GE Ep 66: Why Joe Fairless Left His Cushy VP Position to Start a $7M Real Estate Investment Business With Joe Fairless

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Hey guys, today’s interview is with Joe Fairless, who runs a really popular real estate investing podcast. In this episode, we’re going to talk about real estate investing, investing in general, and how you can get started with real estate investing. There’s a lot to learn here: both about investing and creating a successful business.

Joe also shares an exclusive discount for Growth Everywhere listeners on his Create a No Fail Biz Model Course, so stay tuned.

Climbing the Corporate Ladder Leads to the Desire for Something More

Fresh out of college with his crisp, new advertising degree, Joe moved from Texas to New York City so he could work alongside and compete with the best of the best in advertising. He started out as a junior product manager, and before long was the youngest VP at an NYC advertising agency, all before the age of 30.

But as a fan of Tony Robbins, he was familiar with the six basic human needs, and felt like his career in advertising wasn’t meeting the last two for him: he wanted to feel like he was growing and contributing to something that was meaningful to him on a personal level, and advertising wasn’t cutting it.

His first endeavor to start his own thing was a bit of a flop, though.

He wanted to offer consulting to college students to help them climb the corporate ladder quickly like he did. But after investing $2,000 to $3,000 in a cool website, he realized that college students don’t have the cash on hand to pay a consultant.

Lesson learned: Make sure your customers can pay for your services.

After that though, he launched Fairless Investing, which now controls $7 million by raising money with investors to buy apartment communities. Alongside this business, he’s also got a podcast called The Best Real Estate Investing Advice Ever where he interviews successful real estate investing professionals and uncovers their best advice.

Get 80% off Joe’s Create a No Fail Biz Model Course by using the code “growth”

If You Want to Invest in a Property that Costs $1 Million, How do You Raise Equity for a Down Payment?

As an investor that initially started with four single-family homes and then made the bold move from that to a full-blown apartment complex with 168 units, Joe says, “If you want to get there, you will get there.”

According to him, there’s lots of different ways to raise the funds, from hard money to crowd funding to bringing in investors.

“First and foremost, people invest in you,” he cautions. “You have to be a credible, trustworthy person with a track record of responsibility.” It also helps if you’ve got the perfect storm for getting investors on your side:

  1. You know what you’re talking about.
  2. You’ve got the numbers to back up the deal.
  3. You’re presenting a unique opportunity.

He doesn’t site a “top 3 ways” to raise equity. Instead, he says his strategy is to develop relationships with people, have conversations about what their goals are, and finding properties based on their goals to open up the door for them to do business together.

Get 80% off Joe’s Create a No Fail Biz Model Course by using the code “growth”

When is the Right Time to Get Started in Real Estate Investing if You Want to Buy a Property?

Joe says the time to get involved in real estate investing is after you’ve read up on it, you know it makes sense to you financially, and it’s something you’d enjoy from a time commitment standpoint.

He got started by reading Investing for Dummies in 2006 or 2007 because he simply wanted to know how to invest his money once he had money to invest.

While reading the book, he gravitated towards real estate because he liked the fundamentals surrounding it, it was comfortable for him, and he didn’t see much traction in stocks and bonds investing.

How Much Can You Make From a Real Estate Investment?

“With each property,” says Joe, “you should anticipate making a minimum of 10% on your money.” Though it does vary based on what you buy and how you buy it.

If you’re putting a deal together as a syndicator, Joe lists 3 ways you can make money:

  1. Collecting an acquisition or organization fee, which is usually 1% to 5% of the total purchase price.
  2. Charging an asset management fee, which is based on the assets being controlled.
  3. Having equity in the deal, which is typically an 8% preferred return, meaning investors get the return before you do, and then you split the profits above that by 50/50.

How Starting a Podcast Helped His Business

Joe started a podcast first and foremost because he can meet successful real estate professionals through it and learn from them.

His podcast gives him a valid reason to reach out to them and request their time, and in turn, they get more exposure for their businesses.

He’s also noticed that the network connections with some of the most famous real estate investors out there has made him more valuable to his clients, and it’s something he’ll also be able to collect sponsorship money for in the future.

To top it all off, it’s helped him get more clients and turned him on to being involved in online communities like Bigger Pockets, where he’s been able to meet some of the members offline.

The Best Pieces of Real Estate Advice from Joe’s Podcast

  1. There’s not a lot of land flippers out there, but it is a profitable business.
  2. Lease option is your BFF: it’s a great way to sell a property in a difficult market, and a great help in getting around a pre-payment penalty from a lender when someone needs to sell.
  3. A master lease with option to purchase releases the owner of management responsibilities while there’s a down payment agreed upon between the two parties so the owner has some kind of immediate takeaway.

The Biggest Mistake He Sees in Real Estate Investing

The single biggest mistake Joe says he’s seen in the real estate investing world is people not educating themselves or seeking guidance from the right people. Rather that cite handfuls of blunders that differ depending on the type of real estate investing at hand, he says misinformation (or lack of information) is what they all boil down to.

Citing Tony Robbins again, one of his favorite quotes from the author is “success leaves clues.”

He says the only way he was able to get to his own level of success fairly quickly was by finding investors who were already successful at what he wanted to do, reaching out to them, paying them for their time and advice, and rode on their coat tails as they helped him make it happen.

Get 80% off Joe’s Create a No Fail Biz Model Course by using the code “growth”

How a Newbie Can Get Started

Joe admits that real estate investing is a very broad category, and the type of real estate investing you get into depends heavily upon your own personality.

For total beginners, he suggests reading Investing for Dummies to find which type of investing resonates with you and then dig deeper into the subject from there.

For more information beyond the book, he suggest the Bigger Pockets website where there’s plenty of advice on all types of real estate investing – it’s also where you can start to figure out who the successful investors are that you want to look up to so you can reach out to them and partner with them if possible.

The Biggest Struggle of Starting a Real Estate Business

Raising money.

Before Joe started Fairless Investing, he’d never raised a penny for anything, let alone enough to purchase an apartment community.

He learned as he went along and suggests for new investors to keep a spreadsheet with one column for each network they’re a part of. When the time comes to raise money, your goal is to get one person from each column interested.

This way, you can name-drop in your conversations with other potential investors by telling them that [Certain Person] is either also interested or totally on board.

Another hard lesson he learned was to raise more money than you think you need, because people will let you down and back out of deals. So when push comes to shove, it’s best to have some people waiting on the sidelines rather than scrambling to cover all that money by yourself.

Create a No Fail Biz Model – The Most Highly-Rated Class on Skillshare

From all the things he’s learned from launching Fairless Investing, Joe’s put together a business model course in video form to help people with existing businesses or who have a new startup idea.

It’s a step-by-step guide for structuring a company so it can be the best in its class from exceeding customer expectations to making your business profitable.

It’s been the most highly rated class on Skillshare, and Joe’s giving an 80% discount on it to Growth Everywhere listeners: use the code “growth” on The Joe Fairless Academy website to redeem the savings

Get 80% off Joe’s Create a No Fail Biz Model Course by using the code “growth”

Advice to 25-Year-Old Joe

If Joe could step back in time to give himself advice at 25 years old, he’d say, “It’s important to give before your receive.”

He also says, “I would tell myself to focus on self-improvement… it’s crazy how that pays exponential dividends whenever you do that.”

His Best Productivity Hack

Joe hangs a small, $10 whiteboard in his workspace where he writes down his goals for the month.

Each month, before it begins, he lists out his monthly goals and puts a blank check box beside each one.

He says it’s been an incredibly useful tool in driving his focus for the month, boosting his productivity for month-long goals.

One Must-Read Book

Joe recommends Crucial Conversations, which teaches you how to approach conversations, especially when the stakes of those conversations are very high.

He says the key takeaway is to approach any conversation with mutual purpose so you can tear away what you and the other party disagree and build upon the one thing you both want to get out of the conversation. He recommends it as a great negotiating approach for real estates, as well as life and relationships.

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