Real Estate Revealed

#20 - Dr. Joe Russo, COVID Ending the Real Estate World

Eric Wilson
March 15, 2021


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Dave Seymour,Intro Voice Over, Joe Russo


Intro Voice Over  00:00

Have you ever 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? Keep listening. This is real estate revealedhosted by Dave Seymour the star of ad libbing Boston and CEO of freedom ventureinvestments in Danvers. Get the real deal about investing in commercial realestate to create long term stable financial wealth smarten up your real estateskills now. Well,


Dave Seymour 00:36

goodmorning. Good morning Dave Sema 104 point nine FM it's my favorite time of theweek. Real Estate revealed. I do this every time What are you doing? It's 11o'clock on a Saturday. You're cleaning out the garage yet? you thinking aboutlittle spring cleaning soon. Maybe you're looking around your old primary residenceand thinking to yourself, man, I need a new bathroom fan. Or maybe I should rundown the home. chipola slows? I'll go down and stand in line to buy me some newblinds for the bedroom. I mean, how does how does your honey do list looktoday? Honey, do this honey do that. My name is Dave Seymour, we talk aboutreal estate from a different perspective. Here we talk about it as a as afinancial tool to create wealth, wealth or maybe your family definitely wellfor the investors family out there. using real estate as a as a vehicle. Likesome people use the stock market, we're going to talk about how real estate ispotentially something that can really take people to that finish line inretirement. This is not your HGTV show, guys. So if you want to talk aboutpaint and carpet and pretty pillows turn us off right now that's not what thisis all about. But every week I get to bring on really cool guests all acrossthe country to talk about real estate from their perspective, how it's impactedtheir lives going forward, maybe some of the challenges they have and some ofthe successes they have as well. Now I know my voice and my accent is a littlecrazy. You're thinking to yourself, where do I know that guy from? Yeah, youdo? hit TV show flipping Boston right on a&e network. I'm the star of thatshow. Remember, it was me and Dog the Bounty Hunter. We were the cool cats backthen. But you know, that was a TV show. We're going to talk about the realityof real estate. So my guest this week, kind of different from our regulargroup. He's become a very dear friend of mine. He is a physician down inNewton, Newton, Massachusetts. His name is Dr. Joe Russo. And I bought Joe onbecause we met in a an education arena and we'll talk about it on the showtoday. But he's become a very close friend of mine, as has his two grown sonsgot to meet his beautiful wife recently at a property that we were looking atover in Melrose. So Dr. Joe Russo, the man the mystery and absolutely a legend.Are you with us? My friend? Please say yes, yes, but I'm definitely a legend.In my own mind. I want to make that clear when we thought that's a reality,isn't it? I'll like think about it. I don't think about much. But all I thinkabout is me. Right? That's that's an awfully in line. Joe, I appreciate you,man. Thanks for being on the show. How are you? Are you well,


Joe Russo 03:26

I'm verywell and thank you for having me on. It's always a pleasure to talk with you.And hopefully I'll get a chance to pick your brain a little bit because you'resuch a mentor to me than I I want everyone to know that to start.


Dave Seymour 03:35

Oh, lookat yo mag throwing up the kudos right out of the gate. I appreciate yourbrother. So Joe Russo, you're not just the you know, like a like a regularfamily doctor. You're kinda like a specialized individual. No, I'm gonna I'mgonna pop the bubble on this one right out of the gate because I want you toask you something. Are you a plastic surgeon? Or what title Do you have Joethis there's like, I think plastic surgeon is cheap right? That's not that'snot politically correct. What kind of what kind of doctor are you man let'slet's go there. First of all,


Joe Russo 04:11

I'm afully trained surgeon and trained in general surgery and plastic surgery but Iam plastic surgeon and what you may be thinking about is a lot of otherspecialists try to latch on to our wagon and call themselves plastic surgeonseven though they're not trained as plastic surgeons. So you know, when you're aplastic surgeon, you go to college, you go to medical school for four years,you do a surgical residency for you know, five years and then two more years asa plastic surgeon then maybe even do some fellowship training. So you're in itfor a long time, right? I didn't even I went straight through without anybreaks. I started my practice when I was 34. So from the time I was 18, I getto this to get to this position. So it's a long time but you know, you findpeople like I don't know E and T dogs and dermatologists and even ophthalmologistcalling themselves like ocular plastic surgeons or Facial Plastic Surgeons orthis kind of plastic jogger. You know So so if you start to see qualifiers infront of the term plastic surgeon, you know, they're not really a plasticsurgeon, but they may do aesthetic procedures of a certain part of the body. Sothat's kind of been one of the things that we should have dealt with over theyears. But no, I am. Just because I'm qualified to give Botox injections. Thatdoesn't mean I'm a plastic surgeon. Correct? Correct. Okay, probably quite theopposite. Because most plastic surgeons really, you know, really mostly just dosurgery. Yeah, they mostly spend most of the time in the operating room. Somost of them don't do a whole lot of those injections. In fact, most of what wecall the mid levels, like nurses, nurse practitioners, physician's assistants,those sorts of doing the vast majority of the injections nowadays. I mean, it'sreally changed dramatically in the past 10 years. So it's kind of down. Yeah.So you you at 18 years old, obviously, you're still you're still in aneducation arena. Yeah. Did I hear you say correctly, Joe, you didn't start yourpractice until you were 34 years old. So because you figure for the time I was18, and went to college for four years. And I went to medical school for fouryears, and I did seven or eight additional years of surgical training. So youknow, that takes you into your mid 30s. Right there.


Dave Seymour 06:10

If youdon't have to answer this question, Joe, but I'd be interested. Yeah. What waswhat was the financial investment in your education?


Joe Russo 06:18

Get toput that all together. I don't remember the exact number. But I can tell youthat I was paying off debt until I was in my mid 40s. Wow. Because you have toremember that when I was in medical school, Jimmy Carter was president and youmay remember the gas wars and gas prices, and the prime rate was up close to20%. So I was taking out loans called heal loans, health education assistance loans,which were tied to the prime rate. So my loans are being were accruing it likealmost 18 to 20%. So I paying back for x what I borrowed. And believe me, Ididn't have any help from my parents or anyone else. So I was completely on myown. So I literally was paying those loans off till I was in my mid 40s 10years after I started practice. So Wow, yeah, it was a long haul. Wow. You camefrom pretty humble background, you didn't come from a family of physicians anddoctors and anything of that correct? Not at all. I was the first person in myfamily to go to college. If I like the first person to finish high school. Infact, that might be the case. Because, really, yeah, both my parents droppedout, help, you know, their families, or the depression and everything. So I wasreally the first person to get much past high school. So that were your parentsfirst generation Italian, or it was second generation second generationItalian. Yeah. And then you were the first one to get out of high school and goand do these great things going forward. Yeah, that's interesting, man. That'sinteresting. You know, it's funny, there's a perception, right, that the, youknow, the physician, the doctor is, you know, always financially independent,right. You think about your your well paid attorneys, your business owners,your physicians, your doctors, people don't think about paying debt oneducation, Joe until their mid 40s. And you said that was a forex payback onthat deck? Yeah, and they're being pretty Yeah. forex, as I remember, whatwould you say? I think the answer to this is yes. But I'm not going to answerfor you. Would you say that, you know, that that amount of capital to forex,payback was a good investment. I mean, if you look at the ROI on that, andpeople have done studies, you know, looking at what's the ROI on becoming adoctor, and, you know, sort of as a general, and the ROI over the course ofyour career, maybe like 8%, you know, pretty, pretty low, I guess, you know,compared to what you could perhaps make in other professions, but, you know, asI was saying to one of, to one of my sons, you know, who was thinking aboutgoing into medicine, and he was struggling, like, he liked medicine, but healso liked economics and all these other things. And, you know, he was he wasdoing an analysis of that, he said, If I go to, you know, if I take the medicalthing, I go to college, that medical school is like, at $100,000 a year and youdon't, you know, that's all that then I go into, into my residency or internshipand I'm making, you know, 30 $40,000 a year, I'm not even paying that, by thetime I get out and pay all that debt back. I've had 10 years of no income anddebt, then I try to pay that back versus getting an undergraduate degree, goingto school, you know, learning about economics or getting a job right away, eventaking like a median level income after an economics degree, you know, andyou've got 10 years of earnings versus 10 years of debt, these catch up and Isaid well, that's certainly the case. But if medicine is the kind of thing youhave to do, and you just really love it, there's nothing else that turns you onlike that then you got to do it but if that isn't the case, don't do it. And heended up not doing which is fine, but it is that kind of thing. There isn't agreat ROI You know, there really isn't and we have to make that work you haveto really work crazy hard. What let's let's get this transition there right?Work crazy hard. Is What You know, Dr. Joe Russo. Just share with us what whatwhat's the what's the hourly commitment, like the weekly commitment at itsheight, would you say


Dave Seymour 10:00

Yourpractice, and have you been able to dial that back a little bit? Today withwith the amount of years you have under your belt?


Joe Russo 10:07

Yeah,it's kind of interesting, because you probably work harder than you've everworked in your life during your residency, which for me was about seven years,seven and a half years. And during those times, you're living more in thehospital, honestly than out of the hospital. And when you're out of thehospital, all you want to do is sleep, you don't even care about eating oranything else. I remember one occasion, when I was out for an anniversary withmy now ex wife, I literally fell asleep with my face in the plate. So you'reworking hundreds of hours a week, I mean, you're literally there at four in themorning, and you go home, when your work is done. 6789 o'clock at night, andyou're back again at four in the morning. So that's probably the hardeststretch for you. But then when you get out of the practice, you know, it's kindof like, you know, with real estate, in a sense, you're starting a business,right, you're doing a medical practice, we know how to take care of patientsreally well, we know how to how to do all that. But we don't know how to run abusiness, all of a sudden, day one, I'm trying to hire people and fire peopleand understand how to, you know, work by phones and do this and, and financethings, I had no clue, I've never had a minute of business training, but I'vehad a lot of medical training, but all of a sudden, I'm running a medicalbusiness, which was very challenging. And the other part about it was whenyou're building a business like that, you take anything you can get. So I wascovering emergency rooms, you know, holidays nights, because I was on callpretty much 24 seven for about 10 years, right? 20 473 65. So I was alwaysgetting called during, you know, holidays, vacations, Christmas, Thanksgiving,whatever, some, but it needed to have their face sewn up, or their kids sign upfor their dog bite or whatever it was. And that's kind of how it builds. Andthen after, you know, sort of 10 years of doing that, I was finally able tosort of stop taking insurance or phasing it out and then really working, quote,unquote, a more normal lifestyle, if you know more of a nine to five ish kindof thing. But obviously, you know, you go past that when you need to so so itwas a slow transition. And now I'm in my 60s. So I'm taking days off here andthere during the week, working mostly four days a week, but when I'm here, I'mworking hard. So you know, it's it's just it's a different kind of thing. Butit certainly requires, you know, a lot of attention to detail when you're doingthe kind of work we're doing.


Dave Seymour 12:12

Yeah, Iyou know, you and I have shared some, some up stories of your years and growingthat business. And we've also shared some of the some of the challenges thatthat I know you faced. Because to your point, you know, for phenomenalphysician, phenomenal doctor, patient care, you know, being the expertise, andyet not not being able to build a business, grow a business, finance abusiness, and then and then realizing that a big component of your business isthe sticks and bricks, do I lease the property? Do I buy the property, if Ihave an opportunity to purchase my office space, should I these are all some ofthe discussions that we've had going forward. It's been a real pleasure for me,I gotta be honest with you, Joe getting to know you get to learn more about youknow, your journey in medicine. Because I think that the medical community atyour level is a very tight knit group. You know, the average person doesn't getan opportunity to, to interact with an physicians and doctors and a friend outin New York. But we've had a couple of zoom calls with you know, the, theskincare doctor extraordinaire, tennis, you know, it's, it's been a pleasurefor me to be invited into that group bring in, you know, my skill sets withreal estate. So let's do this. We're gonna we're gonna transition and take aquick break. And when we get back, I'd like to talk about, you know, thechallenges we've had with COVID and how it affected your business specifically.And, you know, just just what that impact was what it looked like goingforward. So Joe, I appreciate you being here. Don't go away. We're gonna beright back.


Intro Voice Over  13:57

RealEstate revealed We'll be right back. thinking of selling your home but don'twant to deal with all the headaches from open houses, expensive realtorcommissions, costly repairs, cleaning and Home Inspections than you need greenrise homes. greenwise Homes is the area's most trusted real estate solutionsprovider and will eliminate all of the headaches that come with selling a homegreen rise will buy your house as is close quickly and can make you a fiercecash offer within just 48 hours working one on one with each customer.greenwise homes promises to make selling your home easier than ever before.Call them now to get a hassle free cash offer on your home. 875-245-7377 It'sthat easy. 8752 or 57377 or visit green rise


Dave Seymour 14:46

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 worth? Tune in? For all the answers on myshow real estate revealed? This is Dave Seaman You might recognize me from thehit TV show flipping Boston's. I'm also the CEO and co founder of freedomventure investments. To smarten up your real estate know how by tuning in everySaturday for all investment details, visit us at info at freedom venture.comslash 104 point nine call my team at 781922441 night thinking of


Intro Voice Over  15:19

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Dave Seymour 15:58

Yeah,you know where to go when you need a mortgage. Reach out to my friend rightGeorge could selfs absolute genius and market origination mortgage originationhere on the North Shore. His reputation walks away before him. Self Directedindividual retirement accounts. I know my guest, Dr. Joe Russo as used thatvehicle for investments in his own life. So reach out to the guys at horizontrust, let them know that they've sent you But let's get back on track, Joe.You know, we were kind of like on the early phases of our friendship when whenCOVID hit I remember we were in that property over in? Well, we Melrose wasMelrose just before Malden Melrose. That's right, the one that you and the boysdid. And, you know, we were talking about it unlike everybody else, you know? Imean, I think I you had a comment and you said you know this thing will blowover when the winter comes. And that was a common thread even from from amedical standpoint. But as we got to learn more about it, you know, I stillthink that maybe herd immunity would have done us some some favors, but youknow, the cost of that foot in life was probably way too high. But anyway. Whatwhat was what was the impact on you and your business? Because you pretty muchshut down? You couldn't do any surgeries or anything correct?


Joe Russo 17:23

Yeah,pretty much changed everything for us for about a three month period, we reallyshut down everything. You know, we just saw patients who needed to see us forfollow ups and emergencies. But you know, we we had pretty much gutted theoffice, take everything off the shelves, take all of our books and things down.People had a way in the park, even when we reopen, people are still waiting inthe parking lot. We don't allow anyone in the waiting area, like visitors canyou know, husbands and wives can't come into the room together. It's just oneperson, you know, it's everything gets sanitized. So it's been a, an arduousprocess. And it's kind of slowed us down a little bit. I mean, we've adjustedto it now because it's, you know, the new reality, I guess, but or the newnormal as the governor would say, but you know, it we were we were dead in thewater for three months.


Dave Seymour 18:06

Yeah.Now, just just for the folks listening. You're a plastic surgeon, you know,Tommy tucks facelifts augmentation, you know, the things that we know of, youknow, without going too deep in it all. But you also have like the spa, spatype concept to your business model as well. Tell me a little bit more aboutthat, Joe.


Joe Russo 18:30

So weyou know, I was one of the first physicians, certainly in my discipline, andcertainly in the area that recognize that you need to diversify, like, youknow, when when the really bad timeshare in 2000 789 when people weren't doinghigh ticket items anymore facelifts and you know, big procedures, they werestill doing their Botox and fillers, that sort of stuff. And before that pointin time, I recognized that, you know, these are things that are add value to mypractice. So I want to have a fully diversified practice where it's like a onestop shopping comp, you know, idea where you can come into my office, and youcan have anything done that you need to whether it's my my Med Spa upstairs ordown here with me surgically. And when that when that period of time came through,and all the surgeons were like, Oh my god, no one's doing surgery anymore. Noone want no one could afford it, whatever. We were still going we were stillactually going stronger. Because all those patients who weren't spending alltheir money on faceless, we're still doing Botox and fillers and maintenancetreatment. So so so I recognized that diversity was a really important issue.And since that point in time, we've, I've partnered with a group of people andwe're partnered on patented about six different med spas right now. And they'regrowing and we're sort actually growing that portion of the business. So theonly because it's never really responding to demand, right? There's a demandfor these services. The world of aesthetics is exploding and we're trying toexpand to fit that fill that need


Dave Seymour 19:47

is thata franchise type model? Joe? The spas, if you're partnered in six of them, isthat something that you can potentially roll out under that kind of concept orno?


Joe Russo 19:57

Yeah,that's that's, I mean, our idea really is to grow it To get it reallyprofitable, and probably to sell it, you know, because it's a, it's a, it's alot of balls in the air, it's a lot of management, a lot of stuff. And it's areally good business opportunity. But I've been doing it for so long that, youknow, for me, it's probably better to just sort of get it built and have anexit.


Dave Seymour 20:15

Sothere's a, there's a ton a ton of capital, or what we call dry powder in themarketplace right now a lot of uncertainty because of COVID. And the impactit's had on the economy. And, you know, the stimulus package that consistentlyseems to be rolling out every couple of months, you know, force in inflation,we talk about that often. Your spar business model is potentially an asset inand of itself, that could be taken out by an investment group, is that correct?Yeah, there's


Joe Russo 20:43

a lot ofinterest in the private equity sector, because they, I mean, one of the reallyinteresting things is, it's really hard for a group that has never beeninvolved with medical practices or medical concepts to come in and run thatbusiness. And we've seen many, many attempts at, you know, these sort of groupsthat have run all kinds of businesses come in and fall on their face in themedical spa business, just because it's so different. It's all about treatingpatients and building loyalty and delivering quality care. It's not like a, youknow, chop shop, like there used to have it. So, you know, we feel like doctorsand people who are in the medical field are really only ones that can reallymake this grow. So we feel like we have a real niche. And a lot of groups havebeen, you know, have come to us with interest. But we said we're not ready yet.You know, we really want to be at a point where we have a really great EBITDAbefore we really want to enter into that field. So we're in the process of kindof making that better and building our bottom line.


Dave Seymour 21:31

Whatkind of what kind of multiples does a business like that trade on? Joe? Iwouldn't have any idea. And I don't know if you do, or they'd like 5x 10x.What,


Joe Russo 21:39

ifyou're looking at like an IP, that's one thing, but if you're looking atprivate equity, there's somewhere between four and six, usually, okay? IPAs,obviously, it's, you know, it's a much different look. And it's a much biggernumber. But that requires a lot more work. So we're, you know, kind of lookingat both of those options,


Dave Seymour 21:56

we kindof, we kind of took a little divergence there in the woods, we're allowed to,it's our show, but for those of you listening, businesses are sold on multiplesof their valuation, either net or gross incomes of the company. And what theydo is they multiply it out by the by the valuation on a company, that's how ifyou watch Shark Tank, for example, you know, that's That's right. That's howthey that's how they do it. So you know, the next Med Spa business that Ientertain buying Joe, I know it's a four to six, four to 6x. Buy one of thosethings, I buy the building, and then I put the put the spire in it, that's whatI'd end up doing.


Joe Russo 22:34

Yeah,that's the right way to go.


Dave Seymour 22:35

That'sthe right way to play. So let's, let's transition here. So Joe, why don't youWhy don't you tell our listeners how we met? Yeah, we how we fell in love, onceyou tell them share the story. Joe, I'm,


Joe Russo 22:49

youknow, through my life, I've always been interested in real estate, you know, Iown the building that I work in, and I flipped a number of I think four houses,you just buy a house living it, go to next house, and you kind of move up. Andso I've always liked that I've always enjoyed that. I've always recognized thevalue of doing that. But you know, was just so busy with my own practice thatit wasn't practical for me to sort of have another business when I was likespending all my time and you know, just building my own business. And, youknow, again, it was something I've always thought about. And then I think I sawan ad on TV for Fortune Builders. I can't remember exactly what sparked myinterest. But I had slot thought to myself, you know, it's a free thing. Let mego listen to these guys. I got there late, they didn't want to let me in. I waslike, You know what, just let me in. Yeah, it's okay. I know, I miss some ofit. But I just want to see what this is all about. And I went in for a halfhour, 40 minutes, whatever it was. And this initial Fortune Builders conceptwas talking about the power of real estate and just kind of revealing that, youknow, there is this possibility out there for you. But obviously, in order todo it, you need help. Just like if you want to become a good surgeon, or a goodinjector of Botox or whatever, you can learn it. But you really need help tounderstand that a mentor is kind of the obvious way to sort of get you throughit. Because the mentor sort of guide you through is you know, as I usually sayon my my shows, I've stepped on all the mines. I've been blown up a few times,so I know where not to go. And I can help you through that somewhat safely. SoI went to this thing. And I thought to myself, this is really cool. I think I'mreally interested to say this, you know, find out more about it. And I thinkthe next step was to sign up for one for one of these meetings. And I sort ofthought to myself, you don't want to get my boys involved with so I signed themup to and we went to this thing, and we were very excited. And then I think thenext thing was the one with you if I'm not mistaken. I've got my sequence.Right. And we spent a weekend with you at a hotel on wall Sam, and you blew oursocks off, man. You just like spoke from the heart. You cried a couple times onstage. You hit us. Hey,





Joe Russo 24:48

Thepassion you had any emotion you showed really sort of resonated with us and myboys and I just sort of look I mean, I wasn't saying anything to them. I wasjust watching them and they were completely into it. Now they were both in it.They're both fully employed, my older son was a consultant traveling every weekaround the country doing financial accounting for, for banks and otherfinancial institutions, and, you know, making a lot of money but working veryhard. And he said that, you know, I'd rather make less money and just work lesshard and have more of a life because he's, you just turned 28 earlier thisweek, and my younger son was working in a financial tech startup, and he wasworking very hard, but he was working in someone else's business, right. And hewas really helping this other guy make a lot of money, he wasn't sort of seeingany of the rewards of that. So you know, after we spent time with you met withyou, we decided we were going to buy in and you know, kind of get invested inthis. And that's kind of how it started. Was your energy Enix and passion thatkind of drew us in,


Dave Seymour 25:46

youknow, you talk about the passion, Joe? I, I'm a crier, I admit it. But thetruth of the matter is, is that for me personally, that, you know, the journeywas was very emotional, I was coming from, from a different place in the senseof, you know, not having financial control over my future, just trading timefor money, you know, and the trade of time for money is kind of the same story.That's why we resonated because you're out there, Joe, you're trading hoursupon hours upon hours of time. But if you didn't trade that time, you didn'tmake any money, right? If I didn't trade time in a firehouse, if I didn't tradeit on the construction side, if I didn't trade it, in the other jobs that I wasdoing, I like you wasn't gonna make any money. And I think one of the one ofthe reasons we connected similar age group number one, your boys are the sameage as my oldest boy. And I don't know, man, I just I just talked to you guys,I liked the conversations we had there. And then when you you know, you use theword buy in what what you buy when you invest in yourself in anything, whetherit's your education as a physician, or whether it's your education as a realestate investor, you buy accountability, you're not going to go to medicalschool, Joe, spend all that time, money and energy and then not be a physician.Right? Right. No, it's accountability. And that's what I really enjoyed aboutthat time that we met. And out of that both your boys quit their jobs, as yousaid, I'm gonna give them a shameless plug. If you are selling a single familyhome in distress, you're gonna call green rise homes, green rise homes. That'sthe company that was built off of that. Let's do this. We're gonna we're gonnatake a we're gonna take another break, Joe, when we get back, let's let's talksticks and bricks. Let's talk about, you know, some of the challenges you haveas a physician, even now being educated in real estate, some of the challengesyou have in taking some of these deals down. And let's talk about what that youknow, 510 year plan looks like for you around real estate. And you know, howwe're how we're able to help you right here freedom venture investments, don'tgo away. You're listening to real estate revealed with my friend, Dr. JoeRusso. And we'll be right back.


Intro Voice Over  28:00

RealEstate revealed We'll be right back. Today, the real estate market is booming. mortgagerates just hit 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 for us today at 866-712-2007. That's86671 to 2007. Unlock the power of your retirement account and take advantageof one of the most profound opportunities in real estate since the housingcrisis 15 years ago, call horizon trust retirement specialist at 866-712-2007.And for a limited time, get our free Ultimate Guide to buying real estate withyour IRA that's 866-712-2007 or visit horizon slash day. HorizonTrust Company 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 rising trust doesn't receive any commissions or fees if I invest withany other sponsor.


Dave Seymour 29:29

You everwondered how to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? Do you know what analternative investment strategy is? With tune in for all the answers on my showreal estate revealed this is they see my mic recognize me from the hit TV showflipping Boston. I'm also the CEO and co founder of freedom venture investmentsto smarten up your real estate know how by tuning in every Saturday for allinvestment details visit us at info at freedom slash 104 point ninecall my team at 78192 24418 thinking of selling your home, but don't want todeal with all the headache greenwise homes to buy your house as is closequickly and can make you a fair cash offer within 48 hours. greenwise homespromises to make selling your home easier than ever before.


Intro Voice Over  30:13

Norealtor fees, no open houses, no repairs, call them now to get a hassle freecash offer on your home 8752 or 573 77 or visit green rise you'relistening to real estate revealed with Dave Seymour from a nice living Boston


Dave Seymour 30:30

backwith my friend Joe Russo, Joe so let's get down and dirty sticks and bricks,you come to the event you spend three days with me. You resonate with thepassion you resonate with the journey you resonate with the fact of you knowtrading time for money is a loser's path. You know, it's funny, I remember boththe Old Boys telling me they pulled me aside what they said, you know Dad's notas happy as he was in the in the practice and I'm like, why they go square?You've ruined it for him. What do you mean? They say cuz now he realized he'sjust a really highly paid tech bishop. I think we're doing some live one day,kids the kids are so mad he's his arms hurting him from from doing life. Oh,all day long a highly paid technician yet so yeah. Let's Let's do this. Youknow, the boys start their journey, they fall in green race homes, you know,you're supporting them, but you know, still obviously running your practice andyour and your school for Botox, etc, etc. What's the focus for the boys today?Cuz I know they were down in Florida looking at some deals? And what do youwant to achieve? Now that you've got some, you know, real estate experiencebehind you? You know, you got me in your corner. But what are your goals withsticks and bricks? Joe?


Joe Russo 31:46

Yeah, mypersonal goals? Yeah, you know, my personal goals are to really become muchmore involved in real estate, I mean, I want to, I mean, I'll be 63 a month ortwo. And it just gets harder physically to kind of do what I'm doing every day.So I'm looking to bring in a partner kind of sort of transition, that reallyspend more time doing the real estate thing, because that's really what my, Imean, it's really a unique opportunity for me to be able to do have a businesswith my boys, I don't know how many people in the world can do that. But whenyou do that, it just really allows you to have a completely different kind ofrelationship with with your kids. And I really value that more than anything,that's I, you know, what I really believe about life is that no one really cangive you anything except an opportunity, right? And you can give people moneyand time isn't that but that's, that's tangible. And you know, you use up yourmoney to use every time. But if you give someone an opportunity, what they dowith that opportunity really says everything about that person, you know, andwhen I hire people, I say, Listen, I'm giving us an opportunity, what you dowith that opportunity is up to you. Like if you want to kill it and becomeamazing, and have incredible career, it's all here. But if you don't yousquander it, you know, that's on you. So so that's what I, that's what Ibelieve I've been given, I mean, I've only been given an opportunity, that'sall anyone's given to me. And I've tried my best to make the most of it. And Iwant to impart those values on my son. So we're in this business together, soto speak, we are but really, I'm still here working, and I'm helping them youknow, they told me talk pretty much every day about stuff. And we all have toagree on what we're going to do. But really, they're doing the work. They'rebuilding the business. There were oil where I was 30 years ago, right. But theydo have a little bit of support behind them, whereas I did but so that's reallywhat it's all about, for me is like building a business, building a financialfuture with security that's based in real estate.


Dave Seymour 33:27

Nice,nice. So, you know, let's let's, let's draw a comparison to you know, thathighly paid technician in, you know, plastic surgery. Well, I look at buy, fixand flip, right, the stuff that we see on the TV shows the things that I didfor years, it's still a highly paid technician, right? If the boys don't buy aproperty, fix a property, sell the property for profit, the business doesn'tmake any money. So one of the things that I know David, for example, in yourgroup has done in the past is taking capital and put it into real estate as alender, a hard money lender. So that's, that's a passive structure. There'salso the the journey that the boys are on of buying and holding real estatelocally. They took down a five bedroom property, and they've got some tenancyin there as well. Correct. Right. And what what does that do look like that isthat tenants got a pretty pretty good rental coming in on that property.


Joe Russo 34:34

Yeah,they've got three rental properties now to two families and this five bedroomwhich is essentially well if there's three people in it, but it could be youknow, two family, whatever. So they've got three rental properties that are allcashflow positive, and they're enjoying that. They're enjoying the seat seeingthat we recently tried to get a six unit building that sort of fell apart butthey understand the concept and effect their trip to Florida. It's all aboutfinding rentals, right? And finding right? The things that can use for Airbnbshort term rentals, whatever part of it is they wanted to use it to becausethey don't really like that Florida experience. But but they do realize thevalue of like flipped versus like, just long term consistent income with rentalunits. So I think we had more in that direction as well. But when you see agood flip, you got to take it right, because that's something that we'redeveloping as well. Yeah, it's


Dave Seymour 35:23

money onthe table. Right? It's money on the table. And yeah, it's not it's not as easyas it looks on TV. There's a lot of potholes literally and figuratively, thatthat can get involved with those. So let's, let's transition a little bit overI obviously, you know, I brought you on the show, because because you're agreat guest, you're also now a good friend, but also for you to share some ofyour insights as a potential investor, with with fun structures, like we have,like, I know, you're looking at the 81 unit syndicated deal with us. You know,you're committed to that project with us. also committed to the to the fundstructure, just just from your perspective, what what are the benefits that yousee in doing those kinds of investments, rather than maybe going out and buyin, you know, a 50 unit complex yourself? I mean, what, what, what, what makesyou excited about doing that kind of investing with us?


Joe Russo 36:18

Right?Well, the last thing you mentioned, by just going out and buying the fifth unitcomplex, I mean, we would just be weighing over our heads, like we don't havethe experience, expertise, wherewithal to do that comfortably, and we would,you know, would be really struggling. So what makes this kind of thing good,like the find, or that anyone you were talking about is that it would be likesomeone kind of joining me in practice, like if I took out a junior associate, thejunior associate has skills and abilities, but they've never run a practice,they've never done all the things that I've done, you know, so when they comein day one, it's all set up for them. Right, they can just set them up, theygot a staff, you've got operating them time, you got all the equipment youneed, you've got all your liposuction stuff you've got, everything's ready togo, you got you know, every payrolls in place, you just have to do the work. Sofor me, you know, I think for most professionals, most physicians who are, youknow, doing their own stuff, we don't have time to do all right. So if we're,if we have someone who we vetted, someone who's quote, unquote, our mentor,like I would be for a junior surgeon, I can trust that. I mean, I can trustthat you've been in the business for a long time, we've done this for a longtime, you've got, you've assembled an incredible team of professionals who weredoing this, and you've already got really good results. And you've got a long,very long track history, track record, and you've got a history that's, youknow, unblemished, and an incredible reputation. So for me, that's a safe play.And I know you personally, and I know, you're probably one of the mostconservative investors I've ever met, which is not what you which is great,because, as I was on the show, you know, a number of times, you told us not todo certain investments, and we've done them.


Dave Seymour 37:51

Yeah,Joe, look, I can't I can't tell you that, you know, everybody takes my adviceall the time. It's funny, because I said to you, I think we were at dinner thatnight. And I said to you, you know, Joe is is me recommending you not do adeal. And then you're doing it and make money. Does that increase or decreasemy credibility? or What did you say? What was your answer to that? Well,


Joe Russo 38:16

I mean,as I was saying, the boys, whenever we do a deal, we run it by you, because wewant to hear all the downsides. The reasons not to do it. The way we have toweigh our own desires, passions, and like, you know, just hunger for this,versus, See, the thing about you is you're totally detached, you're not. You'rea very emotional person, but you're not at all emotional about these deals.You're all about the numbers and the facts and the what the numbers show. So Sowe know that when we come to you, we're just getting the facts, ma'am. Youknow, we're not, there's nothing glossy about it. So you are that person whodoes it. So when we when you're running a fund or, you know, getting above someof these other side deals. Um, you know, to me, that's like, the best kind ofperson because, you know, you're doing things at a very high level, and you'vedone it for a long time. And I trust you so comfortable. And as I said, becauseyou're so conservative, because you're so I mean, conservative, that shouldn'tbe meant in a bad way. It's just that you're, you don't like to lose money,right? And you're passionate about that. I mean, maybe and you said to me, atone point, we were driving a car or something, you're like, I've lost, I walkedaway from like, hundreds of millions of dollars of real estate deal. You know,I walked away from him and I tried never looked back, because it doesn't matteranymore. Like it's already past history. And that was a really fine point. SoSo, you know, we took it took us a while to understand you like what you're allabout, but now I think we have a pretty good understanding. So so verycomfortable, you know, answering your question, I think you are the mentor forus, to lead us through the real estate world.


Dave Seymour 39:46

For thefor the folks listening. We're kind of you know, we need to give it somecontext. What Dr. Russo was talking about is the fact that he invest with thatcompany here at freedom venture investments. His capital comes into our fundstructure just like a, you know, any other fund that's traded on the stockmarket, for example. And inside there instead of a bunch of different stocksinside our fund is a bunch of different real estate assets, we invest inapartment complexes, 50 to $150, down in the, in the Gulf Coast region ofFlorida. And then Dr. Russo gets to participate in the upside of those thoseassets, recording distributions. And you know, to your point, Joe, you know,why I why I'm detached from these deals, because as soon as you get emotionalwith them, that's when you that's when you start to make mistakes. And butsecondly, I'm also passionate about not losing money, because I never had anymoney growing up. I think I shared this with you or another investor this week.I'm not sure whenever Walter, who you know very well, as well writes a checkfrom the fund for for one of our deals, he sweats, I say, why are you sweating?He says because I'm writing a check of for somebody else's money. And I thinkit's important to understand that, you know, you invest with us, Joe, asindividuals first and then the deal second. And you know that that's veryimportant. It's like, you know, your patients have a comfort level with you, astheir surgeon. Think about it. They literally put their life in your hands.Yeah, well, I look at it the same way you put your financial future in myhands. And I take that oath as seriously as you do. When you take, you know,the physicians have in dealing with patients going forward. That makes sense.Absolutely. I completely agree with that. Yeah, for sure. Yeah. And it's sogood to because I get to see, you know, Kyle and Dylan, absorb that sameenergy, you know, for me, to you to them. And now you get to I know the prideyou have, I see the pride in what they're doing. Like I listened to you, Ilistened to the message between the message and you know, real estate as beenable to give you that ability to know that there's a business after the business,when that private equity firm comes in Joe, and they take out your spire at a6x because you're that good at what you do. And now you're sitting on capital,where's that money gonna go? It's gonna go right into the real estate business,right? We'll put some of it in passive, we'll put some of it inactive. And thenyou and I get to sit down on the vineyard and tell stories in our 70s and 80s.That's my goal.


Joe Russo 42:22

I likethe sound of that, my friend.


Dave Seymour 42:24

Soundslike a player. I appreciate your brother. I appreciate your being a part of ourteam from an investor standpoint, and I look forward to you know, what we whatwe built together, going forward and taking good cares to good care your sonsat the same time. So that was Dr. Joe Russo. We're going to take a break andthen we're going to wrap it up. Real Estate revealed 104 point nine FM no sureradio.


Intro Voice Over  42:50

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 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 clients and 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


Dave Seymour 43:29

you everwondered how to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? Do you know what analternative investment strategy is what tune in for all the answers on my showreal estate revealed this is a scene where you might recognize me from the hitTV show flipping Boston I'm also the CEO and co founder of freedom ventureinvestments. To smarten up your real estate 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.


Intro Voice Over  44:00

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Dave Seymour 45:30

they'veseen a real estate revealed


Intro Voice Over  45:32



Dave Seymour 45:34

freedomventure investments, freedom ventures, calm 78192244189 Why am I putting thatphone number out there? Because I'm telling you, you're gonna want to call meJoe Russo, physician, plastic surgeon in Newton, as you heard from from ourconversation, you know, there are challenges for a lot of people and he's he'sno different in the sense of, you know, how do you get capital to work withwhat we call velocity here at freedom venture, having your money work hard,and, and really be in a position to grow retirement, you know, to give a familysome comfort. I was looking at some statistics this week, and they don't lookgood. The T bond, for example, the bond market is usually been a place where investorswould go for you know, a lower yield a lower return, but incredible safety,where the returns are so low right now. They're hovering around 1%, if not lessthan 1% and inflation. I pulled up a report this week and do your own research.But there are some economists are predicting that inflation is going to starttaking anywhere between seven and 9%. Think about that for a second seven or9%. So if inflation does get to those horrendous kind of numbers, you had Joeright people were borrowing money in the in the 20 percents, you know, back inthe days of Jimmy Carter. But if if if the inflation rate gets up that high,his retirement gotta be safe. Right? Um, I don't I don't know the answers tothese I asked questions. I can't ever tell anybody what to do. But I think it'simportant to, to air this discussion out sometimes, because you're certifiedfinancial planners aren't going to aren't going to address some of theseissues. It's not in their wheelhouse to talk about, you know, my asset class,which is commercial real estate investing and, and how the average investor canparticipate in the upside potential. So So what is the upside in commercialreal estate? Well, first of all, it's got to be better than inflation. Everyreturn, every investment has to be better than inflation, otherwise, it's anegative yield. And the bond market is a negative yield right now, becauseinflation as it stands today is around three and a half percent. So if ifinflation is three and a half, and you're anyone you're losing two and a halfpercent if your money sitting in the bank, and then you know, 0.0, I'm not eveninterested in giving you a return, then you know, it's losing money. It'salways amazed me how we were just trained to work trade time for money, putmoney in the bank, save money, get a good college education, which in Dr.Russo's example, he was still paying off his debt in his 40s you know, how youdoing with your with your with your college debt, you know, is that is thatchewing up your your lifestyle, because you've got to make that payment on topof a rent payment on top of a mortgage payment on top of a credit card paymenton top of insurance payment. You know, we step into these financial scenarios,I believe being underground, let's use that term, shall we? I don't even knowif that word exists, but I just created it but not having enough firepower togo out and create some some wealth for us. So what we do here at freedomventure investments is we work with people who want help in in wealth creation,who want help, in a really strong retirement plan, not just what the 401koffers at work, not just the stock market offerings, not just the stuff thatthe you know, the average advisor investment advisor has in their in theirtoolbox. I'm talking about alternative investments. And if you do listen tothis show, and you take a couple of notes now would be a really good time to dothat. Alternative investments, everything outside of the non you know, Bitcoin,don't know anything about it. I don't understand it. But what I do understandis commercial real estate investments. So freedom venture investments runs afund. And in that fund, we put commercial real estate assets 50 to 150 doors orapartment complexes of that size into the fund. And what we do is is we raiseInvest the capital to augment the acquisition of these assets and also anyconstruction and repairs that we do to them. So for an example, an investorwould need to be an accredited investor to participate with us. an accreditedinvestor is determined by the SEC, the Securities and Exchange Commission, asan individual who earns $200,000 a year or more as an individual 300,000 as afamily, or a million dollars in net worth. Now, it always amazes me how peopleimmediately discredit themselves as being accredited when they hear that. Butas soon as they spend five minutes on the phone with one of our team members,they find out they are accredited, because their pension is included. If theyhave whole life insurance, it's included. So there's actually a value to us.And if that value is a million dollars or more, then they can start to look atthese alternative investments. So an investor accredited will be able to thenlook at our investments our fund, for example. And what the fund says is, is wewill take a minimum investment of $100,000 from an investor. And for that, inreturn, we will give them what is called a preferred rate of return of 6%. Sothey get the first 6% of all profits have cash flow that come from the assetsinside the fund. Once that 6% threshold is hit, they then share in profits over6%. With the fund managers, which is our company, they share in a 7525 splitwith the fund managers, the company 75%, obviously being to the investors. Soit targets out for them a rate of return through quarterly distributions, likecash flow money coming to that investor, every quarter of around 10 to 14%.Now, most people here 10 to 14%. It doesn't resonate. It doesn't make sense tothem. But they've never seen those numbers before. Well, the reason they'venever seen them before is because they've never been in this arena before. Thisis commonplace in real estate. I get up every day with an expectation of a 2020% return on my investments. Why shouldn't you? That's the question I alwaysask. Now, what's beautiful about commercial real estate is, is we reposition itor improve its value by bringing in more cash from the assets. We do thisthrough increasing rents. We do this through leasing up empty units. We do thisthrough repairs to the property and making the property more valuable. And whatthat does is at the end of the investment scenario of that $100,000 we talkedabout that stays in the fund and is working in there at targeted double digitreturns for a 72 month hold. at that end of that hold. We sell everythingthat's in the fund, we sell it all We liquidate the fund. Well, because we'reas good as we are at what we do, there's a profit on the back end. And that'sthe beautiful thing where the investors also get to participate in the equity orprofit on the back end while we sell these assets. That's also a 7525 split. Soan investor has an expectation of a targeted return. It's called an IRR orinternal rate of return of 20%. Plus when they put money in with their fund.What do you think about that? I don't know. Maybe it sounds like something sogood. It can't be true. Right? We heard from Dr. Russo. The reality is, is I amprobably the most conservative investor you'll ever listen to. I'm very proudto say I've never lost one dime of invested capital in my career. I've alwaysmade that contributions, as has my business partner Walter Novick, you, you'veheard on the show down in the Fort Myers market, it's one thing to raisecapital, it's another thing to actually deploy the capital and pay the returnsto the investors going forward. You know, I said this last week, I said it theweek before and I'm gonna say it again this week. 2021 will be a defining yearfor this country, I think also a defining year for the world economy. Becauseas the band aid is begin to be really pulled off of the COVID crisis that we'veall had to suffer through. We're gonna see some some huge changes, I believe inthe financial markets. Good friend of mine owns and manages two and a halfbillion with a B billion dollars worth of apartment complexes throughout theUnited States of America. This guy only works in the 200 to 250 300 unitapartment complex is, you know, the really sexy a class properties. But he saidsomething pretty, pretty profound the other day. And he said to me, David, he'she said, You know, there's going to be two kinds of people towards the end of2122 2324. He said there's going to be two kinds of folks there's going to bepeople who own assets and People who don't people who own cash flowing real estate,and people who don't? So the question is, is, you know, what side of theequation? Would a smart investor want to be on? What side of the equation whata wasn't what an intelligent individual want to be on? What they want to be onthe equation side of cash flow money coming towards them? Or do they want to beon the side of the equation where money is always going away from them in theform of insurance and mortgages and, and and, you know, collegiate debt, andcar payments, etc, etc. You know, if the money coming in, isn't augmented, ifit isn't boosted? through some kind of, you know, cash flowing asset, thenthere's going to be challenges going forward. So, you know, it's a discussion,it's a discussion, you know, what, what, what is the what is the landscapegoing to look like for the individual, you know, we buy cash flow, that's thatbusiness model, those smaller assets that we buy are, they're in distress.Right now, there's a lot of amateur property owners who have found COVID to bea challenge they could not overcome. Therefore, they are liquidating andletting these assets go. And we're gobbling them up. Being in the market for aslong as we have over 25 years and the Gulf Coast region of Florida, doingexactly what I'm describing to you, is put us in a position. And this is youradvantage as it is ours. It's put us in a position where these smalleroperators get a challenge like they faced with COVID. And they want to releasethese assets. Well, who do they call, they call us, they call our team becausewe've been doing it for so long. So we buy assets that are what's called offmarket, it's not the stuff that you would see on the MLS doesn't have a forsale sign in the front yard, doesn't usually have a realtor even attached toit. It's come through word of mouth and through a network that allows us to bethe only potential buyers on these assets. And if we're the only ones there,then we get to negotiate a very aggressive price, which keeps me happy, becauseit keeps me in the ultra conservative investor category in which I've beenliving for years. The time is, is now it's not talking to a guy today on apodcast out in the Midwest. And he said to me, what advice would you have tosomebody who wants to invest in real estate? And the answer to that is, is Ican buy real estate, I can wait to buy real estate, or I can buy real estateand wait and buying real estate investing with freedom venture investmentsallows you to then wait to pick up a quarterly distribution every year forseven years and then wait for the equity bump and the equity benefit on theback end when we sell those assets. Is it your time? I don't know. But youcould give us a ring 78192224418 if you don't want to pick up the phone you canvisit us at WWE dot freedom I enjoyed doing this every week. Ienjoy the conversations I have an I enjoy the feedback I get from you, thelisteners when you reach out to us with fantastic questions and just have agreat day take care of each other be well know that challenges pass and that wehave options. We have options. We don't have to keep on doing the same thingover and over again. Because we do we get the same result. So my challenge toeverybody who listens to this show every week is do something different. Davesee more real estate revealed by


Intro Voice Over  58:51

anysecurities being offered are under an exemption provided by sec regulation Drule 506 c only accredited investors who meet the SEC regulation d 501.accredited investor accreditation standard often provides suitable verificationof accredited status may invest into these offerings. Any historicalperformance data represents past performance past performance does notguarantee future results. Tune in again Saturday mornings at 11 for real estaterevealed hosted by Dave Seymour, the star of AES gloving Boston and CEO offreedom venture investments in Denver.