Ep 153: Starting with Nothing and Structuring Deals to Your Advantage with Josh Cantwell
Many people dream of leaving their day jobs and entering the world of real estate investment, but few take the plunge and even fewer find success. Today’s guest is a multifamily syndicator and apartment investor who has raised over 80 million dollars of private capital through real estate. On today’s episode, Josh Cantwell, Strategic Business Coach and CEO of Freeland Ventures, shares his story of starting with nothing, overcoming health issues, and using his knowledge in financial planning to make informed decisions that supported his career. He tells us about the steps he took to integrate commercial investing into his business, how his workload has drastically reduced and his net worth has increased in recent years, and what motivated the decision to stop lending at the start of the pandemic. We discuss the distinction between the fund business and the apartment business, and Josh reveals how he structures his deals to force appreciation over short periods of time, as well as how he manages to retain 100 percent equity. Learn about the three-part investment return: immediate, from cash flow, and from the return of the principle interest reserve, and Josh shares what he considers to be the biggest risk and the biggest upside of a deal. Join us for an action-packed episode today!
Key Points From This Episode:
An introduction to Josh Cantwell, a multifamily syndicator and apartment investor.
Josh’s story of starting with nothing, overcoming health issues, and finding success.
How Josh’s background in financial planning helped him to make informed decisions.
The steps Josh took to integrate commercial investing into his business.
How his workload has drastically reduced and net worth has increased in recent years.
What motivated the decision to stop lending at the start of the pandemic.
The fund business versus the apartment business.
How Josh structures his deals to force appreciation over short periods of time.
How the 10 percent return and one percent kicker offered to investors allows Josh to retain 100 percent equity.
Why having two partners on board allows him to focus primarily on raising money.
Why struggling to raise money means you have to give up more equity.
The value of understanding the return principle.
Why it is the norm to give up 70 percent and why it is possible to provide the possible.
Deals Josh has done where he has over-raised capital, and where there is just enough.
The three-part investment return: immediate, from cash flow, and from the return of the principle interest reserve.
What Josh considers to be the biggest risk can be the biggest upside of a deal.
If market conditions dictate that Josh can only return 50 percent in three years: give up the cash flow, bring in unsecured notes, and keep doing deals.
“I’m a multifamily syndicator [and] apartment investor. We own 3700 units and apartments, we’ve raised about 80 million dollars of private capital, and I have a story I think a lot of real estate investors think might happen for them or aspire to.” — @JoshCantwell [0:02:14]
“I started with a desire to get into real estate because I hated my day job as a financial planner. I got into residential real estate with no money, no income, no credit.” — @JoshCantwell [0:02:25]
“We were primarily doing residential investing. Then we got to the point where we were doing so many flips and so many wholesale deals that I was really good at raising money because I had [a] financial planning background.” — @JoshCantwell [0:04:10]
“At the end of the day, it’s all about listening to the market, listening to what we’re passionate [about], what we really enjoy doing, and tackling that one step in front of the other.” — @JoshCantwell [0:07:20]
“The fund management business is just an income play and my net worth was based off of a multiple of the revenue.” — @JoshCantwell [0:10:42]
Links Mentioned in Today’s Episode:
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