The #1 Fear That's Causing Your Investment Failure

Summary

In this episode of the Freedom Show, hosts Flip and Danny discuss investment strategies for 2024, emphasizing the importance of long-term planning over emotional, short-term decisions. They introduce a new liquidity fund offering various investment terms to cater to different risk appetites, from 90 days to three years. The conversation highlights aligning interests with investors, the wisdom of Warren Buffett on passive real estate investments, and the benefits of a vertically integrated company approach for diversification and reliability.

Takeaways

• 💡 Investing in liquid assets can lead to emotional decision-making and may not be the best strategy for long-term wealth building.
• 📈 The speakers emphasize the importance of having a long-term perspective in investments and not letting fear dictate investment choices.
• 🏆 They discuss the benefits of aligning with a trustworthy team when investing, especially in areas where one lacks expertise.
• 💼 The concept of 'buckets' for different types of investments is mentioned, suggesting a strategy of diversification and planning for different financial goals.
• 🤔 The script addresses the fear and uncertainty in the market, advising investors to be confident in their strategies and to understand their investments.
• 🏠 The speakers share insights about real estate investments, discussing the benefits of passive investing over active management.
• 💼 Warren Buffett's investment philosophy is highlighted, particularly his preference for passive investments in real estate and businesses.
• 🔑 The importance of having aligned interests with the companies or teams one invests in is stressed, to ensure mutual benefit and success.
• 🚀 The speakers talk about launching a new fund that offers different classes of liquidity to cater to varying investor preferences and risk tolerance.
• 🌐 They mention the trend among high net worth investors to move towards debt instruments for their predictability and reliability.
• 🔄 The idea of a 'liquidity fund' is introduced, offering investors the option of accessing their funds within 90 days, one year, or three years, depending on their comfort level.

Q & A

Why should investors avoid putting their money into something too liquid according to the transcript?

Investors should avoid overly liquid investments because it can lead to emotional decision-making, causing them to withdraw their investments too frequently based on fear, which can hinder long-term wealth building.

What is the 'safety bucket' mentioned in the script, and why is it important for investors?

The 'safety bucket' is a part of an investor's portfolio that is secure and not subject to emotional investment decisions. It's important because it allows investors to have a portion of their investments that they don't need to worry about, providing peace of mind and stability.

What is the 'Wealth and Wisdom Wednesday' webinar, and how can someone join it?

The 'Wealth and Wisdom Wednesday' webinar is a monthly event for investors where topics relevant to the market are discussed. To join, one can visit the website freedomfamilyinvestments.com and find a way to email the company expressing interest in participating.

What is the significance of Warren Buffett's investment philosophy mentioned in the script?

Warren Buffett's investment philosophy emphasizes being greedy when others are fearful and vice versa. It encourages long-term investment strategies and aligning with trustworthy teams, which can lead to better investment outcomes.

What is the 'liquidity fund' that the speakers are planning to launch, and what does it offer to investors?

The 'liquidity fund' is a new investment vehicle that offers different classes of investment with varying levels of liquidity, ranging from 90 days to three years. It aims to provide investors with the option of higher-than-average returns in real estate while still maintaining some level of liquidity for peace of mind.

Why do the speakers believe that investing in debt instruments is a popular strategy among high net worth investors in 2024?

High net worth investors are favoring debt instruments because they offer predictable and reliable returns, backed by tangible assets like real estate. This strategy reduces the need to hope for the upside of equity investments, which can be more volatile and risky.

What is the concept of 'aligned interest' in the context of the script, and why is it important for investors?

Aligned interest refers to the alignment of the interests of the investors with those of the investment company. It's important because it ensures that the company is working towards the success of the investors' investments, creating a win-win situation.

How does the property management company discussed in the script align its interests with property owners?

The property management company aligns interests by eliminating certain fees such as tenant placement fees and management fees during vacancy periods. Instead, they charge a renewal fee, which only applies if they successfully retain a tenant, thus making money when the property owner is also making money.

What is the significance of being 'vertically integrated' in the context of the investment company discussed in the script?

Being vertically integrated means that the company controls all aspects of its operations, from investment opportunities to property management. This control helps to ensure that the interests of investors are aligned with the company's and that the quality of service is consistent across all areas.

Why do the speakers suggest that investors who are not fearful in 2024 should consider long-term investments?

The speakers suggest that long-term investments can offer higher rates of return because fewer investors are pursuing them due to a preference for liquidity and shorter-term investments. This can provide opportunities for those willing to wait out market cycles.

What is the 'speed fund' and how does it provide an advantage to investors interested in long-term investments?

The 'speed fund' is a 90-day class within the new liquidity fund. It offers investors the first right to certain long-term investments before they are offered to the public, providing an advantage to those who prefer higher returns from long-term investments.

Outlines

00:00

💡 Emotional Investing vs. Long-Term Strategy

The speaker emphasizes the importance of removing emotion from investment decisions and highlights the pitfalls of treating investments as liquid assets, which can lead to emotional reactions and poor financial outcomes. They advocate for a long-term approach, using the concept of 'buckets' to categorize investments and a 'safety bucket' to keep investments stable. The introduction of the 'freedom show' podcast is made, with hosts Flip and Danny discussing topics relevant to the market, including interest rates, inflation, taxes, and investment opportunities. They invite listeners to join their webinars for insider investment insights.

05:02

🏗️ Navigating Fear in Real Estate Investments

The paragraph discusses the challenges of investing during times of economic uncertainty, such as fear-driven market fluctuations. The hosts share their strategy of being proactive during these times, underwriting deals, and waiting for the right opportunities. They mention the importance of adapting to market conditions and not letting fear dictate investment decisions. They also touch on the idea of creating a fund that offers liquidity to investors, allowing them to invest with less fear and more confidence in the market's long-term potential.

10:03

💼 The Shift Towards Liquidity Funds in 2024

The speaker outlines the shift towards liquidity funds in 2024, driven by investor preference for debt instruments over equity due to market volatility. They introduce a new fund that offers different classes of investment based on liquidity, ranging from 90 days to three years, providing investors with the option of higher returns than average in the real estate market while maintaining some liquidity. The fund aims to give investors peace of mind and the flexibility to access their funds if needed, despite advising against it for optimal long-term gains.

15:04

🤝 Aligning Interests with Investors in Real Estate

This section focuses on the importance of aligning interests between investors and the companies they invest in. The speaker discusses the benefits of passive real estate investing, as endorsed by Warren Buffett, where investors can benefit from real estate profitability without the management responsibilities. They highlight the company's efforts to prioritize investor interests, ensuring returns, and managing risks. The speaker also emphasizes the value of tangibility and reliability in real estate investments, especially during economic slowdowns.

20:04

🔄 Disrupting Property Management for Investor Benefit

The speaker shares insights on how their company has disrupted traditional property management by aligning interests with property owners. They discuss the industry's standard fees and propose a model that waives certain charges, such as tenant placement fees and management fees during vacancy periods. The new model is designed to profit from renewal fees, indicating successful tenant retention, thus ensuring a win-win situation for both the property management company and the investors.

25:06

🚀 Embracing Long-Term Investments Amidst Market Fears

In this paragraph, the speaker encourages investors to consider long-term investments, even amidst market fears, by following Warren Buffett's advice to be 'greedy when others are fearful.' They highlight the opportunities available for those willing to commit to longer-term investments and the benefits of being part of a fund that offers first access to such deals. The speaker also appreciates the feedback from their audience, which helps them continually improve their investment strategies and offerings.

Keywords

💡Liquidity

Liquidity refers to the ability to quickly convert assets into cash without affecting the asset's price. In the context of the video, it's discussed as a factor that can influence emotional decision-making in investments. The script mentions that investors often seek liquidity due to fear, which can lead to hasty decisions of pulling out money, potentially missing out on long-term gains.

💡Emotion in Investing

Emotion in investing is the psychological influence on investment decisions. The video emphasizes the importance of removing emotion from investment choices to avoid impulsive actions that can be detrimental to wealth building. It contrasts emotional investors who might withdraw funds hastily with those who maintain a long-term perspective.

💡Long-term Strategy

A long-term strategy in investing involves holding assets for an extended period to outlast market cycles and achieve greater returns. The video encourages viewers to adopt a long-term approach, exemplified by setting up 'buckets' of investments and waiting for the market to favor them, rather than reacting to short-term market fluctuations.

💡Fear in Investing

Fear in investing is the apprehension or anxiety that leads investors to make conservative or rash decisions. The script discusses how fear can cause investors to prioritize liquidity and equity investments over potentially more rewarding long-term investments, thus hindering wealth accumulation.

💡Investment Buckets

Investment buckets are categories or segments of an investment portfolio that serve different financial goals and risk tolerances. The video script uses the term to illustrate a strategy where investors can allocate funds according to their comfort level with risk and time horizon, ensuring that they are not overly emotional about their investments.

💡Market Cycle

A market cycle refers to the recurring patterns of economic activity, typically involving periods of growth, peak, contraction, and trough. The video suggests that long-term investors can outlast these cycles, implying that they can potentially benefit from the eventual upturn after a downturn.

💡Passive Investing

Passive investing is a strategy where investors entrust their money to a professional or a fund that manages the assets without the investor's direct involvement. The video highlights Warren Buffett's preference for passive real estate investments, where he benefits from the asset class without the management responsibilities.

💡Equity Investments

Equity investments represent ownership stakes in companies or real estate, with the potential for high returns but also higher risk. The script contrasts equity investments with debt investments, noting that many investors are currently wary of the former due to market volatility.

💡Debt Investments

Debt investments are loans made to borrowers, expecting to receive interest payments and the return of principal at a later date. The video discusses a shift towards debt investments among high net worth individuals, who prefer predictable returns and reduced risk.

💡Aligned Interests

Aligned interests occur when the goals or benefits of different parties are aligned, often leading to better cooperation and outcomes. The video script describes how the company has structured its property management and investment funds to ensure that the interests of investors are prioritized, leading to a win-win situation.

💡Vertical Integration

Vertical integration is a business strategy where a company owns or controls several stages of the supply chain for its products or services. The video mentions the company's move towards vertical integration to maintain control over various aspects of their investments and ensure better alignment with investor interests.

Highlights

The importance of investing in liquid assets is discussed, emphasizing that emotional decisions can lead to losses in wealth building.

Investors are encouraged to have a long-term strategy and not let fear dictate investment choices.

Introduction of the 'Freedom Show' podcast, which provides insights on investment strategies and wealth building.

The significance of understanding market trends and investment opportunities, especially in the context of webinars and investor communities.

Emphasis on the value of insider knowledge in investment markets, particularly for identifying off-the-radar opportunities.

The concept of 'buckets' in investment strategy, suggesting a diversified approach to manage risk and emotional investment.

A discussion on the psychological aspects of investing, highlighting the pitfalls of emotional decision-making.

The launch of a new fund that offers liquidity to investors, addressing concerns about market volatility and fear.

Different classes within the new liquidity fund, offering varying levels of investment commitment and liquidity.

The preference of high net worth investors for debt instruments over equity due to market uncertainty.

Warren Buffett's investment philosophy, focusing on passive real estate investments and the intrinsic value of tangible assets.

The benefits of passive investing in real estate, including the avoidance of management responsibilities and higher returns.

The alignment of interests between investors and the company, ensuring that both parties benefit from successful investments.

The strategy of being 'greedy when others are fearful', leveraging market downturns for investment opportunities.

The introduction of a 90-day fund that offers first rights to long-term investments, providing an edge to investors seeking higher returns.

The importance of feedback from investors in shaping investment strategies and products offered by the company.

A reminder that the insights provided are not personalized advice, urging investors to consult professionals for tailored guidance.

Transcripts

you're not supposed to put your

investments into something liquid right

why it's emotional you're trying to make

take the emotion out of it and so if

it's liquid you are allowing yourself to

get emotional and go I'm going to grab

my money and take it out and you do that

and you keep putting your investments in

and out and in and out that's why many

people who have that strategy are losing

the game of Building Wealth because

they're allowing fear to take over as

opposed to the investors who understand

hey this is a long-term game I've

figured out what my buckets are and I

have this safety Bucket over here I

don't have to be emotional about my

investments I can put it in there and

wait for the long term because when you

wait for the long term typically you are

going to win because you're you're

outlasting the market cycle or the

economy or whatever is going on and you

actually have some more peace of

[Music]

mind hey everybody flip and Danny here

welcome to another episode of the

freedom show

The Crowd Goes

Crazy luckily this is only once a week

so hopefully nobody gets tired of that

one yeah yeah yeah they

will we're super excited to be here

today and we are we just got off a

couple webinars actually today um we are

speaking to a CPA firm and their clients

um this afternoon and then we just got

off our wealth and wisdom Wednesday

webinars if you are not a part of our um

investor list and investor Community you

are missing out our team uh comes up

with topics every single month um that

they feel are really incredibly relevant

to um the market what's going on we've

been talking about interest rates we've

been talking about inflation we've been

talking about taxes we've been talking

about um places to invest um right now

um uh investment opportunities uh and uh

today off the um radar Market markets

like markets that um are within uh areas

of the top investment markets of 2024

and that um other people aren't even

privy to because uh you know it's local

to us and you know we know where those

spots are and so um our investors are

getting that inside scoop so they

understand um where we're investing and

why and so if you are not on our

investor list and you're not a part of

those um uh monthly webinars then you

need to get there so um go to our

website freedom family investments.com

and I'm sure you can find somewhere to

email us it could be invest at freedom

family investments.com and say I want to

be part of your wealth and wisdom

Wednesday webinars and I can't even say

it once and you're whipping it

off and you can join those it's private

for our community only I don't even

think we publicly um announce it it's

really just for our investors so uh we

just got off that and now we're here um

talking to you guys so you happen to um

get a little inside scoop about

something we do for our investors but

today what are we going to talk about

flip there's like three things you want

to name one of them do you remember uh

let me look at your notes um oh how

about where to invest in 2024 yes that's

a really good topic I'm super excited

very timely too yes super excited about

that one um another one is be more like

Warren Buffett definitely going to talk

about that today he's the five o'

somewhere guy right no that's the

other rest in peace the last one is uh

finding companies with an aligned

interest with you um or who prioritize

you we talk about that a little bit

today so um a few things that we're

going to cover and we're excited to um

bring you some goodness at least she

will I'll bring the

laughs all right try so uh where to

invest in 2024 so um we have been

talking to a lot of people as usual

we're always talking to investors and

finding out what what are they doing um

where is people in where are people

investing where are the fears um you

know ever probably for the last year and

a half or so um as interest rates

started to rise as inflation um was

going up uh people were getting fearful

and you know the Warren Buffett quote be

greedy when other others are fearful and

fearful when others are greedy yep so we

said we've been on stages and at events

and we continue to say as everybody else

is going you know you know I'm I'm just

not not really comfortable investing

right now uh we've been like uh we're

underwriting every single freaking deal

that we can get because the comp there's

no competition out there um and at the

very least if we don't buy which we have

not we've bought one deal in 2023 so

although we were underwriting we just

did not find a deal that we were

confident in we're not going to throw

money at a deal we don't believe in yeah

we're going to keep underwriting hoping

that we actually find something that we

love um and actually we have a couple

deals right now it's because 2024 that

the the doors are really opening and the

people that know that the doors are

opening um and sellers are getting more

reasonable in their asking prices and

that's why it's finally starting to

pencil um we're the ones that are ready

and following up with all the people we

were talking to in 2023 and saying hey

how's it going have you sold no huh why

not I wonder what it is and you start

having those conversations because

you've already established the

relationship you've already been talking

to those people because you didn't allow

fear to take over and then you just sat

on your hands so um you always have to

be aligned with investors um who are

going to always pivot and adapt to the

situation the economy the market

whatever is going on um and that is

something that we did so we're going to

talk to you about a couple things most

importantly um maybe uh we're going to

speak to you all on a different level so

some of you going to be like us who say

Hey you know I agree with that when

other people are fear fearful I'm

jumping in um and I'm going to invest

because I know that the opportunities

are there and some of the the most

wealth is achieved in times like this

it's the people who are still out there

um looking at deals investing in deals

um and being confident in their strategy

because they know what they're doing or

they believe in the team that they're

working with I'm also going to talk to

you uh to those who are just like

flipping Danny I kind of really like you

I'm listening to you because I like you

but I'm still a little scared and I'm

not quite sure what to do and you know

you're going to have to really kind of

you know help me um gain some confidence

um so let's start there um because we

have been working on a fund that has

taken me taken us so long to um launch

because we kept talking to investors

going okay where you're at where where's

the sentiment you know what what do you

feel confident in and many people were

really looking for liquidity um they

were looking for liquidity because of

fear right right and so do you remember

the podcast that we did about um uh the

I don't remember the the the title but

it something about um Building Wealth is

boring MH I do yeah so we were really

talking about the fact that um you're

not supposed to put your investments

into something liquid right why well

it's it's emotional it's non- emotional

whichever way emal yeah yeah yeah you're

trying to make take the emotion out of

it yes and so if it's liquid you you are

allowing yourself to get emotional and

go I'm going to grab my money and take

it out you do that and and you keep

putting your investments in and out and

in and out that's why many people who

have that strategy are losing the game

of Building Wealth because they're

allowing fear to take over as opposed to

the investors who understand hey this is

a long-term game I've figured out what

my buckets are and I have this safety

Bucket over here I don't have to be

emotional about my investments I can put

it in there and wait for the long term

because when you wait for the long term

typically you are going to win because

you're um you're outlasting the market

cycle or the economy or whatever is

going on and you actually have some more

peace of mind right right because you're

not thinking about should I take it out

I'm not you know I read the news today

oh honey should I take my money out I

don't I I don't know what we should do

what what should we do like who wants to

live like that um so really

understanding your buckets for those of

you who are not sure where to invest um

or you have some fear it's okay we've

all been there um there's things flip

and I don't understand some some types

of Investments um and we don't invest in

them why because we don't understand

them um and we understand real estate we

have something that we are so confident

in that we invest all of our money in

except for a flip with I don't know 2%

of our money is placed in oh 2% that I

didn't get that much oh my gosh I did

find out though that cryptocurrency is

actually is derived from the Greek word

of losing

money yeah yes I've I've I've learned

that

fact yeah

yeah so uh so anyways yeah we're we're

confident in what we're doing but if we

weren't in real estate right now and if

we were just um if we were Physicians if

we were just doing something else that

really didn't allow us to invest in our

own business in our own real estate like

we can do now we'd be finding the team

that we could trust right if we were

really interested in crypto or we were

really interested in stocks um of which

we're not we like played withp CTO

because we heard it on stage we're like

this sounds fun let's throw let's throw

some money at it and just see what

happens yep and it's been a little bit

over two years now and I'm almost back

to even there you go boring see you just

left it right we said we were going to

burn that money um and he could have

gotten emotional cuz it like the second

invested yeah went up like a blaze of

glory man it just went down down down he

could have just gotten emotional and

pulled it out but look what's happened

he just left it alone said I don't even

care it's not that's not why I invested

so and now it's back up and and breaking

even I do think that there's so much

opportunity in crypto but you have to

know and understand crypto to even get

into it we don't so we don't talk about

it except for when we're joking with

ourselves about putting a little bit of

money in crypto to have fun I think

that's the one time that I actually

don't have to swear to you that I'll

never put any more money into it because

I just

won't so funny um so if you're an

investor who does have a little bit of

uh fear about where you're putting your

money um number one find the team that

you can trust and if that team is us um

then figure out what is your where is

your comfort level um so if you this is

about this is why I'm talking about this

fund because we've had these

conversations we understand where

investors are are thinking right now um

and so we've actually we're getting

ready to launch a fund and it's going to

be a liquidity fund you've heard us

talking about this idea of a liquidity

fund for a very long time and as the

market shifted we were like okay where

are we going are we going to finalize

this fund exactly how it is because the

Market's shifting and investors might

not be you know in love with this idea

so you know let's watch let's figure it

out let's talk to more people and see

what they're going to like ultimately

we've decided over the last probably

year or so that we've been talking about

launching this fund we decided we're

going to leave it liquidity fund um and

so we took what we were going to call um

the speed fund and the power fund and we

actually put those into classes into

this liquidity fund and so this is to

really dive into where people are

investing in 2024 um so the speed fund

is 90 days it gives people the liquidity

so if there's some fear they can go okay

I'm GNA invest like $25,000 into this

and I'm going to see what happens and I

know in 90 days I can take it out if I

want to take it out um right and so and

they'll make their $10 and

then um and so uh and then we also have

in that fund um a one-year component and

so like oh okay I'm not too nervous

about one year that that still allows me

to take the money out in a year I don't

have to commit to like seven or 10 years

and then we have a threee for people are

like okay I too don't like seven to 10

years but I'm okay with three years so

this liquidity fund has different

classes to it I think it's the speed

which is 90 days I think it's shelter

for one year and I think it's um Power

for three years um so we're offering the

opportunity for people to get higher

than average returns still um in the

real estate world and sphere um that we

believe in and that we do every single

day and that we're really dang good at

um and invest it for above average

market returns but still have that

liquidity piece so that they have some

piece of mind that hey I actually can

tap into this money if I need to but we

are telling you it's not the smart thing

to do but if you want to we're giving

you the option so that you have

something that you can like have some

confidence that at least um flip and

Danny and the freedom family team gave

me something that I can feel good about

right and um so we have lots of features

um on it and compounding and everything

like that so now let me go into why I

said where to invest in 24 2024 and it's

because those longer term investments

and those equity Investments um people

are really fearful of um they don't want

to tie up their money for seven and 10

years um they don't want to put their

money into Equity where they think that

they're going to get a higher return

they're like okay I've actually seen um

that the market can be volatile and even

in the real estate space where I thought

it was safer than um uh most things

which is absolutely 100% true I was

banking on the equity thinking I was

going to get 18 20% return over all and

only a little pref um uh now I'm

realizing oh shoot when the market goes

down I lost my I had this low pref but I

lost all that you know um upside that I

thought I was going to get this is why

we continually preach we don't like

Equity Investments um we're going to

eventually probably build some for those

of you who like Risk and and you don't

mind taking the risk um uh in for the

chance for higher rewards um certainly

we're going to build something at some

point for you or maybe we never will

because we personally love reliability

and predictability that's just what

we're all about um uh but some people

have millions of dollars and say and say

hey can we JV with you and can we have a

piece of the equity and you know they

have an understanding that they know

that if we don't end up doing really

great on the property that they're not

going to get that great of return as

opposed to the people who are like hey

really like you and trust you but I want

you to pay me first before you guys get

paid and I don't want to take any risks

so where are we at on the on the

cryptocurrency for flip is there going

to be a flip coin still working on flip

going that's pretty good I know I like

that thank you very much huh you should

talk to somebody who's actually good at

I've already trademarked

it um so yeah so we're we're offering

this liquidity fund so where I was going

for the Investments of 2024 is people

want debt right now there's a lot of

very high net worth investors and

they're they're putting all their money

into debt instruments what does that

mean to you um that means private money

lending that means um uh the new fund

that we're getting ready uh to launch um

it's debt that is is giving you a

predictable and reliable return um for

the money that you're putting in and

it's backed by Something Real Estate

businesses whatever it might be um and

they prefer that debt because they don't

want to hope for the upside of equity

which is where most high net worth

investors will do they'll do a little

bit of debt they'll do a little bit of

equity um and they're just like no I

don't want to do the equity right now

you know I don't I don't know if I like

the market I don't know I just don't

know I'd rather work with a team that

says this is what you're getting and the

rest of the risk is on us and we're The

Operators and we have to figure out how

you know how the the investment is going

to perform and if if and how we get paid

um so that is one big big big tip for

2024 in where High net worth investors

are going and so we've provided that

fund to be able to give you the

opportunity to keep your money liquid if

you are fearful um uh or if you just

want like the idea of of being liquid um

and uh and then we're backing it by like

it's a debt fund so it's going to be a

predictable reliable return and it's

going to have um it's going to be backed

by you know something real estate

businesses things like that um so that's

really exciting that I wanted to talk

about because I want people to know when

we're the ones actually talking to

everybody and seeing where everybody's

money is going um I want to be the

resource that you guys um can hear from

uh that hey we know where everybody's

going right now and if you want to feel

a little bit of of safety um if if you

if that's important to you then here's

what everybody else is doing and why so

um that's the big one that I want to

talk about for the

2024 and then the be more like Warren

Buffett really goes back to our boring

um right so uh you know he even is right

now he invests he invests mostly in

company so he likes business I like

business too um that's why we built so

many companies that's why we have so

many actually uh investors have who have

gone to the master note program because

they like helping us and backing Us in

both real estate and business um and

there's just higher returns you you lock

in with a very good company um in

business the returns can be higher and

again predictability and reliability is

very very important um but there's

there's these articles that like we

printed out because I was looking and I

was like hey what's Warren Buffett doing

right now and I just wanted to study it

before we did this um this podcast and

he was talking about he's he's

Diversified also of course between

companies in real estate and the real

estate um what he what his big thing is

is um I love real estate but I don't

want to own the real estate right right

I want to be the passive investor for

those of you who are getting into real

estate and thinking that you're going to

be a passive investor um by owning it

yourself um it's not the case and

usually people find out and then they're

like crud now and they want to get rid

rid of it after they've lost a lot of

time and money um and that's essentially

what he warns people about real estate

he wants to invest in a company that

does Real Estate um and provides passive

return um to him um so I thought that

that was really important to be talking

about I'm trying to think of what else

um I'm actually going to read a couple I

like one of the lines that he says is uh

and this is like having your cake and

eat it too yeah you know he said

investing in real estate is a different

story passive real estate Investments

allow investors to reap the rewards of

this profitable asset class without

taking on management responsibilities

yes I mean it's just because owning real

estate you know of course everyone

watches the the flip this house or

whatever you know and they like oh that

looks fun you know right until they get

into it and then they and then they lose

their hat um because it's a business

it's not it's not a a hobby um it's a

business and there's there's so much so

many things that are involved with it um

whereas passive investing is somebody

else is still doing all of that but

you're not y you're investing in

essentially you're investing in them yep

uh but the the the real estate does what

PS it obviously um and so it's it's man

I like I know that we keep saying it's

funny because I think our answer has

changed now the would you have done

something differently when you started

you know now it's because for me I I was

I always said uh oh I wish I we would

have gotten into Apartments first yeah

no not my answer now is I wish we would

have gotten into passive investing first

right yes you know not into Apartments I

mean yes that that was that's cool and

all but that's even more work than

single family house but doing letting

somebody else get into apartments and

where just investing in them yes yes

agreed um another thing that uh is in

this um article as well this is a Yahoo

finance by the way um many investors

have turned to the private markets for

Passive real estate Investments and have

Aver averaged even greater returns and

Buffett's approach to real estate

Investments is focused on the intrinsic

value of real estate unlike many other

investment options real estate is a

tangible asset with lower susceptibility

to Market volatility in general its

value tends to increase over time as the

value of of money decreases during an

economic slowdown there's a high

likelihood of an increase in real estate

value and then in quotes they're the

businesses that you buy once and then

you don't have to keep making Capital

Investments sub Subs

subsequently subsequently um Buffett

said in a recent shareholders holders

meeting so you do not face the problem

of continuous reinvestment involving

greater and greater dollars because of

inflation that's one re reason real

estate is generally good during

inflation I thought that was really

really good as well um I always like

looking to um people I mean I have a

picture of Warren Buffett in the office

with his you autograph I a sign off his

actual signature yes yes which is huge

yeah so well it's actually small but

it's huge oh my gosh sorry I went

there um but yes to to to listen uh to

his um view on real estate it goes back

to what we talk about all the time about

active investing versus passive and how

passionate we are about talking to be to

people about the difference

um because so many people understand the

power of wealth building through real

estate and they think there's only one

path to get there and they think they

have to do it in order to get in the

game and that's just not accurate and so

here's Warren Buffett saying hey I don't

want to be a landlord like being a real

estate investor or owning real estate is

a business it is another job I want to

invest in real estate I simply want to

invest with a team that is doing all the

work and I get to get some of the

returns so that is exactly what um we

offer here at freedom family it's what

we're um super excited about because you

know I get excited uh we we we grew up

we say poor but rich is that what we say

poor in finances rich in love or

something well there's that too I I say

um I wasn't poor but I didn't have any

money yeah there you go yeah so um we're

just so passionate about um helping

people like that we didn't grow up

knowing about money and as we learned

about money and as we learned about real

estate and as we grew these companies

we're like let's help all the other

people who don't have the opportunity

that we did to really just go all in and

to build this and to have an incredible

team behind them and let's help those

people get good returns backed by a

company in real estate um that they can

feel safe with they can feel confident

with right because um we always say um

there's not one private money lender

that has ever not made exactly what they

were owed back in capital plus all the

interest that we owed for the time that

we had their money exactly as promised

we don't negotiate anything um and the

private money lenders are the first

people we had the opportunity to work

with to be able to say that um and that

is so so important because we're putting

our investors interest before ours why

because you're trusting us as the

professionals right and um that's really

really important and you just don't see

that um you also let's let's just roll

into the aligned interest

right you don't see a whole lot of

companies um that are purely aligning

their interest with the investors um and

that is something that we've also just

said hey we're always going to put the

investors first no matter what we are

going to make mistakes it's just a part

of life and business and in the game um

uh and we get that but if they're going

to trust us with their money we're going

to make sure we pay it back we're make

sure they get the return that they

promised um and we are going to figure

it out and continue on growing however

we need to do that and that's

like we just got Scrappy right building

these companies we just had to get

Scrappy and that's a good way to put it

Scrappy yeah and we you know we did make

mistakes and we did lose money but our

investors didn't and that's really

really important so as you go into an

uncertain market and 20124 don't get me

wrong it's not uncertain to us 2023 was

probably a lot of uncertainty with the

high the interest rates and inflation

and everything that was going on there

was so much fear but we were still

underwriting we were still going after

deals 2024 for like I said the doors are

opening wide open sellers are getting

more reasonable um the in fact interest

rates are going down um as we've talked

about real estate has been a hedge of

against inflation um already so Mo most

people understand that they're not it's

really worried about um inflation but it

is um with rental properties you have to

always be looking at hey I can rent this

at

1,700 but is the resident base in this

area or the tenant base depending on how

you how you phrase that um can they

afford $1,700 um so that is one of the

fluctuating things in um real estate um

but going back to aligned incentives you

want to find people who are saying hey

um our our alignment is with you um we

talk about property management companies

a lot so I'll let you I'll let you roll

with this one and and and what we did to

kind of disrupt the industry for

property management because we didn't

like that the interests were not

aligned you want to share yeah about how

the interests were well because we're

investors we're like well let's take the

approach of hey hey an investor run

property management company let's make

it more instead of we still want to take

care of the residents as we call them

but let's take more care of the actual

owners and hey you know what let's stop

gouging them on everything we do you

know hey you know what we need to post a

notice on the door there's

$75 you know hey you know what we need

to put a tenant back in your in your

property uh because the last one left

there's another $3 $400 1,200 if your

month if you're

yeah or or hey you know what I I just

saved you from having to do a turn on

your on your house and I kept the

resident in your house that's

$350 whatever whatever what the the was

standard renewal fee yeah the renewal

fee you know and so I'm just like

there's so many fees there's fees there

there's the fee that's on top of the fee

um and so so we sat down and let's how

can we get rid of all these stuff these

things and still make a profit you know

cuz that's what the company's supposed

to do yeah yeah yeah we're not a not for

profit no we're not uh but we made it

more uh we leaned it a little bit more

towards the owners yes yeah the

investors yeah so um so to be very very

specific um to what uh flip just went

into we aligned our interest with the

investors and it came from a

conversation of our property manager

actually coming to us because we are

clients of our own property management

company and him saying hey I've been

running the numbers and um you know here

here's what I think that we can do and

we had that conversation and I was like

yes yes and yes and then I went put the

owner hat back on are we going to make

money like are we actually going to be a

profitable company if you do that um so

it's funny you know putting the owner

hat on and the investor hat on and

figuring it out but like you know just

taking the risk of actually aligning our

interest with with with um our investors

and what uh specifically it is is

Property Management charges their um 10%

property management fee that's the

industry standard um they also do charge

a $250 renewal fee so now let me um

explain what that means that's it that's

the management fee and the renewal fee

that's all they charge so they don't

charge um uh uh tenant placement fees

that's the big fee that you're going to

have they also don't charge manage

management fees during your vacancy um

so what happens is you own a rental

property and you are uh the tenant just

left for whatever reason it could have

been a job change and they had to leave

it doesn't it's vacant um now you don't

have income now you have a property

management fee to pay um uh when you

don't have income now they've got to

turn it to make it look at again so now

you have an expense there and now it's

going to cost you one month's rent to be

able to find the new tenant like you're

just getting hurt when you have zero

income coming in and so the proposal was

how do we align interest with our

investors and it was stop charging to

actually lease up the place and don't

charge a management fee when the

property is vacant um so now how do we

make money got to put the owner hat on

hey let's make money by actually

charging the least renewal fees because

what does that mean we did a damn good

job of pleasing that Resident and they

are staying so you don't have a turn you

still have money coming in and we're

actually going to get a fee for doing a

good job so that's how our property

management company makes uh makes money

so that's a perfect easy example for you

understand like how we're trying to

disrupt things and say hey we don't want

to be um making money while you are

suffering we want to make money because

we did a good job for you and you are

making money too same goes for every

other investment opportunity um so how

are we putting your interest equally

aligned with ours or even above ours and

many times with our funds and our

syndications and things like that we're

saying it's a preferred return meaning

you get paid before we can get paid and

we're giving you a high preferred return

not a low preferred return and you get

some Equity that uh might be there might

not be there um no we're just giving you

a high preferred return and in order for

us to win we've got to do better than

that um so you have that predictability

and that reliability and finding

companies that will do that for you is

so incredibly rare on top of the fact

that we're vertically integrated we are

on that we webinar with the CPA and the

firm and they were like this this is the

place where you can do it all they're

like and at the end end of it it was

this is the type of company where you

can diversify within the company you can

do the turnkey stuff you can do it fund

you can do private money you can do a

syndication um you can do a master note

you got all of the options so that

you're diversifi Diversified within the

freedom family um and so uh I thought

that was really incredible and again the

nurse was just like you know I'm going

to take this to the other Physicians and

talk to them about it because there's

it's very rare to find a company that's

fully vertically vertically integrated

and that's why we talk about it so much

because when we started we weren't and

we were losing control of the things

that can really go wrong and make

investments go wrong and in order to

align our interest with the investors um

and making sure we w we win and you win

at the same time we had to make changes

we had to start bringing every single

company inhouse and taking over the

control and now we've gotten to a point

where we're doing it better um and we've

made a lot of it's been a roller coaster

we've made a lot of mistakes um but

again we're in Ohio with a 15,000 foot

office and we just run down the hall and

go knock knock knock knock knock got to

fix this um and it's been a pretty

incredible ride so um I hope that like I

think really hits the three things that

we were talking about where to invest in

2024 what other people are doing um the

uh piece of aligned interest and then

Warren Buffett I just like talking about

him from time to time um so I I will say

for those of you who are a little bit um

uh that aren't fearful like us um that

the investment opportunities of you know

five seven and 10 years are still out

there and right now they are few and far

between because so many investors are

liking the liquidity piece are liking

the short shorterm Investments so you

have more opportunities to get the

higher rate of return in those

Investments so if you want to use War

Buffett's quote of be greedy when other

people are fearful and fearful when

other people are greedy jump into those

long-term Investments because that's

where we're putting our money to because

we know we can get the higher return

because we're willing to sit and wait um

because we know what the Market's going

to do and we don't we want the peace of

mind we don't want to worry about our

money and and think oh we're going to

take it out and we're going to do this

and that and whatever um I will say one

more thing and that is our liquidity

fund that 90day um uh uh fund is uh that

90-day class that we're calling speed

fund it's the tier um in our new

liquidity fund um that one is going to

have like first right to some of those

long-term Investments so if you're an

investor that says yep I like the

long-term stuff I don't I don't want to

have to think about it I want the higher

return you can put your funds into that

90day um bucket and then we're going to

say hey we're getting ready to buy this

deal and we're actually looking at a

couple deals right now getting ready to

buy it who's in and you guys get first

shot we won't even advertise it to the

public until um everybody in that 90-day

um tier is allowed to enter in so we're

doing some really cool things and it's

because you guys are awesome you guys

talk to us you guys let us know what you

like what you don't like um and we

continually to we continue to improve um

based on your feedback and we appreciate

you um so much so what do you think flip

I well I still I keep thinking back to

the the the whole waren Buffett line the

the you know be greedy when others are

fear for you because we first heard that

or at least I remember and that was when

we were in Texas in 2008 yep and we were

doing a condo auction and I just

couldn't believe there was all these

people lined up to buy these condos in

Austin and Everywhere You turned was the

real estate market is crashing and

everything the sky is falling and

there's 200 people there for an auction

for condos in in Austin it just didn't

it didn't make sense to me Y and and I I

needed to really chew on that for a

while but now it makes complete sense to

me yes uh but yeah I love that yeah I

love it so um Freedom we're all on the

road to Freedom right um time wealth uh

uh geography that's the ones that are

talked about the most um you know that

today's episode was really kind of talk

about the financial opportunities out

there not to sit on your money make sure

that you're investing and finding

something that you feel comfortable with

um and uh I hope that today gave you a

lot of insight into what other people

are doing um so that you can move

forward in 2024 with confidence love it

awesome all right so um we're going to

take off we've got um another episode

next week um and we're super super

excited about it as always so we'll see

you next Wednesday

[Music]

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