Industrial Real Estate Genius! Joel Friedland's Strategy

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Today on the Aim High podcast, I'm thrilled to have Joel Friedman joining me for an insightful conversation about his decades of experience in the industrial real estate market.

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Joel's journey in real estate began in 1981, and since then he's bought and sold over 100 industrial buildings across the United States.

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He shares his laser-focused approach to investing in Chicago's industrial market and his unique strategy of using little or no debt in his deals.

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Throughout our discussion, joel opens up about the challenges he's faced, including a devastating loss in the 2008 financial crisis.

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He shares valuable lessons he's learned and how they've shaped his conservative approach to investing.

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We're also going to dive into the importance of building strong relationships and the power of active listening in both business and personal life.

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Joel's wisdom and experience shine through as he shares his insights on what truly matters when it comes to success and happiness.

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So, whether you're a seasoned investor or just starting out, this episode is packed with valuable advice and inspiration to help you navigate the world of real estate investing.

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We provide real estate investors with the tools to achieve generational wealth.

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This is the Aim High Podcast.

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Let's aim high together on episode 77.

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Hello and welcome to the Aim High Podcast Today.

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Today, I'm joined by Joel Friedland.

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How are you, joel?

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Doing great bud.

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Nice to see you.

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It's nice to see you as well.

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You've been doing this for quite some time, you know, in the real estate industry and multiple facets of the real estate industry commercial, industrial brokerage.

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Give me a quick rundown.

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Oak Ridge.

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Give me a quick rundown.

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Yeah, sure, I graduated from the University of Michigan at age 22, in 1981.

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I'm 64 now and I went to work as a leasing agent for a family that owned 84 industrial buildings and I didn't know anything about industrial.

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The family hired me.

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And I didn't know anything about industrial, the family hired me.

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Interest rates were 17 percent in 1981.

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The market was just being crushed the industrial real estate market, whichutors and service companies.

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So I cold called in industrial parks in the Chicago area to find tenants.

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Literally, I'd walk into the front door of a company and I'd say to the person sitting at the front desk hey, who do I talk to about whether you guys might be looking to move your company, because I have a building two doors away and I'd love you to move into it and move out of this dump.

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I'd say something like that, you know, just to be funny.

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One time I called a place a dump and the two people sitting in the front said we'll be right back.

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And they came back with a dad in a wheelchair and the dad said who called my building a dump?

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And I said oh no, I was just kidding.

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And he said boys, take them out.

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So the two big sons about six, four and six six picked me up, one under one arm, one under the other, and they carried me out the front door and threw me on the asphalt parking lot and I landed on my knee and cut my pants and they said and never come back.

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That's the only time I've actually gotten physically thrown out of a cold call in person, but that's what I did.

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I cold called and then I started syndicating because the family was syndicators and they taught me how to do it and they put the money up in the beginning to help me do it.

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So I started buying industrial buildings with partners and since then I've bought a hundred industrial buildings Ohio, new York, florida and the Chicago area and still to this day I'm raising money every day in chunks of 50 and a hundred thousand to go buy buildings for a couple million dollars each.

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Awesome, and how much do you have right now overall?

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We have 19 buildings We've got three of them are multi-tenant and the rest are single tenant, so we've got 22 or 23 tenants.

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It's a small operation, but the buildings can be expensive.

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We have one building that's worth 16 million.

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Yeah, I don't see industrial going away anytime soon.

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I know that there's a push against office space right now, but what is your feeling on the industrial market as a whole?

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It's hotter than hot.

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Rents have gone up 80% in the last four years.

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That's an average rent growth of 20% a year.

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Industrial is very sought after by investors, pension funds, insurance companies and individuals, but there's not a lot of it available because many companies are in their own buildings that they own and they're not looking to move.

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So it's very clogged up in terms of us being able to buy more.

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Now there's almost nothing available.

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Amazon, for example, came into the markets and took literally 100 million square feet around the country.

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In Chicago maybe 5 million square feet roughly.

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Other companies that use big warehouses like that.

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We don't buy those kind of buildings, the kind you see on the side of the highway.

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That's not what we do In Philadelphia, pittsburgh, all over East Coast, west Coast, florida, carolina is everywhere.

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The industrial market is hot as hell.

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New buildings are built and they fill up as fast as they get built.

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Those are called A industrial buildings class A.

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We buy the old brick buildings that were built in the 80s and 90s.

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They're smaller and they're not as pretty, but they work Financially.

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We try to buy buildings where our investors can make an unlevered 7% or 8% return.

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Great.

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What does your buy box look like as a whole?

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if you don't mind going into it a little bit, Well, we're laser focused now only on Chicago, because we're experts here.

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We were not experts in the other markets.

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We're experts here.

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We were not experts in the other markets.

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And I think if you're super laser focused you can do better than jumping all over the country and pretending that everything always goes up because it doesn't.

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So our buy box is 10,000 square foot buildings here, up to call it, maybe 40,000 square feet smaller buildings.

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They're worth about $100 a square foot.

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So a little building 10,000 feet is a million dollar building and 30,000 square feet is a $3 million building.

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And we buy mostly single tenant and we've got fabulous tenants.

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We buy mostly single tenant and we've got fabulous tenants.

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What people do in industrial buildings is just so cool.

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Yeah, We've got.

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We've got a tenant who makes protein bars.

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He was on shark tank in year one.

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We've got Instacart.

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We have a U S postal service warehouse.

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We have AT&T.

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They have a fleet of vans that they have in our building.

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And then we've got manufacturers who make metal parts for airplanes and magnets for computers and things like that.

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That's awesome.

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That takes my next question, which was can you tell me any of the people that you have living in your buildings?

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Now?

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Curious enough, when you're trying to acquire these things, or you're actually in the acquisition process, what kind of money are you using?

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Are you agency money and what are the rates?

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Like in industrial?

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We don't borrow.

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Oh okay, we are the weirdest syndicator in the United States.

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I believe there's 4,000 syndicators with 50 million or more in assets in the United States.

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We are probably the only one that doesn't use debt.

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Occasionally we do, but our maximum loan to value ratio is 30%.

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There's a reason for it.

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We're not total idiots because real estate is a leveraged business.

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I know you use leverage and I and I understand why, but in my case, I went through four down cycles and in 2008, I devastatingly went into a spiral that I couldn't get out of.

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We owed money to seven banks.

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I had personal guarantees on 50 loans and I had to work tooth and nail not to go bankrupt and to bring everything back from the brink of just devastation to being healthy again, and I made a decision that I and maybe a bunch of people that I could find might like doing deals that are super, super safe with a little corner of their portfolio.

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I don't want anyone to invest more than 3% of their net worth with me.

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If they're syndicated investors, they should spread it all over the place, but in my case, I don't have the temperament or the tolerance for losing money, and I know you know so.

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Funny people would say Joel, why don't you borrow?

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You know rates are 3%.

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They're 4%.

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If you're floating, they're two and a half percent.

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If you're floating they're two and a half.

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And I said they could go up to 17.

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They said there's no way.

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It'll never go above four or five.

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That's what it is.

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And I said you know what?

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I've been through four down cycles and when I started rates were 17 percent.

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And don't say never.

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You know, you, as a military guy, know this really well and I know that there are some mentors that you've had that have been very strategic in how the military decisions are made, taught you that and you've learned it from experience.

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I wasn't in the military but I was in a battle.

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I was in a battle for my family's financial well-being and my investors's financial well-being, and when someone says that can never happen, you know from your experience you've seen things that shouldn't have happened.

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That happened.

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You know, yeah, people forget that in any situation the enemy gets a vote.

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You know, even the best laid plans can sometimes be unraveled.

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Yeah, I'm fully aware of that.

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And listen, I watched.

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I mean, I'm a little older, not as seasoned as you.

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However, I did live through the Carter administration and did watch my father's business go upside down with an arm, did watch my father's business go upside down with an arm, where he went from skyrocketed up to that 17% to 20% range and just tanked his company.

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What prompted you in 91 to break away from this other company and start your own?

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business.

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Well, it was a family and I loved them.

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It was a father, milt, and two sons, steve and Randy, and a daughter, bonnie.

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To say that I loved them is a huge understatement.

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I felt like I was part of the family.

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The only thing is I wasn't part of the family ownership position in the family and they were very much control freaks.

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And as much as I love them, I couldn't stay there because at age 31, I was entrepreneurial and I wanted to go do my own thing or have a meaningful piece of their thing, and I couldn't have a meaningful piece of there.

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So I decided to go start my own business with three other guys, all industrial brokers and developers like myself, and I left on incredibly good terms.

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And Steve Podolsky, who's the oldest son from that family I worked for.

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He's still a mentor to me today, in his 70s.

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I haven't talked to him since yesterday and whenever I make a major decision, I call Steve and he is a partner, an investor, in all of my new deals.

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So that's imagine a 42-year relationship.

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That's still going.

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Mentor, mentee, by the way, I mentor him a little now too, but he doesn't admit it.

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He says no, no, no, no, no, no.

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You never mentor me, I mentor you.

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Listen, I learned from everybody.

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I've learned from you know, my airman, when I was in charge, and you never know.

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If you give somebody the, hey, go ahead and do this and don't give them the, you know, do it this way.

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You'd be surprised at how they figure stuff out and the things that you can learn from it.

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Yeah, that's leadership You're talking about.

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You're a leader when you do that.

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Yeah, yeah, it's eye-opening.

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And then, like, as you know, Darth said, then the student has become the master.

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Right?

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That's my nerd coming through Now.

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It wasn't all sunshine and rainbows.

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Can you tell me about a deal that you know, maybe you had to rescue from the brink of disaster, or one that just didn't work out the way you anticipated?

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Yeah, I'm very open about this.

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I've had 10 major losses out of the 100 deals that we've done and I don't think that that's unusual.

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I think anybody who claims that every deal is a winner is a liar.

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There's no such thing.

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I'm a baseball fan.

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There's nobody who gets up to bat every time and either gets a walk or a hit.

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People strike out and I've had 10 bad deals and they all make me sick.

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They're all traumatic experiences that when I talk about them I'm not reliving them, because I've come to terms with the fact that not everything's going to be a winner.

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I had a partner who decided let's do something different than industrial, let's do retail.

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And I said no, no, no, no, no, I'm laser focused on industrial.

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He said humor me.

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So we bought the old RC Cola bottling plant at 47th and California in Chicago was 11 acres and they had abandoned it and the family that owned RC Cola still own the property and my partner thought it would make a great retail redevelopment.

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But that wasn't what we knew and he said just do it, I'm going to make you a fortune, just do it.

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And I raised money for it and we bought this place.

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Simultaneously, we bought a piece of land in a town called Vernon Hills.

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We bought seven acres, also to do a retail development, and we put debt on that.

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So we had these two properties in 2007 that we didn't know how to make work.

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That had to be developments and when the market tanked in 2008, it there was nothing we could do.

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They were dead properties.

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There was nobody developing anything for the next couple of years and we were carrying it.

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We paid the taxes, the insurance, the maintenance and the mortgages.

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Explain to dozens of investors who had trusted me with their money why I allowed my partner to convince me and I allowed it to shift into retail when we were absolute experts at industrial and nothing but industrial and we lost $1.2 million on the RC plant and we lost $1.7 million on the land in Vernon Hills.

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And investors who are with me in those deals are still investors now because they watched how hard we worked to not lose every other dollar we had in 2008.

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But these were two I couldn't save.

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Yeah, how do you recover from a $3 million almost loss?

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Well, as a syndicator, i's.

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It's really not my money, it was partially my money, but it was a hundred percent my reputation and I was devastated.

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I went into such a deep, dark place because I had to own up to my mistake and I had to explain it to people and keep them informed on a very regular basis.

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The recovery was hard and part of it was saying what's my, what did I learn?

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And I learned that, for me, I'm not going to stray from my focus, which is industrial, and I'm also not going to borrow money, because if I hadn't borrowed money on those two deals, instead of losing a million two and a million seven or a million one and a million seven, we would have made double or triple that if we had the staying power to survive those years.

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And that's how I get through it.

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I get through it with remembrance and learning that I touched a hot stove with my fingers and I'm not going to touch that stove again.

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And knowing that and explaining it this way to my investors makes me feel like I'm being vulnerable enough to admit that I made a big mistake and that I learned something from it.

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Yeah, one thing that you said that I'll take away from this conversation was I allowed myself to let that happen, right?

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So that's, that's a credit to you and and and your integrity, because a lot of people would have said, you know, well, this guy talked me into this, or this guy talked me into that and I, you know it's not my fault, so I give you a lot of credit for that.

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Yeah, it took a long time for me to take credit for that, because for the longest time while we were in it and it was horrible I was blaming him instead of taking the blame, and that's that's not taking responsibility.

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I I said yes, I should have said no.

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I knew it was wrong for me and he had helped make a lot of money on a lot of other deals, so I trusted him.

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And I came to this point where he was saying do you trust me or not?

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And I should have said not.

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Instead I said, of course I do, let's do it, and I knew it was wrong at the time.

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I just I allowed it to happen.

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Yeah, and that's unfortunate, because it's not a matter of do I trust you or not.

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It's more along the lines of are we, do I trust you, and we're working within the confines of our expertise.

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Yeah, after having gone through the really difficult period, which was it required me to learn some things, meditation, counseling needed to be part of what I was doing.

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I was so depressed that medication was part of what I needed.

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I never want to feel that pain again, the pain.

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There was a tremendous amount of gain from having all that pain, and the beneficiaries of my pain are my family and my investors, who know that if they invest with me now, I'm not going to say yes to something that shouldn't be allowed.

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It's amazing how that works, and then, all of a sudden, you become more conservative with your underwriting right, yeah, yeah, exactly, I know you do a lot of deals in different types of real estate.

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Commercial and multifamily, but primarily residential.

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Say, your main focus right now is yes, sir, yeah, we go from.

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We're trying well, not trying.

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We're working on picking up between one and 30 unit properties.

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We've struck out at above 10, but we're doing well with the below 10.

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So it's working out with the below 10.

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So it's working out.

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I remember, I remember hearing you say something about making tons and tons of offers, and I remember that story.

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Are you still doing that?

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Are you making lots of offers?

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We do.

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Right now we are concentrating on self-management.

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So we're building a property management company in the South Jersey area, specifically because we were not happy with the way our managers were.

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A lack of communication, which is, you know, unfortunately, when you get a warrant issued for your arrest and your active duty military, it's not one of the best things in the world.

00:21:27.267 --> 00:21:37.211
So I got a warrant issued for my arrest for failure to respond to an inspection that they missed, and there was a citation issued and it didn't go to me, otherwise I'd have answered it didn't go to me, otherwise I'd answered it.

00:21:37.211 --> 00:21:38.896
Um, so we fired them.

00:21:38.896 --> 00:21:40.781
Yeah, we fired them and then moved on.

00:21:41.891 --> 00:21:43.394
Yeah, we also self-manage.

00:21:43.394 --> 00:21:52.041
But it's hard to self-manage because you need to pay salaries to people who are good at what they do and they don't come inexpensively.

00:21:52.041 --> 00:21:55.377
I can tell you that I lose money on my management business.

00:22:01.490 --> 00:22:05.945
Yeah, yeah, I'm pretty much break even right now, which is fine, you know, it's better than paying someone else 10%, but we're breaking even on the 8% that we charge ourselves.

00:22:06.891 --> 00:22:07.692
Yeah, we're we.

00:22:07.692 --> 00:22:19.321
We charge 4% for our industrial deals and we're, um, let's just say, uh it I look at I have a bank account with a low six-figure amount of money in it.

00:22:19.321 --> 00:22:27.279
I've already said to myself that's just money that I'm going to spend this year on managing our properties.

00:22:27.279 --> 00:22:30.203
That's not going to be reimbursed by the management fees.

00:22:30.203 --> 00:22:31.086
They're not high enough.

00:22:31.086 --> 00:22:37.318
I love it when an investor says to me oh, you charge 4% and you manage the properties, you're making a fortune.

00:22:37.318 --> 00:22:41.685
Because when you add it up to all the oh, you charge 4% and you manage the properties, you're making a fortune.

00:22:41.685 --> 00:22:44.349
Because when you add it up to all the properties, you know what I say to them.

00:22:44.349 --> 00:22:49.971
I say tell you what.

00:22:49.971 --> 00:22:54.145
I'm going to turn over the management company to you and you're going to run it and you can charge the 4%.

00:22:54.165 --> 00:22:54.728
I'll tell you what charge.

00:22:54.728 --> 00:22:55.230
5% and you pay.

00:23:01.349 --> 00:23:02.794
And they go no, no, no, no, no, no, no, no, no, no, no, no, I get it, no, no.

00:23:02.794 --> 00:23:03.817
Yeah, people don't realize that the the amount of.

00:23:03.817 --> 00:23:14.817
So, um, I had someone help me with a study a couple years back, when we were looking at self-managing and, um, it was before we even made the transition and essentially we came to the conclusion that, yes, we're charging eight percent, but it's costing us 12.

00:23:15.597 --> 00:23:17.903
That's right, I charge you more.

00:23:20.070 --> 00:23:20.991
It's costing me eight.

00:23:21.153 --> 00:23:23.696
It's exactly costing me double what I'm bringing in.

00:23:24.617 --> 00:23:24.877
Yeah.

00:23:24.877 --> 00:23:39.895
So you know anyone who says oh, you're making a, yeah, you're not really making anything and it's a very you're working a lot, it's not, it's crazy, it is Now.

00:23:39.895 --> 00:23:42.422
Where are you going from here, joel?

00:23:50.849 --> 00:23:52.393
Well, I'd like to buy a bunch more industrial buildings in the Chicago area.

00:23:52.393 --> 00:23:53.736
I currently have offers out on about 20 buildings.

00:23:53.736 --> 00:23:57.123
I'm guessing I'll get maybe two of them if I'm lucky.

00:23:57.123 --> 00:24:00.416
And then during due diligence, we're incredibly careful.

00:24:00.416 --> 00:24:03.050
I've got an advisory board of eight of our investors.

00:24:03.050 --> 00:24:23.711
When we do due diligence, we have these big Zoom meetings with everybody on the call and I ask everyone to ask me their roughest, toughest questions to try to trip us up, Because if they don't ask, before we buy it, the hard due diligence questions, it's too late when you buy it to ask the questions you should have asked earlier.

00:24:24.373 --> 00:24:27.380
So I want to just make great decisions.

00:24:27.380 --> 00:24:41.999
You know, Bud, to me, what helps me put my head on the pillow at night and sleep well is using good judgment, as opposed to being impulsive and gambling and playing sort of like the fast and loose.

00:24:41.999 --> 00:24:43.141
I don't.

00:24:43.141 --> 00:24:44.911
I don't need to worry about details.

00:24:44.911 --> 00:24:46.193
I'm the big picture guy.

00:24:46.193 --> 00:24:52.212
I don't want to invest with anybody who's the big picture guy who doesn't know the details.

00:24:52.212 --> 00:25:12.236
I listened to a webinar yesterday a very famous, well-known syndicator and he didn't have the answers to the questions that if I didn't have those answers I wouldn't do the deal, and he was already raising money for something where he didn't have the answers.

00:25:12.777 --> 00:25:13.017
Right.

00:25:13.557 --> 00:25:26.019
And I'm trying to figure out how anyone would invest with him, because if you don't ask the tough questions, you know the answers to the difficult ones.

00:25:26.019 --> 00:25:34.413
Those are the ones that are going to trip you up and lose money for you If anything goes bad, if anything goes against you.

00:25:34.413 --> 00:26:02.769
And so, yeah, these people who invest as syndicated investors, like in my kinds of deals, and they put up a hundred grand or 200 grand or whatever it is, and they don't know the right questions to ask, they need a consultant who's really good at asking those questions and says, hey, here are the 10 questions that have not been asked.

00:26:02.769 --> 00:26:11.317
Let me ask them and get definitive answers and figure out if this syndicator knows what the hell he's doing or if he doesn't.

00:26:13.865 --> 00:26:34.571
Yeah, and that's not a Henry Ford moment right, where Ford is sitting at his desk and he's getting blasted, because there are times when I don't know all the answers but the people that I'm working with do, and I don't want to be the smartest person in the room, I want to be surrounded by the rest of the other smart people, but in that case I fully agree, I don't know that I would invest with that person.

00:26:34.571 --> 00:26:37.671
They don't know the basics of the.

00:26:37.671 --> 00:26:40.518
You know the underwriting that's going on.

00:26:40.518 --> 00:26:53.608
How can you answer the questions and we used to call them a murder board when you stand there and you're about to do a presentation and you stand in front of a group of colonels and majors and whatnot and they're throwing these questions at you because you're about to brief a two-star?

00:26:53.608 --> 00:26:56.579
In this case, it's the same thing, right?

00:26:56.579 --> 00:27:01.154
I don't know that I would feel comfortable taking someone's money if I didn't have all the answers that they asked.

00:27:05.545 --> 00:27:08.490
Yeah, this is a multifamily deal that I was looking at and I'm not going to invest in it.

00:27:08.490 --> 00:27:17.829
I do look at and invest in other people's deals besides our own for diversification purposes.

00:27:17.829 --> 00:27:35.196
And what he was explaining yesterday was that this is a return, a 7% yield, and on the back end in two years they're going to sell the property and they'll make another seven, so that you'll make 14 total.

00:27:35.196 --> 00:27:42.999
So 7% each of the two years and then 7% for each of those two years from the sale proceeds.

00:27:42.999 --> 00:27:49.229
So it's like a 28% return on your money and your money back in two years.

00:27:50.673 --> 00:28:08.726
So here's the question that I had that I didn't ask because if I had to ask the question, that means he didn't present it and if he's not presenting it, he doesn't really expect something horrible to happen at me.

00:28:08.726 --> 00:28:10.048
He doesn't really expect something horrible to happen.

00:28:10.048 --> 00:28:37.384
But he said two years ago when they first started this deal, they believed that they could sell it for a four cap and because things have gotten bad in multifamily in that town in the Southeast, in multifamily in that town in the southeast, he thinks that they'll eventually sell it for a five cap and on the five cap, that's where you're making your 14% return annualized.

00:28:41.286 --> 00:28:44.631
And the question I would want to know is what happens if you sell it for a six cap?

00:28:44.631 --> 00:28:51.930
And he sort of glossed over that by saying the worst it's going to be is a five cap, because rates are going to go down.

00:28:51.930 --> 00:28:59.477
And when interest rates, when the Fed brings interest rates down, cap rates go down and the Fed's going to cut rates three times this year.

00:28:59.477 --> 00:29:00.346
That's what they said.

00:29:00.346 --> 00:29:02.953
No, they did not say that.

00:29:02.953 --> 00:29:04.999
They said they were thinking about it.

00:29:04.999 --> 00:29:08.027
It would depend on inflation.

00:29:08.027 --> 00:29:15.388
You got to listen to Jerome Powell very carefully, because what he says can't be black and white, it's gray.

00:29:15.388 --> 00:29:21.167
He's saying if this, then that he never said oh for sure, we're cutting rates this year.

00:29:21.388 --> 00:29:33.491
By the way, if they do cut rates, it's probably because there's a problem in the economy and they're trying to save it, which means just because rates go down doesn't mean the cap rates go down.

00:29:33.491 --> 00:29:46.307
Cap rates could go up even if interest rates go down, because there could be a huge vacancy in the market and there could be lowering of rents, because if the economy is in trouble, rents don't go up.

00:29:46.307 --> 00:29:48.214
When things are bad, they go down.

00:29:48.214 --> 00:29:57.726
So they might have lower rents and a higher cap rate at the same time, in which case it would be like my Vernon Hills deal you can lose all your money.

00:29:57.726 --> 00:29:58.907
It could be all gone.

00:29:58.907 --> 00:30:06.593
So you know, I don't like when someone's explaining a deal and they don't explain the worst case.

00:30:06.593 --> 00:30:11.791
They explain like, well, the worst case won't happen, well, ok, but what if it does?

00:30:11.791 --> 00:30:14.251
How are you prepared for that?

00:30:14.251 --> 00:30:20.298
And the fact that they want to sell this property in two years also bothers me.

00:30:20.298 --> 00:30:23.855
I know you feel the same way, that you keep a lot of your stuff.

00:30:24.565 --> 00:30:25.567
Yeah, most of it.

00:30:25.567 --> 00:30:28.296
Very rarely do I sell it off.

00:30:28.944 --> 00:30:29.085
Right.

00:30:29.085 --> 00:30:32.915
And these syndicators many of them are in it to make their promote.

00:30:32.915 --> 00:30:36.832
They make this disproportionate share of the profits on a sale.

00:30:36.832 --> 00:30:40.987
They make 20 or 30% of the profit over the preferred return.

00:30:40.987 --> 00:30:57.273
And so, if this is such a great project, they showed pictures and a video of this multifamily and they said it's so great, it's class A and it's great and it's so well designed and well built, why are they selling it in two years?

00:30:57.273 --> 00:30:59.079
Why don't they keep it?

00:30:59.843 --> 00:31:08.398
And I think they're afraid to tell syndicated investors that they're long term holders because they're afraid people will say well, I don't want to be in for the long term, I'll be dead by then.

00:31:08.398 --> 00:31:19.679
And I say to people when you come into my deals, the exit strategy is your death because we're going to own them long term and it'll probably end up being owned by your kids.

00:31:19.679 --> 00:31:24.869
It's generational and that's how real estate really works.

00:31:24.869 --> 00:31:32.211
I think it's gambling to buy stuff with the intent of selling it quick like a hot potato.

00:31:32.211 --> 00:31:42.192
It's gambling because cap rates can go up, the economy can go down, rents could go down, vacancy could be all over the place.

00:31:42.192 --> 00:31:50.190
I just don't get people who think it's great to have the best property in the world and be trying to get rid of it.

00:31:51.272 --> 00:31:51.472
Right.

00:31:51.472 --> 00:31:55.388
And then, of course, making the assumptions about the interest rates are just.

00:31:55.388 --> 00:31:58.415
That's, by the way, the last two meetings.

00:31:58.415 --> 00:31:59.686
They haven't done anything.

00:31:59.686 --> 00:32:02.965
They're like we're going to see, Okay, You're going to keep it stable.

00:32:03.826 --> 00:32:20.453
I watch this thoughtful money podcast with Adam Taggart, which is fantastic I recommend it so highly and he's got three shows a week where he interviews top economists and researchers and some of them think that rates are going to go up.

00:32:20.453 --> 00:32:23.775
Some of them think that the market's going to crash and rates are going to go up.

00:32:23.775 --> 00:32:25.605
Some of them think that the market's going to crash and rates are going to go up.

00:32:25.605 --> 00:32:37.156
So there's a lot of negativity out there and these guys who are so positive that rates are coming down and cap rates will go back to where they used to be and everything will be great again.

00:32:37.156 --> 00:32:39.606
You know that's BS.

00:32:41.130 --> 00:32:42.090
Yeah, I don't know.

00:32:42.090 --> 00:32:43.353
I honestly don't know.

00:32:43.353 --> 00:32:51.596
I plan and I underwrite for the current and then for the future, the pro forma has to be conservative.

00:32:51.596 --> 00:33:00.476
I had people underwriting deals and sending them to me at 5% growth, 10% growth that's not realistic.

00:33:00.476 --> 00:33:14.348
2%, 3%, tops interest rates potentially going up here, going up there, bridge loans I'm about to do one on one of the commercial properties only because we know we're going to refinance it for a long-term hold.

00:33:14.348 --> 00:33:19.833
But I need to do some repairs and I already have three of the properties occupied and I don't want to refinance it all into hard money.

00:33:19.833 --> 00:33:24.371
So we have a 3.25% mortgage on it.

00:33:24.371 --> 00:33:27.897
So I'll take the bridge loan, then I'll just refinance the bridge loan into a long-term debt.

00:33:27.897 --> 00:33:30.491
But we'll still be at that point.

00:33:30.491 --> 00:33:34.112
And, joel, much like you, I only carry.

00:33:34.112 --> 00:33:36.778
We're at about 55% leveraged.

00:33:36.778 --> 00:33:41.836
I don't like to be over that, simply because of 2008.

00:33:41.936 --> 00:33:44.510
Yeah, no, I love your philosophy.

00:33:44.510 --> 00:34:01.307
I've I've seen you interviewed on other people's podcasts and I wish we had gotten maybe we'll do it another time more into your personal, uh, philosophies and your thoughts about how to live life and some of your past experiences.

00:34:01.307 --> 00:34:19.045
I think you've got a um, a very interesting and compelling story, and I think you're really smart in how you do your deals, and I just give you so much credit that you started really doing real estate in earnest in 2018, and you're already where you are now.

00:34:19.045 --> 00:34:22.311
I love your story.

00:34:22.311 --> 00:34:26.480
I have you are like I have great admiration.

00:34:29.351 --> 00:34:30.798
You're going to make me cry.

00:34:30.798 --> 00:34:37.485
All right, Joel, I'm going to ask you the one question Uh, what have you learned as your wealth increased?

00:34:39.248 --> 00:34:41.170
Um, relationships are everything.

00:34:41.170 --> 00:34:48.460
It doesn't matter if you're a billionaire or if you have $10,000 to your name.

00:34:48.460 --> 00:34:50.405
Relationships are everything.

00:34:50.405 --> 00:34:54.070
My wealthiest investors, who are multi-billionaires.

00:34:54.070 --> 00:35:02.873
To them, what matters most are the people that they care about, who care about them, and there's nothing more important than that.

00:35:02.873 --> 00:35:05.833
It transcends money by far.

00:35:07.985 --> 00:35:09.289
Yeah, thank you very much.

00:35:09.289 --> 00:35:13.938
That is absolutely a perfect, perfect answer to that question.

00:35:13.938 --> 00:35:19.237
Networking is everything, and tight networks are even better.

00:35:20.224 --> 00:35:30.518
Yeah, close relationships where you really get to know people and they get to know you and you understand each other and can confide in each other and help each other and have fun together.

00:35:30.518 --> 00:35:35.556
You know, go out and have lunch and talk about stuff that matters and solve problems.

00:35:35.556 --> 00:35:38.313
You know my daughter's got a problem.

00:35:38.313 --> 00:35:48.753
She's looking for a house and she can't find one and she and the kids and the husband are in an apartment and they really want a house but there's nothing available in our market.

00:35:48.753 --> 00:35:56.887
And then I'll be explaining that to some friend of mine at lunch and close friend it'll say, oh, my daughter's going through the same thing.

00:35:56.887 --> 00:35:58.753
You know, what do we say to them?

00:35:58.753 --> 00:36:00.277
How do we support them in that?

00:36:00.277 --> 00:36:07.864
You know, having that real discussion about things that matter and that you know having that real discussion about things that matter.

00:36:11.864 --> 00:36:12.849
Yeah, yeah, yeah, I agree.

00:36:12.849 --> 00:36:13.715
All right, joe, we're going to move on to the soaring forward.

00:36:13.715 --> 00:36:17.610
These are the same four questions that I ask every guest, mostly mindset that can help someone who is starting out achieve new heights.

00:36:17.610 --> 00:36:20.416
And question number one is what keeps you motivated?

00:36:21.925 --> 00:36:23.168
I just love what I do.

00:36:23.168 --> 00:36:25.755
I just absolutely love it.

00:36:25.755 --> 00:36:48.768
Again, it's the relationships I have relationships with industrial brokers, with tenants, with my investors, with my kids, grandkids, the wife, the father-in-law my mother, I mean kids, the wife, the father-in-law my mother, I mean that.

00:36:48.768 --> 00:36:50.896
That motivates me to to work and to work on my relationships to make them better.

00:36:51.864 --> 00:36:52.045
Perfect.

00:36:52.045 --> 00:36:57.846
Is there one thing that completely changed your mindset, something you can put your finger on?

00:36:58.847 --> 00:37:04.947
Yeah, so I told you about earlier uh, not needing to take big risk with lots of debt.

00:37:04.947 --> 00:37:08.788
I just got too burned and I just won't do it again.

00:37:10.190 --> 00:37:10.490
Great.

00:37:10.490 --> 00:37:13.617
What tools do you use to keep you on track?

00:37:14.925 --> 00:37:16.525
I've got the best tool in the world.

00:37:16.525 --> 00:37:18.166
You ready, hit me.

00:37:18.626 --> 00:37:18.887
It's a word.

00:37:19.487 --> 00:37:20.166
It's a word.

00:37:20.166 --> 00:37:21.487
It's W-A-I-T.

00:37:21.487 --> 00:37:21.987
Word.

00:37:21.987 --> 00:37:24.748
It's a word, it's W-A-I-T.

00:37:24.748 --> 00:37:28.090
That is my tool when I'm talking to somebody.

00:37:28.090 --> 00:37:38.893
Often I think about one thing when they're talking to me listen carefully when I'm talking, be careful.

00:37:38.893 --> 00:37:42.175
What I say W-A-I-T stands for.

00:37:42.175 --> 00:37:48.398
Why am I talking when I should be listening instead of talking?

00:37:48.398 --> 00:37:49.757
W-a-i-t.

00:37:49.757 --> 00:37:51.398
That's outstanding.

00:37:52.018 --> 00:37:52.579
Why am?

00:37:52.699 --> 00:37:53.239
I talking.

00:37:53.920 --> 00:37:56.240
Right, you hear the two ears, one mouth.

00:37:56.240 --> 00:37:58.300
You should listen twice as much as you talk.

00:37:58.300 --> 00:38:04.222
I just like to sit there in the room, you know, at least I'm in the room.

00:38:12.331 --> 00:38:14.903
So the last question is if you had to change one thing and start all over, what would it be?

00:38:14.903 --> 00:38:27.773
I think I would have, from a younger age, uh, relationships more and been less afraid of what I was going to say when I was with someone and be more concerned about how I could listen to them and help them.

00:38:27.773 --> 00:38:35.532
I think I would have had better relationships in high school and in college and in my early years in the business.

00:38:35.532 --> 00:38:59.614
You know, it's so hard to feel like you really mastered being with people, but I really feel like I've become good at it, because Dale Carnegie said it best Nobody cares how much you know until they know how much you care, and I love that.

00:39:01.235 --> 00:39:01.717
That's great.

00:39:01.717 --> 00:39:05.148
All right, I think that's a great place to close.

00:39:05.148 --> 00:39:08.726
Joel friedland, thank you very much for your time.

00:39:08.726 --> 00:39:14.657
I will have your contact information in the show notes, but thank you, for I know you're busy man and I I really do appreciate you coming on.

00:39:14.677 --> 00:39:18.052
This was a fantastic conversation I'm really glad we did it.

00:39:18.052 --> 00:39:18.976
Thank you so much.