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Raising Capital for Real Estate: Why Investors Pass on Your First Deal w/ Jeffrey Fidelman · Real Estate Investing with RealDealCrew

• 0:00
  When you get a when you buy a lead,
• 0:02
  whether it's a spreadsheet or pitch book or somebody gives you a bunch of leads,
• 0:06
  there's some intrinsic value to a lead.
• 0:08
  Then that lead agrees to have a call with you.
• 0:10
  That lead went from 30 cents to three dollars.
• 0:13
  Then you have a call with that lead and send them more information.
• 0:16
  That went from $3 to $7. Now that $7 lead,
• 0:21
  if you don't follow
• 0:22
  up with them, it's it's gone, right?
• 0:24
  Most real estate sponsors raise money one deal at a time
• 0:28
  and lose investors that they've already talked to.
• 0:30
  Jeffrey Fidelman has spent more than a decade helping companies raise capital
• 0:35
  and his team's in-house fundraising CRM just launched
• 0:40
  as its own software, Fundex.
• 0:42
  In this episode, you'll learn why investors will typically pass on the
• 0:46
  first deal and invest in their second,
• 0:49
  how he built the first version of Fundex himself for a few hundred
• 0:53
  dollars, and why every lead you don't follow up with
• 0:58
  is money walking out the door.
• 0:59
  If this helps, hit subscribe. Let's get started.
• 1:07
  Jeffrey Fidelman joins me here today and you can learn what he can help
• 1:11
  you with by heading over to usefundex dot com.
• 1:15
  I'm gonna have that as a clickable link in the show notes.
• 1:17
  But really appreciate your time here,
• 1:20
  Jeffrey. We're gonna be kind of diving into kind of new territory for us here.
• 1:24
  So this should be an interesting and fun conversation.
• 1:28
  Yeah, thanks so much for having me,
• 1:29
  Jack.
• 1:31
  So your first business was in real estate in New York City and you sold
• 1:36
  it in twenty ten. What was the business actually doing day to day in that operation?
• 1:42
  So I had an interesting opportunity right after 2008.
• 1:46
  And for most of us, we know it happened in the city,
• 1:48
  but there was a little bit of a recession or depression or whatever
• 1:52
  you would call it in real estate specifically due to mortgage markets.
• 1:56
  And and there were two main buyers coming into at least New York,
• 1:59
  Manhattan to purchase real estate right after 2008,
• 2:02
  into 2009. And those were buyers coming out of China and buyers coming
• 2:07
  out of Russia.
• 2:08
  I am a product of immigrants from former Soviet Union,
• 2:12
  so I speak Russian fluently. And I was able to start building
• 2:15
  a business specifically catering to Russian speaking individuals that were buying
• 2:19
  real estate in Manhattan.
• 2:21
  And that started out as one of the first buyers-only brokerages in Manhattan.
• 2:24
  Meaning, in a typical real estate transaction,
• 2:27
  there's a buy-side, a sell side.
• 2:29
  Sell side agents typically will get the asset,
• 2:32
  stage the asset, try to sit there all day and bring appointments to them
• 2:36
  to sell that asset. Whereas a buyer's broker really represents a specific buyer that
• 2:42
  then goes around to different assets,
• 2:44
  and I keep saying assets, whether it's an apartment or a building or otherwise,
• 2:47
  to purchase them.
• 2:49
  At the time, that was a relatively novel idea.
• 2:51
  So we started a buyers-only brokerage focused on Russian-speaking individuals that
• 2:55
  were coming here to buy real estate.
• 2:57
  And the first six months, maybe nine months of that,
• 3:01
  we were predominantly selling apartments,
• 3:04
  so individual units and apartments.
• 3:07
  That formed into commercial sales as well,
• 3:10
  given some properties were entire buildings.
• 3:12
  At first it was brownstones and townhouses in New York,
• 3:14
  and that expanded to the five boroughs.
• 3:16
  And because a lot of these buyers were not based in New York or in the US,
• 3:22
  we also started a property management company to help them manage those assets.
• 3:26
  So by 2009, kind of a few months into 2009,
• 3:30
  we had a buyers only brokerage focused on both commercial as well as residential,
• 3:35
  and a property management.
• 3:36
  management company that was overseeing the assets that we would help facilitate
• 3:40
  the sales of.
• 3:41
  Well, a couple aspects then. Like one of is is that I find it interesting that
• 3:45
  you niched down the way you did,
• 3:48
  not only a buyers only brokerage,
• 3:50
  but Russian speaking, you know,
• 3:53
  th that I I think that goes against what most people try to do where they they
• 3:58
  be they're generalists in in so many aspects.
• 4:01
  Did you did you find that that approach like did you try that generalist aspect
• 4:06
  at first and then realize that
• 4:09
  Nitching was where the gold was sitting?
• 4:12
  N not really. I kind of fell backwards into it,
• 4:14
  quite frankly. And even now, having ran that business,
• 4:18
  sold that business, thinking about it,
• 4:19
  if you're representing a specific unit or a building,
• 4:22
  chances are it's going to sell.
• 4:24
  It's highly likely going to sell.
• 4:26
  When you're representing a buyer,
• 4:28
  The likelihood from a statistical perspective is far lower that
• 4:32
  a transaction actually happens.
• 4:33
  Maybe they don't want to invest in New York.
• 4:35
  Maybe they don't want to invest in real estate at all.
• 4:37
  Maybe they don't even have the capital available to them.
• 4:39
  but because of, first of all, it was kind of my I don't know,
• 4:42
  I was 20-nothing years old at the time.
• 4:44
  and I had an opportunity to represent some of these buyers that were coming over
• 4:48
  because of my ability to speak English well,
• 4:50
  because of my ability to speak Russian,
• 4:52
  because I was located in the city at the time.
• 4:55
  And coming back and forth from from ultimately where I ended up going
• 4:58
  to school in Boston, it it was an opportunity that compounded over time
• 5:02
  and there was no reason for us to go out and and approach the business from another
• 5:05
  perspective.
• 5:06
  Then also you are you're you were building and eventually selling this opportunity
• 5:13
  in what is considered the one of the bigger financial crisis w crises that we've
• 5:18
  seen. Like with all of that experience,
• 5:22
  what did you learn that you're still using today?
• 5:24
  It's something I had learned early on,
• 5:25
  and it's not going to be that shocking to anyone,
• 5:28
  but you know, be around when no one's when no one else is.
• 5:32
  So, you know, when it's holiday time or end of August,
• 5:36
  I mean we're sitting here September 2nd,
• 5:37
  right before Labor Day, having this conversation.
• 5:40
  Being around when most people are not is fundamentally what has driven
• 5:45
  a lot of success over the time in in my life and in any business that I've been in.
• 5:49
  as well as just consistency and and and making sure that you do focus on a niche.
• 5:55
  I think a lot of people, when they're starting out,
• 5:57
  go too far broad and generalist.
• 5:59
  And ultimately, I think that's absolutely fine.
• 6:01
  When I started my current company,
• 6:03
  it was it was very much the same.
• 6:05
  I was more of a generalist where I'd pick up the phone and say yes and then
• 6:09
  ask what the question was. But invariably any any successful
• 6:13
  Person who's written a book or has been quoted almost always reverts to
• 6:18
  do one thing really, really well and only focus on that one thing.
• 6:22
  so I had the I had the privilege of learning that very early on in my career.
• 6:27
  I do think it's important to go after a more general aspect if you don't have kind
• 6:32
  of an opportunity that's knocking on your doorstep,
• 6:34
  and then no matter what, start niching niching down to figure out what what
• 6:38
  it is you're really, really good at,
• 6:40
  and then rinse and repeat from there.
• 6:42
  Mm-hmm.
• 6:42
  So y you've you pivoted a couple times here now.
• 6:46
  You know, you went from the the real estate world and then I think you were
• 6:49
  in the financial world with and now and now the software platform.
• 6:54
  Like
• 6:55
  Right.
• 6:55
  what made you decide to sell any of those ventures versus sticking with
• 7:00
  it and scaling it? Did it kind of fall in your lap or did you was this planned
• 7:05
  the whole time?
• 7:06
  It was not planned. I don't think any of it was planned,
• 7:10
  quite honestly. the real estate business,
• 7:12
  I was still in in college at the time.
• 7:14
  I was actually taking a train,
• 7:16
  a cella back from Boston every Thursday night to New York,
• 7:20
  staying in the city until Sunday,
• 7:22
  sometimes Monday morning, and then taking a train back up to Boston
• 7:25
  to finish school.
• 7:27
  When I was finishing school, all of my most or many of my classmates were going into
• 7:31
  finance, and I thought that that was really where the opportunity was going to be.
• 7:34
  2010, kind of on the rebound. Little did we know what would what would happen
• 7:39
  the following year. But I I sold that business to the partners,
• 7:42
  so it wasn't a kind of a big notoriety,
• 7:45
  notor notable sale. It was just a sale to my partners at the time.
• 7:50
  And went into finance, initially started in banking.
• 7:53
  first at Morgan Stanley, then at HSBC.
• 7:56
  I did a variety of things for the banks,
• 7:57
  but it was always around client-facing,
• 7:59
  fundraising, or investment banking type of type of roles.
• 8:02
  And and while I was there, I really wanted to get into something a little
• 8:06
  bit more entrepreneurial. Not to say to start my own business.
• 8:10
  I didn't really have any ideas at the time.
• 8:13
  or kind of played around here and there with some ideas.
• 8:16
  So ultimately was either was presented with an opportunity to go into consulting
• 8:21
  at PWC. And right before I accepted that position,
• 8:24
  there's a family office that reached out to me saying,
• 8:26
  you know, we're starting a venture fund in New York.
• 8:29
  We'd love to have you come on and help us build that out.
• 8:33
  And in my mind, Venture was as close to entrepreneurship that I could
• 8:36
  get at the time, really interacting with a lot of founders
• 8:39
  and not necessarily helping them build their businesses,
• 8:41
  but translating what I had learned in my banking experience to
• 8:45
  now helping these earlier stage companies secure funding.
• 8:50
  So I worked with the venture fund for a number of years,
• 8:53
  helped them get it set up. And the thesis of that fund,
• 8:56
  and really what we did day to day,
• 8:58
  especially myself, I ran investment relations there,
• 9:00
  was that we would anchor, meaning invest the first amount of capital into
• 9:05
  a company's round, and then help that founder go out and syndicate and
• 9:10
  go out and raise the rest of the capital.
• 9:13
  And that's where I saw a white space or such a significant difference between
• 9:18
  how institutional-minded companies would go out and raise capital
• 9:22
  and syndicate the capital, and how these earlier stage entrepreneurs would kind
• 9:27
  of hobble together. I'd love to say organized chaos,
• 9:30
  but it was just absolute chaos in terms of what their fundraising structured looks
• 9:35
  like.
• 9:36
  So that's when kind of this idea came about to create a at first it was more
• 9:40
  of a consulting firm than investment bank.
• 9:42
  We got licensed a few years later.
• 9:44
  but in 2015 I left, I saw the white space,
• 9:47
  and we wanted to create a firm to help early stage companies raise capital.
• 9:51
  And we wanted to do it in a way where it didn't exist in the past.
• 9:55
  Fundamentally speaking, if you're early stage,
• 9:58
  you're not supposed to hire an advisor to help you raise capital.
• 10:01
  You are supposed to do the work,
• 10:02
  you are supposed to
• 10:03
  To
• 10:03
  build the relationships with your investors in order for them to give you capital.
• 10:07
  And this reins true for early stage venture funds,
• 10:10
  early stage companies. This reins true for even a real estate investor.
• 10:14
  If you're buying real estate and you'd like to expand your portfolio,
• 10:17
  you'd want to raise capital. You need to build a relationship with those investors
• 10:21
  in order for them to have faith in you and give you that capital.
• 10:26
  So we came up with this kind of radical idea at the time,
• 10:30
  although it seems very simple,
• 10:32
  was to build a managed service for helping our clients raise capital.
• 10:36
  And what a managed service is,
• 10:38
  by definition, is you have some sort of software,
• 10:41
  and then you have a human that runs that software for you.
• 10:45
  So we ended up
• 10:48
  At first using a variety of different technologies and then ultimately building
• 10:51
  a CRM, subscribing to every relevant investor database that exists:
• 10:56
  Prequin, PitchBook, FinTrix, Dakota,
• 10:59
  et cetera, and then layering an analyst on top of that to create what
• 11:04
  we called fundraise as a service.
• 11:05
  So you would hire me, ABC Company,
• 11:07
  you would engage us, I'd assign an analyst,
• 11:10
  Alex would call investors from ABC Company,
• 11:13
  or Alex would email investors from ABC.com.
• 11:15
  And we quickly realized a couple of years ago that,
• 11:18
  hey, the software that our analysts are sitting on,
• 11:22
  the CRM that we built specifically for our analysts,
• 11:24
  can actually be further productized and released as a separate software company.
• 11:29
  So that is what Fundex is that we soft launched last month.
• 11:33
  We're kind of having a proper launch either around mid September or October.
• 11:38
  That this is a CRM purpose built for fundraising where you can upload your
• 11:42
  own investors, you can dig into our investor database,
• 11:46
  manage pipeline, connect your inbox,
• 11:48
  call text directly from the platform so that as you're going out to raise capital,
• 11:53
  you don't need to use spreadsheets,
• 11:55
  you don't need to use your cell phone,
• 11:56
  you don't need to use different platforms for tracking.
• 11:59
  Tracking everything, everything is one place.
• 12:02
  And not to mention that our analysts have been using this
• 12:06
  for several years successfully to help our clients get in front of investors.
• 12:10
  So that's kind of how I ended up falling into software.
• 12:14
  It started out as a managed service,
• 12:16
  and then we just took the next step forward to productize it into
• 12:19
  an actual software company.
• 12:21
  Mm-hmm. Yeah, that's really an interesting progression.
• 12:25
  And you you kind of beat me to the punch because I was gonna traverse
• 12:28
  Yeah.
• 12:29
  what you just laid out there. Based on what your your experience now though,
• 12:33
  I'd be interested in what your experience was actually building this platform out.
• 12:40
  It sounds like the the the software and and you've definitely found a hole
• 12:45
  in the market, but
• 12:48
  Based on what I've seen online and what you just broke down,
• 12:51
  I I can't imagine this was an easy lift.
• 12:54
  No, no, it was not. and taking even a step or two back,
• 12:58
  back to our your question around kind of niche or being a generalist,
• 13:02
  as I mentioned, when when I started this company a little over 12 years ago,
• 13:07
  I was alone and I was literally picking up the phone,
• 13:10
  I was saying yes and responding yes,
• 13:12
  and then figuring out what the question was and and then trying to provide it.
• 13:16
  And and what I learned, I'd love to say quickly,
• 13:19
  I suppose it's relatively quickly,
• 13:21
  was that I really our firm doesn't do anything that I personally don't know
• 13:26
  how to do at this point. We started doing operational consulting,
• 13:30
  we started doing things around design,
• 13:31
  we started doing things around all these different facets that clients were asking
• 13:35
  us.
• 13:36
  And the reliance on other people to do tasks that have kind
• 13:40
  of intellectual capital behind it that I couldn't manage and I didn't know
• 13:44
  how to complete was, first of all,
• 13:47
  terrifying as a business owner because I was relying on someone else
• 13:50
  to deliver a project for my client that I kind of brought on and sold on.
• 13:53
  But number two, the reliability of people,
• 13:56
  especially post-2016-17,
• 13:59
  as everything was kind of getting jumbled up again,
• 14:02
  wasn't there, especially going into COVID.
• 14:05
  so we went back to basics. That's kind of when I said,
• 14:08
  you know what, I we do this one thing really,
• 14:10
  really well. We're cutting out all the fat,
• 14:12
  and we're just going to focus on this one thing.
• 14:14
  And that ended up being fundraise as a service.
• 14:17
  there's a there's actually an amazing book.
• 14:19
  I talk about it a lot on some of the podcasts that I've written about it.
• 14:23
  It's called Productize by Aisha Armstrong,
• 14:26
  I believe is the author's name.
• 14:29
  And the book itself is effectively how to take a service business,
• 14:34
  then turn that into a managed service business,
• 14:36
  then turn that managed service business into a product or productization.
• 14:40
  That's the name of the book. And I can tell you that I've almost followed that book
• 14:46
  as a blueprint to the T in now launching and creating Fundex.
• 14:51
  But the early stages of Fundex was without exaggeration.
• 14:54
  We were using HubSpot. It was getting very expensive between that and
• 14:58
  all the other tools. We started looking at alternatives,
• 15:00
  at white-labeled solutions. Those didn't work for our purposes because
• 15:04
  of how they were built. And most CRMs out there are,
• 15:07
  I would say, are more built towards business development and marketing
• 15:11
  and sales as opposed to raising capital.
• 15:12
  So we we
• 15:14
  Said, okay, we're gonna build our own.
• 15:15
  Started getting quotes in the hundreds of thousands of dollars range.
• 15:20
  And this is just as like Claude and Cowork and GPT and Cursor were starting
• 15:26
  to come out, so there wasn't too much AI usage,
• 15:28
  in Lovable. And before we ended up spending all that money and committing to that.
• 15:32
  Because we weren't planning on raising capital,
• 15:34
  I ended up building the first version of the CRM in Lovable.
• 15:39
  so I I built the first version in Lovable.
• 15:41
  It cost maybe a few hundred dollars,
• 15:43
  definitely a few hundred hours over the course of a month or two.
• 15:46
  And while that is not the product that exists today,
• 15:49
  and I'll get into the story in a bit,
• 15:51
  the experience that I gained in trying to build the platform on my own.
• 15:58
  Was invaluable. It taught me about data structure,
• 16:02
  it taught me about which questions I should be asking that I wasn't asking because
• 16:06
  I have zero technical background,
• 16:08
  engineering, development, zero background whatsoever.
• 16:11
  And and what it enabled us to do was basically take that.
• 16:14
  I don't know, let's call it MVP or functioning product,
• 16:17
  then hire a development team, show them this product,
• 16:21
  and say, just put this into production,
• 16:23
  build this out the way that you currently see it and use it,
• 16:26
  but make it production ready. and that's that's essentially how how Fundex began.
• 16:31
  now we do have a full-time development team and and they're building it out and
• 16:36
  We're we're rolling out new features and fixing bugs kind of on the fly as needed,
• 16:40
  but but that's how it started.
• 16:42
  Just myself in in a dark room on Lovable,
• 16:45
  this AI coded platform and putting it together.
• 16:48
  Well, we're gonna dive into this a little bit further,
• 16:50
  Jeff Jeffrey. You just
• 16:51
  Sure.
• 16:52
  opened a can of worms. just remind everybody,
• 16:55
  we head over to usefundex.com.
• 16:58
  That's gonna be a clickable link in the show notes.
• 17:00
  If you found some value in what we're chatting about so far,
• 17:02
  do us a favor, share this with one of your friends.
• 17:05
  If you're watching us on YouTube,
• 17:06
  give us a like and subscribe.
• 17:08
  How far did you find that that MVP got you?
• 17:12
  Like did did they feel like they had to start from scratch?
• 17:16
  How good was the was their assessment
• 17:17
  Yeah.
• 17:17
  of the code? You know, how does how how was the starting point?
• 17:21
  And and in the end, did you still end up spending hundreds of thousands
• 17:25
  of dollars getting getting to the finish line or to where you are today?
• 17:30
  So no, it did not spend hundreds of thousands of dollars yet.
• 17:33
  I'm sure that you know, as you go through it,
• 17:36
  as we go through it as a team,
• 17:37
  as we get client feedback, there's so many features that and requests that people
• 17:40
  are making. So we're being cognizant about how we're rolling those out
• 17:44
  and how we're prioritizing, call it the bells and whistles,
• 17:47
  a separate and aside from the core platform.
• 17:49
  I guess there's there's two ways to look at it.
• 17:52
  I'm I was not raising capital for this.
• 17:54
  This was an internal project to replace a couple of technologies that
• 17:59
  we were using internally. So so quite frankly,
• 18:03
  you know, day one, month one, month three,
• 18:06
  four, five, six, you're paying you are paying double because you can't
• 18:10
  let go of your old technology because the new technology isn't fully built yet.
• 18:14
  Yes, you know, the MVP that I put together,
• 18:16
  clickable kind of database, every all the structure was done.
• 18:19
  but ultimately the developers did have to rebuild it from scratch,
• 18:22
  which is so much easier and better once you have an MVP that you've built,
• 18:27
  because a typical development cycle is wireframes,
• 18:30
  then kind of enhanced wireframes,
• 18:32
  then you have to worry about UX UI,
• 18:35
  then you have to worry about actually putting it together,
• 18:36
  then database structure. And all these questions that you don't really think about.
• 18:41
  unless you have the background in putting together a software a software business
• 18:46
  or a software internal tool. So the developers have been incredibly helpful
• 18:50
  and I'm very fortunate to have found who I who I did just through internal network.
• 18:53
  They have rebuilt it and it's it's one of the it's it's one
• 18:57
  of those situations where you will get the most amount of work done
• 19:04
  the earlier you are in any type of project.
• 19:07
  Where, you know, the frustration usually comes up towards the end of
• 19:11
  a project where you feel like you're sitting on the ninety-yard line for two weeks,
• 19:14
  but it took you three weeks to get from seventy to ninety.
• 19:18
  So I think that's probably what everyone should kind of think about
• 19:21
  in terms of frustration. I mean,
• 19:22
  with AI, it's probably even more frustrating.
• 19:25
  I saw this graph or this meme the other day where on a 30-day basis you're using
• 19:29
  AI to build something. Day one,
• 19:31
  you feel like you're the master of the universe,
• 19:33
  you're unstoppable, you're the next billionaire.
• 19:35
  This is gonna be great. By day 15,
• 19:37
  Mm-hmm.
• 19:38
  you're like, this is a lot harder than I thought.
• 19:40
  I don't really know how this is gonna go.
• 19:41
  I'm going back and forth with GPT or Claude or whatever.
• 19:45
  And then by day 30, you're cursing your AI out,
• 19:48
  telling it it's the dumbest thing in the world,
• 19:50
  and why can't it get it done? And I think anybody who's had
• 19:53
  Yeah.
• 19:53
  some experience in building something with AI has probably experienced this
• 19:58
  is what this is what I'm talking about.
• 19:59
  But I'm thankful to have been able to use Lovable not only to provide
• 20:04
  the developers with a with a basis or a point of reference to start,
• 20:09
  but
• 20:10
  As I mentioned before, the way that I spoke about the structure of the database,
• 20:14
  the interconnectivity, the way that I thought about how you have
• 20:18
  to click through screens and and and how you have to go back and search
• 20:21
  our database functionality, I never would I wouldn't have gotten to that point until
• 20:26
  six months into developer process if I hadn't done it myself.
• 20:30
  Yeah. Well I I think that's really what is is powerful here.
• 20:35
  You know, you before you got the like a professional developers on board,
• 20:40
  I mean you essentially in a roundabout way did kind of a wireframe.
• 20:44
  You but it's it's like it's one of those things though,
• 20:47
  if you've ever gone through that process,
• 20:49
  it's almost like pulling teeth or having a root canal trying
• 20:54
  to communicate to an engineer what you
• 20:58
  you envision. Being a i you know,
• 21:01
  you you've kind of s having something even built in Lovable and you hand
• 21:05
  it over to them, I mean you've essentially sketched it out.
• 21:08
  Like they have a point of reference.
• 21:10
  It just kind of gets them up to speed far quicker.
• 21:14
  Yep, exactly.
• 21:15
  And another thing you're you're mentioning is I'm sure your a your your developers
• 21:19
  are using AI in in in in their process and it's likely speeding
• 21:25
  up the revisions and changes and and the like.
• 21:28
  But this is one of those a great examples of who is wielding the tool,
• 21:33
  right? Like I
• 21:35
  Absolutely.
• 21:36
  it it's it's like anybody like a a master carpenter swinging a hammer versus me,
• 21:42
  we're gonna get different results.
• 21:45
  I mean it's and and having somebody who has had that engineering coding
• 21:51
  background is is frankly un understandably gonna be using these AI tools at
• 21:56
  a at a much higher level than than we could.
• 22:00
  For
• 22:00
  sure. It and it's also time value of of money,
• 22:03
  right? Like I n not to sound overly I don't know.
• 22:07
  mod underly modest or overly cocky,
• 22:10
  but if I if I could take the next month off of work and not do anything other than
• 22:15
  sit with like a Claude and co-work and code with it,
• 22:19
  I probably could figure it out as well.
• 22:22
  Maybe not not as good as someone actually doing this every day for many years.
• 22:26
  But I think I think the learning curve for a lot of entrepreneurs
• 22:30
  is relatively flat.
• 22:32
  When it comes to using one of these tools,
• 22:34
  the problem is bandwidth. And I couldn't take a week off,
• 22:39
  let alone a month off, and remove all my calls,
• 22:42
  client calls, internal calls, everything else,
• 22:44
  and focus on this. So that's really where hiring a specialist to that
• 22:47
  end is important because they'll do it once and done in a way shorter amount
• 22:52
  of time than you'd be able to do it,
• 22:53
  even with AI tools out there.
• 22:55
  Well, let's let's kind of pull this back towards real estate investing,
• 22:59
  just briefly. Like let's say
• 23:01
  Sure.
• 23:01
  somebody is whether it's like them them setting up their first funding
• 23:05
  or they need some help with their funding round or or what have you.
• 23:09
  Could we kind of walk through the process of like how they would use this,
• 23:13
  how their experience might be as as they set up an account and how it all works?
• 23:19
  Sure. Look, when you're there's a few different ways to to purchase real estate,
• 23:24
  I suppose, especially if you're a professional investor.
• 23:26
  Where where I think a lot of people end up failing pretty quickly is when they
• 23:32
  try to set up these SPVs too quickly and too soon.
• 23:36
  The problem with that, and it's and it's maybe more about positioning,
• 23:39
  is setting up an SPV that has a 30,
• 23:42
  60-day closing window because your deposit is going hard,
• 23:45
  because you need to get the cash in.
• 23:46
  A lot of times, if you're doing broad outreach to investors,
• 23:50
  meaning it's not friends and family,
• 23:52
  but it's kind of one or two or three arm's length removed,
• 23:55
  that's when a lot of people fail and they're not able to capitalize their projects
• 24:00
  to the tune that they need to.
• 24:02
  Because fundraising workflows and time windows are six months,
• 24:07
  nine months, three and a half months,
• 24:09
  whatever the case may be, it's not very fast,
• 24:12
  especially when you're kind of a new,
• 24:14
  call it emerging manager or real estate investment platform or any
• 24:18
  one of those things. So the the highest value that you'd receive in fundraising,
• 24:24
  in using Fundex as an example,
• 24:26
  and again, Fundex is more of a kind of a CRM where you can organize your fundraise,
• 24:29
  where you can organize all the investors you're reaching out to.
• 24:32
  To the best and highest value uses for real estate investors that
• 24:37
  are really building more of a platform,
• 24:38
  meaning this is my first asset I've invested before,
• 24:43
  this is my first asset I'm doing on my own,
• 24:44
  and the plan is to invest in multifamily properties up to
• 24:50
  50 units across the southeast of America.
• 24:53
  I'm just making something up so that you have an investment thesis and a focus.
• 24:59
  And even if each of the assets you're purchasing is an SPV,
• 25:02
  or eventually maybe you'll put it into a fund,
• 25:04
  I think it's more important to have that type of focus so that when you
• 25:08
  do go to investors, meaning I call up Jack and say,
• 25:12
  hey Jack, my name is Jeffrey, this is what I'm doing,
• 25:14
  this is the past projects we've had,
• 25:16
  this is the project we have right now that I'm looking for equity investment in.
• 25:21
  From my experience, more often than not,
• 25:24
  because I don't know you, Jack,
• 25:26
  you might be interested because you're a qualified investor.
• 25:29
  You might want to take a look at the project.
• 25:31
  But more often than not, you're gonna pass on this deal,
• 25:33
  see how I do and how I execute on this deal,
• 25:36
  and then be much more open to investing in my next deal when I call
• 25:40
  you back on that. And when I call you back,
• 25:42
  you're probably gonna ask me, hey Jeff,
• 25:43
  how'd that first deal go? That you called me about three months ago
• 25:46
  or six months ago.
• 25:47
  Mm-hmm.
• 25:48
  So
• 25:48
  Even more so with real estate investors and how it applies to Fundex
• 25:52
  and how Fundex could add value,
• 25:54
  you kind of have this store of pipeline to know who you've reached out to,
• 25:58
  where they are in in the investment process.
• 26:01
  And I I do that because investment and sales is very similar.
• 26:04
  And then you can start building a repository of that pipeline of investors
• 26:08
  to know that, okay, for my next deal,
• 26:10
  here's all the people that I can call.
• 26:13
  For my next deal, I've already sent all these people a newsletter
• 26:16
  for the past couple of months showing them performance on the first deal
• 26:19
  and the other deals that we've done.
• 26:20
  So we've established a line of communication.
• 26:23
  You do all of this through Fundex,
• 26:24
  and then you re- you you create a new campaign for your next deal
• 26:28
  and start reaching out to those investors,
• 26:30
  hopefully to close on the capital.
• 26:31
  When you've talked to people around this,
• 26:33
  especially in the real estate world,
• 26:35
  what is their initial reaction to it?
• 26:38
  They love it. they because look,
• 26:40
  a lot of people are raising capital still to this day through spreadsheets.
• 26:44
  A lot of the CRM platforms out there,
• 26:46
  whether it's Zoho or HubSpot or
• 26:49
  go high level or any one of those,
• 26:51
  they're not built for fundraising.
• 26:53
  They're built for sales or you can customize them to do something else.
• 26:57
  Ours is built specifically for fundraising.
• 27:00
  There is no customization of our platform.
• 27:02
  And we built that on purpose in that way.
• 27:05
  The platform is built
• 27:08
  As a literal reflection, as if somebody hired us to for the manage service
• 27:13
  for fundraise as a service, they hire an analyst who sits on Fundex helping them
• 27:17
  execute their capital raise. So that's what we've spun out is that platform that
• 27:22
  our analysts continue to sit on today.
• 27:24
  So when real estate, I'll call them investors,
• 27:27
  but it's really kind of the GPs or or sp or sponsors of these deals,
• 27:30
  take a look at our platform, it's it is the productization of what they're probably
• 27:35
  doing internally at their own shops in terms of doing the outreach,
• 27:40
  managing the stage of each investor,
• 27:42
  managing communications with the investor,
• 27:44
  having it all in one place, being able to know when in the appropriate time
• 27:49
  is to follow up with each of those investors as well.
• 27:52
  Well, can you maybe give us an example of somebody who's been leveraging your
• 27:56
  platform to a level of success?
• 27:59
  Sure. I mean we we had a private equity fund looking to raise about $200 million.
• 28:04
  they had their own IR team, so they didn't want to hire an analyst.
• 28:08
  They ended up using Fundex as the platform for raising capital for their fund.
• 28:12
  they were they were a real estate focused private equity fund.
• 28:16
  I should mention. And they ended up raising close to 150 million dollars
• 28:20
  in about nine months. It was fund two or three,
• 28:22
  so they already had a little bit of an LP base.
• 28:24
  But they came back, and and I mean,
• 28:26
  we are constantly checking in with all of our clients,
• 28:29
  we always will, but especially now that it's relatively fresh in the public eye.
• 28:33
  And they said that prior to using us,
• 28:36
  they would be lost in spreadsheets,
• 28:38
  and roughly 10 to 20 percent of the individuals that not only they've reached
• 28:42
  out to but also spoken to would fall between.
• 28:44
  The cracks and they would never follow up with them.
• 28:46
  And that, quite frankly, is one of like the worst things that could happen
• 28:51
  in fundraising, where you actually get someone interested,
• 28:55
  you get them to agree to a phone call,
• 28:57
  you have a 30 or 60-minute phone call with them,
• 28:59
  and then you never follow up with them.
• 29:03
  you now you've just not only wasted their time,
• 29:05
  but you've wasted your own time and it's also value that you're that you're wasting.
• 29:09
  When you get a when you buy a lead,
• 29:12
  whether it's a spreadsheet or pitch book or somebody gives you a bunch of leads,
• 29:16
  there's some intrinsic value to a lead.
• 29:18
  Then that lead agrees to have a call with you.
• 29:20
  That lead went from 30 cents to three dollars.
• 29:23
  Then you have a call with that lead and send them more information.
• 29:26
  That went from $3 to $7. Now that $7 lead,
• 29:31
  if you don't follow
• 29:32
  up with them, it's it's gone, right?
• 29:35
  The value that you have created in that lead is gone in that possible
• 29:38
  and potential investor. So again,
• 29:41
  I'm making up numbers: 30 cents,
• 29:42
  $30, $7, but the point of the matter is that there's intrinsic value
• 29:47
  to every lead you receive when you pay for a list.
• 29:49
  And every time you have a touch point with that individual lead,
• 29:54
  from an intrinsic value perspective,
• 29:56
  that lead gets more expensive or more valuable to you.
• 30:00
  So this just helps with structured organization,
• 30:03
  structured, consistent outreach as well,
• 30:06
  which is the cornerstone of fundraising,
• 30:08
  right? If you're fundraising, especially for real estate,
• 30:10
  A, you're probably in a state of always fundraising.
• 30:13
  But B, the only way that it really works is that if you're consistent around it.
• 30:18
  Well, th this has been a really interesting conversation,
• 30:20
  Jeffrey. We're gonna dive into the rapid fire and start closing out this episode
• 30:24
  Sure.
• 30:24
  here soon, but before we do, is there anything else we should have tried
• 30:28
  to hit on here today?
• 30:29
  No, I don't think so. I mean everyone everyone in real estate now
• 30:32
  I think is watching midterms, is watching where interest rates go.
• 30:34
  A lot of people say interest rates are going to go down after midterms,
• 30:37
  although the signaling has been opposite fr from the Fed.
• 30:41
  And I think they're just trying to make us keep guessing.
• 30:44
  my opinion is that they probably get pulled back or or nor or kind
• 30:48
  of flat now through the rest of the year after the midterms.
• 30:51
  And I think even if they flat,
• 30:53
  they remain flat, there's a ton of capital in the market trying to push itself
• 30:57
  out there. so it really depends on where you are.
• 30:59
  I have a lot of opinions. I still have very close ties to a lot
• 31:02
  of different real estate family offices and projects and owners and operators.
• 31:06
  So happy to chat with anyone offline as well if they'd like to get into it.
• 31:10
  Just to remind everybody, you can find more information at usefundex.com.
• 31:15
  That's going to be a clickable link in the show notes.
• 31:16
  But if you're ready, Jeffrey, we will dive into the rapid fire and close
• 31:20
  out this episode. What lie
• 31:21
  Let's do it. Yeah, let's do it.
• 31:23
  do entrepreneurs often tell themselves?
• 31:26
  Nobody else is better than me in in this business.
• 31:29
  This is the greatest thing since sliced bread.
• 31:31
  no one is even close to doing what I'm doing.
• 31:33
  No one's ever heard of this type of project.
• 31:35
  No one is even close to me in doing it.
• 31:37
  A lot of that has been less and less true over the past couple
• 31:44
  of years and will and will continue to be less and less true over the next couple
• 31:47
  of years, especially as it relates to software,
• 31:50
  as it relates to services businesses,
• 31:52
  because of AI.
• 31:53
  So I'm not saying be modest. I think every entrepreneur needs to be
• 31:56
  a little bit crazy and and brazen.
• 31:58
  but just keep in mind that there is likely competition out there that
• 32:01
  you need to address.
• 32:04
  If you could go back in time and give your younger self one piece of advice,
• 32:07
  what would it be?
• 32:08
  There they're I talk about this a lot actually,
• 32:10
  even with analysts that come on.
• 32:12
  I look at it now as kind of a two-sided coin.
• 32:15
  On one side, and I always believe this,
• 32:17
  is that I truly care about every single client I have.
• 32:20
  And I'm not saying that just to say it on a podcast or a show or whatever,
• 32:23
  but like I
• 32:25
  It's just my personality. I want every client that comes to us to
• 32:29
  be able to successfully raise capital.
• 32:31
  I truly do. And whatever I can do to help them do that,
• 32:34
  I I will do and I have been doing.
• 32:36
  And the one piece of advice that I didn't realize now looking back,
• 32:39
  flipping the coin to the other side,
• 32:41
  is that there will always be more clients.
• 32:44
  And I think it's part and parcel.
• 32:45
  As long as you care, as long as you do the right thing for people,
• 32:48
  as long as you can focus on people around you making money,
• 32:52
  you will make money. And there's always going to be more clients as long
• 32:55
  as you do the right thing for them.
• 32:56
  I need you to look back at whatever business,
• 32:58
  you maybe the one you're currently in here today and and look at that first hire
• 33:03
  and that first position you filled.
• 33:05
  Would you fill that position the same way today if you went back and
• 33:10
  and did it again?
• 33:12
  Yes. Easy answer. the individual I have working with me now
• 33:16
  has helped incredibly not only build out the fundraiser as a service piece,
• 33:19
  has helped a lot build out Fundex,
• 33:21
  but also has been responsible for maintaining the company culture as
• 33:24
  we continue to grow past 30, 35 people.
• 33:27
  So it's it's without without hesitation,
• 33:31
  is yes, is my answer.
• 33:33
  And finally, what single tool or process have you implemented that
• 33:36
  has had the biggest time saving impact?
• 33:39
  Saying no. and and I and I think it's look,
• 33:42
  it's it's hard. I heard that when,
• 33:44
  you know, 10, 15 years ago when I was just starting out.
• 33:47
  I heard that a lot too. And I thought to myself,
• 33:49
  like, how how the heck do I say no?
• 33:51
  I need money, I need to make money,
• 33:52
  I have a new family, I just got married and all this stuff.
• 33:55
  But I think that there's a strategic way to say no,
• 33:59
  to value your time more. Of where,
• 34:01
  where can I, I'll look at myself,
• 34:03
  where can Jeffrey provide the most value?
• 34:06
  To the person he's talking to on the other end,
• 34:08
  whether it's a podcaster, a new business,
• 34:10
  or or or internal analyst or associate or whoever I'm talking to.
• 34:14
  I used to kind of have the mentality of you have to go out there,
• 34:18
  you know, kiss a thousand frogs before you get your princess.
• 34:21
  I I not that I don't believe that,
• 34:24
  I still believe that very much so when you're starting out.
• 34:27
  But as as quickly as you possibly can,
• 34:30
  learn the power of no.
• 34:32
  Well, Jeffrey, this has just been fantastic.
• 34:35
  one last time you can find more at usefundex dot com.
• 34:39
  Clickable link in the show notes.
• 34:41
  Really would appreciate you coming back again sometime,
• 34:44
  Jeffrey. This was great. It was great to meet ya.
• 34:47
  Would love to. Thank you so much for having me,
• 34:49
  Jack.