Real Estate Revealed

#13 - Walter Novicki, Update on Freedom Venture Investments

Eric Wilson
January 21, 2021


investor,people, walter, investment, invest, commercial real estate, multifamily,talking, buying, real estate, assets, market, numbers, returns, capital,property, florida, retirement, north shore, started


Walter Novicki,Dave Seymour




Dave Seymour 00:36

SteveSeymour, your host real estate revealed starve and he's flipping Boston. Sothey tell me, more importantly, the CEO of freedom venture investments, basedout of Danvers, Massachusetts and also down in in the Florida market and FortMyers. Welcome. It's Saturday morning. What are you doing? How's your day, it'sbeen an absolutely crazy week in the news. I'm not going to weigh in on thatone. My guests might, but I'm probably going to stay away from that. I like toI like to focus on on real estate. This is not your regular real estate show.It's called real estate revealed for a reason. Because what we do is is wereveal the things that 99% of the people don't know about real estate. And welook at it purely from an investment standpoint, you have an opportunity to goto our website, WWE dot freedom, venture calm, you'll take a look at that siteand scan around and enjoy yourself, get some education, and you can learn someof the things that a very small percentage of people know they call him the onepercenters and I know that's probably not not the right politically correctterm to use these days, but asked me if I care because the answer is no. Butyou know, the 1% is the elite, the the institutional investors, what have theybeen doing with their capital? When you look at Harvard and Yale, thecommercial real estate in their portfolio has grown dramatically over the pastfew years. So if there's already a plan of success out there, when it comes toinvesting, why don't we just duplicate and copy it, and we're going to addressall of those all of those things today. So I am the CEO of freedom ventureinvestments, we are a commercial real estate investment company that buysmultifamily assets in the Gulf Coast region of Florida, we put thoseinstitutional assets in front of you the the retail investor, and we give youthe opportunity for those that qualify to to participate in high yieldinvestments, targeted high deals, investments, and I can't do that on my ownright. I am the common denominator of the five people I hang around with. Andif I'm the smartest person in any room, I'm in the wrong room. So I like tosurround myself with experts and my team, my partners of the very, very best inthe business and we're blessed. We're lucky today to have my business partnerand chief investment officer with us today. His name is Walter no Vicki, goodIrish kid. And Walter Walter is consistently rubbing my nose in it because helives down in Fort Myers. And he is our acquisitions. Officer, as I said, andwe interview waterboarding on the call earlier on. When we first started, theshow is probably maybe two months, maybe two and a half, three months ago now.But it's absolutely the right time to bring Walter back here and get a littleupdate on what's going on with us as an investment company, but also how fastthe climate is changing financially for our country and also investmentopportunities that we see. So anyway, that's enough chat out of me. drumrollplease. Ladies and gentlemen, my dear friend and business partner, Mr. Walterknow Vicky tell you their wallet. Hey, I'm


Walter Novicki 03:53

here,David, how are you?


Dave Seymour 03:54

I'mgood, man. I build you up like that man. And then you got to raise the energy.You can't i can't come out. My man. I was like, it's the big introduction. Andyou're like, hey, David,


Walter Novicki 04:07

how areyou? You know, you look at numbers all day. It's hard just to get that excited.Nobody has your energy. Nobody has your energy.


Dave Seymour 04:14

I had ameeting today with a financial advisor right here in town. real cool guy. Andhe said you know, it's some people are excited by numbers, right? Theaccountant. The acquisitions manager are excited by numbers. That's why that'swhy I leave the the analysis up to you. But I think it's I think it's good togive the folks a brief background Walter and you'll do yourself that adjustthis and I will How long have you been invest in personally as a commercialreal estate investor? How long have you been, you know, raising private capitaltell tell us a little bit about your journey just so folks get a flavor for whowho you are?


Walter Novicki 04:52

Yeah,absolutely. Those those numbers are actually the same. You know, you have tohave the capital to go out and acquire the property. So I've been active. I'vebeen active in the real estate arena for 35 years, started back did my firstfirst acquisition. At Ohio State University. I was a ROTC instructor at thetime, decided that I needed to make a little bit of money and plan the nextexit out of the military. And, you know, real estate was the path for me. So Istarted actually doing campus housing. It Yeah, in the Columbus metropolitanarea, they're just south of south of Ohio State, if anybody makes it toColumbus. If you look where the new arena is on South High Street, that isactually the first project I ever did.


Dave Seymour 05:43

Really?Yeah, they would have probably taken it by eminent domain today, brother if hestill


Walter Novicki 05:48

long,long God, yeah, the city came in, took it down and put up a big arena. Butthat's alright. I made my money.


Dave Seymour 05:54

Yeah, Ithink you know, this. We had Craig Hanson, the ex Boston Red Sox pitcher on theshow a few weeks ago. And it's it's interesting to watch because he had asimilar journey to you when he, you know, when he injured out of the majors, heknew that real estate was a retirement plan for him. And he did as you did, hestarted in student housing. And I was actually on a call with him yesterday, andhis student housing is near Connecticut University called you in willimantic.And it's interesting, because, you know, you're talking about student housingand, and some people would say, Oh, my God, that's a risky investment. But whathe did, and I'm sure you understand this, as well, is what he did was was allof the students that came into his student housing, and it's not a lot. It'smaybe $10 or 10 units altogether. The very first question I sent to himyesterday was Craig, I said, Did you make sure that the parents co signed onthe lease? And he said, Oh, yeah, absolutely. So you know, having the parentsco signed the lease, they have that responsibility for their kids, even thoughthey're not in college right now. You know, just just a just a little nugget,if you will, for those investing. But anyway, I digress. That's enough aboutme. Let's talk about you, Walter. So you started in student housing in Ohio.Give me that, give me the progression. Man, how did you end up being down inFlorida and doing what you're doing for us and our company today?


Walter Novicki 07:18

Well,you know, I had wanted to come south, just because of lifestyle and weather, myentire life. And I got that opportunity. In the late 90s, I actually started todo some, some what they called land banking, where I was actually buying upparcels of land and a little town called Cape Coral. Now the fastest growingcity in all Florida, one of the fastest in the United States. And that's whatactually gave me the ability to move down there. Very quickly, I realized thatthere was a massive and growing need for for multifamily down here. You know,lots of condos. Yeah, you know, lots of lots of single families. But thereweren't a lot of multifamily complexes. And the ones that they had down here,most of them were older. And you know, it really didn't meet the needs of agrowing family. You know, they were set up initially for retirees. And, youknow, we saw it, we saw the need, and that's when we actually stepped into themultifamily arena, we were doing quite a bit of new construction and actuallydoing something that is is strange to a lot of investors when I say it, but itmakes sense here. And that was reverse customization. So we are going out andwe were actually buying condo buildings and converting them back to or intoapartment complexes is





Walter Novicki 08:43

Yes,that's interesting. That's where the demand that's where the demand is.


Dave Seymour 08:47

Yeah,that's, you know, what's important about a statement like that Walter that alot of people don't realize, is through lack of education through lack ofknowledge and understanding. Knowing the specific market in which you invest inis just so critical, right? Everything that we do in and just forclarification, you say multifamily to us up here in New England, Walter,multifamily in our mind projects into like what we call a three family or a twofamily property. That's not what we're talking about, folks, when Walter saysmultifamily, he's talking about apartment complexes, you know, a specificniche, if you will, is 40 to 140 150 doors, but knowing what the demand of thatspecific market is, is so critical to be successful. So you know, I can't helpit well, so I gotta jump in and add my two cents as you're as you're goingalong. So you're doing reverse condo conversions, in essence going back tomultifamily. And then you you actually rode right through the the the horrorshow, right? The financial horror show of the collapse 2000 and late 789 10.What was that like? I mean, how did that play out down there for you


Walter Novicki 09:59

and wetry not to Think about that day.


Dave Seymour 10:02

Look,man, look, watch this, well, let the person who says they haven't made theirown mistakes, they haven't got their own lumps and bumps and scars, I havemine, or I've had my own. I am very proud, as you know, to say, I've never lostone dime of investor capital, no missed a distribution or a payment to myinvestors. It doesn't mean I haven't had my own lumps and bumps. But sure yougot through that you came out the other side of that, and what what was thatlike? And what did that do for the strategies that you were you were involvedin? In? 910 1112?


Walter Novicki 10:38

Yeah,you know, that is actually a very good question, especially being here. When Isay here, Lee County, Florida, and Las Vegas, those were the epicenters brutal,of the crime. You know, I tell people this, and I've had people come and say,No, there's no way and then they Google it. And they're like, Oh, my God,you're right. We had a 78% drop in property values. in Lee County, Florida.Yeah, that's crushing. Especially when you're a real estate developer, itdoesn't feel real good. Yeah. But on the other side of it, it kind of thinnedto hurt, you know, a, it really did, the people that came out the other end,the are able to survive that, you know, the, they're, they're better off for itoverall. And truly, our local economy is better off, you know, it was a highly speculativemarket in 2005 2006. And I've shared the stories with you, everybody you metdown here was a real estate investor, and everybody that you came across, hadmillions of dollars in net worth, but it wasn't real. They were going out, theywere buying a piece of property for, you know, $60,000 just sitting on it. Andliterally 30 days later, you know, that property was worth 40 or $50,000. More.Hey,


Dave Seymour 11:58

hey,Walt, it sounds like you're talking about Bitcoin and Tesla stock right now.


Walter Novicki 12:01

Thereyou go, doesn't it? And, you know, it just, it just wasn't it just wasn't areal market, you know, no, right or wrong here. But it was propped up by theease of access to capital, that, you know, Freddie and Fannie made available.So we had a lot of people buying a lot of property that probably shouldn't be,yeah, buying properties, you know, banks were throwing money at everybody andanybody to get it on the street so they could start getting some presumablereturns, the bottom fell out the the market, those of us who who were able to,to weather the storm, you know, just find ways to reposition ourselves. Ilearned a long time ago, if I want to, if I want to be successful at something,I find somebody who's doing it. And then I mimic what they're doing and try tryto tweak it a little bit, make it my own. And I was I was fortunate I had somegood mentors down here in this market, some guys who had been through the therise and fall down here, but never to the extent of what we saw in Oh, eight,as far as length goes, everybody thought it was gonna be, you know, six months,nine months, a year, you know, not really, you know, 567 years, almost a decadeof a down market. But we followed what they did, and we actually turned it intoan opportunity. People needed cash, banks were sitting on assets that theydidn't want to sit on, we were able to go out and negotiate some sub blockpurchases of properties, we were actually able to create a larger fund thatwent out and started to acquire waterfront properties for truly pennies on thedollar. So we found a way to we found a way to profit in a really negativenegative time.


Dave Seymour 13:42

Yeah,yeah, hold that thought, Walter, we're gonna take a quick break. When we getback. You said a cut, there's a couple of things you said in a reposition. Andyou also said, you know, to be successful, you don't have to reinvent thewheel. You just need to find the right people to align your investmentstrategies with or your business plan with. So I want to peel back the layerson that a little bit because I think that's critical and everything that youand I and Eric our other partner do together with freedom venture investments,so don't go away. You're listening to real estate reveal what they see moreWalton Vicki, Principal offices at freedom venture investments,


Intro Voice Over  14:18

realestate revealed We'll be right back.



Today,the real estate market is booming mortgage rates just at historic 30 year lows.And the New York Times recently reported that investors are snapping up realestate at rock bottom prices. And now savvy investors are buying real estateusing their IRAs that allows them to access their retirement funds to buyproperties without paying any penalties or early withdrawal fees. If you havefunds in your retirement account and you are interested to learn more callhorizon for us today at 866-712-2007. That's 866-712-2007 unlock the power ofyour retirement account and take advantage of one of the most profound opportunitiesin real estate since the housing crisis 15 years ago, call horizon trustretirement specialist at 866-712-2007. And for a limited time, get our freeUltimate Guide to buying real estate with your IRA that's 866-712-2007 or visithorizon trust comm slash day. Horizon Trust Company is an independent passivecustodian and it's not associated or affiliated with and does not recommendpromote or advise any specific investment investment opportunity investmentsponsor, investment company or investment remote or any agents, employees,representatives or other such firms or entity horizon trust is not providinginvestment advice, advocating or endorsing these options may or may not be afit for individual investors investments are not FDIC insured, offer no bankguarantee and may lose value or rising trust doesn't receive any commissions orfees if I invest with any other sponsor.


Dave Seymour 15:47

You everwondered how to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? You know what analternative investment strategy is what tune in for all the answers on my showreal estate revealed this is Dave see my might recognize me from the hit TVshow flipping Boston. I'm also the CEO and co founder of freedom ventureinvestments to smarten up your real estate now by tuning in every Saturday forall investment details, visit us at info at freedom slash 104point nine call my team at 781-922-4418


Intro Voice Over  16:19

thinkingof purchasing a new home second home or investment property or mayberefinancing to get a lower rate consolidate debts drop PMI or need to cash outto do home improvements. George kudos mortgage Officer of cross countrymortgage and Danvers is just a loan officer you will need as Essex County's toploan officer with more than 8000 past happy clients in over 30 years experienceGeorge and his team will be happy to assist you with rates the lowest inhistory Don't hesitate act now you may be able to save 1000s of dollars callGeorgia 97877746 630. You're listening to real estate revealed with Dave seemore from a nice living Boston,


Dave Seymour 16:58

you'relistening today see my Walton a Vicki Hey, um, you know reach out to reach outto George kudos, you know that residential mortgage or maybe that smallcommercial mortgage that you're looking for right here in the New England area.Georgia has been part of my team for many, many years was very, veryinfluential, right and important. In our years of flipping single familyhouses. It's It doesn't matter how beautiful your product is, if you're aninvestor, if you can't find a buyer for it, forget about it. Right. So Georgekudos nice. 787774663. And then, you know, my realtor to the stars. Steve, Steve,he blesses Steve, he could take great care of you, he can exactly match theright property. For the right for the right, right individual 617-763-1001. AndI'm looking forward to having Greg Colleen back on the show soon. If you are aregular listener, you're new Greg Colleen is the CEO and co founder of horizontrust. What would it be like if you're a self directed retirement account, atthe potential to work with velocity at double digit returns? Putting lazy moneyto work is a strategy that Greg has worked on his whole career, something thatwe offer to our clients. So Greg can be reached at 866-712-2007. So Walter, youknow, we were talking about, you know, what 2008 did? And and, you know, ourmath, because that's kind of when I started wall, right? And I would peoplewould say I'm still in the fire department back then. But people would say, youknow, what do you do, I'd say I'm a real estate investor, and they'd step awayfrom you. Like you had some some terminal illness, it was almost as if there'salmost as if they were praying for you. But as I'm caring for one of a betterword, it sounds you know, when, when there is misfortune, fortunes are created.And, you know, neither you nor I created the COVID crisis that we're in today,neither you nor I created the, the the crash of 2007 and eight, but instead ofbeing, you know, victims of that scenario, we became victors by aligningourselves with the words you used where, you know, mentors and, and, andrepositioning. So talk a little bit about that, what was what was the landscapelike? And let's do this, in, you know, you got more years in the game than methan I do. Walter, you know, so I always defer to other people's expertise ofexperience. What do you see? If anything, you know, let's just have a reallyfrank and honest conversation. What do you see in any of the similarities thatwe're not, you know, you and I experienced in eight 910. Do you see anysimilarities now with regard to commercial real estate, which is ourwheelhouse, you know, population, GDP, economy, political landscape? I mean,are there parallels because some people say absolutely not. And then some, somepeople say absolutely, there are what's your take on the COVID landscapingcommittee? Listen to what you experienced back then.


Walter Novicki 20:03

Well, I,I do think that there are a lot of correlations between what happened then andwhat's what's happening now. You know, people have short memories, they reallydo. You know, everybody everybody was, you know, the guy that made it throughthe crisis that survived that, you know, had that conservative mentality. Andnow it seems to just be out the window. And when you really look at it, andthen I had a conversation with a with a broker, a real estate broker the otherday, and he was talking about, he can't find agents that went through thedownturn. He said, Yeah, he goes, these guys, they, at the markets been goingup for the past decade, slowly, you know, it's banged along the bottom, butit's been going up. So a lot of the professionals that are in this marketinvestors and, and, you know, all these peripherial people, many of them justhaven't gone through a downturn, they haven't seen, they haven't seen a bottom.So, you know, there is a there is a lot of, you know, for lack of a betterword, a lot of naivete, you know, people just don't want to believe that thingscould get really, really bad. But when I look at the fundamentals, when I lookat it, when I look at the numbers, when I look at the statistics, things aregonna get, they're gonna get dicey. I mean, you know, you look at you look atthe number of properties right now that are in default, and not just in ourmarket nationwide. Yeah, we have an issue, we have an issue. Once, you know,the momentum picks up on that the banks are going to have to make some toughdecisions. I know that a lot of the a lot of the banks are moving towards, youknow, establishing certain levels of liquidity so that they can counter anydownturns, they're being proactive in dealing with people that have issues. Butthis isn't, you know, a problem that you know, billions is going to solve, it'sgoing to roll in the trillions of dollars, and the banks just won't have thatoverall liquidity, and the government can only do so much. So you know, at somepoint, things are going to are going to boil over,


Dave Seymour 22:13



Walter Novicki 22:16

I'lltell you, I'll tell you that six months after it happened.


Dave Seymour 22:22

Sixmonths later, yeah, you


Walter Novicki 22:23

can't picka bottom, you can't pick a top, it's always in the rear view. You know, butwhat it comes down to Davis is just just knowing that it's out there, and whatI am seeing, and this is working to our advantage, I think a lot of people aresmarter this time out, and they're being proactive. They they see the traincoming in some people not all, but some people were taking action, you know,they're there, they're reaching out. And that's why we have the deal flow, thethat we have, as I mentioned to you, you know, my my marketing shifted a numberof a number of months ago, because our incoming deal flow was surpassing whatare our outgoing deal flow? What's, you know, the the things that we wereactually the marketing? Yeah. So, you know, we're, we're completely driven nowfrom, you know, incoming incoming deal flow. And that is a that is a product ofthe ever changing economy. And it's a product of the the folks who are outthere coming to the realization that, you know, things are probably not goingto dramatically improve, and they need to make some decisions now, beforethey're forced into doing some things later.


Dave Seymour 23:39

proactiverather than reactive, right, exactly out of his boat. It is for some reason,during that downturn, you know, people focused on the on just to survive. And Iremember a guy saying to me, during that period of time, he said, Dave, you cansurvive, or you can thrive. It's, it's a choice that you have, right? It's theactions that you take, it's the knowledge that you acquire, to your point, thepeople that you're aligning yourself with going forward. You know, this Walter,we invested in a study early in our, you know, development of our commercialreal estate fund to bring investors in pay them or returns that we retarget.But we did it we did a study to find out what were the concerns of, of what'scalled an accredited investor here in the United States, somebody with someliquidity with some, some reserves for one of a better term or a net worth.Just for the folks listening. The Securities and Exchange Commission allowsmyself and Walter and our team to only do business with accredited investors.They're people who earn $200,000 a year or more as an individual 300 as afamily or they got a million dollars in net worth. sec determines them to besophisticated or educated investors, which I always find amusing, because Iknow plenty of people who've got money or Ain't that smart. You know what I'msaying? But anyway, you know, we looked at what their concerns were, and fromthe best of my recollection without pulling up, the data that we paid for itwas loss of capital is that is their number one concern. So they do eithernothing with it, right, or they or they just sit still with it, you know, theystay in a, in a negative yield, like, like a bond investment, or a T bill,something like that. The second thing was that their fear of taxes. And I thinkthat's a legitimate fear that needs to be discussed sooner rather than later,especially with the consistently changing political climates that we live intoday. And then the other thing was, was a, a catastrophic event, like a, likean illness in the family, something that, you know, really eats away at theirfinancial 42 of their depth, if you will. And the fourth one, it just came tome was knowledge. Like they knew there was something outside of what the thefinancial advisor pedals 24, seven, right, they know, there's there's somethingon the wind, shall we say? Well, you know, what I mean, like, there are thesethings called, quote, alternative investments, and alternative investment isbasically anything outside of stocks and bonds. And yet they didn't have thatknowledge base. I mean, you tell me, do you see a more Intelligent Investortoday compared to, you know, 2005, six and seven? I mean, do you do you see thequestions that they ask being more in depth and pertinent, rather than I justwant a 4%? return? You know, what I mean? What what's what's your take on theinvestment mindset, today, based off of kind of, like, the setup I gave youthere?


Walter Novicki 26:48

Sure.Yeah, I definitely see it as more sophisticated than they were a decade plusago. It also the, they're, they're more knowledgeable. And I think that comesto the ease of information. I mean, you know, it's amazing what transpired, youknow, since since 2008, technology wise, I mean, we have access to so muchinformation. In some ways, it's intimidating for a lot of people as well, Imean, I talk to a lot of very intelligent people, you know, professionalindividuals out there, they might be an engineer, it might be a physician, anattorney and accountant, but they don't have expertise in real estateinvesting. And when they start to delve into it, number one or so 1000different schools of thought, but also, you know, what, what's goodinformation, what's bad information, what's really relevant to the market. So Ithink the amount of information is, is a little bit overwhelming for for somepeople. But overall, yeah, they are more sophisticated group, they are also Ithink, a little bit more conservative, you know, the people that weathered thestorm or building wealth back in 2008, and continued to build wealth, you know,they for the most part took some pretty big hits, than what we've seen in the equitymarkets. You know, it's, it's putting a lot, it's doing a lot of fear in peopleand, you know, they're looking for, for alternatives. But they don't want totake the the big risk of going out there and just, you know, trying to do it ontheir own, you know, if you have a net worth of, you know, two $3 million, thatyou've worked your entire life to create. A lot of people don't feelcomfortable, and I definitely understand why going out on their own andplopping that down on, you know, a 40 unit complex somewhere. Yeah, when theyjust don't have the experience, that's, you know, it might be the bestinvestment in the road for him. But if if they can execute, you know, it's,it's not going to be a winner. So, you know, there's, there's a lot of there'sa lot of hesitancy just because of that lack of lack of knowledge, lack ofinformation.


Dave Seymour 28:52

Youknow, what's what's critical? I think, Walter and not many people really focusin on it, you know, as an investor, what do you really invest in? Right? Do youknow the name and the address and the history of the guy who works at the Teslaplant? You don't? Right? Do you even know, you know, the, you know, the trackrecord of, you know, the guy Oh, just, you know, push through. So some Bitcoin process,whatever it is that we're talking about, you know, not to tear anybody down tobuild us up. But I think what's important is, and we'll talk about this, we'regonna take another quick break, but when we get back from the break, I want tounpack and talk about the fact that what do we really invest in as investors isthe fact that we invest in people, right? We invest in people and I had thissame conversation. Just Just this morning, I had a right here at Kathmandudownstairs. I had a at a meeting with a financial advisor from a company calledLPL. And we both agreed that our clients invest in us, right, they don'tnecessarily invest. Yeah, important to be knowledgeable. But at the end of theday, they're investing on our track record as skill sets so that they don'thave to. And that's the power of what's called a passive investment. That'smoney that goes to work and puts money in your pocket on a monthly basiswhether you're asleep whether you're awake, whether you're on vacation, orwhether you're grinding it out at a J. ob. So you're listening to Dave SeymourWalton, the Vicky real estate revealed and we'll be right back Don't go away.


Intro Voice Over  30:29

RealEstate revealed We'll be right back.



Stevemolestus of Solaris reality as intimate knowledge of the North Shore market,with over a decade of experience and record of 300 real estate transactions.When it's time to buy or sell property. Give Steve a call directly at6177631001177631001


Dave Seymour 31:02

you everwondered how to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? You know what analternative investment strategy is what tune in for all the answers on my showreal estate revealed this is Dave siemer might recognize me from the hit TVshow flipping Boston. I'm also the CEO and co founder of freedom ventureinvestments to smarten up your real estate and know how by tuning in everySaturday. For all investment details, visit us at info at freedom ventures.comslash 104 point nine call my team at 781-922-4418. Today the real estate marketis booming



mortgagerates just at historic 30 year lows and the New York Times recently reportedthat investors are snapping up real estate at rock bottom prices. And now savvyinvestors are buying real estate using their IRAs that allows them to accesstheir retirement funds to buy properties without paying any penalties or earlywithdrawal fees. If you have funds in your retirement account and you areinterested to learn more call horizon trust today at 866-712-2007. That's866-712-2007 unlock the power of your retirement account and take advantage ofone of the most profound opportunities in real estate since the housing crisis15 years ago, call horizon trust retirement specialist at 866-712-2007. And fora limited time get our free Ultimate Guide to buy real estate with your IRAthat's 866-712-2007 or visit horizon trust calm slash day. Horizon TrustCompany is an independent passive custodian and it's not associated oraffiliated with and does not recommend for any specific investment investmentopportunity investment sponsor investment company or investment for motor orany agents employees representative or other such firms or entity arising trustis not providing investment advice, advocating or endorsing real estate. Theseoptions may or may not be a fit for individual investor investments are notFDIC insured, offer no bank guarantee and may lose value horizon trust doesn'treceive any commissions or fees. If I invest with any other sponsor.


Intro Voice Over  32:58

You'relistening to real estate revealed with Dave Seymour from a nice living Boston.





Dave Seymour 33:04

Welcomeback. Saturday morning, was still early in the year. Right? You've got time toto map out some goals fit for yourselves, you know, personal development goals,you know, health goals. But we talk a lot here about financial goals. Walter iswith us my chief investment officer. He's in Florida. I'm not long, Walter. Butyou know, we were talking about investing mindsets, you know, what is what doesan investor look for? So Well, what is what's your avatar, when it comes toinvestors, like you've raised about 120 530 million somewhere around there. Inprivate capital, you've deployed that capital on approximately a quarter of abillion with a B dollars worth of transactions, real estate transactions overthat 20 year period that you've been, you know, you've been working working inthat Florida market? Who is your avatar? What what what do you look for, in aninvestor for you to say this is going to be a really good fit not only for theinvestor, but for us as well. Right? As GPS, as we're now general partners ofan investment or in our case, a private equity fund. You know, there are somepeople that are not a good fit for what we do. And it's not just whether theyhave access to capital or not. It's also how they, how they look at what we do,and you know that they'll tell you very, very quickly whether they're going to bean ally or an enemy, when when they're when they're investing with you. So whatdo you look for Walter? What's your what's your perfect avatar for an investor?


Walter Novicki 34:45

Well,first of all, we have the the requirements to be an accredited investor. Solet's make that assumption that the individuals an accredited investor, youknow, what I look for is I look for somebody traditionally that's going to becomfortable being a passive Civ investor, we're very transparent what we do,every every acquisition that we make, you know, rent rolls, all those thingsare there to be viewed by our investors. So I'm not talking about the lack oftransparency, because we are very transparent. What I'm talking about is thethe trust, the trust, the fact that they're willing to entrust us with takingtheir capital, investing it, growing that asset producing income for them, andeventually, picking the time and the place to liquidate that asset for maximumreturns. You know, that's, that's crucial in what we do. Because InvestorRelations, we want them to be happy, we want them to be knowledgeable, we wantthem to be informed about what's going on. But we also want them to be on theon the passive side of things, we, we have the expertise, we have themanagement team, we have the track record and experience. So a client has to becomfortable with that. And, you know, you have to identify that, you know,right up front, make sure that it's a match force, you know, and what I what Ilove is the fact that, hey, if they want to go out and figure out how to do iton their own, you know, we could help them with that as well. But if they'recoming in, as an investor, you know, in there, they're looking at a fun levelinvestment, such as what we offer, they have to be comfortable turning thereins over.


Dave Seymour 36:26

Yeah,it's definitely it's definitely a position where, you know, they can't drivethe bus. No, I like that. You know, I was, I was looking through our investordatabase. Yesterday day before, I, you know, there was some numbers that I payattention to, and some that I don't. And what I've seen is this, and it's partof the investor questionnaire that we kind of go through, when we interview andinvest there to see whether they fit with us. And the question that we getasked of us, and we offer advice on is always around retirement. So you and Iboth are pretty close in age, I think, I think I'm a couple years younger thanyou, but not much. And, you know, we we had our age group in that early 50 age group,you know, we're looking and planning out that next 1520 year run, you know, tothe finish line, and I don't mean that the big dirt nap, I just mean theability to retire. Knowing that, you know, there is significant or sufficientdepending on you know, how you want to look at it, cash flow going forward. Youtell me, Walter, have you been able in your career to help accelerateretirement funds for investors? And and what did that look like for them? Imean, what what was the what was the the expectation going in? And and thefulfillment on that look like?


Walter Novicki 37:55

Yeah,you know, it's funny that you should mention that because one of my, one of myvery first investors, who did, you know, he went along with me on a deal bydeal basis, you know, is still with me, in other in other investments that wehave, you know, his retirement is based on his ability to get that, you know,10 to 12% cash on cash return. You know, when he did his calculations yearsago, and many, many people did it, I remember sitting with a financial advisorwhen I was leaving the military, and being told, hey, you know, you're going toget when you retire, you'll be able to invest in a good bond fund, and you'llget, you know, six to 8% income from from the dollars that you were investing.But, you know, fast forward to 2000 22,021 now, you're not getting 8% Dave, youcan't get a CD, you can't get a CD for seven 8% anymore. So we have people thatare paying it, we we have a lot of people that we talk to that, you know, youlook at their retirement and they've done everything right, they've made everysmart decision, you know, they got the good education. They got the good job,they've you know squirreled away everything that they could they, you know,maxed out the 401k they did everything right. But here, they're coming up onthe horizon, a retirement horizon that's maybe 810 years out, and they'resuddenly realizing they don't have enough based on the returns that they canget through traditional income producing investments. You know, we're talkingmutual funds, government bonds, CDs, so they're looking for alternatives. So itis a game changer. When you sit down with somebody that's in that situation andyou show them how they can still conservatively and vast get capitalappreciation, get growth and also get, you know, 810 12% targeted month.income, you know, in quarterly distributions, that is a absolute game changerfor these folks,


Dave Seymour 40:08

you andi, you and I are both familiar with. What's the name of that show? Do youremember Walter? It was jack Bogle when he was interviewed on 60 minutes, 60minutes, it was like 2005 or six. Yeah. Too broke to retire or something toremember the name of the thing, Walter, I searched it and throw it on thewebsite. So yeah,


Walter Novicki 40:31

yeah,that would be something. You know, it's funny to look back on that because eventhough that's, you know, 15 years ago that they did that interview. It'srelevant today. It's more relevant today. Yes,


Dave Seymour 40:43

yes. Totoo broke to retire was the name of it. And you can actually find snippets ofan interview, that frontline, it was frontlines. With jack Bogle, who was thefounder of Vanguard, Which one was it was Vanguard Vanguard, correct, lowestfee based, mutual fund, out there. And what they said was, is a Vanguard, bythe way, for those of you listening, if you google Vanguards annual report,they do an annual report on the performance of the 401k in America. And it'ssomething which is horrendous. And I mean this sincerely, because it breaks myheart, the average 401k balance in our country for a 50 to 55 year old Americanis somewhere around 60 to $65,000. Because nobody ever calculated the power, adestructive power of a compounding cost inside a 401k plan that add away at thecompounding returns that are projected. And when I mean compounding costs, I'mtalking about the consistent movement of capital inside that that retirementfund by the financial industry, right, they're always moving that money aroundand as you know, where money is moved, money is made, and it's usually made bywall street. So you know, we get to that point today, where and, again, I don'tmean to keep referring to this meeting I had this morning, but theconversations just gone there. You know, the financial advisor was saying, youknow, the the first question always is, is how do I retire early? Well, you'renot going to retire early on a 4% return on your capital, the math just doesn'tmake sense. And here's why. I pulled up some statistics. This comes from theCongressional Budget Office, it's part of their data pool. And they'recomparing the, the the debt, right the national debt, and relevance to our GDPor gross domestic product, right, which is a productivity as a nation. And they'relooking at these numbers now from 2010. They projected into 2030. In this thisthree projections that they have dependent on which economists you look at, andI don't care which number you want to get comfortable with. But but all of themscare the scare the pants off of me, we're heading towards 98% of our GDP willbe debt, right, the debt number will be 98% of our GDP. They're pushing thisout to about 2031 projection is 109%. And the third one, which is worst casescenario, that they're looking at an alternative scenario, you know, this iscoming from from Congress, right? The Congressional Budget Office, they'relooking at 121% relevance of debt to GDP. Well, what does that mean? It meansthat inflation is only going to go in one direction. And I can guarantee youand I am not an economist, but I can guarantee you, the inflation rate will benorth of 4%. By 2030, when you take into consideration the amount of capitalthat this, you know, this, these these these past governments have, have justprinted and poured into our economy. And I get it, I understand why, you know,they printed money in 2008 to get out of a jam, and they've printed a lot moremoney in 2020 to get out of a jam again. But every action has a has a reaction,right? There's a consequence to everything that you do. So if retirement andretiring early and retiring comfortably is a goal. I would just say beware. Andyou know, Walter, don't let me get on a soapbox. But if you're if you'recomfortable, a four to 7% return and you think that's good. You know, I would Iwould suggest somebody educate you on on on inflation. And what that what thatlooks like it's it's going to end up be Does that make sense? Well, Oh,absolutely.


Walter Novicki 44:47

Absolutely.I have to laugh when you talk about the inflation numbers. You know, I'mastounded by the people and these are intelligent, educated people once again,you know, yeah, yeah. And they don't understand that inflation doesn't includecore inflation numbers don't include food and fuel. Things that we use. I don'tknow about you but foods pretty important to me.


Dave Seymour 45:14

Yeah. Soimportant to us brother.


Walter Novicki 45:17

Yeah. Soyou know, it's it's amazing people don't people don't realize that that numberdoesn't doesn't include those those commodities. And we, every time I go to thegrocery store, I'm shocked. You know, it seems like everything's going up, youknow, a nickel here a dime there, but it all adds


Dave Seymour 45:34

up. Solet's do this. Walter, if if somebody seeks information, they can find itright. And all depends on what they look for. So if you agree that this is apotential problem, you know, you and I believe it's a catastrophic problem, butthat's a belief but if you believe that that is a potential problem. I'm thatguy always says if it's a problem, let's find a solution. We're going to take aquick break. When we come back, we're going to look at commercial real estatepotentially for some not for everyone being a solution to the retirement problem,no go away.


Intro Voice Over  46:10

RealEstate revealed We'll be right back. Thinking of purchasing a new home, secondhome or investment property, or maybe refinancing to get a lower rate,consolidate debts, drop PMI, or need to cash out to do home improvements.George cuartos mortgage Officer of cross country mortgage and Danvers is just aloan officer you will need as Essex County's top loan officer with more than8000 past happy clients and over 30 years experience George and his team willbe happy to assist you with rates the lowest in history Don't hesitate act nowyou may be able to save 1000s of dollars call George at 978-777-4663


Dave Seymour 46:49

you everwondered how to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? You know what analternative investment strategy is what tune in for all the answers on my showreal estate revealed this is they see my might recognize me from the hit TVshow flipping Boston. I'm also the CEO and co founder of freedom ventureinvestments to smarten up your real estate now by tuning in every Saturday. Forall investment details, visit us at info at freedom slash 104 pointnine call my team at 781-922-4418. Steve molestus



ofSolaris realty has intimate knowledge of the North Shore market with over adecade of experience and record of 300 real estate transactions when it's timeto buy or sell property, give Steve a call directly at 617-763-1001. That's617-763-1001


Intro Voice Over  47:50

you'relistening to real estate revealed with Dave see more from a nice living Boston.








Dave Seymour 47:57

It'sgetting kind of serious. He's kind of kind of a down moment right there talkingabout inflation and potential retirement challenges that America faces. Butcheck out that Vanguard report. I mean, there's some there's some prettyintense data in there. Vanguard is the lowest fee based fund that's traded tothe best of my recollection that that might not be 100% true, but I knowthey're they're probably one of the lowest fee based funds out there Vanguardbut, you know, even even the the, you know, the founder of Vanguard had his ownconcerns with compounding costs, what the cost involved inside these thesefunds would be and, and how they affected the long play for a retirementaccount. You know, have you ever looked at your 401k and thought yourself, man,it should be more money in there, right? It's probably the cost structure thatis true to weigh the potential returns. So if that is a problem, if it's achallenge for people, you can roll over retirement accounts into self directedaccounts. You can get information on that on our website, do a little researchthere at freedom And then you take back control as an investor assomebody who wants to have a better retirement than maybe what the current planlooks like. You're able to direct those assets. So So Walter, let's talk aboutcommercial real estate, give give the listeners the you know, the quicksynopsis on what we do how we do it. Talk about a core plus asset, talk about avalue add asset, and what we focus on and our buybox. let's let's let's delveinto that a little bit.


Walter Novicki 49:32

Sure.Yeah, we could we could drill down on some of the details. We do what's calledcore plus investing. We also are starting to move now on some single assetsthat are more in the value add arena. Basically the difference you have youhave what are called core assets. core assets are the running like a race car.I mean everything is absolutely perfect are producing income. And you know, thethey're they're growing in value that's a, that's a core asset. Core plus is isa step backs. Core plus is an asset that's producing income. But there'ssomething that's not quite right. There's some things perhaps deferredmaintenance, that's not being taken care of, maybe there's some issues with themanagement structure that needs to be corrected. Some improvements that need tobe done to the property, it's something that is lacking. So there's valuebecause it's a core asset, it's producing income, but it's not producing incomeat the level that it's capable of. That's, that's core plus and there's valueadd value, add are massively underperforming assets, that needs a lot of work.They're the they're the fixer uppers of the of the commercial world. So there'sa different risk profile associated with with each of those value add a littlebit higher risk, but ultimately, a higher return. And then going all the way upto core and core is very, very little risk, but also a minimal, minimal return.So you know, we Oh, yeah, we're investing David in predominantly core plusassets that have that have a value add component to them, we're able to comein, and we're able to bring value and significantly profit because of that, itcomes down to having access to that expertise.


Dave Seymour 51:31

Yeah.And that's a good point. So when when we we use the terminology repositioningin commercial real estate. And this is important when Walter and I talk aboutcommercial real estate, we're not talking about a strip mall. We're not talkingabout the North Shore mall. We're not talking about the necco building inrevere, we're not talking about a cinema with it. That's not what we're talkingabout in commercial light, industrial industrial, a garage, a laundromat, we'renot talking about any of that when we talk about commercial real estate, we'retalking purely about apartment complexes. We at we invest in 40 to $140sometimes if the deal sweet enough, and we like it enough, we'll we'll go alittle larger, or we'll even go a little bit smaller. So Walter, I'm aninvestor, I'm accredited. I've got maybe $2 million dollars in a retirement account.I just got laid off, right, my 401k is now in a position that I can roll itover into another investment. And um, you know, I've done my research onfreedom venture investments. I love that guy, Dave Seymour from flippin Boston,he, he's awesome. He's also partnered with that guy, Kevin Harrington fromShark Tank. I like that guy, too. I you know, I sat on a couple ofinformational webinars, I can see the track record is there. What does it looklike for me, as an investor, walk me through what my expectations are? What'sthe upside? What's the challenge? Because everything, everything is aninvestment. every investor we ever deal with, we tell them, you can lose everydime that you put into this property. That's important, right? That's keepingit real. That's wearing long pants, not short pants, don't paint a you know,always a rosy picture. Let's keep it real. But that being said, you know, withour track record, we have a very, very high expectation of success, not justone time, but all the time. So what does it look like for me, Walter, what canyou do with my money? I'll give you $250,000? What what what can you do for me,Walter?


Walter Novicki 53:30

Greatquestion. We hear it every day, you know, when it comes down to is there isrisk whenever we invest, what we have become experts in is mitigating thatrisk. And how do we mitigate that risk? Well, number one, we buy qualityassets. Now, as I said, third assets that some people might look at and say,well, boy, that needs a lot of work. Well, we're buying it at a discountedprice. So everything is factored in. And what we do that I think separates usfrom a lot of other investment groups that I've come across out there is wedon't buy on forecasts, we buy on a trailing 12 month history on this property.So we look at what the property is currently doing. And we base our investmenton that. Now, when you're doing that you're buying the property right, we'rebuying the property based on current cash flows, knowing that we have thecapability to increase those cash flows through improved management, propertyimprovements, improve tenancy, all all those factors. So when we do that, we'remitigating a lot of the risk because now we're not over leveraged like so manyother other investment groups are, you know, quite frankly, you know, we'recoming in Dave, as you know, when we when we do these properties, you know,we're 65% leveraged into the into the property that's what our capital stacksLooks like so we're coming in with 35% equity. And that's based on ouracquisition price. That's not based on actual valuation on the property. Soafter we do our improvements many, many times, it takes our debt position downto 50% or less. So we're in a position where we're going to be a lot strongerthan the a lot of other investors who don't have the experience and don't havethe background. who haven't weathered that storm. We haven't seen what couldhappen to property values in adverse markets. So buying it right is the keythat's going to help us that's going to help us mitigate. And it's also goingto help us get those double digit returns, that investors are are activelyseeking out.


Dave Seymour 55:45

So let'slet's talk about that for just for a minute or two, though, because, you know,if you say to the average investor on the street, double digit returns 10 to14%, targeted quarterly distributions, 20% IRR targeted at the time ofdissolute disposition when we sell the assets, right. Oh, numbers, like you andI live in that world, those numbers seem to be so so obscure, are so onachievable or unattainable, whatever the correct word is. What what are thosenumbers? Why is it that we can we can target those numbers out with confidence?It's the leverage position. But it's also track record, correct?


Walter Novicki 56:26

Absolutely.It's it's the fact that we're we're not trying to do this in every nook andcranny across the country. People ask me all the time, why Florida? Why GulfCoast? Yeah, the the big reason for it is the fact that's where the resourcesare. Now, it just happens that there is a tremendous benefit for being here.You know, we're one of the fastest growing places in the country, one of thetop places to open a small business, our population is growing, not to knockyour your home state their Massachusetts, but, you know, a lot of the NewEngland area, you know, coming down to the eastern seaboard, they're losingpopulation right now, Chicago's losing population right now, a lot of thosepeople were coming down making their way down to the southern states andFlorida, Texas, Arizona, they're all benefiting from that, from that shift thatpopulation shift. So we're in a, we're in a, an overall, you know, wonderful,wonderful market here. But I have two decades of building relationships and establishingresources here. Yeah, we're able to execute, you know, if you don't have thatcapability to be able to execute, you know, the, the, you're operating at adisadvantage. That's why these large rates, I mean, you know, I talk to them ona regular basis, you know, somebody's closest, closest friends that I have, areon acquisition teams for these rates. And I just laugh they're going out therebuying these 1500 unit complexes. And you know, the the cap rates, we just, wejust watched one go down here locally, and it's a four and a half percent capand a five and a half percent cap market, but they're willing to pay a


Dave Seymour 58:12

premiumtaking a 1% Yeah, taking a 1% hit on valuation just just because they have theability to do it because their pocketbook is so deep yet, Walter, I tell you,brother, one hour is never enough time. Appeal all of this back. I know. Iknow. We're crawling around in people's brains right now. They're hearing myvoice in yours. We're in there rent free. Right, shake it, shake it the trees alittle bit to see what to see what falls down. Walter. Look, if you'relistening to myself and Walter reached out to us get more information, you cancall us directly on 781-922-4418 at freedom venture investments. You can connectwith Walter directly through that phone number, pick up a pick up aconversation with him or myself. We are always available. We got to wrap it upbut I'm going to do what I do every week. I challenge you to do somethingdifferent this year. I challenge you to ask the right questions and getdifferent results. You've been listening to Dave Seymour Walton of Vicky realestate revealed god bless take care of each other and I'll see you next week.Any securities being offered are under an exemption provided by sec regulationD rule 506 c only accredited investors who meet the SEC regulation d 501.accredited investor accreditation standard or who provide suitable verificationof accredited status may invest into these offers. Any historical performancedata represents past performance past performance does not guarantee futureresults.


Intro Voice Over  59:38

Soonagain next Saturday at noon for real estate revealed hosted by Dave Seymour,the star of AES will be Boston and CE o freedom venture investments in Denver.