% of that because I did such a great job." No, I just got my 12 bucks an hour and my free rent. It was a blast. I learned a ton.
Darin: But you got more than that, right?
Learn the Values You Can Bring in Thought Leadership Platforms
Darin: You got the experience. If you asked a lot of syndicators like, "how do I break into this space?" They say, "You gotta partner with an experienced guy to win a deal, as you can't be a newbie and win a large deal on your own. And then people are like, "Well, look, I haven't done a deal. Why would somebody want to partner with me?" It comes back to what you just said is each partner has to bring some value to the table.
But new people don't understand, "What value can I bring?" Whether you thought consciously or not, you were like, "I'm going to go out and give up blood, sweat, and tears to learn." So you didn't ask for a big financial payday. You're like, "Give me free rent and a low hourly rate. I'm going to just absorb everything and I'm going to take that knowledge and I'm going to leverage it." That's huge. A lot of people wouldn't do that. They want the big hit right away. They're not willing to read the books, listen to the podcast, go manage an 18-unit property to learn.
Adam: Yes. That was a huge learning experience for me. He knew everything that needed to be done. He's like, "I need you to switch the linoleum for tile, I need you to replace this and that." And it was funny. I replaced the subway tiles for travertine tiles. And then 10 years later, subway tiles are the thing again. But anyway, yes, I would take off all of the subway tiles in the bathroom and then replace it with travertine. It was a lot of fun. It was lots of little small things, going from all white walls to going to two tones, three-tone painting jobs.
Starting Very Humbly
Adam: That didn't cost him very much having one person get paid $12 an hour. I could paint a room in three hours and it was done. So he wasn't paying hundreds of dollars or anything like that.
Darin: The other interesting thing about that is when you told that story about like you're making cold calls. You're saying like, "Look, I have no experience, but I'll do this." When you said "I got a guy that brought me in", a piece in my head goes, "Well, was this guy dumb?" But you look at it and the guy was really, really smart. He took a guy that had no experience, but he knew he could coach him. And that turned into a million bucks for that guy.
All those other people were like, "Why would I want somebody that has no experience?" They passed on you, and you made this other guy a million bucks. So he wasn't that dumb. Was the land your first real estate deal?
Adam: Yes. 2005, just a cabin lot. I think it was about an acre. I still remember the address and everything, it's strange.
Darin: How did you pull the trigger on that because I think that some people start in a single-family, or start with a land lot, or fix and flip and then they go into a multifamily. Some go right into multifamily. But it's interesting to me, and I think it's interesting for people that are trying to break into space to really get into the mindset of your first deal because it's scary, man. It's scary to pull the trigger on your first deal. And so talk about how you overcome that?
Good Strategy Gets You to Places
Adam: I grew up with my stepdad who owned all sorts of things. He did tax deed acquisitions. So every October in Utah, there's tax sales. What he would do is he would go to some of the more rural areas, like not Salt Lake or Utah County, but he would maybe go to Sanpete County, etc. Instead of buying at the tax deed auction against other people, he decided that he's going to send letters to the people that owned the properties. He offered them $100 to go to the bank and do a quitclaim deed prior to it going to this auction. Then he would take care of the rest.
So the first time I collected rent at one of our multifamily properties, I was nine years old. I used to snowplow our self-storage units so it was really normal for me to think that I'm going to be a real estate investor. I didn't know when, and I didn't have a ton of money. But my dad ended up for Christmas letting me pay that $100 for one of these pieces of land. That was my first ever deal. My dad found it, sent the letters, and I just paid 100 bucks.
So that was the first deal. And two years later, they were bringing electricity and plumbing through to the area. And so it ended up getting really valuable. So I made like a 12,000% return, much better than 20% on all the money that I had put in there with taxes and everything else. That was the first deal. I had a lot of support from my stepdad. It was a lot of fun. I was just in college and I saw more money out of that one deal than a whole year of bartending.
Effective Solution Is a Profitable Venture
Darin: I've heard of tax lien sales and that sort of thing, but it's one of those things that if you don't learn. You don't do it and you don't get around people that do it, it just sounds scary and like. I don't know if I could get used to it. But what your stepdad did, and I'm not proficient in this, I'm just going to talk it out and see if I'm right here. But by changing it to contacting the owner before it goes into that auction process and doing the quitclaim deed, I imagine that that saves the owner's credit from becoming tainted. Is that correct or not?
Adam: It is correct and it's more prominent if they have a loan against the property. In this case, they own the property. You'll still see that they've taken the property from them. There's judgments and everything like that. Anyway, yes, it does save all of that and it's a lot easier for them to say, "I sold it, then I got foreclosed on because it's a tax foreclosure."
Darin: Got you. I guess the point I was getting at was that your stepdad came up with a solution. They still were hurting their credit, it sounds like, but not as much as if they went to the full foreclosure process. So he's providing a solution, which it turns into a win-win for them, and it's a profitable venture for him and he taught you how to do it. That's great. Now, I interviewed somebody last week that said he got into real estate because he had met an older gentleman that told him, "Look, don't buy your first home right out of college. Buy a fourplex, live in one unit, and rent out the other three."
Getting Advice From the Wiser
Darin: He took that gentleman's advice and he did that, and then he made money off of that investment. Then he did a 1031 exchange and rolled into another one. He just kept snowballing and you had your stepdad. I think that's a theme that I keep hearing from different people. They heard somebody that was older, wiser who had done something and they latched on to it, said, "How do I do it? I want to do that," and then they went and took action.
And I think that's the key: there's a lot of people out there like, " I want to invest in real estate. I want to get into a big multifamily." So go out and talk to people that have done it. You have to go talk to people that have done it and learn from them. Don't do it on an island, on your own. You were fortunate that you had it in your home.
Now, were you an only child or did you have brothers and sisters?
Adam: I love the question. I was born in a polygamous colony. So my biological father had six wives. I've got one full-blooded sister and I have 19 half-brothers and sisters from my dad and his other wives. One half-brother from my mother and my stepdad that I grew up with. Technically, I have a big family. But I don't see a lot of the other parts of the family from my past. But just a couple of days ago, my half-brother, Bo, came into Colorado from Utah and we went biking. So we have a pretty strong relationship within that smaller family. It depends on how I answer that. But generally, it's just me and two others, but sometimes, I have to say I've got 20.
A Visionary in the Making
Darin: When you grew up, you grew up mainly with your mom and your stepdad?
Darin: Did you have brothers and sisters living in the home with you or were you an only child?
Adam: Yep. It's me, my full-blooded sister, and then my younger half-brother, Bo. There were three of us growing up.
Darin: And you were in the middle?
Adam: No, I'm the oldest.
Darin: All right. So when you were young, did you ever have any thoughts like, "I see myself being successful," and what did that look like to you if you did?
Adam: Well, when I was young, I used to think that I'd be an Air Force pilot flying F-16s. I guess I was 18 or so, I looked into doing that. And I had a conversation with my mom and she said that my personality didn't like authority. So she said, "You probably don't want to do that."
Darin: Is she right?
Adam: Yes, very much. I've got to roll my eyes even to myself sometimes.
Darin: You don't like to be told what to do.
Adam: No, I don't. I want to be in charge – be a visionary. I want to direct other people. It's tough for me. Anything someone tells me, I go the exact opposite. I was in eighth grade and I had just started playing music. And I remember just saying to my band teacher that I was going to write a symphony and we'll play it at the end of the year at the final concert. The band director, he laughed and he said, "You can't do that. There's no way." And so immediately, I puff up my chest and I'm like, "I'll prove to you that I can do it."
The Power of Determination
Adam: I learned how to play every single instrument. Every day, I would go to my different friend's house and I was like, "teach me how to play your clarinet, teach me how to play your saxophone, teach me how to play your trumpet." I learned every instrument, and I composed this symphony and we ended up playing it at the end of the year. To me, there was no other reason for me to do that, except I just had to prove it. So it's just random, but I don't like to be told what I can and can't do.
Darin: You are determined. That reminds me of the story of my son and my wife. We went to Disney World and she went shopping. It was right before school started and the kids were young. She pulled out two hats, a Yankees hat, and a Red Sox hat. I'm like, "You can't do that." I grew up in Connecticut and I was a Red Sox fan.
And so she puts on the Yankees hat and I told him, "Look, I'm not walking around the magic kingdom with you all day wearing that Yankees hat. People are going to think I'm a Yankees fan, there's no way." And he really wanted to wear it and I refused. I said, "I'm not going until you put the Red Sox hat on." So, I won the battle, he put the Red Sox hat on, and he's been a diehard Yankees fan ever since. He definitely goes the other way as well.
Being in Thought Leadership Platforms
Darin: Look, with putting yourself out there as a podcast, host and social media, and you said you're shy, what's it like when you go someplace and people walk up to you and they're like, "Adam, I feel like I know you. I've listened to so many of your podcasts and I feel like I know you. I watch you on social media," what does that feel like to you and how do you stay grounded?
Adam: Well, most of the time, I enjoy it. My main reaction is, "Well, that's awesome because that's what I wanted to happen out of creating this thought leadership platforms. I wanted it to benefit our brand and our company." And so for the most part, I am happy. But every now and again, it's a little intimidating, and mostly, because there's not like fame. I can't just walk around. It's not like when you're in the movies.
Darin: Another five years.
Adam: If I'm at a real estate conference or thought leadership platforms though, everyone seems to know me and want to take pictures. But if I'm at the grocery store, luckily, I can still shop just fine. But it gets a little intimidating. Sometimes it can be difficult just to walk. If you're at a real estate conference, just to walk from one place to the next, or you can't really blend in. There is a little bit of enjoyment of having that anonymity. It's nice sometimes to be able to do that, but I no longer can do it at a real estate conference.
Darin: Right. You said something that's very similar to me. Look, starting the podcast and my why was really twofold. One is I'm looking for financial independence like many other people.
Building the Right Crowd
Darin: So I'm looking to do more deals and attract new investors and all that. But another piece of my why is I really just truly enjoy helping somebody else get to the next level. A lot of people are attracted from the real estate side because it's a real estate podcast. But I love just talking to anybody because there's a lot of similarities. Pushing past the fear to start your own business or to go after another venture or whatever. I get a lot of just personal joy out of helping somebody from that perspective.
And with my other business, I really didn't have that capability to do that. It's more, all the profit comes to me and my family, and all my interaction was working on deals to actually close sales for the company. So I really enjoy that duality of trying to grow your business, but also it's serving others. I think that the just syndication business in itself, like that deal that guy did, he improved the property and sold it for $1 million profit. Well, that deal, he owned by himself.
But if it was a syndication deal, he would've raised the wealth of all of his investment partners and I love that. So where do you find most of your passive investors? Do they come through social media? Your mentorships or thought leadership platforms? Or where do you find most of yours?
Adam: A big portion of our passive investors came from our weekly meetup every Thursday and connecting with people in person. It's really easy for those relationships to grow strong and deep when you're meeting in person. And so the first $4.2 million that I raised for our deals came directly from the meetup group.
Headhunting Process in Thought Leadership Platforms
Adam: Right about now, in part, because the meetups have been shut down for about six months, to meet in person, and in other parts, because the podcast grew. So we're getting most of our investors through the podcast and through word of mouth now. But definitely, a significant part in the first two-ish years all came from the in-person meetup group. We get some from social media, but I would say the biggest two places are number one, the podcast, and number two, just referrals.
Darin: So, referrals, talk about that. I had somebody else I talked to that said he had one investor that ended up investing in a deal, and then, later on, introduced them to other investors and they pieced it all together and said, "This one investor turned into adding another 13 other investors that invested in subsequent deals." That's pretty crazy to get that snowball effect. Have you seen that as well?
Adam: I don't think I've had enough time yet to get there. I've been syndicating deals for a little over three years. And so you and I are right close to each other because I think you started two, three years ago.
Darin: Yes, end of 2017.
Adam: Yes, about the same time. And so we haven't had that yet, but we've had a lot of people that listen to the podcast and they have a friend who's doing like 1031. And so I'll get an email that's from a podcast listener saying, "Hey, this is my friend," just call him John. "This is my friend, John, he's doing a 1031 and wondered if you might be able to work with him for one of your deals." So stuff like that happens quite often.
Attracting the Right Investors
Adam: I would say we've also had a few passive investors that have referred their family. So there are a few deals that we have where we have one woman who's investing with her IRA into our syndication. But she also gets her husband to invest with cash, and her son, who had just made his first 50. So that's happened multiple times where we've had two or three family members that are all putting into the same deal. It definitely is starting to snowball, but I can't say that one person has gotten to 13 quite yet.
Darin: Right. That's part of it. I mean, the meetup group, the podcast, thought leadership platforms, building an investor database, it's something that takes time. People are going to invest with people that they know, like, and trust. And there are people that are watching, "Let's see how he does. Let me talk to the other investors in the first deal or two. And then if it goes well, then it starts to progress."
The longer you're in the business and that you're successful and you're providing strong returns, then more and more people want to get into the deals. That's what I hear at least. I'm still behind you. I've got one syndication in those three years. So I'm still chasing you, and you got almost 500 podcast episodes, and I'm on like 20.
What kind of sacrifices did you have to make in order to get into this line of business and push forward?
Adam: Good question. I can't really think of a specific individual sacrifice. It's kind of like when we decide to do something, we always let other things go. For me, I remember I was working as a project manager, and we were doing large deals.
Thought Leadership Platforms Requires Focus
Adam: I was the manager of multimillion-dollar construction projects for apartments and condo associations. To me, I decided to quit that job that would pay me. I was on salary and it would take care of me for however long. My decision was, "I want to be full-time in real estate versus having that guaranteed paycheck." In a way, that's a sacrifice. But the way I see it is when we truly want one thing, we have to be able to focus.
And so there are things that I let go like some security, but it's because I cared more about focusing on real estate full-time. I know that there are a few deals that I have done that's a year's worth of salary at that one job. And so to me, even though it can feel uncomfortable, me personally, I feel like it wasn't a sacrifice. It was the obvious choice.
The obvious choice was for me to focus there. There have been times that I've taken coaching calls on a Saturday, where I'll help and support a client who's trying to really grow their thought leadership platform. I do in a way feel like it's neglectful for my kids because Saturday is the day that I want to take them and do something fun and memorable so that two-hour coaching call I will feel a little bit bad. I read this book called The One Thing. And he has this piece of the book where it opened my mind to something.
Darin: Who's the author?
Adam: Gary Keller. There's this piece of that book where it talks about there's no such thing as work-life balance. I've never heard anyone say that before. So it really surprised me and I read in detail.
Adam: What I learned was that Gary was suggesting that you go to the extreme. So you don't stay in the middle and try to do everything at the same time. When you're with your family, you go all in. And when you're with work, you go all in. And when you're at the gym, you go all in. You work to focus on only the things that are important to you. When you're doing one task, in a way, you let go of everything else so you can focus deeper.
That's what I've started to focus on is if I'm with my kids, I don't want to have my phone out, I don't want to be partially working and not giving them full attention. So those two hours that I was with my coaching client for a Saturday, I put everything into that coaching client and I tried to forget about how it felt bad not being with the kids and I should be with the kids. But I gave that client everything I could for the two hours. And then when I got with the kids, I let go of everything else and we just worked to have the best time we could and to make memories and to not let me get distracted.
So I feel like those types of decisions happen to all of us. And certainly, for me, I want to make sure that if I'm with my sweetheart, it's date night and I'm focused on just that. The same thing with my kids, or when I'm on this podcast with you, I'm trying to give the listener and you the real deal, what's going on, and not getting distracted on anything else that may be happening in life.
Budgeting Time Wisely
Adam: Anyway, that book, The One Thing, it was pretty interesting. I learned a lot of interesting things and it helps me to just, I guess, cope with the thought of work-life balance and really what I'm looking to achieve. I've decided, and I think that the listeners should as well, that we ought not to be distracted by all these other shiny objects. We need to create a budget for our time. We only have so much time. And so we need to say how much time we're going to allot to each of these things and be present at the moment for that time that we've put aside.
Darin: Yes, I think that's great. I'm always looking for book recommendations. So I wrote that one down. You brought something up, If it's the biggest, it's up there in the top three of things that new people looking to get into the industry have to grapple with is, one, how do I start this while I'm still working? And then two, at what point can I jump ship? Those two things are very difficult questions to answer.
For me, I had another business and it was running efficiently. So I had a lot of free time and I had funds. I was fortunate from that perspective, but I set myself up for that by saving money so that I could start a business. And then making that business successful, which gave me the freedom of time and resources. But I think that there are so many people in life that they get pay raises, and they get a nicer car, they get a nicer house, and then they can't take a chance.
Planning Your First Deal Through Thought Leadership Platforms
Darin: And so just like when I mentioned the other individual that I interviewed when he came out of college because he talked to that older gentleman. He didn't buy the nicer house just for him, he bought a fourplex and lived in one unit. And he's like, "It wasn't the best place in the world," but it set him up.
I think that for the listeners out there that want to make a change and want to get into real estate, I think there are sacrifices. Instead of watching Netflix at night, you're underwriting deals. Instead of going on vacation, you're having to sock away that money to go into your first deal. You have to figure out and plan so that you can have a better life, and so that you can have more freedom of your time and your resources. It won't just happen. You have to plan for it, and then you have to take action.
So, Adam, if somebody's listening, has never invested in syndication before, and I would say that word can be intimidating to people. I would just define it as, "Hey, it's just a group of people coming together to buy an asset. They couldn't buy on their own so you can invest with a much smaller dollar amount." But how would somebody go about learning how to become a passive investor for their first deal?
Adam: My suggestion would be that they, number one, make sure that they understand what they're getting into. And so you can call that education. There's a lot of ways to get there. Number one, if they have been doing business for a long time and they understand the business, maybe it's a quick transition.
Adam: Maybe they ought to take a coaching program or thought leadership platforms as you did in DFW. How you joined a program where there were a lot of other people doing the same thing and it allowed you to connect with the right people to put your money into. Either way, for the listener, I want them to understand what it is they're getting into. There are risks, and what the risks are, and how to mitigate them prior to investing their money into those types of deals.
Once that's happened, then the second step would be to start spending time vetting operators that they might want to partner with. I like something that you said around partnering with these people, putting your funds in like buying a piece of Coca-Cola. You literally are investing into shares. We call them shares of the property. The same thing exactly, except instead of investing in a public company, you're investing in a private company.
So I want them to start looking at all of the people that are doing this. And the thing that I was going to say that you mentioned was asking other investors. You said maybe talking to some passive investors that were in on one of the other couple of deals. That's probably the easiest way to vet operators out of all of the things that you can do. Getting honest feedback from others that have invested with that person is going to tell you the best story and to help you understand if you ought to be doing this or not.
And the third thing that I would suggest for the passive investor that is critical for me is actually looking into the market that those properties are being purchased in.
Educate Yourself and Know What You're Getting Into
Adam: There are quite a bit of syndicators that are purchasing in towns, and I'm one of them that are purchasing in towns that don't have really strong metrics, they just have really high numbers. I don't think that that's the right way to purchase. And so for the listener who's thinking, "I'm going to be passive," I want for them to underwrite the market themselves to determine is the population is growing? Is there job diversification? Are jobs growing? Wages growing? House prices growing? Is the average wage, is it approximately 30% of the rent?
Because if the average wage is 55% of the rent, people are less likely to rent, they're more likely to buy. And if it's under 30%, then people are going to struggle to be able to pay for the rents. And so I want the listener to see those metrics and determine if they like the market.
Those are really the three steps, educate yourself, just understand what the risks are, vet the operator mostly by referrals, and then vet the market itself. And markets change, they are all cyclical. So there are some markets that may have been strong last year or may have done well for the last four years, but they don't look good next year. There are definitely some markets like that.
Darin: I think you hit everything perfectly. I would maybe change the category to say get educated, and you could do that by reading books, listening to podcasts, join mentorship programs, find what market you want to be in, and then find what operators are operating in that market.
Find Your Kind of Operators
Adam: I think you're right. Actually, I like that better than picking the operator first.
Darin: So people are listening, they're like, "Well, how do I find the operators?" But look, once you know what market you want to be, if you want to be in Texas, you want to be in Arizona or Florida or wherever you want to be, then you start looking around. And on social media, there's a lot of people that are putting out content. You can Google multifamily, you can go to multifamily Facebook groups, and you'll start if you're looking for it. There are so many opportunities out there in life and you won't see it unless you are looking for it.
So once you focus and you start looking for it, you will start to see the operators. And the other terms, operators, syndicators, general partners, they're all interchangeable words. But what's different in this business than the stock market is you can't call up the CEO of Coke. But with these syndication deals, you actually can private message on Facebook or on Instagram the actual person that is doing these deals and ask them to give you a call.
And if they're unwilling to do that, then maybe they have enough investors and they don't need new investors. But most syndicators that I've talked to are happy to continue to grow their investor database and grow their network. So there's plenty of room for you to find a connection in the market you want to be in. Adam, what do you do for fun outside of real estate?
Adam Outside of Thought Leadership Platforms
Adam: The big one this year has been mountain biking.
Darin: I've seen the pictures. Talk to me about that. How'd you get into it? Who do you do it with?
Adam: I do it with any friend who wants to go. And how I got into mountain biking, growing up, I was always in individual sports, not team sports, but I ran track. I did a triathlon, I did century rides that are like a 100-mile bike ride. This was what I liked. What I enjoyed is just getting out there and doing something myself and just pushing my limits and always trying to better me.
And then I got into something called CrossFit. As I was trying to figure out what to do in the off-season, people said that cross-training was really good for your muscles. When you're only going swim, bike, run, swim, bike, run, you can start hurting your joints and deteriorating. So I decided, "Yes. In the off-season, I'm going to do this CrossFit thing."
Darin: Which is completely easy. I haven't done it, but I know guys that do it. Look, to be a CrossFitter, you bust your tail.
Adam: Absolutely. You're pouring sweat every time, you're out of breath every time, you're pushing your limits every time. It's been a lot of fun and I've enjoyed CrossFit. However, about six months ago, from the time we're recording this, our CrossFit ended. Gyms shut down for a little while.
Darin: With COVID?
Adam: Yes, exactly. So, March comes around and I don't exercise in March. April comes around, and I'm not exercising. May comes around, and I'm starting to feel just terrible.
Finding What Makes You Happy
Adam: I'm like, "When are the gyms going to open up?" I decided that I was going to buy a $300 mountain bike because that sounds like what a mountain bike's supposed to be. And so I start looking and the only mountain bikes I can find are $6,000. And I was like, "If I can find a mountain bike for under 1,000, I'm going to buy it. I'm going to buy it right away." And so I found my first mountain ever in right before my birthday, my birthday is June 6th. So right before my birthday, I found this mountain bike, bought it sight unseen. He said it was 999, I said, "Done, done."
"I'll be there tomorrow to pick it up." So I bought my first mountain bike and I started just getting into the sport and going on all the trails. I think I said I live in Denver. Technically, that's Denver, Metro. I live in Conifer, which is about 45 minutes up the Hill. And so I've got tons of trails. And so I decided I couldn't ride my road bike because my skinny tires, there are no paved roads up in onifer.
So I said, I got to get some type of mountain bike, but I got into it so hard that I finally upgraded to one of those $6,000 bikes. I am having a blast with it. I'm going to different bike parks, learning how to do jumps, going on different trails, going uphill, going downhill. I've lost so much weight, and I feel so healthy by just getting back out. And CrossFit – it's an indoor sport. There's something about the activity of being outdoors, breathing the fresh air, having vitamin D that makes me happier and more healthy. I've enjoyed the coronavirus.
Enjoying the Time in Colorado
Darin: You live in Colorado, you need to be doing something outside. It's a beautiful, beautiful, beautiful country there. That's exciting. It's always nice when you can find something new and exciting. Look, I'm 50 years old and I still am craving new, exciting adventures. And so you found yourself one and who knows how long it'll last and then you might be on to another one. But right now, you're enjoying it. It's just fantastic.
Adam: It better last a while because of the new bike I've got to ride it quite a bit to feel like I can justify it.
Darin: That's not just you saying that, right? Is it your better half?
Adam: Well, I'm sure she thinks that as well.
Darin: Adam, if people want to reach out to you, what's the best way for people to get ahold of you?
Adam: The number one best way if they are looking to attract more capital, start their thought leadership platforms, raisingmoneycoach.com, or they can just find me on Facebook, Adam Triple-A Adams.
Darin: All right. So you heard it there. I'll have that in the show notes also. Look, I appreciate you coming on and you being a leader in the space. I believe in learning from others that have gone before you, and you're one of those guys that have gone before us in terms of podcasting. You've put yourself out there on social media. That's attracted a lot of attention to you and the business as a whole. Some of it clings to you and some of it just falls off to other people. And so I appreciate your contribution to space and your willingness to come on and share with others. So I appreciate that.