Episode #257 – Growing a Massive REI Business From Scratch With Dave Seymour, Part 2

You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.

0:39 Hey, guys, welcome back. You're listening to the second part of last week's episode. Let's jump back in. So let's let's use it as a transition point. Because I love that story. I wrote down like one of your lines, are you talking about the cancer of more? I think escaping that is such a kind of critical element that like really anybody can take in, right, but let's so let's transfer kinda to the present. You know, you have this like story of struggling through the crash and making it work today, right? You're you're in the present, right? You've got all your kind of knowledge and your system's in place. Walk us through a little bit about what your company does today. You mentioned that you're primarily in Florida, to do that kind of repositioning, particularly I wanted to ask about, we're kind of repositioning what you mean by that. And what that is give people kind of the overview of how the business is structured today, how you look for deals that kind of yeah, great questions. Again, let freedom ventures structured today came out of the COVID crisis. Oh, in January, when was COVID-19 2020. Right.

1:39 I think it was 20. Because I remember it was my 40th birthday party got cancelled those like in March. And I was like, Oh, that was the first time where I was like, oh, oh, this is real. If it's a big enough deal to cancel my birthday, because you are the center of the universe. Then I bought toilet paper? No. Yeah. But anyway, but yeah, so that's a sharp knife. It's a battery. So from I think, I think the world went to shit in March of 2020. Good. And in January of 2020, I started building up a hard money lending business with with a couple of partners. And I was end of February, I had 16 million in the pipe and loan origination, I had seven loan originators. And I was working off of a $50 million line of credit out of New York from a tertiary capital source. And basically, we would originate a loan, and we would immediately sell the loan to a different commodity on Wall Street, and then pay back the line of credit. So it was a what we call a five day ramp. And I was like, Oh, this is good, right. It's just a great deal. Or I can help investors find the money. I knew the game from the ground up.

I had done the TV show flip in Boston on a&e network reality TV show. So I had some national recognition, I was able to draw in investors from all over the country. I wasn't taking it to our market, it was a beautiful thing until it was done. And that was in March of 2020, where Wall Street said we're no longer buying non QM loans, not you know, non owner occupied loads, it's got to be all owner occupied, that'll be by the numbers for the investment capital just dried up. So that pulled me out of business in less than 24 hours. I was able to get my bar was one hours, 24 hours then so your birthday party was not a priority. Yeah, you didn't even even RSVP even when there was a deal.

3:33 And I was busy. Busy. Yeah, we were out. We were done. Because we lost that line of credit. We'd lost that line of credit in in 24 hours, they shut it down. And it happened to a lot of people because everybody goes into fear. Right? And, you know, I stepped back, I took a breath. And I was able to get all my borrowers off to other lenders, some smaller private lenders, who could, you know, take care of the borrowers that we had in pipeline. And, you know, I took a couple of weeks I ate too much. You know, I cried a lot. And I connected with my now partner, Walton, oh, Vicki, and my other partner, Eric Wilson, who's been with me all the way through. He's a younger guy, super, super smart kid. And I called Walter and Walter have been a developer and a capital raiser in Florida, Fort Myers, Cape Coral, and he just been in the game for a long time. And him and I were pretty good friends. And he said, he said, I've been what they call syndicate doing one off large commercial deals for my career.

He said, Why don't we get together? He said, I think we're gonna see some opportunities as a result of COVID. Why don't we start raising larger amounts of capital from accredited investors, people who can write a substantial size check 50 to above, he said, and instead of just doing one or two deals, we'll do a lot of deals. And that was it. That was where we started. So freedom venture investments, he's about four and a half is from that time now. So what 2024 years, we're hitting the four year mark in that period of time, we now have about 300 and 50 million in development work in our pipeline, either under contract negotiation or actually building the assets. So we do development work, our investors will come to us, they'll put capital into the deal, they have an expectation of a pretty aggressive return profile, especially if they're coming in during entitlement and land. So their return profiles are scheduled at anywhere between a 3x and a 4x on their capital, over a three to five year hold. So an investor will put up 100 grand, they've got an expectation of getting that 100 grand back, plus another 200 or 300 grand over that three to five year run, we've got a lot of work that we we are currently in right now, a couple of family offices have written us some substantial checks and committed to our development process of work.

And then at the same time as that we also will reposition existing assets. So a multiphone multifamily assets value is based on a calculation of its net operating income, how much money it brings in net operating income, not including the debt service or the mortgage payment that will be on a property, and then that's multiplied by the capitalization rate that they sell out in the market. And that's how you value commercial assets in the multifamily arena. And most other readings that we frankly do not like a CMA current market analysis like the like, so for guys like us, we can go in there and see a deficit. So we might have vacant units, we might have bad management, we might need to reposition the tenant base, all of these are areas where we can go in and increase the net operating income, right, reposition the tenant base, get the other tenants out that they can live for free, you can't I know it's America, but you still you still gotta pay for your own shelter. But if you create a great community, if you create good communication, if you have massively proficient property management teams, and getting the net operating income up is a is a pretty, pretty viable, you know, path to a lot of wealth. So you know, that's the work that we do today, we've done it in what's called a fund structure. So I'll bundle maybe three or four or five development projects into one fund that investors like that they get security, diversification of having more than just one assets, where their capital is working, some investors like to just be on one deal that I just saved my money sitting on that property. So we'll do the syndicated raise as well, where we are today is what I've described for you, but also purely private equity.

But we will raise chunks of the debt stack for other developers who may add criteria and will raise two and a half to 5 million for any one specific deal of a proven operator, giving them the ability to go out and do more deals, my investors are happy because they're still on good assets. So if I raise for another investor will carve out a nicer delta for us in comparison to whatever regular LP or limited partner would get on a deal. We'd come in on a cohort they call a co GP position, and it just gets money working man. I mean, there's there's so much money sitting on the sidelines and the podcast being around real estate marketing, you know, who's got the loudest voice, the best message and who resonates the most with the client isn't always the best guy or girl, man, there's a lot of predators out there. So you know, for me, I try and work off of off of, of consistent messaging. I'm not about cars, boats, and leather coats a bit down that road, as I said, you know, it hurt me. So I tend to attract my own demographic, my own age group looking to really juice up their retirement accounts into the last 2030 years of their run. We can do that with self directed retirement accounts in real estate as well. So it's crazy dude, if you'd have told me when I was sitting in a firehouse that I'd be talking this language, this this mindset X amount of years later, the guys would have just busted my balls. But you know what I mean, but you've got where the where it makes sense, man, and you follow the path. So that's what we do today.

9:11 That's such a cool business model. A couple of quick questions. So one, yeah. Why Florida? Is that where you're located now? Or did you choose that markets but not? Yeah, great. Yeah. Great question, Walter. So we've got offices in Florida, our offices in Boston, I'm not getting the Boston office. Okay. My job is to raise the New England money or what we call the Snowbird Monte up here in New England, right? Yep. So the snowbirds are up here out in the dojo, and then Walter has been a 30 plus year developer contractor in Fort Myers, Cape Coral, Naples and the assets of Florida is what some says why Florida, it's the number one market in the country for growth. It is on the supply housing times 100 And it's documented it's not just me spouting some bullshit. I mean, it's it's documented that the What we focus on is what's called workforce housing.

So it's not the gated communities with the swimming pools and the tableside service and the golf course we serve the firefighters, the police officers, the teachers, the nurses, and when you take that underserved demographic, and then we also add, the Florida is still the number one number two retirement destination in the US for every one retiree that moves to Florida, it brings four service jobs attached to it, restaurant health care, etc. So the population growth is massive, number one, and then number two, I don't want to do business in states that don't want my business. I like to be in the states where they say, Let us help not hurt you. Right. And I'm not gonna get overly political with you. But there are red and blue states in our great country. I like to go where I want it. Because there I can help more people. I don't want to fight government. I don't want to fight local government. I don't want to make an argument around giving people decent, clean, affordable, safe housing. I don't want to make an argument around that because there's a you know, a palm tree over here that shouldn't have its views changed. Or whatever silliness Deborah hand up. Does that make sense? So yeah, that's probably like smarter. Okay.

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11:48 So there's a million things I want to ask you about. One of the things that really strikes me about your story is you've got multiple instances where it seems like you needed to make a jump, that it strikes me that other people probably thought was about it. Right? So it's like one had coming to the states in the first place, then you had making the jump into real estate during the crash, then you had during COVID, like sort of pivoting when everybody was like retracting, right. So you have these like multiple times in your life, where you kind of do the opposite thing of what's expected. But at the same time, you have to persevere down that path, a significant amount of time before it pays off, isn't it like you're like pivoted to real estate, and then you were rich, right? It's like several years of like you said, you have this relationship with, you know, with your wife, where she's like, I really support you.

And it's important, because I imagine there are long periods of time that you are going in all these different stages of your life where there is little to no positive feedback, right? It's like you're like doing the thing and checks not coming yet, or whatever it is. I want to ask you about that. Because it's like, I think most people when they make a jump, or they, you know, make a shift, or whatever the feeling of going without getting the validation is very nerve racking, right? So I guess, how do you either deal with that? Or no, you're on the right path? Are you looking at something else? You're like, look, I did the research. I know, you know, I have a faith in this thing. Is it just you have a personal belief in yourself? And you're like, Yeah, I don't this maybe this thing isn't great. But I can make it work. Like how do you get through those periods where you're not getting the pat on the back from the universe

13:25 before we started recording? Right? Yeah. Like I said to you, you know, what's your time commitment? You said, I'll study 35 Or in the fall, we'll go a little longer. And then you made a comment, you know, maybe it'll be tears and snot at some point, you know, during the, during the, during the podcast. And when you ask that it's not deep, but it's direct of a question. Every successful in my opinion, and every successful entrepreneur, as those moments of inception, something comes in, and, and reinforces that decision that is domain. Now for me, I answer it a couple of different ways. I share this on a podcast for no other reason than it helps maybe somebody who ends up listening to us, you know, when I came from, from there to hear at 23 years old, yeah, both financial illiteracy, but I also bought a cultural norm of as much alcohol as you could possibly drink, right? Real man drink. We're down a pub badass soccer football hooliganism, right. Like it was just sewn into the fabric of my life, and it almost destroyed me. It almost destroyed me. And that was that was for me. At 23 years old. On January the fifth of 1990 23. I started a sober journey, which is just picked up 34 years last week, right? Wow. Although 34 years without a drink or drug or mood or mind altering substance, not for a pat on the back. But part of that journey.

A massive part of that journey is the personal development side, which has apps in My opinion, the beyond point, right? If I can't buy can't sit in this skin, how can I build a business, personal development and business development, in my opinion needs to be like this, they need to be interwoven with each other. So, you know, being on that journey I've learned over, what, 34 years now, other people's opinions of me, none of my business first, think about that, say for a second, what I say on this podcast, what you think about it, then and this is with respect what every single listener thinks about it, oh, my business doesn't have my business. That way. I can't fail. I can't, I can't fail. If I don't care, to watch. Do I care? Of course I care. But what I learned is, it's a detached attachment. I'm attached to the outcome. I'm attached to giving some value to you as a podcast host. I'm attached to try and give some value to the people who listen, but I'm detached from the outcome, brother, I can't I can't go to sleep at nine sec. Man. I wish I said this. I wish I said that. I wish he did ask me this. This could have been good that I can't do that. Right. It's wasted mindspace.

So if you can find that, and I found it through a number of different avenues. I mean, I can tell you story after story after story of grace and faith, and and replacing my fear with faith as often as I can, like, I can give you story after story around that. But at the end of the day, if I am empowered and faith driven with the decisions that I make, then I have the ability to pivot. Am I scared? Posts I'm scared, I'll give a shit who you are, dude, you're a frickin liar. If you say you ain't scared, but here's the magic man. Embrace fear, bail, often bail burst, but failed followers dude, bail, followed you mouthful. Don't give up. Never quit, never surrender, never lay down, get up and go, right or don't or Tom sit back there with the rest of the whiners. And the cries of the entire lives and, you know, live in that world ever want to come from a place of of, you know, grandstand or soapbox or any of that there are millions of people in this world who think I'm an asshole. And there's a small powerful group that want to come on the journey that I've created as I want to go on there's right. And that commonality that raving fans as we call it in the marketing world, right? Can you can you create a community, you start to do that, and people will resonate, and they will be attracted to what it is?

You know, I'm a big believer in the law of attraction. Once you think about you bring about Richard will back that up. You know, it's it's pretty powerful stuff. If you spend some time in it, pray a little meditate a little. What's next is next, I'm going to be okay. And here's here's what's interesting that and I'll finish finished with his topic. So 16 years as a medic firefighter. In a city, we got to see some shit, right? We got to see some stuff. My partner Walter down in Florida. He's 60. I'm 57. Walter was military. And when he left the military, he left major Walton, oh, Vicki, and he ran a special forces group of guys that you couldn't talk about, right? Like he was he? You don't want those guys knocking on your door? Well, that was Walter and his guys. And, you know, we talk often about when a moment of stress and a moment of distress appears in business, these moments of pivot, you know, we're blessed in the sense of our feed into the chaos, man, I'm not interested in chaos. I want solutions, we can identify problems all day long. So Walter, and I say often is this an emergency? Or is this just another problem that needs to be thought fit, fixed up and executed on? So you know, that's that's how I've been able to pivot during those times.

It's, it's life experience, brother, you know, I wouldn't be the guy 57 That I was at 21. And I know that's a stupid sounding statement. But I've got 34 years. So, you know, live in living life on life's terms to be able to stand in front of somebody else and be authentic. Right. And that that attracts more more authentic people? I think so. Yes, question. That was a good answer. I liked that one. Well, all right. Well, I want to ask because we're coming up on time, and I don't want to keep your own to make sure that they will respect your space. So for people who are curious about either learning more about you or learning more about the company that we mentioned the website it's freedom venture.com So v e n t u r e freedom venture.com. You can go there and check that out. Outside of that, is there places that you want people to find you online or anything particularly you want them to, to look at the on the website, anything like that?

19:54 Yeah, look, your show notes will have the spelling of my name on there. Right we confirm My name and then my stuff on the TV show a pop up clip in Boston. When we did that on the a&e network, the more mature way to for us to connect is to just do it from LinkedIn. Look find my LinkedIn profile. Dave Seymour, I think it's Dave seamless 343 I'm not sure but just Dave see more Boston they've seem off you know, Freedom venture. That's a great way to five y'all. I love LinkedIn. It's great platform for some mature social media rather than cats plan pianos. You can even just reach out to me at Dave at Freedom venture.com I'll take that email direct. Then, just let me know that you heard us solving the world's problems on this podcast.

20:45 Yeah, look, guys like, like, this was the last episode we did it. So there's nothing left to do. You know, we solve all problems, I will definitely reach out to all the links get added you can get go there. adwords.com/podcast. You can find it. But as we mentioned, go on LinkedIn. Look for Dave Seymour, Boston freedom venture.com. Obviously, we didn't get to the TV show. It's going to ask if we didn't just spend time on the air. But I want to say Dave, I really truly appreciate your time spent on the show. This was really fascinating, a really helpful and insightful story. And I just want to say thank you for sharing your time. God bless problem. Thank you. Hope that makes sense, everybody, I hope this was useful. I really got a lot out of that. So I'm really excited for you to hear listen, if you are at all interested in working with me or even just talking to me, or someone on my team, you should go to AdWords nerds.com AdWords nerds.com. That's the company. I've been running this company for over 12 years now, which blows my mind. And we are only doing motivated sellers for real estate investors. That is the deal. And I would love for you to check it out. So go to AdWords nerds.com. You can request a call with someone on my team we will help you put together a marketing strategy for your market. Without any further ado, go have a great rest of your week and I'll talk to you next time.

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