Real Estate Revealed

#19 - Kevin Harrington, Original Shark Tank Boss and Godfather of Infomercials

Eric Wilson
March 8, 2021

SUMMARY KEYWORDS

investment,kevin, real estate, business, deals, buy, investors, people, invest,opportunities, disclaimers, kevin harrington, home, commercial real estate,property, world, george, talk, shark, years

SPEAKERS

KevinHarrington, Dave Seymour, Intro Voice Over

 

Dave Seymour 00:05

Have youever wanted to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? Do you know aboutalternative investment strategies deep listening, this is real estate revealedhosted by Dave Seymour, the star of Amy's living Boston and CEO of freedomventure investments in Danvers. Get the real deal about investing in commercialreal estate to create long term stable financial wealth smarten up your realestate skills now. Alright, so this is they've seen Miami, a host of realestate revealed here. Oh 104 point nine and I am very excited to bring a friendand an a special guests onto the show today, gentlemen that I've got waiting inthe wings right here is the Kevin Harrington. Kevin was the original shark onthe TV show Shark Tank. Kevin is now chief of business development with us hereat freedom venture investments. And I was able to pin him down in his busyschedule to spend a little time with us. So Kevin, how I I'm great to be here.Yeah, good, man, I appreciate you. I appreciate you coming on. You know, I wasthinking Kevin before jumping onto this, that this this spot here with ittoday, how unique it is, I think that you know, you get a couple of TV guyslike you and I find in an alliance later on down the line where we see value ineach other's skill sets and be able to put a put a pretty powerful businessmodel together. So I just I wanted to start off and say I'm grateful foreverything that you do for us over here freedom venture investments, and thethe insights and the experience that that you bring to our company. You know,it's it's just it's powerful to have you with this product. I love the teamyou've assembled and there's so much experience in the world of real estatearound your place that it only makes sense to, to put it to good use to helpother people get get involved in making money in real estate. Yeah, yeah. Yeah.Thanks, man. No, I appreciate you, Kevin. Look. So let's let's talk about Yo,alright, I know my favorite subject is me. But today I'll be talking about Yo,first of all, if you read anything about you, Kevin Harrington, original sharkfrom Shark Tank, it talks a lot about almost like the inventor of theinfomercial. And I remember we were down in Tampa a couple of months back and Iask you about that. Just Just how did you get into it, man? How do you becomethe infomercial guy? What What was the process to be where you are in that set?Oh,

 

Kevin Harrington  02:32

so thankyou. I'm gonna go back a few years just to tell you the quick story. But I wassitting in the early 80s I was a serial entrepreneur selling I was a businessbroker selling pizza parlors, delicatessens, restaurants, manufacturingcompanies, laundromats flower shops, and did a lot of trade shows and I hadjust ordered cable television in my home and I got 30 channels in my firstround of cable and if you remember the old days Dave were you know, we canremember back then when milling channels okay. Sudden cable comes in. And but Igot to my last channel 30 on this 30 channel package was Discovery Channel andit was brand new, and and there was nothing there. So I called the cablecompany and I said, Hey, I love this cable concept of 24 hours of sports, 24hour movies, HBO and music, MTV and ESPN and all these great channels. Butthere's nothing on channel 30 discovery. They said, Oh, it's it's only an 18hour day channel. It's a brand new channel. They don't have a budget for 24hours a day. And they said so what's on the other six hours? They said deadair? And yeah, I said dead air. I said, hey, what if I had something to put onthere? Now, I don't know if anybody else was thinking the same thing. But maybeothers, they get to a channel. There's nothing there. They just keep flippingme. I want to know what's on this channel. 30. Right. So when they told me deadair, I was at the Philadelphia home show right around that time. And this guyslicing through a Coca Cola can through a muffler and a pair of sneakers. Andhe says it's the Ginsu knife and he's selling the heck out of it, right. And sowhen it clicked, I said, Wait a minute, dead air on TV, this guy. He's got thispitch that's so powerful that everyone around them almost was buying theseknives, including me and make a long story short, I went up to him and I saidhis name was Arnold Morris, he said, and I said, What if I give you heat? Thisguy was going for 12 years. He would go from one show to the next 40 weeks ayear on the road. And I said, Arnold, what if I could film this pitch and putit on television on dead airspace, and he's like, What's that? Okay, yeah, makesome money together and maybe you don't have to travel anymore. He said, Wow,let's do it. We shot it, gave it put it over on discovery that ended up doinghundreds of millions of dollars around the world. And the rest is historybecause Arnold knew Billy Mays, and he knew others fairly. George Foreman's,and all of a sudden, we had jacquelene in the juicer and Tony Liddell and thegazelle and Billy Mays course, Billy ended up doing oxy clean as you remember.So yeah, I mean, this was the beginning. And it's been going ever since. What astory I tell you, Kevin, I have heard that before, obviously. But every time Ihear it, I think to myself, you know, those moments of clarity, right? Some peoplecall it insanity. Investors like us and entrepreneurs like us, we call it thosemoments, those divine moments of clarity where, you know, an opportunity arisesand he's just not connecting some thoughts, such a cool story rather thansurgicals. And then to and then to have your, you know, your influence in somany of those other products. You mentioned some pretty powerful guys, a GeorgeForeman and lalana and the workout gear and all that kind of stuff. And theyalmost become a pop culture in themselves, don't they? I mean, oh, yeah. Isthere an American even my 25 year old kid knows what a jinzhou or Ginsu knifeis, yeah, because Tony littles been on Geico commercials he was just on CricketWireless, you can try. So these people be Billy Mays was spoofed on SaturdayNight Live a number of times since Tony little, by the way. And yeah, I mean,we we've been in dozens and dozens and dozens of movies. I mean, we had likeone guy that just felt all the movie houses, as they were wanting clips, youknow, I mean, like, what do you want the clip for? It's like, Oh, well, this isa movie where some they're, they're, they're in their living room, and they'rewatching TV, and we need something to be playing. We want it to be somethingfunny, like an infomercial, right? I mean, there are our infomercials have beenrunning for almost 40 years all around the world that the next step of mydistribution was taking them into Europe, Latin America, Asia, the Middle East,etc. So we created a global business went public on the New York StockExchange, had a lot of fun, and did did a few sales along the way, like, youknow, billions of dollars in sales.

 

Dave Seymour 07:25

Let meask, let me ask you that, Kevin, because those numbers are astronomical. Howmany products would you say you've actually like resets the bolts of themarket? What do you think the value of those sales have been in your career?Oh,

 

Kevin Harrington  07:38

I'velaunched over 700 products. And, and those and, and let me just say this, firstof all, Dave, not everything works like, right, I'm the first to admit that Ifail more often than I succeed. So shout out to 700 product launches, 550 ofthem probably didn't make money. It, it's the 250 to 200. That didn't work thatdid $5 billion in sales. So it's, you know, you got to know when to hold themknow when to fold them. Because not just because you put a lot of time andmoney into something doesn't mean it's going to be successful, there has to bemore demand. And it also has to be done in a proper fashion.

 

Dave Seymour 08:23

I lovethis. I love that tenacity of the entrepreneur. I'm not a baseball guy. Youknow that whenever I hear something like that, from a guy like you, Kevin, Iuse the baseball analogy. If you don't swing the bat, you don't stand a hope inHeck, right of a home run. You got you got to get up to the plate andparticipate. Otherwise everybody else is going to you know, everybody else isgoing to get involved with this game and you're going to be on the sidelinesand the sidelines. They're not doing much fun these days. That's for you. Solet's talk let's talk about the you know, I'd say the 800 pound gorilla in theroom, but it's actually a great white shark. Let's let's talk about image SharkTank. How did that come to be? And what was that experience like? And you know,people are always saying is it real that I really invest in those things? Giveus give us the down and dirty man. Give us the inside scoop.

 

Kevin Harrington  09:12

So hereI am doing all these crazy infomercials and I did one with Kim Kardashian andone with Paris Hilton, Kathy Hilton. We took all around the world. I took Kathyover to Europe run European shopping channels, and one day my phone rings andmy assistants like hey, it's Mark Burnett's office and Mark wants to talk toyou. I'm like the Mark Burnett, the you know, the TV guy. And

 

Dave Seymour 09:35

I mightadd these and yes, I'm just delaying it

 

Kevin Harrington  09:40

until Iget on the phone and he said, telling me I've got this new show coming out andthis and that. And I'm like, Well, hey, that's fantastic. I'd love to come talkto you about it. Can you tell me anything about Well, hey, look, we got to signsome NDA paperwork, but it's called Shark Tank. Come on out. I got off thephone. I was excited to tell him Life. Oh, you won't believe that Mark Burnettwants me to come out. He's got this new show Shark Tank. I'm gonna go talk tohim. She said what Shark Tank? I said, Oh, he said that he'll tell me when Iget there. I didn't want to tell me over the phone. She's I know why he won'ttell you anything. Think about it. What does he do to those people on thatsurvivor show? And he wants to be on Shark Tank. Okay. I said, Oh, no, it's Hesaid it was a business show. Right? So I mean, when you think about it, Dave,who, who would have known the show called shark tank is people pitchingentrepreneurs like me, and then the rest of the of the sharks. Okay. Well,there may be some real sharks on there. Mr. Wonderful is sort of a shark Ithink Yeah, right. Right. Anyway, so I go out, I meet Mark Burnett, and heuntil he finally tells me what it is. He said, I said to mark in a quick couplesentences, what a shark tank he said, inventors come out, they, they they'regoing to pitch you their business, their service, or their idea, the patent,they get three minutes to pitch and you and three, four other sharks get for agood three minutes to make up your mind who's gonna do the deal, if any of youand you compete against each other? And I said, Wow, I said, guess what is it?What is it? I've been doing that for almost 40 years? He's already I said, I goto the hardware show the house for show the fitness show the beauty show theToy Show, The golf show, and what do I do? I take pitches from people that haveproduct, and then I invest. So he said, Kevin, I did a little audition. Theysaid, fantastic. He called me a few days later, you're the shark. Let's do it.By the way, we invest our own money. Because the worst deal that I did on SharkTank, I wrote a check for 500,000 for a piece of equity in a company helped herout got her on home shopping network that all these amazing things. Six monthslater, she closed the doors down, ran through all the money. And it's a longstory on this call, but not every deal works, as I said, Okay, so yes, I lost ahalf a million on one of the worst deals I did on Shark Tank. But hey, all thesharks had lost money. But they've also had some winners that performed bigtime. And that's all about

 

Dave Seymour 12:14

got it.So there it is. That's a perfect segue. We're going to go to a quick commercialbreak, Kevin, and when we get back, let's talk about you know, winners andlosers in in in in business. Let's take a look at how you know how yourexperiences is working right now with us at freedom venture investment, sowe're gonna take a quick break.

 

Intro Voice Over  12:34

RealEstate revealed We'll be right back. Today, the real estate market is booming.mortgage rates just hit historic 30 year lows and the New York Times recentlyreported that investors are snapping up real estate at rock bottom prices. Andnow savvy investors are buying real estate using their IRAs that allows them toaccess their retirement funds to buy properties without paying any penalties orearly withdrawal fees. If you have funds in your retirement account and you areinterested to learn more call horizon press 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 buying real estate with your IRAthat's 866-712-2007 or visit horizon trust.com slash date. Horizon TrustCompany is an independent passive custodian and it's not associated oraffiliated with and does not recommend to promote or advise any specificinvestment investment opportunity investment funds or investment company orinvestment promoter or any agents employees representatives or other such firmor entity horizon trust is not providing investment advice, advocating orendorsing real estate. These options may or may not be a fit for individualinvestor investments are not FDIC insured, offer no bank guarantee and may losevalue or rise interest doesn't receive any commissions or fees if I invest withany other sponsor. Thinking of purchasing a new home second home or investmentproperty or maybe refinancing to get a lower rate, consolidate debts drop PMIor need cash out to do home improvements. George cuartos mortgage Officer ofcross country mortgage in Denver is just the loan officer you will need asEssex County's top loan officer with more than 8000 past happy client and over 30years experience. George and his team will be happy to assist with rates thelowest in history Don't hesitate act now you may be able to save 1000s ofdollars call George at 978-777-4663 you're listening to real estate revealedwith Dave Seymour from a nice living Boston.

 

Dave Seymour 14:42

Allright I'm with Kevin Harrington the original shark from Shark Tank Kevin sharewith us his journey to be where he is today through through the dead air spaceon cable TV to all the shows that you've attended over the year the trade showsto Shark Tank to To be in one of the notable notable business influences, Iwould say globally, Kevin, and as I said, at the beginning of the show on aTabby as chief of business development with us here at freedom venture investments,so I'm going to pivot a little bit Kevin, what do you see as opportunities thatare created within the the current landscape of business? I mean, COVID is anabsolute crisis. It's not something to be, you know, dealt with lightly. Whatdo you see as as the the opportunities that evolved because of crisis? And whatwe've gone through carefully? How do you see that?

 

Kevin Harrington  15:33

So letme let me talk about that a little bit. Yes, I'm getting I'm getting calls frompeople like, I just got off the call with a gentleman that is in the restaurantbusiness, and he's lost $300,000 in the last six months. That's brutal. That'sdevastating. And look, he Unfortunately, that's the business that he's been in.I wouldn't start a restaurant today. Right. All right. And when you think aboutit, I mean, I try to follow the trends. And, and COVID has heard a lot ofindustries. But there's a lot of industries that are that are not justsurviving, but they're thriving and doing very well. We're going to talk abouta few of those Just a second. But I think the key thing is like for example,you know, there's a lot of celebrities that are endorsing different productsand clothing and fashion. And so Sofia, Richie, she was selling fashion but shechanged it to work at home fashion and look good, you know, at home, becausenow people are having to do these zoom calls and videos and you know, this andthat. So what's needed is a pivot it with many people, right? And so literallyyesterday, I'm watching, I love to watch CNBC is a you know, it's my mic whereI follow my stocks and business and tips and things like that. And it came on,and they said there is a major shortage is in certain industries, you know,buying small freezers, small dishwashers, outdoor heaters, office furniture forthe home, right? These are industries that are just they can't keep up, keep upwith the demand. And unlike what outdoor heaters, what's that all about? Well,the restaurants that are open, they need to serve 20 477 days a week, and youknow, 365 days a year, what's cold in a lot of markets. So heaters are comingin like crazy for restaurants all over the place. And people why are theybuying freezers because they're at home, one of the things I did, I had aproduct on television 15 years ago, called the magic saw out of Korea. And thisis a handheld saw that does amazing things. And I said you know what, peoplestaying at home, they're there, they're fixing up their house, let's bring someof those tools back. We brought magic salt, magic wrench, magic hammer back,put them on QVC 500,000 pieces sold over a six month window, because people aresitting at home needing things to do. And so the world out there just like youknow, we're talking here about opportunities. There's opportunities in realestate, which I know, you know, you like to talk about too. And that's why Igot involved with you guys, but I'm following the unfollowing the trends andfollowing also obviously sanitizers and the whole world of personal protection,right, pp products are huge. So, you know, if, if you're starting somethingfresh right now, and you want to get into something new, there's industriesthat you can follow that are doing very, very well.

 

Dave Seymour 18:47

Kevin, Iwant to jump on what you said right there because I think it's so so important.It's important for large, you know, capitalized investors like like ag company,or whether you're that entrepreneur homos, like my Lord, you know, I've got I'mat home, what can I do? How can I create? How can I be inventive? You use thatterm following trends? Right, following the trends. And you know, in yourcareer, Kevin, and we've had these discussions, one on one your Korea, yourefer to it as, as driven by bell curves, right. Yeah. And I thought it was soinsightful. That conversation we had down in Tampa when he talked about that,you know, you have a product that does exceptionally well and it rises rises,rises, rises, rises, it maximizes itself, and then it reaches the top of thatbell curve, and then the sales begin to drop off. And then what what you whatyou bring into this conversation, which again, I think is incredibly incrediblyimportant, is following the trends and you just highlighted it perfectly. Thetrend now says bring back the magic saw, bring back the magic wrench, you know,whatever that item is, that will now start another bell curve, because themarket demands it. So when we take and these conversations I get I get likeamped up when you add Every time I talk with you that that energy, whether it'sone on one or whether it's like we get going, we're off and running. Yeah, Ibegin, right I begin to, you know, parallel what you've done with withproducts, the same way that we do with, you know, commercial real estate. Andfor us, he's, you know, kept the trend is being prepared to offer clean,affordable, decent housing, to the renters that are going to be coming into themarketplace. Because the trends, right, the trends in commercial real estateshow us that single family homes have a high exposure to foreclosure due to theforbearance stuff, and now they're beginning to lift the moratorium onevictions, and that these people are getting kicked out of one property, butthey're going to need somewhere else to go with their so let me just share acouple of reasons why, you know, after a career so heavily invested in productsand services, why why you're in a position to look at our business model andsay, yeah, that's something that I want to be aligned with. And that'ssomething that you know, I want to participate in, at a you know, at a highlevel, I mean, you're, you're a management level with us so, so why, why do yousee that? What do you like about it?

 

Kevin Harrington  21:12

I wouldsay this, if you look at Ed history, and I, I've had many homes over the years,I bought my first house 4546 years ago, and that house is probably selling for10 times what I paid for it, or five times, whatever the number is, right. ButI, I bought it and I sold it in real estate over time, it's been one of thebest ways for people to acquire wealth. At the end of the day. It's a riskyworld out there stocks, I played the stock market, I still play a little bit inthe stock market. But I mean, just today Netflix is down, right? Like why isNetflix down, they've got almost 200 million subscribers, right? I mean, it's,it's the whim of the marketplace that thought they should have grown faster,it's too risky to play that kind of situation. And, and so I believe that realestate is solid. And as you will know, this has been your life for many, manyyears. I've made a lot of money in real estate personally, even here recently.So I just believe that if you can teach people how to do it and get involvedwith a good group of smart people, like you've assembled, it's nowhere to gobut upward.

 

Dave Seymour 22:29

Yeah,yeah, for sure. You know, when, when you and I first began talking, I mean, wemet each other in the in the education space many, many years ago. And, youknow, we realigned when COVID came around. But one of the things that I'veloved about having you particularly on this team is the fact that a lot of ouracquisitions are right in your own backyard. If you go to freedom, venture,investments, calm freedom venture.com if you go there, you'll actually findthere's a video that we shot. And it was almost almost like an infomercial,Kevin, I felt like I was on a one of your best works when we were when we weresitting right down there in Tampa, in your own backyard. But the ability to be,you know, offering double digit cash flow in opportunities to passiveinvestors, you know, in your own backyard. I know, it was something that reallywas something that was attractive for you. And I think, you know, I think thatwas a big part of why we why we ended up aligning with each other as well, youhad a chance to meet Walter, he's down there in Fort Myers, our chiefinvestment officer. So the vetting process, the point of me bringing all ofthat up is that the vetting process has already been done. So that we now havethat confidence moving forward as a company to execute on our plan, you know,going forward. So again, man, look, have enjoyed this conversation. I knowwe're going to have many more in the future, I'd love to maybe see if I can pinyou down to come in on on these radio spots with me maybe once every couple ofmonths, so that we can update. But again, I know your time is tight. You'llprobably go golfing if I know you've got somewhere

 

Kevin Harrington  24:12

over theweek, you know, he's always been catching up with you. You know, it's you'veyou've had an amazing run, Dave, and you know, you're, you know, on TV and thenpresenting all around the country. And when you and I hooked up a few yearsago, I said there's going to be some great opportunities for us. And this is itthis this freedom, venture investments is where we are at and I'm excited aboutit. I just want to thank you for including me and getting me involved.

 

Dave Seymour 24:44

Brother,God bless you, man. I'm gonna let you go. We're going to break KevinHarrington, the original shark from the hit TV show shark tank and chief chiefof business development. Right here with us at freedom venture investments.Kevin. God bless. Thank you for your time, brother.

 

Kevin Harrington  24:59

Take carebuddy.

 

Intro Voice Over  25:03

RealEstate revealed We'll be right back. Steve molestus of Solaris realty hasintimate knowledge of the North Shore market. With over a decade of experienceand record of 300 real estate transactions when it's time to buy or sellproperty, give Steve a call directly at 617-763-1001. That's 617-763-1001.Today, the real estate market is booming mortgage rates just hit historic 30year lows and the New York Times recently reported that investors are snappingup real estate at rock bottom prices. And now savvy investors are buying realestate using their IRAs that allows them to access their retirement funds tobuy properties without paying any penalties or early withdrawal fees. If youhave funds in your retirement account, and you are interested to learn morecall horizon for us today at 866-712-2007. That's 866-712-2007 unlock the powerof your retirement account and take advantage of one of the most profoundopportunities in real estate since the housing crisis 15 years ago, callhorizon trust retirement specialist at 866-712-2007. And for a limited time,get our free Ultimate Guide to buying real estate with your IRA that's866-712-2007 or visit horizon trust.com slash date. Horizon Trust Company is anindependent passive custodian and is not associated or affiliated with and doesnot recommend promote or advise any specific investment investment opportunityinvestment sponsor investment company or investment remote or any agentsemployees representative or other such firm or entity horizon trust is notproviding investment advice, advocating or endorsing real estate. These optionsmay or may not be a fit for individual investor investment or not FDIC insuredoffer no bank guarantee and may lose value or rising trust doesn't receive anycommissions or fees. If I invest with any other sponsor. You're listening toreal estate revealed with Dave Seymour from a nice living Boston. All right,well, thanks

 

Dave Seymour 27:05

forlistening to us here at Real Estate revealed I can take it down, take it down anotch. You know, I was I was I was thinking about the energy that it takes, youknow, high energy high results. It's It's not easy, I guess to always be thatup for whatever is around us. But you know, Kevin Harrington has been as youheard in this, in this business development world and entrepreneurship for avery, very long time. And it's been, it's been a pleasure for us at predementia investments. So to include Kevin because it's it's not, it's notnecessarily his wheelhouse. I think in business, finding what somebody his corecompetency is executing on that, proficiently and consistently is what creates,creates big results or massive results. You know, it's the, you know, it's it'sthat feeling you get at the end of a really good day in business where you cango home to your family, and, you know, just look across the table and smile,because you know, you're you killed some dinosaurs today. I always I always saythat to Mary Beth and my boys, I say that's got to go, I gotta go kill somedinosaurs today, bring on some bacon. So, you know, having that energy to toengage and overcome challenges is critical. And I think what was importanthearing from Kevin as well is that, you know, we don't always win every singletime. So how do we, how do we get involved in finance? How do we get involvedin, you know, longevity, wealth, generational wealth, how do we do that withsome confidence? Knowing that there are, you know, risks out there, there'sthere's risk risk aversion out, you know, how comfortable is somebody gettinginvolved with with with a new investment opportunity? why somebody like KevinHarrington, would consider being involved with us? Why would he put his nameand his reputation into a world that he's not overly familiar with, which iscommercial real estate investing, multifamily investing. And what I wanted todo was, was kind of like, pivot into a little bit of an education piece forthose of you listening. I think it's important as a fund manager, which is whatwe are, is to also bring the education level of our investors as high as wepossibly can, without overloading them in unnecessary details. And a big partof that opportunity that Kevin was talking about is the fact that commercialreal estate investing is a vehicle that has consistently offered a low riskprofile, very similar to the bond market actually, which is kind ofinteresting. There was a statistic that came out from one of the large financecompanies that there was actually $31 trillion worth in bond investments rightnow in the marketplace, which are set up to show negative yields. And peopleare out there looking for for security, and they think a bond, you know, a bondinvestment is the way to go. And yet, because of the rate of inflation, some peoplesay three and a half percent, you know, if a If a If a bond investment, youknow, a government backed bond is paying, you know, point 5.2 point, one point,whatever, then, you know, it's, it's, it's setting itself up for a negativestructure. So how do you get, you know, the safety of that kind of riskexposure, and yet at the same time, preserve capital, the money that goes intoan investment, and grow the money at the same time, because that's really whatwe want, we want yield, right? We want we want our money working at a high rateof speed, the way that we've been able to identify to do that and have beensuccessful in doing it now, Walter, no, Vicki, who I will be bringing onto theshow next week. Walter is our chief investment officer. He's a criticalcritical piece of what we do at freedom venture investments. Walter has a muchproprietary in the sense of what he identifies as opportunities in commercialreal estate so that people can have a high expectation of these of thesereturns and safety in a world that may be somewhat new to them. And the way wedo it is, is we have what's called a Buying Criteria. And I'm going to sharesome of that with you guys, I don't think it's going to be an overload ofinformation. If you've ever been to the Florida market, and you've driven pastone of those really nice looking apartment complexes, picture that, okay, andwhat that is for us is, it's it's a property that is close to a certainemployment number. I mean, we need to see good employment in the areas we invest,obviously good schooling, because of tenant based Generally, if children, welike areas with low crime, suburban area, we don't go in a city, business andlandlord friendly states are very important to us as well, you know, to be ableto offer opportunity, I've got to do all the work right in the beginning, tohelp our investors along. So you know, that's why we invest in Florida, forexample, the opportunity is huge there. But it's also a very landlord, abusiness friendly state. We like a certain population specific to a, like moredowntown area, or we call them essays, but there's a population that we likeand what are called secondary and tertiary markets. So when we identify alocation like that, then we start to look at the specifics of the actualproperties, right, the amenities. So what we like to focus on and you know, ifI feel like I'm teaching a class, but it's, this, this stuff is what I live andbreathe, it's what gets me as excited as Kevin is, when he gets to do a, youknow, a charge for a product, right, because we both see huge opportunities inthese, but we invest in what are called Class B properties. Now, a Class Bproperty really means just its age, we like smaller communities, nicerapartment complexes, maybe 20 to 150 units, not these great big monstrosities,we like to focus on those, we like occupancies that are at least 90% becausenow I'm actually buying 10% of free real estate is the way we look at it whenit's not occupied. Because we're going to increase occupancies if there is anopportunity to raise rent, and bring it up to market value. That's that's ahuge strategy for us as well. So when we start layering on all of thesedifferent pieces of this business model, which each property really is, it'shis own business, we can see that there's there's a way to to, it's calledrepositioning, taking something that is not performing well make some changesmake it more cash flow positive. And the cash flow is what creates the value inan asset. We love what are called core pluses is really the term we use incommercial meaning that I can do some slight upgrades, maybe some some signage,a kitchen and a bathroom goes back to my my flippin Boston days, it was funny.I was talking to I was talking to an attorney in my in my neighborhood here inDanvers. And I was describing in a more in depth detail what I'm kind ofsharing with you guys now on how I how we identify properties. And I stoppedtalking about core plus and deferred maintenance. And Kevin was his name. AndKevin says to me, David, you got to stop. I'm like, Why? He said, You've got tostop. I'm like, you're not interested. Kevin. I'm excited about this. He goes,No, no, no, I'm interested, he said, but basically what you're telling me is,is you're doing exactly the same thing you did on the TV show where you buy itugly, fix it up and make it more valuable. You But now you're just doing it onsteroids, is that correct? And I said, Yeah, man, I said, Yeah, that's it. Andthat was a big lesson for me that day, because it was like, he's very, veryproficient in law and case law, and, you know, prosecution, etc, etc. Went toschool for that. And yet, you know, I went to school for commercial real estateinvesting. And it's interesting that, you know, just making the assumption thateverybody knows and understands what what you do in life and in business isn'talways the case. So going through these steps, I think, is important. So welike to do some renovations to them. And then on the financing side, I won't gocrazy on that. But we have incredibly great financing options today, whetheryou're buying your own primary residence, whether you're looking to refinance,a loan on a primary residence, or whether you're like me operating in the inthe commercial arena, the final cost of capital right now is ridiculously low.And the Federal Reserve has stated recently that they have no intent of raisingthat for probably two years to keep the economy moving during these crazytimes. So you know, just like Kevin was looking at that dead air space, on onthe Discovery Channel, we look at all of these options and say to ourselves,all the ducks are lining up, the stars are lined up for for massiveopportunities in the commercial arena. Because if my cost of capital to buy islow, then my profits are high. It's simple mathematics. At the end of the day,we hold these properties for five or six years, and then we sell the assetsonce we've made them more valuable. I think a good way to wrap your head aroundthis, if it's a whole mood discussion for you, is to think of a guy like whatWarren let's talk about Warren Buffet, right, Warren Buffett, he the oracle ofOmaha, you know, everything he touches turns to gold. And what Warren basicallydoes at a very, very core level, if you will, is they identify underperformingbusinesses, businesses that are not meeting their potential. And then Buffettwould buy that business at its current market value, hire and fire, repositionthe business, make it more profitable, and bring it into his portfolio. That'sthat's kind of part of what Warren does outside of his regular, you know, stockand invest in in that area. And that's what we do at freedom ventureinvestments. You know, we identify underperforming commercial real estateassets, multifamily assets, and we reposition them and we make them moreprofitable than they're doing. So investors who invest with us, we offersubstantial returns on the capital that they put into these these types ofassets. The cash on cash or quarterly distributions that we we consistentlytarget for our investors are 12% plus 12%. Plus, not not 1% in the bond market,but 12% plus, that's a targeted cash on cash return that we put into our putinto our finance structure. And then the internal rate of return, which is thevalue of money working over a longer period of time is over 20% Plus is what wetarget. So these these are elite offerings. Walter, he refers to the deals thatwe do as Country Club deals, these are the ones that go down on the 10th holeof the country club and pre dementia investments. We're very, very excited tobring those kinds of deals to the marketplace. So we're going to take anotherquick break when we come back. I'll share with you an opportunity where youtoo, can look at these investments firsthand, have an opportunity to meet theteam face to face, and we'll keep rockin and rollin.

 

Intro Voice Over  38:47

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 dropped PMI or need cash out to do home improvements. Georgecuartos mortgage Officer of cross country mortgage in Danvers is just the loanofficer you will need Essex County's top loan officer with more than 8000 pasthappy client in over 30 years experience George and his team will be happy toassist you with rates the lowest in history Don't hesitate act now you may beable to save 1000s of dollars call George at 978-777-4663 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 you're listening to real estate revealed with Dave Seymour fromAmy's living Boston

 

Dave Seymour 40:00

Welcomeback, it's an interesting world definitely is a dynamic landscape that has alot of fluidity to it both from, you know, a day to day routine, watching mybeautiful wife, become a homeschool teacher and adjust into that watchingrestaurant tours, as Kevin was mentioning, you know, looking for the outside,outside lamps, I was I got to be very direct folks, I was kind of a littleoffended that he was talking about outside lamps and the need for heat, whenhe's living in the Florida market, I think up here in New England, were theones who should be getting up getting all those outside lamps, they should justship them up from Florida, you know, they start wearing fur coats down there,when it gets when it gets down to 70 degrees. So I think I think they need tostart shipping some of those lamps up there. But my point is, this, there's alot of there's a lot of movement, there's a lot of movement in our lives,there's a lot of movement in the marketplace, which is why, you know, theseopportunities that we talked about are so so unique in and of themselves. And Iwant to touch back if I can on the on that financing piece. In the commercialworld, generally, we don't necessarily lock in our investments for for like 30years, like we do in the residential marketplace, they usually 20 or 25 or 15year loans. But a lot of folks I know you're listening to this show, you arehomeowners, you know, you're you're in, you're in that position right now,where maybe there's some equity in your primary residence, maybe, you know, yousee that opportunity to purchase your first home. You know, part of my mysuccess in businesses, as you can see, by having somebody like Kevin Harringtonon the show, is that and it sounds corny, and I don't mean it to but therereally is no I in team you know, every successful deal that I've ever doneevery, you know, company that I've that I've built has been built with withother people. And I want to just give a shout out, I think it's appropriatewhen we're talking about finance into a very dear friend of mine, aninstrumental part of my success in business whenever I either one needed amortgage to buy a piece of real estate, or number two, to find the very, verybest buyer for the assets that we had fixed up and sold them make sure that wehad a good qualified buyer in there. George could self's George could SOS iswith cross country mortgage based right here in Danvers. And you know, whetheryou're, whether you're looking to purchase that new home, like I said, or asecond home, maybe you got a feel and a flavor after listening to this showthat you want to step up to the investment game. And financing is a necessitythere, maybe get a lower rate, consolidate some debt. Some folks out there,we're dealing with PMI, private mortgage insurance. George could sell themortgage officer, like I said, with cross country mortgage. He's a performerGeorge has been servicing our community for decades, over 30 years with 8000 pasthappy clients, who will testify to the quality of service that Georgepersonally gives all of the deals that he does. So reach out to him if realestate is in your in your, you know, on your on your horizon in any capacity,give George a call, he can service you can take great care of you. And look, asI said with it with the interest rates being where they are today atunprecedented lows, I think even historically low, the potential to save 10s of1000s of dollars in finance expenditure is potentially there on the table foryou as a as a as a homeowner. So give George a call 978-777-4663 George couldsource cross country mortgage, tell him Dave the Englishman center and maybeit'll buy you a gift or something I don't know George's to send me like the RedSox schedule. And maybe every now and again, I get a pen or a cup or something.he's a he's a strong, strong professional in the in the mortgage industry andhe will take great care of you. So look, I wanted to I wanted to talk aboutmore on these deals. I've listened so many times in my career to you know,potential investors and they start to look at they start to look at real estateand they will consistently say you know, real estate is is risky. They, youknow what, why would I want to be involved in real estate? It's way too risky.And I get a little bit of a wry smile. And here's why. With respect to thosepeople, it's an uneducated statement. Think about this what what's riskierinvesting A company that you know absolutely nothing about investing in anindividual that somebody knows nothing about investing. To Kevin's point, realestate has always maintained its value and improved in value over a longerperiod of time. It's not a, you know, a scratch ticket, it's not a penny stock.Real estate is you know, it's it's it's real, it's it's tangible, it's it'ssticks and bricks, this is either going to scare you away, or it's going toentice you more, but I don't care, I pulled up the disclaimer that we usewhenever somebody looks at a commercial investment. And I'm just going to hit acouple of the high points on there. But listen to this and tell me if this isscary, right? The presentation that's shared here is for informational purposesonly says this is in no way considered investment advice of any kind. Freedom,venture investments cannot or will not assess the suitability of any particularinvestment to any personal situation. And the reader of the document and theinformation bears complete responsibility for their own investment decisions,and should seek professional advice from a qualified investment advisor and taxprofessional. It goes on to talk about how in investing, there is always thepotential to lose principal. And it talks about that the information containedis provided as is without any warranties of any kind, you know, and what itreally does is that disclaimer, in this sandbox in this mature world ofinvesting is designed to scare away the uneducated, it's designed to put thehalt on the expectations of you know,

 

46:49

hugequick

 

Dave Seymour 46:50

returnsguaranteed and, and all of the all of the junky sales techniques that are outthere. Now the reason that I'm reading you this is because I then think aboutit. And I think to myself, I go back to my, my days at stop and shop, right. Iworked with stopping shop companies for many years on and off. And, you know, Ifollowed the, the 401k journey. And you know, I followed the the plan that wasavailable to me, as an employee was stopping shop. And guys, I'm not, you know,I'm not tearing anybody down to build me or my strategies and company up. Ishare all of this stuff sincerely for informational purposes only. But here'swhat I never received. And maybe you did and you don't align or you don't, youknow, resonate with what I'm saying? Or maybe I'll maybe you will when I saythis, I would like to know what disclaimers we would given when I went throughmy investment options as an employee. If I remember rightly, and it was a fewyears ago now, I think that there weren't any disclaimers. I was neverappraised of the fact that there was the potential of small gains, and evensome losses inside some of the mutual funds that were in my 401k account. Idon't remember seeing any of that information. If you did, I'd like to hearabout it. But But I don't remember seeing that. And I think about it today. Iwonder if there was transparency in every investment, the way that we aretransparent, based off of the way that we present investments. I wonder whatthe investment choices would look like nationwide, and I'm just throwing thatout there to cause some trouble, right? I'm just I am. I'm just throwing it outthere to cause some trouble. I like I like a good debate. I don't think there'sany real right or wrong. I think there's only left or right. It's it's atolerance for risk. It's a tolerance for exposure. But did you get adisclaimer, when you signed up for your 401k plan? I'm going to give you alittle scenario here and see if you resonate, remember this one. I remembersomebody saying, Hey, everybody needs to go to the conference room. Andeverybody's like, Well, why were they doing that 401k presentation, we're goingto get a half an hour off of work a half an hour after work with pay. Let's go.Oh, by the way, they've also got free bagels and cream cheese, bagels and creamcheese and free coffee, and a half an hour paid. Let's go. And we all went weall went in droves. And we all we all showed up in these conference rooms allacross America. And somewhere along the line. Somebody said this free money.And they said what do you mean free money you have is free money in there aswell. They call it a company match. They're going to give us free money in 401kplans. And we signed up and not just myself but millions if not billions ofother people signed up and when I actually got there and this is myresponsibility, I'm guilty as charged. I just Your Honor, but my responsibilitywas to do my own due diligence, which I didn't do. But when I got there, thepitch or the presentation back then without any disclaimers, without any realprojections of what my financial future would look like, was basically this. Itwas How old are you? Oh, you're in this age group, then you go in a higherrisk. bracket, you're this age, you go in a medium risk bracket, you're older,okay, you're, you're close to the the retirement red line, I think they call itthen you go in, in this bracket. And really, that was that was as much of theeducation as I got going forward. And I've always looked back on that with twothought processes, one, you know, I wish I'd have known more. And to, well,who's responsible for me knowing more. And I've carried a lot of that bluecollar attitude into this white collar world of real estate investing today. Sothen all the disclaimers are there for reasons they show integrity. There, it'salso part of sec compliance, there are rules and regulations that we have tofollow, we can never talk about guaranteed returns in real estate, because inlife, nothing is guaranteed. But the ability to put these kinds of dealstogether has really been a blessing. Because what I'm now able to do is iswatch, and I get to see investors light up is the best way to do it, they lightup, they get to see these tangible assets. If you go to freedom venture.com freedomventure.com and spend some time there, you'll begin to get a feel and a sensefor what it is we're buying, and how the average American investor can nowparticipate in these these Country Club type deals. I pulled up one of the oneof the properties that we have that's that's just gone through underwriting.And this is just the just a bread and butter deal that we look to do and bringinto the fund. But to give you some idea of the type of deals that we look atthis particular deal, it's a 24 unit. So think of a nice 24 unit apartmentcomplex. This one's just north a tamper. So now you got to picture it. ImagineClose your eyes, the sunshine in the palm trees are gently swaying in thebreeze, no hurricanes, just gently swaying in the breeze. You know, you can youcan see that little lizard running across the patio like you do if you get togo down to Florida. So this beautiful properties quick 25 minute drive fromdowntown tamper consistent to 12 unit buildings. So we like that. What's niceabout this property is it's it's got a resort style pool and cabana area, it isvery vacation. Like right it's it's got that feel about it, which is which isnice. It creates great community for the tenant base in there. And this is anewer one, this one was built in in 2017. All the grounds are in excellentcondition, it needs very little in the way of upgrades, it's in a really niceposition. But it's been badly managed. We can purchase this property for 2.6million. And this investor, by the way, who actually bought this property, thisis interesting, right? bringing yourself up to speed and being knowledgeable inthis business. This investor purchased this from a builder who just said, Hey,we'll take care of everything, you just buy this thing, it's all set. And it didn'tcome to fruition. This guy was an amateur investor who purchased this he didn'the didn't execute Well, he didn't understand. You know how to how to engage andbring in the right tenant base, etc. and rent collections were low. So when webuy this thing for 2.6 million, we'll bring in our professional managementteam, we'll get the rent collections up to where they need to be the units, thesize of the units is is great larger units, bringing up the rental income onthe property about 43,000 without any negative impact on occupancy. So the teamidentified several line items in the expenses on the expense side that need tobe addressed. That gives us an additional 13,000 in value or income in thatyear because we're not spending that and expenses. So operating income on thisthis little little beauty will be operating income increase of 56,400. So thatcreates more value in the building. So it boosts the value of the building byabout 146,000 in one year. This is a different game. This is so different fromfrom the single family marketplace that I've spent a lot of my career in butI've always been in the commercial on the backside. So our investors arelooking at targeted returns that come in on on on this particular deal. YearOne the cash on cash is a 13.44% targeted return and then as we continue towork these out assets, we love them, we treat them right, you know, we treatthe tenants rights, the cash on cash accelerates up to 16 and a half percentover five years targeted. And then the value of the money working in this dealover the life of the investment comes in at what's called an IRR, an internalrate of return of 24%. But what's interesting in this world, we also have whatare called equity multiples. So the equity multiple on this when we do the mathis what's called 3.4x. And basically, what that means is for every $1 that goesin, at the time of selling the asset sharing in the profits with investors,every $1 that an investor put in, they will get an additional 2.4 dollars back.So I know it's it's kind of hard in a radio format to picture these deals. ButI do I do have some some news. If you're driving, pull over and get out a penand paper. If you're fixing lunch for the kiddies just stop a second and relax,grab a pen and paper, you're going to want to reach out to us, I'm going togive you a phone number, the phone number is 781-922-4418. We give that to youone more time. 78192224418 will now show you exactly what it is that we'redoing and how we do it. We'll talk a lot about the tax advantages that we asreal estate investors have been blessed with in our careers, to be able toshelter exposure to the IRS, say take that off a moral ground and put it on areality if you want to. If you start to look at what the government has donewith our money, it hasn't been the best business model in my opinion. So if Ican keep more capital on my side of the equation, I can do more good works withthat capital. I believe that the government can. So we talked a lot about thetax advantages. We also talked about how investors use retirement accounts topotentially look at these double digit yields in their retirement and watchtheir retirement grow. With velocity of velocity of capital, pick up the phone,call us at 781-922-4418 and get some of this this inside information here atfreedom venture investments. 781-922-4418 Thanks for listening. Every Saturday104 point nine no Sure. I'm your host Dave c my styra flippin Boston on a&eand CEO of freedom venture investments Catch you next week.

 

Intro Voice Over  57:40

Anysecurities being offered are under an exemption provided by sec regulation Drule five oh 60 only accredited investors who meet the SEC regulation d 501.accredited investor accreditation standard or provide suitable verification ofaccredited status may invest into these offerings. Any historical performancedata represents past performance past performance does not guarantee futureresults. Tune in again Saturday mornings at 11 for real estate revealed hostedby Dave Seymour, the star of AES live in Boston and CEO of freedom ventureinvestments in Denver.