Dave Debeau [00:00:09] Well, hey, everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast coming at you from Beautiful that cruise to want to actually Mexico do a little bit of R and R here. And my special guest for today is Josh Cadwell all the way from Ohio. How are you doing today, Josh?
Josh Cantwell [00:00:26] I'm awesome, Dave. Thanks so much for having me on all the way from Mexico.
Dave Debeau [00:00:30] You know, it's got to love technology, man.
Josh Cantwell [00:00:33] Yeah. I appreciate you plug it in while you're Elgin's na na. So that's great. Thanks for having me on.
Dave Debeau [00:00:37] So if you're not familiar with Josh, Josh is a very real estate entrepreneurial kind of guy. Josh is proud to say he's never had a boss in his adult life, has been an entrepreneur all his adult life, and he's done a lot with real estate. In fact, over 700 deals and twenty five states currently focusing on multifamily properties. Twenty two hundred apartment units in his portfolio, over 30 million dollars of other people's money being managed to get these apartment buildings. So I think we can learn a lot from you here today. Josh, thanks for thanks again for being on the call.
Josh Cantwell [00:01:12] Yeah, well, we'll see how much you can learn
Dave Debeau [00:01:16] actually at 15 minutes, but we'll do our best. All right, Josh, so why don't we start with this? How did you get involved in the whole crazy world of real estate investing in the first place?
Josh Cantwell [00:01:24] Yeah, yeah, great question. So the short version is I was a financial adviser. I came out of college and everybody my dad was in the financial services world on the employee benefit side. I jumped in as a personal financial planner. So at twenty one years old, I got my three six sixty six sixty three life and health. And I quickly realized within a couple of years that most of my most successful clients had real estate holdings. They didn't have all their money in the stock market. And when we talked, they were more passionate about their real estate deals, their apartments, their single family rentals, their buildings than their than their stock market investments. And when I would talk to them about an eight, 10 percent return in the stock market, they would laugh at me and say, I can do way better than that in real estate. And they were right. And so I took notice and I bought my first investment property in two thousand and one. I was just twenty four years old. I bought a duplex. I actually moved into part of it. So I was able to live there for about one hundred bucks a month. And so I realized very quickly I could rent out the upstairs. I rented out one of the rooms to one of my buddies. I was getting a twenty four year old that was getting nine hundred dollars a month in rent and in my mortgage was only a thousand bucks a month and I was living almost for free. So I kind of fell into it because my clients were doing it. And I was lucky to have caught the bug for income properties at a very young age.
Dave Debeau [00:02:43] Yeah, well that's really, really cool. And I can I can understand the whole financial planner thing. My brother was a financial planner for a couple of decades. I looked at doing that myself briefly until I kind of studied the whole thing about mutual funds. I'm going to jeez, I don't think I'd want to buy one of these things. Why the hell would I want to sell anybody?
Josh Cantwell [00:03:02] Yeah, that's how I feel today. After you studied it for a minute and came to that conclusion, I actually dated for seven years. And today, looking at all the history and the research, it's amazing that more people are not involved in real estate. There's lots of people who are. But it's amazing that we've been conditioned as a society that mutual funds for LNKD is the way to create wealth. And it's really the opposite of the truth. But it's glad you came to that conclusion very quickly. It took me about seven years to get there.
Dave Debeau [00:03:31] Well, hey, man, that was a I was a little older than you were when I when I was taking a look at that, that's for sure. But yeah, you're so right. And why why are why is society condition this, you know, not to be a conspiracy theorist, but I kind of am, as you know, whose benefit is it for us to be buying mutual funds and for us to be investing in Jicks and all this crap that we're told is what we're supposed to be doing? Right. Who benefits from that? Right. So we kind of got to look behind the curtain. They're very, very good. Gosh. Well, that's a big leap to go into going from being a financial planner. Very young guy is a financial planner to owning twenty two hundred apartment units in your portfolio in a big picture, relatively small period of time, short period of time. So how did you how did you kick things into gear? How did that progression look for you?
Josh Cantwell [00:04:21] Yeah, I think it's very much my path. Dave is very similar to what most people probably envision. You're starting with maybe buying your first property, stumbling into it. And then I went to seminars, I went to events, I read books. But some of the guys that wrote the books have become personal friends of mine. A guy named Peter Contee was one of the first books I read, became personal friends with Peter and hung out at his mansion in the Chesapeake Bay. It was unbelievable for me to hang out with the guy that I once read a book from. And what I did was I thought about what what would I like to do? And I immediately gravitated towards foreclosures. Cleveland at that time was already experiencing a two thousand four, was already experiencing a foreclosure crisis. We had 10 major companies, Fortune 500 companies that were either consolidated, bought, sold or moved out of the. So there was a loss of jobs and there was a foreclosures happening, so when I went to these seminars and I thought about what was going to do to get motivated sellers, I started doing direct mail marketing and talking to sellers and getting referrals. And sure enough, everybody that called me back said, hey, I've got a property, it's worth one fifty, but I owe one seventy five on it. And I thought, well, I'm getting this so often, I've got to find a way to make money from these deals with no equity. So I really focused on the short sale that I focused on. Foreclosures and short sales started in 2004 until 2008. That's when everybody had short sales. So all of a sudden by 2008, I already had hundreds of deals under my belt and I became one of the nation's leading teachers' gurus, professors, speakers, seminars around short sales. And I did it by accident because everyone was like, wow, you've been doing this for four years. We're experiencing a national crisis. You've already got a couple of deals under your belt. Teach me how to do it. And so we did that all the way up until 2010, 2011, I was essentially a wholesaler wholesaling short sales, teaching that strategy. And we made millions and millions of dollars doing it. In 2011, though, Dave, I had the pivot. And for most people they pivot from I'm going to wholesale to maybe two rehabs or rentals or wholesale and residential to go into commercial. For me, a lot of people have gone through different economic cycles and in twenty eight everybody went through this recession for me. I went through a personal recession. In 2011, I was diagnosed with pancreatic cancer, so advanced pancreatic cancer, I had to go through about four or five months worth of testing and preparing. And then finally, in November 2011, I had this massive, massive surgery and was basically ripped away from my real estate business. And what I was ripped away from it. I was forced to spend time thinking about what I did well and what I did wrong. And what I realized is that I basically had a very well-paying job flipping real estate deals. I did not have consistent income. I did not have recurring income. I really wasn't building any wealth. I was building an income. And during that time I had bought a couple of properties with private money. I rehabbed them. I flip them and sold them and I did almost no work of my own. I hired contractors. So it dawned on me, and this is one of the big epiphanies for me, was that funding equals freedom because funding allows you to buy the asset. It allows you to own the asset. And today we own tons of assets. So twenty four hundred units of apartments. But it really came out of my experience in fighting cancer that I had screwed it all up. So I took time away and then had them for the next three or four years. I focused just on getting access to capital, buying rental properties, lending on rehabs and creating cash flow through rentals, big flips and becoming a private lender. And that went from 2012 all the way until about twenty seventeen. And then in twenty seventeen we built a fund and we started growing up and really doing focusing on what we call mid-market multifamily, mid-market multifamily is that one million to twenty five million dollar space, mid-market multifamily. So it's been, it's been, it's been an evolution I would say, I think and most people envision their real estate career kind of along that same path. You learn a few things, you make a pivot, learn a few things, make a pivot. And so today all we do now is lend on, joint, venture on and buy multifamily. That's all we do. But it's been a fifteen year or a thirteen year process.
Dave Debeau [00:08:39] Well, it's, it's it's interesting how sometimes it takes a crisis, a major crisis like that. And by the way, thank goodness, obviously everything turned out well because pancreatic cancer, not that I know very much about it, but that's one of the they're all they're all serious. But that one's super duper serious, as I understand.
Josh Cantwell [00:08:58] So it is a relationship that most people say and Alex Trebek from Jeopardy! Is putting it right now. So prayers and a shout out to him and God bless him. But, you know, I mean, Steve Jobs literally had the exact same diagnosis. I didn't didn't make it. So I'm very, very fortunate to be even sitting here with you right now.
Dave Debeau [00:09:16] Yeah, well, definitely. And I think that gives a guy some clarity that gave you that time that you needed to figure out a you know, what I've been doing is fantastic for creating cash flow as long as I'm doing it. But when I stop it, that's when the cash flow stops. So, yeah, having that epiphany about the long term value. But then again, hats off to you for taking super duper massive action. You know, not not just going small, but like building up a massive portfolio very, very quickly. So let me ask you a few questions. In the few minutes we got left here about first of all, what are you doing nowadays? Because it sounds like you're very, very astute marketer when it comes to real estate investing, especially when you're market for foreclosures, all that kind of stuff. Different field now with multifamily properties. What are some of the ways that you find your best deals? Is is it all through brokers or or do you go direct to sellers? Sometimes to.
Josh Cantwell [00:10:07] I will tell you. I just did an hour ago, I got a referral from a realtor that said, hey, there's this there's this other broker who lists and sells a lot of multifamily properties. And this would be out there, smaller multifamily, between half a million to two million. So even though I got the introduction through one broker to another, when I go out to these meetings, we have a tremendous amount of professional marketing collateral. So I have written a book. I take the book. I've got a credibility kit that's about 10 pages long that talks about how we lend on joint venture and buy multifamily. We go through a number of deals that we specifically work on. So we use professional marketing, digital marketing of online and offline, digital and analog marketing to really make ourselves stand out, because there's a lot of guys out there saying, show me all your multifamily. Does it matter if it's direct seller? It doesn't matter if it's through a broker, but the people that stand out are the people that look and act the part. So normally I don't wear a suit to work. Normally I'm in a golf shirt and I like Converse shoes and jeans. But today I got to look and act like a guy that has a two hundred million dollar portfolio because I do and I've got to walk in and act the part. So I would say, look, if you're if you're looking for multifamily, especially the larger stuff now, the stuff that's between two hundred fifty thousand and two million, we do get a lot of that stuff direct to seller direct marketing. We buy it from wholesalers. It's not happening through brokers, not as much. But when you get a two million add up, the sellers are more sophisticated. The buyers, the more sophisticated the attorneys, the deals are more sophisticated than those are typically done through brokers. But what we do is I don't go in with a buyer's agent. I go right to the broker who's got the listing. I tell them right away they can double and the deal they can get both commissions. I'm going to protect myself with an attorney who's going to look at all my documents and all the rolls and all the lease agreements. But when you're up at that two million in upgrades, there's just not that many deals happening unless there's a broker involved. No deal. I did earlier this summer. One hundred sixty four unit was with a friend of mine, Jack Catterick. Jack, I introduced the deal because we had close together. We closed a bunch of smaller multifamily, fifteen units, twenty units, twenty five units. All of a sudden it turned sixty five unit popped up and the local Marcus and Millichap office was approached by a seller that was off market. He approached Marcus Millichap knowing that they're a big player in our area. Well, Marcus Millichap brought it directly to us. Nobody else ever got involved. They never brought it to anyone bought us because they knew we were closing smaller deals that were tougher to close, tougher to find, tougher to get funding for. So we proved ourselves by closing some of the smaller deals locally. And then we we got an opportunity for a ten million dollar deal. So I would say, you know, on the smaller deals, under two million, definitely going direct to seller work, stuff like going through wholesalers works, networking works over two million and up. You're going to have a harder time doing deals unless there's a listing broker involved.
Dave Debeau [00:13:11] Very, very cool. So, Josh, are you. Is your company still doing some of those smaller deals?
Josh Cantwell [00:13:17] Yeah. Yes. OK, I have a six unit. I'm looking at buying the guy that I met with this morning. He's got eighteen million dollars worth of inventory. He says he's going to show me that's a combination of ten different projects. One of them is as small as a six unit. There's a ten unit is a fourteen unit. We'll look at all that stuff because that's in our backyard. But if we're outside of the Cleveland area, the Cleveland, Akron, Canton area, because we have joint ventures that we've done in Oklahoma and in Savannah, Georgia, Macon, Georgia, Albany, Georgia, those bigger deals. We do a joint venture partners outside of our area, but they have to be really big to have economies of scale.
Dave Debeau [00:13:56] All right. So switching gears a little bit here, thank you very much for sharing about how you find the deals. Now, let's talk a little bit about how you find the money and not how you're doing it right now, because you've got the track record, you got the credibility, you got all this kind of stuff. But if you could rewind back to the day when you were first starting out and really now knowing what you know now or what you what kind of suggestions you give your clients and your students, how do you suggest people get started when it comes to raising private capital?
Josh Cantwell [00:14:24] Sure. Well, first of all, I think you have to have an irresistible offer, right. So that's a fancy way of saying don't be a cheap ass. Right. So an irresistible offer to me. Over the years, we've done lots of different things, residential, commercial. But when I got started, I really had a lot of success because I told potential investors. First of all, I would educate them without ever pitching them. OK, this is important. So I made a list when I was a financial adviser and I was pivoting to real estate when I was a financial adviser. They taught us make a list of what they called your project, one hundred, which was one hundred people that were in your sphere. Dare tell our teachers the same thing at Keller Williams in his book Northwestern Mutual. Financial Planning for one of the best in the World teaches the same thing. A lot of realtors, when you start your business. Who are people that you can connect with, people that already know you, like you, trust you, not that they're going to private lend to you, not that they're going to buy a house from you or sell a house, but just so that they can basically cheerlead for you. So I did the same thing in financial services. I did the same thing in real estate, made a list of items, project one hundred. I started sending out a quarterly back then. It was a monthly newsletter to them about real estate. It was a physical snail mail in the mail newsletter. And I talked a little bit on the first page about myself kind of bragging about myself. Second page was typically some deals that I was either I or deals I was selling or even deals that looked like good deals that I wasn't buying. So if you don't have any inventory, just shoki some inventory. And then the third, they don't typically tell a story about a deal or how a deal could be structured if you have no deals. Talk about a deal. A deal could be structured. And the back page was just the call to action. Call me at this number. And these are people that I already have relationships with. I didn't know Dave if they had any money or not. No idea. I wasn't soliciting for private money. What I would say to them is. I pay my private lenders 12 percent interest or 15 percent of my profits, whichever is greater. So your floor is 12 percent, but it could be much higher. And I would go through a process of educating them. But instead of saying, do you have any money to lend to me? What I would say is, do you know anybody that would like to learn more about what I do in real estate and how I pay this 12 percent interest or 15 percent? I'm not assuming you're interested at all, but do you know anyone? And what they would say was over and over and over. And I caught on to this. They would say, well, Josh, what about me? What about me? Right. So then because I was almost ignoring the fact that they could be a private lender. What I found is that worked to my advantage. I educated them with no pressure. I talked to them about my business. I asked them if they could give me referrals for people who could be private lenders, people who could sell houses, people could buy houses for me or if they could cheerlead for me. And at the end it sounded so juicy and there was no pressure involved. They would be like, well, you're buying houses and you're only at sixty five or 70 cents on the dollar. I get two percent interest, a 50 percent profit. What about me? Why wouldn't I do that? So I would take I would go back and tell your audience, take the same approach. My very first private lender was actually my brother's mother in law. Nice. OK. The reason why that worked was I had a great deal and I educated her with no pressure. Then she said, well, how does it work? I said, you basically make the loans. She said, Josh, instead of the 12 percent interest or 15 percent of the profit, I'd like to do a five year note with you at 18 percent interest. And I'm like, sounds good, where do I sign up? So I cut her a check every summer, every June for 18 percent interest. It was you know, she was killing me. It was it was almost usery, but it was absolutely the best thing I ever did. 18 percent is the best check I ever wrote. It allowed me to scale up, invest in coaching, buy properties on my business. And it was because I educate her about what I was doing, never assuming that she'd be a private lender at all.
Dave Debeau [00:18:25] Interesting. So it was, if you don't mind, how much did she invest with you way back when was that? What was that first investment.
Josh Cantwell [00:18:32] So first investor was sixty thousand dollars on a five year note, five year balloon, annual interest only payments. But shortly after that she invested another hundred thousand dollars specifically in the deal, first mortgage. So she funded my business. Then she funded the deal and then she referred me to a bunch of other people. And so without her now I have two hundred and fifty investors that actively have money with me. Right now. None of them are institutions. They're all private lenders. It's about thirty four million bucks. It all started with my brother's mother in law and it just kind of mushroomed out from there. And we got really good at creating a follow up process so that when we did make that first touch, we introduced them to what we were doing. We didn't sell them with no pressure. We put them in our campaign. Now, we would start emailing them once a week. We would send them a direct mail newsletter once a month or once a quarter. We start inviting them to webinars. No pressure. Right. And then we'd get on the phone with them as well and talk about their goals to the point. Then it would we figure out what they wanted to do. And then they were like, yeah, I'm liquid. I'm liquid for two hundred grand. I've got two hundred grand. Josh, what do you have.
Dave Debeau [00:19:40] Beautiful. Love it. Love it, love it. Josh Time flies. We're having fun my friend. Thank you very much for sharing some amazing, amazing nuggets of wisdom. Yes, we did learn a lot in this short interview, so no worries there. If people want to find out more about you, Josh, and what you're up to, what should they do?
Josh Cantwell [00:19:59] Yeah, they can. Business really two places, free land lending, dotcom, if they want to borrow money again, we lend out a lot of multifamily. We joint venture a lot of multifamily. We buy a lot of multifamily freelon lending dotcom and tech with us there. And then I've got a book, The Flip System. They can get it for free shipping and handling. They can go to get flip system dotcom there. They'll learn about my story about fighting pancreatic cancer and some specific tactics like we talked about today in this podcast, specific tactics on what I do to raise private capital.
Dave Debeau [00:20:33] Awesome. Very good. There you have it. Thank you very much. Josh, it's been a pleasure getting to know you. And again, hats off to you for all you've accomplished and for beating cancer.
Josh Cantwell [00:20:42] That's all. Thanks so much for having me on. I appreciate you being here.
Dave Debeau [00:20:45] All right. Thanks, everybody. Take care. And we'll see you on the next episode. Bye bye. Thanks very much for checking out the property profits podcast.
Dave Debeau [00:20:53] And you like what we're doing here. Please head on over to iTunes, subscribe read us and lead us to review. Very, very much appreciated. If you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.