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Thomas St John - From Firefighter To Financial Freedom · REL Freedom Podcast

• 0:00
  SPEAKER_00: But I called for rent signs.
• 0:01
  SPEAKER_00: I found a couple of landlords with vacant houses.
• 0:03
  SPEAKER_00: Figured out, hey, maybe do you want to sell this house?
• 0:05
  SPEAKER_00: It's vacant.
• 0:06
  SPEAKER_00: Maybe it's a a pain for him or a pain point.
• 0:09
  SPEAKER_00: Well, one guy ended up, I don't know how he turned the table on me with this conversation, but he ended up higher hiring me.
• 0:15
  SPEAKER_00: He didn't want to sell the property, but I so I just agreed to work for him.
• 0:19
  SPEAKER_00: I thought that was cool.
• 0:20
  SPEAKER_00: Uh, you know, get a way to learn how to how to do it, learn what he's doing.
• 0:24
  SPEAKER_00: And uh eventually I ended up buying one of his houses, and that was my first property.
• 0:29
  SPEAKER_00: Welcome to the Real Freedom Show.
• 0:31
  Mike Swenson: We inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:36
  Mike Swenson: I'm your host, Mike Swenson.
• 0:37
  Mike Swenson: Let's get some real freedom together.
• 0:49
  Mike Swenson: Welcome to another episode of Real Freedom, where we talk about different ways of building time and financial freedom through opportunities in real estate.
• 0:56
  Mike Swenson: I'm your host, Mike Swenson.
• 0:58
  Mike Swenson: If you want to get started on your real estate investing journey, check out our website, freedom throughrealestate.com.
• 1:05
  Mike Swenson: It's where we put all of our content articles for you to be able to see what other people are doing, learn and hopefully get inspired by other people's stories because it's all about taking action and you can listen to podcasts, go to websites and all that, but find a way to take action inside of real estate in a way that it's exciting for you.
• 1:21
  Mike Swenson: And I'm super excited today to be able to share another awesome story for you.
• 1:25
  Mike Swenson: We've got Tom St.
• 1:26
  Mike Swenson: John.
• 1:27
  Mike Swenson: He is the founder and managing partner of North Corp Capital, based out of Toledo, Ohio.
• 1:32
  Mike Swenson: And so excited, Tom, to learn from you and hear about your journey and for our listeners to be able to be inspired and find their way into real estate as well.
• 1:40
  Mike Swenson: So welcome to the show, Tom.
• 1:41
  Mike Swenson: We're excited to have you.
• 1:42
  SPEAKER_00: Yeah, I'm really excited to be here.
• 1:44
  SPEAKER_00: Thanks, thanks a lot for having me.
• 1:45
  SPEAKER_00: The name of your podcast was uh that's exactly what I shoot for, freedom and teaching other people how to achieve achieve freedom.
• 1:52
  SPEAKER_00: So real excited to be here, Mike.
• 1:54
  Mike Swenson: Yeah, tell us a little bit about why real estate for you and how you got into real estate and and kind of how that that journey first started.
• 2:01
  SPEAKER_00: Okay, yeah, I'll take you back to where um around 2005, my dad, he um I tell the story a lot.
• 2:08
  SPEAKER_00: He had a heart attack on a golf course, and um, you know, he worked in a power plant for 32 years, uh, shift work, weekends, you know, overtime.
• 2:18
  SPEAKER_00: And uh this heart attack kind of forced him to leave his job, you know.
• 2:22
  SPEAKER_00: And I remember him being in the hospital and just saying, you know, whatever whatever I got, I got.
• 2:26
  SPEAKER_00: I'm kind of done.
• 2:27
  SPEAKER_00: Well, fast forward a couple weeks after that, you know, we get this big package in the mail, and I'm real excited.
• 2:32
  SPEAKER_00: I go out and bring it into the house, and we tear it open, and it's this big telescope.
• 2:37
  SPEAKER_00: And I don't know if I was just at that age, but you know, my dad had worked for 32 years in a at a power plant, and uh it was like this telescope was his reward, and that just like symbolized something to me of what 32 years of doing what you're told, doing what everyone tells you to do, what that really gets you.
• 2:56
  SPEAKER_00: You know, and my dad didn't have much in his 401k, didn't have a he was kind of forced to retire, and then he had kind of had to figure it out, you know, and live live off of way less than he had planned.
• 3:07
  SPEAKER_00: So I looked at that telescope and I just kind of vowed at that at that moment to find another way.
• 3:13
  SPEAKER_00: Um back then didn't have a bunch of podcasts like we do now and YouTube videos.
• 3:17
  SPEAKER_00: So, you know, I went to the library and uh I I tell people I especially young younger people a lot, you know, there's a lot of value in books.
• 3:24
  SPEAKER_00: I don't think people read books as much as they should these days, but I read hundreds and hundreds of books on real estate and business, on how to make money on eBay, everything I could about just entrepreneurial chip.
• 3:37
  SPEAKER_00: But this the common denominator always kind of went, always kind of led me to real estate.
• 3:41
  SPEAKER_00: And that's kind of where I found my passion and I was addicted to it from day one.
• 3:45
  SPEAKER_00: You know, you didn't need a ton of money to start, and uh, it seemed like the perfect uh vehicle for me to be able to scale.
• 3:53
  Mike Swenson: Yeah, interesting because I had a similar story with my parents seeing their W-2 journey not end how it should have.
• 4:01
  Mike Swenson: Um, you know, kind of early retirement based on you know them being older.
• 4:05
  Mike Swenson: Hey, we can hire new people for cheaper, and just kind of see how they were phased out.
• 4:09
  Mike Swenson: And I remember thinking the same thing of like, well, if that's what you're supposed to do, right?
• 4:13
  Mike Swenson: Get a good job, fund your 401k, and everything will be happy.
• 4:17
  Mike Swenson: And then it didn't work out that way.
• 4:19
  Mike Swenson: It's like they got to find find something else.
• 4:21
  Mike Swenson: So, so kind of in that in that same boat.
• 4:23
  SPEAKER_00: Yeah, I think it's just a I think it's just a lie that we're told about money, or maybe because it's it's not very common knowledge to do another to take another route.
• 4:33
  SPEAKER_00: You know, you just kind of follow in the path of what you're told, what your teachers tell you in school.
• 4:38
  SPEAKER_00: And not that it there's any ill intent, it's just the teachers don't know either.
• 4:42
  Mike Swenson: Yeah.
• 4:43
  Mike Swenson: So you're you're interested in real estate.
• 4:45
  Mike Swenson: What did you look at keen in on?
• 4:48
  Mike Swenson: And then what I love to hear from people is kind of making that leap from I own no real estate or no rental real estate to now I own something.
• 4:56
  Mike Swenson: Kind of talk about that that moment getting there for you.
• 4:59
  SPEAKER_00: I actually um I drove around, I I found a couple of neighborhoods in my local market that I I was familiar with, and I thought, you know, the prices were where I could uh cash flow a little bit, and I just I started calling for rent signs.
• 5:12
  SPEAKER_00: Kind of another thing that's not too popular these days, you know, with online um search engines, but I called for rent signs.
• 5:20
  SPEAKER_00: I found a couple landlords with vacant houses, figured out, hey, maybe do you want to sell this house is vacant, maybe it's a pain for him or a pain point.
• 5:28
  SPEAKER_00: Well, one guy ended up um, I don't know how he turned the table on me with this conversation, but he ended up higher hiring me.
• 5:35
  SPEAKER_00: He didn't want to sell the property, but I so I just agreed to work for him.
• 5:39
  SPEAKER_00: I thought that was cool.
• 5:40
  SPEAKER_00: Uh you know, get away to learn how to how to do it, learn what he's doing.
• 5:44
  SPEAKER_00: And uh eventually I ended up buying one of his houses, and um, that was my first property, which wasn't until 2006.
• 5:50
  SPEAKER_00: I had some credit stuff to clean up, some down payment money to save up.
• 5:53
  SPEAKER_00: Yeah, 2006 I was able to buy my first one, 2007, eight, and nine, I was able to buy about four houses each year um up until uh we all know it happened in 2008 with uh you know the great financial crisis.
• 6:07
  SPEAKER_00: Um, prices went way down.
• 6:09
  SPEAKER_00: I didn't care.
• 6:09
  SPEAKER_00: That was good for me, but the problem was the credit crunch.
• 6:12
  SPEAKER_00: I couldn't buy nothing.
• 6:13
  SPEAKER_00: You know, a guy like me just couldn't walk into a bank and get a loan.
• 6:16
  SPEAKER_00: You know, the door the doors were closed for for people like me.
• 6:19
  SPEAKER_00: So that was the kind of the first challenge I had to overcome is how to how to build my portfolio.
• 6:24
  SPEAKER_00: Um, after 2009, I had about 10 houses, but I just couldn't really get any more.
• 6:29
  Mike Swenson: So having 10 houses, what was kind of the aim there?
• 6:32
  Mike Swenson: Obviously, you just were trying to find stuff that was cheap that would work.
• 6:36
  Mike Swenson: I also like to ask people too to help understand.
• 6:39
  Mike Swenson: I think so sometimes buyers try to get too sophisticated now with numbers and returns and calculations.
• 6:44
  Mike Swenson: And in some ways, it's it's probably just this looks like a good deal.
• 6:47
  Mike Swenson: I'm gonna buy it.
• 6:48
  Mike Swenson: I didn't even run any numbers, or I did back of the napkin type stuff to get your first 10.
• 6:53
  Mike Swenson: But how much analysis did you do on those first 10?
• 6:56
  SPEAKER_00: Well, all the books I read, I mean, I was I was pretty good as as far as like a I would consider myself I mean an amateur underwriter back then, but I knew I knew more than a lot of people knew.
• 7:05
  SPEAKER_00: But just from the but then to to um implement that in the real life, I I don't I I wouldn't say I was very good at that.
• 7:12
  SPEAKER_00: I looked at a house that was on the market that you know, a three-bed, one bath.
• 7:17
  SPEAKER_00: I loved the ranch style houses with um tenants that seem to like that better.
• 7:21
  SPEAKER_00: I loved brick, so I didn't necessarily only buy brick ranches, but that is what I kind of keyed in on a little bit.
• 7:28
  SPEAKER_00: You know, I didn't have a whole ton of capital either, so I did really light rehabs.
• 7:33
  SPEAKER_00: You know, if I had a new roof, that was perfect.
• 7:36
  SPEAKER_00: I didn't have enough money to replace a roof.
• 7:38
  SPEAKER_00: You know, I looked for houses that just paint and carpet, you know, carpet and paint, brain surgery, they ain't it ain't.
• 7:44
  SPEAKER_00: That's kind of the the motto I went by back then.
• 7:47
  SPEAKER_00: Just keep it simple.
• 7:48
  SPEAKER_00: The all the stuff that I could I could do as far as painting, replace flooring.
• 7:53
  SPEAKER_00: I wasn't even that really skilled as a handyman.
• 7:55
  SPEAKER_00: I I became skilled over the years.
• 7:57
  SPEAKER_00: And I would encourage people that get started out to do the same.
• 8:00
  SPEAKER_00: I don't I wouldn't encourage people to do like major rehabs to start with, you know.
• 8:04
  SPEAKER_00: Get your feet wet.
• 8:05
  SPEAKER_00: What I wanted to build was operational experience.
• 8:08
  SPEAKER_00: I always wanted multifamily, it was always my path.
• 8:12
  SPEAKER_00: I just needed some operational experience and units under management to be able to walk into a bank and say, hey, I I've owned and operated these properties for a number of years.
• 8:20
  SPEAKER_00: Now I want to step into multifamily.
• 8:22
  SPEAKER_00: So that's kind of the experience I wanted to gain is the leasing and the operations part of it.
• 8:27
  Mike Swenson: And were you working a job at the same time as that, or kind of when how long were you doing that?
• 8:32
  SPEAKER_00: Yeah, actually I was a I was a mailman for for a lot of those years.
• 8:37
  SPEAKER_00: And then I actually one of my dreams in life was to become a fireman.
• 8:42
  SPEAKER_00: So around that, around that time I I got in the fire service, and um that actually was very beneficial because the fire service I worked 24 hours on and 48 hours off.
• 8:53
  SPEAKER_00: So I just like sacrificed sleep, which I even I still do that today, but uh I had 48 hours off to like to try to grow my business and um search for properties, make offers.
• 9:04
  SPEAKER_00: So then uh looking back, I think that was um that kind of helped propel my growth a little bit, getting into the fire service just because I had so much free time.
• 9:12
  Mike Swenson: Yeah, I've actually trying to think it had a couple people on on this podcast that have been former firefighters for kind of the same reason and and just being able to build up that stuff while you're still continuing your job, and then eventually there's a time where you don't don't have to do those at the same time.
• 9:27
  SPEAKER_00: Yeah, being on the fire department was helpful too because everyone on the fire department has like a little side job, you know.
• 9:32
  SPEAKER_00: So I I got to meet people who do plumbing, people who do painting.
• 9:35
  Mike Swenson: You had first first access to fire damaged properties too, I bet.
• 9:39
  Mike Swenson: Yeah, yeah.
• 9:39
  SPEAKER_00: I didn't I never I never bought any of those, you know.
• 9:42
  SPEAKER_00: I felt I felt like that was kind of a bad omen, but yeah, I didn't even realize at the time because that was a one-man show for a long time.
• 9:48
  SPEAKER_00: Um, you know, 10 years.
• 9:50
  SPEAKER_00: I I hired my brother as a maintenance guy, um, and he he died tragically in a car accident.
• 9:56
  SPEAKER_00: And uh after that it was really tough because I just wanted to be the operations acquisitions guy, um you know, manage the tenants.
• 10:04
  SPEAKER_00: I didn't had I don't enjoy all the maintenance, but I went for a long time um kind of doing it on my own.
• 10:11
  SPEAKER_00: When I finally decided to really ask for help, really find people in the space who are, you know, I had 107 units at one time when I was kind of at my wit's end of what uh all what I could manage.
• 10:23
  SPEAKER_00: And um I learned pretty quickly that I was building this um business to gain freedom, to gain wealth.
• 10:32
  SPEAKER_00: And I wasn't really getting any of that.
• 10:34
  SPEAKER_00: It was actually costing more of my time, and I actually had less control the more units I had, especially doing it on my own.
• 10:40
  Mike Swenson: I was actually just at a lunch today talking to a guy who is interested in investing, explaining like the couple of paths you can take.
• 10:46
  Mike Swenson: And I said, that's that's typically where that path leads, is try to do it yourself, and you end up with a second job or just completely overwhelmed with what you have, and so trying to find a solution that can scale and or give you the the time freedom um without burying you in in work.
• 11:03
  SPEAKER_00: Yeah, exactly.
• 11:04
  SPEAKER_00: I didn't really know that path existed, to be honest with you.
• 11:08
  SPEAKER_00: You know, all the books I read and stuff, it was all about you know you know, operational ownership.
• 11:14
  SPEAKER_00: And as I've grown through the business, now I focus more on economic ownership.
• 11:19
  SPEAKER_00: I don't care about the operational ownership, you know.
• 11:22
  SPEAKER_00: Why would you want to have part of that?
• 11:23
  SPEAKER_00: It it really takes a super high level of expertise and years to build um you know that deal flow, those broker relationships, the maintenance teams, the community managers, that whole it's it's almost impossible, if not impossible, to do that on your own, to build a 10 or 20 or 100 million dollar portfolio.
• 11:44
  SPEAKER_00: No one's ever done it by themselves.
• 11:46
  Mike Swenson: When did the tide start to turn for you then in terms of going from single family into multifamily?
• 11:51
  SPEAKER_00: Well, that took until uh I always tell people it took me nine years to get started because it wasn't until 2015 the lending you know chain started loosening up on banks.
• 12:01
  SPEAKER_00: You know, at that time I had a bunch of single family houses, so I had the operational experience to go into a bank.
• 12:07
  SPEAKER_00: Um, the down payment, that's always the problem, right?
• 12:10
  SPEAKER_00: You know, everyone needs you got to come up with 25% somewhere.
• 12:13
  SPEAKER_00: I didn't know anything about raising capital.
• 12:15
  SPEAKER_00: I didn't I didn't really have a network of anyone with any money.
• 12:18
  SPEAKER_00: I was the guy that people called when their electric bill was passed due, you know.
• 12:23
  SPEAKER_00: So I uh what I ended up having to do was I I held an auction.
• 12:27
  SPEAKER_00: I I like had a fire sale on 10 of my single family homes to be able to, and the auction went terrible, by the way.
• 12:34
  SPEAKER_00: I mean, a lot of them, a lot of them sold for minimum bids, but I was able to uh sell enough uh single families to be able to foot the down payment for my first multifamily, which was a slow 12-unit building.
• 12:44
  SPEAKER_00: Within two years or about a year and a half after that, I had acquired uh three more smaller multifamily buildings, and I kind of lived in that mid-size 12 to 36 unit multifamily space for a long time, you know.
• 12:57
  SPEAKER_00: It was it was too big for the the house flippers to deal with, and I was too small for the big guys to really care about.
• 13:03
  SPEAKER_00: So I kind of found that little niche for for a lot of years.
• 13:06
  Mike Swenson: And then when you were when you were doing the multifamily stuff there with those types of size properties, were you doing maintenance yourself or did you hire that out?
• 13:14
  SPEAKER_00: I hired most of it out, but I would I didn't have like a a a turnover crew, so I would I would get vacancies and I would go there the next day, you know, load up a dumpster myself, start painting the walls, and have my maintenance guys you know come in if I was gonna replace cabinets or do um you know, but I I I kept them pretty busy just on normal repairs to keep the tenants.
• 13:35
  SPEAKER_00: Yeah, I've always been a big proponent of you know, people don't want to move, they would just want great service, you know.
• 13:42
  SPEAKER_00: So I I took the onus was on me to take care of most of the vacancies.
• 13:46
  SPEAKER_00: I did that for a long time until like I said, I had over a hundred units when I realized I'm getting behind here, I can't do this all all on my own.
• 13:54
  SPEAKER_00: And then I had my daughter, and that kind of that's what really flipped a switch for me.
• 13:59
  SPEAKER_00: Like I did all this to to have this life to go golf and enjoy a beach, you know, and uh there's zero time for that.
• 14:08
  SPEAKER_00: And having my daughter finally finally clicked for me, like, wow, I need to re- I need a retool here, you know.
• 14:16
  Mike Swenson: Yeah, it's funny hearing your story because I I think about we tried to do a flip and I got sucked in trying to do more work myself.
• 14:23
  Mike Swenson: And at the end of the day, when we ended up selling it, long story short, we basically broke even and I thought, well, here I spent all this time away from my family and my kids for freedom, and that never happened.
• 14:33
  Mike Swenson: So I was like, I gotta come up with something else.
• 14:36
  Mike Swenson: So then that's when we moved to the larger multifamily, because I said, and a ways away from where I live, because I was like, I then can't insert myself into this, I have to work through people.
• 14:46
  Mike Swenson: So I I totally get that.
• 14:48
  SPEAKER_00: Yeah, finding great third-party management is is a great tool.
• 14:53
  SPEAKER_00: You gotta be careful, you gotta find the right ones and do a good job of managing the manager, right?
• 14:58
  SPEAKER_00: But I kind of chose to start investing alongside other operators um that own and manage these large large complexes.
• 15:06
  SPEAKER_00: Some of them are vertically integrated, have their own management, some don't, but that's kind of where I excel now.
• 15:12
  SPEAKER_00: I just I love going out, talking to people, meeting people who own and operate these multifamilies.
• 15:16
  SPEAKER_00: Now I still do have my portfolio here locally and I have a management management team in place.
• 15:22
  SPEAKER_00: But uh I almost I focus almost solely on investing in other people's deals now and bringing my investor network into those deals, and they trust me because I have the experience of uh vetting them, understanding the the underwriting.
• 15:35
  SPEAKER_00: Most of these people don't have the time or even want to look at a financial model and figure out what the IRR where all the red flags and the pitfalls might be and all these hurdles and stuff.
• 15:46
  SPEAKER_00: You know, people don't have the time to deal with that.
• 15:48
  SPEAKER_00: So I actually have an odd obsession of with that.
• 15:52
  SPEAKER_00: I like looking at deals like that.
• 15:55
  SPEAKER_00: So I always invest my money first, so I can very confidently tell my investors, you know, just invest where I invest.
• 16:01
  SPEAKER_00: I've done done pretty well with that so far, and I actually enjoy it a lot more.
• 16:05
  Mike Swenson: So talk about that for a second.
• 16:07
  Mike Swenson: So, you know, you started with putting your own money into your own deals, then you're you know, raising money for deals, now you're raising money for other people's deals.
• 16:15
  Mike Swenson: If I'm sitting here, you know, hey, I, you know, as a firefighter, I worked with you or whatever, and I say, hey, Tom, tell me about this real estate thing.
• 16:22
  Mike Swenson: Like I've only invested in stocks or maybe nothing at all, or you know, how do I get into real estate?
• 16:28
  Mike Swenson: Why would I invest in you?
• 16:30
  Mike Swenson: Like, how does that conversation typically go with somebody that you've got, you know, like a good relationship with?
• 16:35
  SPEAKER_00: Yeah, well, the the first thing I tell them is to not invest in public markets to begin with, you know, period.
• 16:41
  SPEAKER_00: You know, Vanguard and BlackRo, believe me, the guys that are the CEOs of those companies, they don't invest in those funds, you know, they invest in private markets.
• 16:51
  SPEAKER_00: There's just way less, uh, way less volatility, and uh there's a lot better um growth and compounding, you know, when you invest in private markets correctly.
• 17:02
  SPEAKER_00: Now, I have the one of the first investments I ever made was in a in a bad operator.
• 17:07
  SPEAKER_00: It was a great deal.
• 17:08
  SPEAKER_00: The numbers worked, the projections were were uh phenomenal.
• 17:12
  SPEAKER_00: It was exciting, you know, but I kind of fell for the noise a little bit and I lost a big chunk of money on my first one.
• 17:18
  SPEAKER_00: And that's when I started my company, North Corp Capital, to really dial in with the investors.
• 17:24
  SPEAKER_00: So when I'm when fireman and other people talk to me in the industry, you know, I I can very simply walk them, you know, five or ten minutes through an underwriting deal and really explain the the underwriting, why it's being why it's conservative and why this deal why these projections don't even have to work for this for the deal to work.
• 17:44
  SPEAKER_00: You know, you can look at like an underwriting model and see like a four or five percent rent growth projection.
• 17:50
  SPEAKER_00: And if that's what it requires for the deal to work, that's kind of a red flag.
• 17:56
  SPEAKER_00: Or the cap rates, you know, if they're buying it at a six cap, but they're projecting on selling it at a four and a half cap, you know, those two numbers them uh those two metrics alone have a very um exponential impact on the outcome of a property.
• 18:12
  SPEAKER_00: And I can make any deal look good on a spreadsheet, you know.
• 18:15
  SPEAKER_00: So those are the two things I like to point out to, especially a new person investing.
• 18:20
  SPEAKER_00: And um, then they can see you know how how the numbers could work.
• 18:24
  SPEAKER_00: I guess what I mean is if I I show them how I stress test the deal, you know, it's way easier to lose money like staring at a laptop than it is in real life.
• 18:32
  SPEAKER_00: So if I can show like this is what has to happen for this deal to not work.
• 18:37
  SPEAKER_00: Yeah.
• 18:37
  Mike Swenson: Yeah, I I was a finance major and I tell people like you can make numbers tell any story that you want.
• 18:42
  Mike Swenson: So you've got to be able to especially with investors, be conservative, right?
• 18:47
  Mike Swenson: And you want, you know, we're trying to create wins for you versus trying to pad numbers that we couldn't produce, and then all of a sudden you're gonna be mad at me three to five years down the road because it didn't hit the projection.
• 19:00
  Mike Swenson: So we are trying to be accurate, but you've got to dig into those numbers to know is it accurate or am I just trying to get your money?
• 19:05
  SPEAKER_00: Yeah, yeah.
• 19:06
  SPEAKER_00: When you talk like you hear all the time, like the you know, uh aligned incentives, you know, and that's all great to talk about, but like let's see that.
• 19:15
  SPEAKER_00: And so I'll be able to show the people how their investor um how the investment is aligned with with the investors, you know.
• 19:23
  SPEAKER_00: Do the people get paid based on performance or based on fees?
• 19:28
  SPEAKER_00: That's kind of the number one thing, you know.
• 19:29
  SPEAKER_00: If if if there's I don't mind an asset um an acquisition fee or even an asset management fee, but is there is it just is this company a just a holding company?
• 19:40
  SPEAKER_00: They're just getting paid to hold properties and they're just charging fees, or do they get paid to perform?
• 19:45
  SPEAKER_00: You know, most of the some of the deals I invest in, you know, I don't know if I mean as a syndicator, I've syndicated several deals.
• 19:52
  SPEAKER_00: You might make a little bit of money on the front end, but you're making almost all your money on the back end.
• 19:57
  SPEAKER_00: In the middle, where you're managing the property, there's there's not a whole lot of meat on the bone for the syndicator.
• 20:02
  SPEAKER_00: You know, I call it brain damage, you know.
• 20:04
  SPEAKER_00: So I look at that like you know, if the investor wins or if the syndicator, the sponsor wins before the investor wins, the incentives are not aligned.
• 20:14
  SPEAKER_00: And I can usually point that out pretty quickly on a on a model.
• 20:17
  Mike Swenson: Maybe for people that under might understand the the numbers and what you're talking about, they still have to be able to make that leap and invest into real estate.
• 20:26
  Mike Swenson: And so, you know, for some people it's it's hard because it's not their decision, right?
• 20:32
  Mike Swenson: If somebody's gonna sell, right?
• 20:33
  Mike Swenson: I could go buy my own duplex and hey, times are tough or we got this bill coming up, let's sell, which even then you might not make money at that point.
• 20:42
  Mike Swenson: But people have to release control.
• 20:44
  Mike Swenson: And so you really are putting a lot of trust in the person you're investing with and their operation because yeah, I can't be like, you know what, guys, in this big building, I'm out, I want my money back, I want to sell.
• 20:56
  Mike Swenson: No, you're you're investing in a a group and you don't you don't have that voting right that you would if it was just I'm buying my own duplex.
• 21:03
  SPEAKER_00: Yeah, I think for me, I don't I hate like the sales here, the um you know, the those kind of tactics, you know.
• 21:11
  SPEAKER_00: I just tell people my story, and people will say that a lot of the time, like I don't I'm afraid to give up control, and I'll tell them, no, you're you're gaining control of your time.
• 21:22
  SPEAKER_00: You know, what do you want control of?
• 21:24
  SPEAKER_00: You know, of the building or of your time?
• 21:26
  SPEAKER_00: Why why would you buy a building to begin with?
• 21:28
  SPEAKER_00: You can earn more money and create more time on the back end.
• 21:31
  SPEAKER_00: So when I walk them through my story and how that absolutely led to zero control, I might have had more money, but I had no control of my time.
• 21:40
  SPEAKER_00: I would walk around with my daughter, always waiting.
• 21:43
  SPEAKER_00: You're you're a a phone call away from the every day is an audible, you know.
• 21:49
  SPEAKER_00: And so when I walk people through that story, a lot of people who know me that saw me go through those periods, they knew how they saw how busy I was, golf outings I had to skip.
• 21:58
  SPEAKER_00: Um just Stuff like that.
• 22:00
  SPEAKER_00: So I just kind of sh like to share my story.
• 22:03
  SPEAKER_00: And it helps for me as a fund manager now that raises money for other people's deals when they see that I invested my money.
• 22:10
  SPEAKER_00: You know, the last guy who invested with me, I I didn't know uh previously.
• 22:14
  SPEAKER_00: He actually called me a couple weeks later.
• 22:16
  SPEAKER_00: Well, it was a couple months later when he got his first distribution.
• 22:19
  SPEAKER_00: And he said, Hey man, you know you know why I invested with you?
• 22:22
  SPEAKER_00: And I thought I knew, but I was like, No, why did you invest with me?
• 22:26
  SPEAKER_00: And he said, Well, because if if you go, if I go down, I know you're going down too.
• 22:30
  SPEAKER_00: I was like, I thought, you know, I thought that was hilarious.
• 22:32
  SPEAKER_00: I told him I was gonna put it in my book.
• 22:34
  SPEAKER_00: You know, yeah.
• 22:35
  Mike Swenson: That's funny.
• 22:36
  SPEAKER_00: For better or worse, at least he knows somebody else is suffering along with him.
• 22:39
  SPEAKER_00: Yeah, exactly.
• 22:40
  SPEAKER_00: That's that just gave him enough peace, like, hey, this guy's gonna he's gonna go down with me.
• 22:44
  SPEAKER_00: That's that's fine, you know.
• 22:46
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 22:50
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 22:57
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 23:00
  Mike Swenson: Real estate investing is what we do full time.
• 23:02
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 23:05
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 23:10
  Mike Swenson: We've got large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 23:16
  Mike Swenson: The best thing is it's 100% passive to you for less capital than you've put down trying to acquire a property on your own.
• 23:23
  Mike Swenson: Don't let this year go by before you don't make the leap, add to your portfolio, or you just did an analysis by paralysis.
• 23:30
  Mike Swenson: To find out more, visit freedomthroughrealestate.com and click on invest.
• 23:35
  Mike Swenson: You can book a call and learn more there.
• 23:37
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 23:40
  Mike Swenson: That's freedomthroughrealestate.com and click on invest.
• 23:44
  Mike Swenson: So talk about the process of kind of vetting out these deals and vetting out these operators and you know what what's the type of stuff you look for.
• 23:51
  SPEAKER_00: Well, mainly when I had my first deal go really go really bad as a as a passive investor, the the number one thing that the first red flag was the communications.
• 24:01
  SPEAKER_00: You know, the transparency in the in the numbers, um, in the communication.
• 24:06
  SPEAKER_00: Communication on that first deal after the first month of distributions was fine.
• 24:10
  SPEAKER_00: Then the second month, the third month, it took about six months, and I stopped hearing from them hearing from them.
• 24:15
  SPEAKER_00: They stopped responding.
• 24:17
  SPEAKER_00: There was no system of reporting or communication.
• 24:19
  SPEAKER_00: Oh, so so I I look at that track record is is very important.
• 24:25
  SPEAKER_00: I look for people who are um very like laser focused.
• 24:29
  SPEAKER_00: They don't they have a niche, you know, they don't have properties all over the country.
• 24:32
  SPEAKER_00: They buy some self-storage, they buy some C class major value ad, they do some class A institutional stuff, you know, they got some vacant land over here.
• 24:43
  SPEAKER_00: I like people who are just laser focused on a certain market, a certain type of property, and they become experts in that particular field or that particular niche, you know.
• 24:53
  SPEAKER_00: That's kind of things I look at.
• 24:54
  SPEAKER_00: And I look for people with integrity, people I like.
• 24:56
  SPEAKER_00: You know, I I I'll fly like the next week I'm going to Texas to fly it and meet meet some people.
• 25:01
  SPEAKER_00: I try to walk the properties a few times a year, meet with the guys, meet their off go in their offices, meet their kids, and uh you get to know people like that when you're um not just uh you know sharing emails back and forth.
• 25:14
  Mike Swenson: And then the nice thing is is you have building through relationships, you don't have to go find your own deals, right?
• 25:21
  Mike Swenson: You're working through people that are trusted, have track records, have done it before, and are people that that uh you you you totally trust.
• 25:29
  Mike Swenson: And so, in a lot of ways, now you don't have to be worried about where's my next deal coming from, you just gotta build a lot of great relationships.
• 25:36
  SPEAKER_00: Yeah, yeah, that's what I like.
• 25:39
  SPEAKER_00: Real estate, like we talked about before the show, it's such a broad industry.
• 25:42
  SPEAKER_00: You can find there's so much to do in the world of real real estate.
• 25:45
  SPEAKER_00: I mean, I really love it all.
• 25:47
  SPEAKER_00: Um, but you kind of find what makes you happy, and now I do love finding deals, and so I sometimes I interject myself into some of these guys, like, hey, did you see this property?
• 25:56
  SPEAKER_00: And they said, Yeah, Tom, we you know, we saw it, man.
• 25:59
  SPEAKER_00: You know, so I I still like to do that.
• 26:01
  SPEAKER_00: But um the other thing I'll ask you know, I know these guys very well, some some of the different groups that I like to raise for.
• 26:08
  SPEAKER_00: And I'll ask him, What tell me about a deal that went bad, and they'll tell me how they navigated that bad deal.
• 26:14
  SPEAKER_00: Like if if every property that this certain uh firm sold was in 2022, you know, at the height of all that COVID, and you could sell anything you wanted for and make money.
• 26:24
  SPEAKER_00: I say, nah, let me see something else.
• 26:26
  SPEAKER_00: Let me see what you happened in 28, 2008, or times like that.
• 26:30
  SPEAKER_00: If you know, but yeah, building relationships is what I really love to do.
• 26:34
  SPEAKER_00: And what I've learned is uh through raising capitals, people don't invest in deals, people invest in people.
• 26:40
  SPEAKER_00: Absolutely.
• 26:41
  SPEAKER_00: Real quick, I think another good avenue, and after the last cycle with rents, you know, cap rates were getting compressed, and there were some really iffy deals going on.
• 26:50
  SPEAKER_00: I didn't invest much in any real estate deals over the last five years.
• 26:53
  SPEAKER_00: So I started finding some other vehicles like private credit funds, real estate debt funds where you become the bank.
• 26:59
  SPEAKER_00: I mean, who the house always wins, you know, what's better than being the bank?
• 27:02
  SPEAKER_00: So I encourage people to explore those opportunities too.
• 27:05
  SPEAKER_00: They're not equity plays, but I earn 12%, you know, annual annual annualized return paid monthly, just on some um private credit and real estate debt funds.
• 27:15
  SPEAKER_00: I think those are super powerful too.
• 27:17
  SPEAKER_00: So in the world of private investments, I mean, multifamily is king.
• 27:21
  SPEAKER_00: I always say it's the vault, but it's not always the ATM machine.
• 27:25
  SPEAKER_00: There's some other avenues too that I would encourage people to explore in the private space.
• 27:29
  Mike Swenson: Absolutely.
• 27:30
  Mike Swenson: And and Tom, you're certainly a wealth of knowledge.
• 27:33
  Mike Swenson: So much stuff we didn't get a chance to talk to today.
• 27:35
  Mike Swenson: For people that do want to learn more and do want to connect with you deeper and hear more about what you've got going on and some of the specifics, how can they do that?
• 27:43
  SPEAKER_00: Yeah, and then go to uh my website, NorthCorp Capital.com.
• 27:47
  SPEAKER_00: I have a ton of free resources on there you can uh download for free.
• 27:52
  SPEAKER_00: Um, I'm active on Facebook, but probably most active on LinkedIn.
• 27:55
  SPEAKER_00: You can just search Tom St.
• 27:57
  SPEAKER_00: John and find me on LinkedIn and send me a text or an email, and I respond personally to everyone.
• 28:03
  Mike Swenson: Awesome.
• 28:04
  Mike Swenson: Well, thank you so much for coming on and sharing your wisdom and uh excited to see uh where you where you guys continue to go and what you invest in.
• 28:11
  Mike Swenson: Awesome.