Real Estate Revealed

#2 - Kevin Harrington from Shark Tank & Inventor of the Infomercial

Dave Seymour
November 24, 2020

SUMMARY KEYWORDS

kevin,investment, real estate, investing, business, buy, people, investors,disclaimers, opportunities, kevin harrington, deal, home, commercial realestate, property, world, george, talk, freedom, money

SPEAKERS

KevinHarrington, Dave Seymour, Intro Voice Over

 

Intro Voice Over  00:00

Haveyou ever wanted to create cash flow outside of your job income or retirementplan? Have you considered large commercial real estate assets? Do you knowabout alternative investment strategies keep listening. This is real estaterevealed hosted by Dave Seymour, the star of any living Boston and CEO of freedomventure investments in Denver. Get the real deal about investing in commercialreal estate to create long term stable financial wealth smarten up your realestate skills now. Alright, so

 

Dave Seymour 00:36

this isDave, I am your host of real estate revealed hero 104 point nine and I am veryexcited to bring a friend and an a special guest onto the show today, gentlementhat I've got waiting in the wings right here is the Kevin Harrington. Kevinwas the original shark on the TV show Shark Tank. Kevin is now chief ofbusiness development with us here at freedom venture investments. And I wasable to pin him down in his busy schedule to spend a little time with us. SoKevin, how I agree.

 

Kevin Harrington  01:10

It'sgreat to be here.

 

Dave Seymour 01:11

Yeah,good, man. I appreciate you. I appreciate you coming on. You know, I wasthinking, Kevin, before jumping on to this, that this this spot here with youtoday, how unique it is, I think that you know you get a couple of TV guys likeyou and I find in an alliance later on down the line where where we see valuein each 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,yeah, it's it's just it's powerful to have you with us progress.

 

Kevin Harrington  01:46

I lovethe team you've assembled. And there's so much experience in the world of realestate around your place that it only makes sense to put it to good use to helpother people get get involved in making money in real estate.

 

Dave Seymour 02:02

Yeah,yeah. Yeah. Thanks, man. No, I appreciate you, Kevin. Look. So let's let's talkabout you. All right. I know my favorite subject is me. But today I'll talkabout Yo, first of all, if you read anything about you, Kevin Harrington,original shark from Shark Tank, it talks a lot about almost like the inventorof the infomercial. And I remember we were down in Tampa a couple of monthsback and I asked you about that just just how did you get into it, man? How doyou become the infomercial guy? What what what was the what was the, you know,the process to be where you are in that sense? Oh,

 

Kevin Harrington  02:33

so thankyou. I'm going to go back a few years just to tell you the quick story. But Iwas sitting in the early 80s I was a serial entrepreneur selling I was abusiness broker selling pizza parlors, delicatessens, restaurants,manufacturing companies, laundromats flower shops, and did a lot of trade showsand I just ordered cable television in my home and I got 30 channels in myfirst round of cable and if you remember the old days Dave were you know we canremember back then when channels okay. Sudden cable comes in. And but I got tomy last channel 30 on this 30 channel package was Discovery Channel and it wasbrand new, and and there was nothing there. So I called the cable company and Isaid, Hey, I love this cable concept of 24 hours of sports, 24 hour movies, HBOand music, MTV and ESPN and all these great channels. But there's nothing onchannel 30 discovery. They said Oh, it's a it's only an 18 hour day channel.It's a brand new channel. They don't have a budget for 24 hours a day. And Isaid so what's on the other six hours? They said dead air? And yeah, I saiddead air. I said, hey, what if I had something to put on there? Now, I don'tknow if anybody else was thinking the same thing. But maybe others, they get toa channel. There's nothing there. They just keep flipping me. I want to knowwhat's on this channel. 30. Right. So when they told me dead air, I was at thePhiladelphia home show right around that time and it's guy slicing through aCoca Cola can through a muffler and a pair of sneakers. And he says it's theGinsu knife and he's selling the heck out of it, right. And so when it clicked,I said, Wait a minute, dead air on TV, this guy. He's got this pitch that's sopowerful that everyone around them almost was buying these knives, including meand make a long story short, I went up to him and I said his name was ArnoldMorris, he said, and I said, What if I get you he this guy was going for 12years. He would go from one show to the next 40 weeks a year on the road. And Isaid Arnold What if I could film this pitch and put it on television onairspace and he's like, what's that? Okay, yeah, pick some money together andmaybe 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 doing hundreds of millions ofdollars around the world. And the rest is history because Arnold knew BillyMays, and he knew others. Yeah, George Foreman's, and all of a sudden, we hadjacquelene. And the juicer and Tony Liddell and the gazelle and Billy Mayscourse, Billy ended up doing oxy clean as you remember. So yeah, I mean, thiswas the beginning. It's been going ever since.

 

Dave Seymour 05:36

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? Somepeople call it insanity. Investors like us and entrepreneurs like us, we callit those moments, those divine moments of clarity where, you know, anopportunity arises and you just start connecting some thoughts, such a coolstory, rather than such a course. And then to and then to have your, you know,your influence in so many of those other products. You mentioned some prettypowerful guys there, George Foreman and lalana and the workout gear and allthat kind of stuff. And they almost become a pop culture in themselves, don'tthey? I mean, yeah, is there an American even my 25 year old kid knows what ajinzhou or Ginsu knife is, yeah, because

 

Kevin Harrington  06:22

Tonylittles been on Geico commercials he was just on Cricket Wireless. You candrive. Yeah, so these these people be Billy Mays was spoofed on Saturday NightLive a number of times since Tony little, by the way. And yeah, I mean, wewe've been in dozens and dozens and dozens of movies. I mean, we had like oneguy that just built all the movie houses as they were wanting clips, you know,I mean, like, what do you want the clipboard like, Oh, well, this is a moviewhere some of their, their in their living room and they're watching TV, and weneed something to be playing. And we want it to be something funny, like aninfomercial, right? I mean, there are our infomercials have been running foralmost 40 years all around the world that the next step of my distribution wastaking them into Europe, Latin America, Asia, the Middle East, etc. So wecreated a global business went public on the New York Stock Exchange, had a lotof fun, and did did a few sales along the way, like, you know, billions ofdollars in sales.

 

Dave Seymour 07:27

Let meask, let me ask you that, Kevin, because those numbers are astronomical. Howmany products would you say you've actually, like researched the bots of themarket? And what do you think the value of those sales have been in yourcareer? Oh,

 

Kevin Harrington  07:40

I'velaunched over 700 products. And, and those and, and let me just say this, firstof all, Dave, not everything works like, right, I am 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. If it's the to the hundred 50 to 200 thatdidn't work that did $5 billion in sales. So it's, you know, you got to knowwhen to hold them know when to fold them because not just because you put a lotof time and money into something doesn't mean it's going to be successful.There has to be consumer demand. And it also has to be done in a properfashion.

 

Dave Seymour 08:24

Allright, let's I love this I love it. I love I love the tenacity of theentrepreneur. You know I you know, I'm not a baseball guy you know that I knowyou guys are doing pretty good down there in Tampa right now I'm not a I'm nota baseball guy. But whenever I hear something like that from a guy like you,Kevin, I use the baseball analogy if you don't swing the bat you don't stand ahope in heck right away in a home run you got you got to get up to the plateand participate otherwise everybody else is going to you know everybody else isgoing to get get involved with this game and you're going to be on thesidelines and the sidelines. They're not too much fun these days as 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 isn't real that I really invested in those things.Give us give us the down and dirty man. Give us the inside scoop.

 

Kevin Harrington  09:22

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 on European shopping channels and, and so, you know, I've oneday my phone rings and my assistants like hey, it's Mark Burnett's office andMark wants to talk to you. I'm like, the Mark Burnett, you know, the TV guy.And yeah,

 

Dave Seymour 09:48

I mightadd these in Yes, just

 

Kevin Harrington  09:51

right.Until I get on the phone and he and he said, he told me I've got this new showcoming out and this and that. And I'm like, Well, hey, that's great. antasticI'd love to come talk to you about it. Can you tell me anything about anything?Well, hey, look, you got to sign some NDA paperwork. But it's called SharkTank. Come on out. I got off the phone. I was excited to tell him my wife. Youwon't believe that. Mark Burnett wants me to come out. He's got this new showShark Tank. I'm gonna go talk to him. She's what Shark Tank I said, Oh, he saidthat he'll tell me when to get there. I didn't want to tell me over the phone.She's I know why he won't tell you anything. Think about it. What does he do tothose people on that survivor show? And he wants to be on Shark Tank. Okay. Isaid, Oh, no, it's He said it was a business show. Right? So I mean, when youthink about it, Dave, who would have known a show called Shark Tank? Is peoplepitching entrepreneurs like me in the interest of sharks. Okay. Well, there maybe some real sharks on there. Mr. Wonderful is sort of a shark they think Yeah,right. Right. Anyway, so I go out, I meet Mark Burnett, and he and so hefinally tells me what it is. He said, I said, Mark, in a quick couplesentences, what a shark tank, he said, inventors come out, they they're goingto pitch you their business, their service or their idea, the patent, they getthree minutes to pitch and you and three, four other sharks get bored. Getthree minutes to make up your mind who's going to do the deal, if any of youand you compete against each other? And I said, Wow, I said, guess what? Hesaid what I said, I've been doing that for almost 40 years. He said, What doyou mean? I said, I go to the hardware show the house were show the fitnessshow the beauty show the Toy Show, The golf show, and what do I do? I takepitches from people that have products, and then I invest. So he said, Kevin, Idid a little audition. They said fantastic. He called me a few days later,you're the shark. Let's do a lot. And by the way, we invest our own money.Because the worst deal that I did on Shark Tank, I wrote a check for 500,000for a piece of equity in a company helped her out got her on home shoppingnetwork that all these amazing things. Six months later, she closed the doorsdown, ran through all the money. And it's a long story on this call, but notevery deal works as I said, Okay, and so yes, I lost a half a million on one ofthe worst deals I did on Shark Tank. But hey, all the sharks have lost money,but they've also had some winners that performed big time. And that's all about

 

Dave Seymour 12:26

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

 

Intro Voice Over  12:46

RealEstate revealed We'll be right back.

 

12:51

Today,the real estate market is booming mortgage rates just at historic 30 year lows.And the New York Times recently reported that investors are snapping up realestate at rock bottom prices. And now savvy investors are buying real estateusing their IRAs that allows them to access their retirement funds to buyproperties without paying any penalties or early withdrawal fees. If you havefunds in your retirement account, and you are interested to learn more callhorizon for us today at 866-712-2007. That's 866-712-2007 unlock the power ofyour retirement account and take advantage of one of the most 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 calm slash date. Horizon Trust Company isan independent passive custodian and it's not associated or affiliated with anddoes not recommend to promote or advise any specific investment investmentopportunity investment sponsor, investment company or investment promoter orany agents employees, representatives or other such firms or entity horizontrust is not providing investment advice, advocating or endorsing real estate.These options may or may not be a fit for individual investors investments arenot FDIC insured, offer no bank guarantee and may lose value. Horizon trustdoesn't receive any commissions or fees if I invest with any other sponsor.

 

Intro Voice Over  14:14

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Dave Seymour 14:54

Allright I'm with Kevin Harrington the original shark from Shark Tank KevinSherwood Whose journey to be where he is today through through the dead airspace on cable TV to all the shows that you've attended over the year thattrade shows to Shark Tank to be in one of the notable notable businessinfluences, I would say globally, Kevin, and as I said, at the beginning of theshow on a Tabby as chief of business development, with us here at freedomventure investments, so I'm going to pivot a little bit, Kevin, what do you seeas opportunities that are created within the the current landscape of business?I mean, COVID is an absolute crisis. Yeah, um, it's not something to be, youknow, dealt with lightly. What do you see as as the the opportunities thatevolved because of crisis and what we've gone through Kevin, how do you seethat?

 

Kevin Harrington  15:46

So letme let me talk about that a little bit. Yes, I'm getting I'm getting calls frompeople, like, I just got off a 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, and COVID has hurt 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,that you know, there's a lot of celebrities that are endorsing differentproducts and clothing and fashion. And so Sofia, Richie, she was sellingfashion, but she changed it to work at home fashion and look good, you know, athome, because now people are having to do these zoom calls and videos and youknow, this and that. So So I think what what's needed is a pivot if with manypeople, right, and so literally yesterday, I'm watching, I love to watch CNBC.As they you know, it's my, where I follow my stocks and business and tips andthings like that. And it came on, and they said there is a major shortages incertain industries, you know, buying small freezers, small dishwashers, outdoorheaters, office furniture for the home, right? These are industries that are justthey can't keep up keep up with the demand. And like what outdoor heatersWhat's that all about? Well, the restaurants that are open, they need to serve20 477 days a week, and you know, 365 days a year what's cold and a lot ofmarket so heaters are coming in like crazy for restaurants all over the place.And, and people why they buying freezers because they're at home with one ofthe things I did, I had a product on television 15 years ago, called the magicsaw out of Korea. And this is a handheld saw that does amazing things. And,and, and I said you know what, people staying at home, they're there, they'refixing up their house, let's bring some of those tools back, we brought magicsalt, magic wrench, magic hammer back, put them on QVC 500,000 pieces rolledover a six month window, because people are sitting at home needing things todo. And so the world out there just like you know, we're talking here aboutopportunities. There's opportunities in real estate, which I know, I know youlike to talk about, too. And that's why I got involved with you guys, but I'mfollowing the unfollowing the trends and following also obviously sanitizersand the whole world of personal protection, right, that PP products are huge.So, you know, if if you're starting something fresh right now, and you want toget into something new, there's industries that you can follow that are doingvery, very well.

 

Dave Seymour 19:04

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 a company,or whether you're that, you know, that that that that entrepreneur at home waslike my Lord, you know, I've got I'm at home, what can I do? How can I create?How can I be inventive? You use that term following trends? Right, followingthe trends. And you know, in your career, Kevin, and we've had thesediscussions, one on one, your career, you refer to it as, as driven by bellcurves, right? Yeah. And I thought it was so insightful. That conversation wehad down in tempo, he talked about that, you know, you have a product that doesexceptionally well and it rises rises, rises, rises, rises, it maximizesitself, and then it reaches the top of that bell curve, and then the salesbegin to drop off. And then what what you're what you're bringing into thisconversation, which again, I think is incredibly important, is following thetrends and you just highlighted it perfectly the trend now says, Bring back themagic saw bring back the magic wrench, you know, whatever that item is, thatwill now start another bell curve, because the market demands it. So when wetake and these conversations I get I get, like, amped up. Every time I talkwith you that that end with a one on one or whether it's like we get going,we're off and running. Yeah, I begin, right I begin to, you know, parallel whatyou've done with with products, the same way that we do with, you know,commercial real estate. And for us, as you know, kept the trend is beingprepared to offer clean, affordable, decent housing, to the renters that aregoing to be coming into the marketplace. Because the trends, right, the trendsand commercial real estate show us the single family homes have a high exposureto foreclosure due to the forbearance stuff, and now they're beginning to liftthe moratorium on evictions, and that these people are getting kicked out ofone property, but they're going to need somewhere else to go with their. So letme just share a couple of reasons why, you know, after a Korea so heavilyinvested in products and services, why why you're in a position to look at thatbusiness model and say, yeah, that's something that I want to be aligned with.And that's something that you know, I want to participate in, at a you know, ata high level, I mean, your your management, your management level with us so,so why why do you see that? What do you like about it?

 

Kevin Harrington  21:31

Yeah,so, I mean, it, I would say this, if you look at at history, and I and I, I'vehad many homes over the years, I, I bought my first house 4546 years ago, andand so that, that house is probably selling for 10 times what I paid for it orfive times, whatever the number is, right. But I, I bought it and I sold it inreal estate over time. It's it's, it's been one of the best ways for people toacquire wealth. And, and so at the end of the day, it's a risky world out therestocks, I you know, I played the stock market, I still play a little bit in thestock market. But I mean, just today Netflix is down, right? Like, why is thatflicks 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. SoI mean, it's it's too risky to play that kind of situation. And and so Ibelieve that real estate is solid. And as you well know, this has been yourlife for many, many years. 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 itand get involved with a good group of smart people, like you've assembled, it'sit's nowhere to go but upward.

 

Dave Seymour 23:00

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.comfreedom venture.com if you go there, you'll actually find there's a video thatwe shot and it was almost it's almost like an infomercial, Kevin, I felt like Iwas on a one of your best works when we were when we were sitting right downthere in Tampa, in your own backyard. But the ability to be, you know, offeringdouble digit cash flow in opportunities to passive investors, you know, in yourown backyard. I know, it was something that really was something that wasattractive for you. And I think, you know, I think that was a big part of whywe why we ended up aligning with each other as well, you had a chance to meetWalter, he's down there in Fort Myers, our chief investment officer. So thevetting process, the point of me bringing all of that up is that the vettingprocess has already been done. So that we now have that confidence movingforward as a company to you know, to execute on our plan. You know, goingforward so again, man, look, have enjoyed this conversation. I know we're gonnahave many more in the future. I'd love to maybe see if I can pin you down tocome in on on these radio spots with me maybe once every couple of months, sothat we can update but again, I know your time is tight. You're probably goinggolfing if I know you you've got somewhere today I did I did

 

Kevin Harrington  24:45

over theweekend. You know, it's always good 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 this The country and and, and and when you and I hookedup a few years ago, I said there's going to be some great opportunities for us.And this is it this this freedom venture investments is where we are at and I'mexcited about it. And I just want to thank you for including me and getting meinvolved.

 

Dave Seymour 25:19

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.

 

25:35

Takecare buddy.

 

Intro Voice Over  25:38

RealEstate revealed We'll be right back.

 

25:43

SteveAlesis of Solaris realty has intimate knowledge of the North Shore market. Withover a decade of experience and record of 300 real estate transactions. Whenit's time to buy or sell property give Steve a call directly at 617-763-1001.That's 617-763-1001.

 

26:13

Today,the real estate market is booming. mortgage rates just hit historic 30 yearlows and the New York Times recently reported that investors are snapping upreal estate at rock bottom prices. And now savvy investors are buying realestate using their IRA that allows them to access their retirement funds to buyproperties without paying any penalties or early withdrawal fees. If you havefunds in your retirement account and you are interested to learn more callhorizon for us today at 866-712-2007. That's 866-712-2007 unlock the power ofyour retirement account and take advantage of a 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 comm slash date. Horizon Trust Company isan independent passive custodian and is not associated or affiliated with anddoes not recommend to promote or advise any specific investment investment opportunityinvestment sponsor investment company or investment remote or any agentsemployees representatives or other such firms or entities. Horizon trust is notproviding investment advice, advocating or endorsing real estate. These optionsmay or may not be a fit for individual investor investments are not FDICinsured, offer no bank guarantee and may lose value horizon trust doesn'treceive any commissions or fees if I invest with any other sponsor.

 

Intro Voice Over  27:37

You'relistening to real estate revealed with Dave Seymour from Amy's living Boston.All right, well, thanks

 

Dave Seymour 27:42

forlistening to us here at Real Estate revealed I can take it down a down a notch.You know, I was I was I was thinking about the energy that it takes, you know,high energy high results. It's not easy, I guess to always be that up forwhatever is around us. But you know, Kevin Harrington has been as you heard inthis, in this business development world and entrepreneurship for a very, verylong time. And it's been a it's been a pleasure for us at freedom mentorinvestments to to include Kevin because it's it's not, it's not necessarily hiswheelhouse. I think in business, finding what somebody's core competency isexecuting on that proficiently and consistently is what creates, creates bigresults of massive results. You know, it's the, you know, it's it's thatfeeling you get at the end of a really good day in business where you can gohome to your family, and, you know, just look across the table and smilebecause 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 it 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 to dowas was kind of like, pivot into a little bit of an education piece for thoseof you listening. I think it's important as a fund manager, which is why Weare, 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 is 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, somepeople say three, three and a half percent, you know, if a if a bondinvestment, you know, a government backed bond is paying, you know, point 5.2point, one point, whatever, then, you know, it's, it's, it's setting itself upfor a negative structure. So how do you get, you know, the safety of that kindof risk exposure, and yet at the same time, preserve capital, the money thatgoes into an investment, and grow the money at the same time, because that'sreally what we want, we want yield, right? We want we want our money working ata high rate of speed, the way that we've been able to identify to do that andhave been successful in doing it now, Walter, no, Vicki, who I will be bringingonto the show next week, Walter is our chief investment officer. He's acritical critical piece of what we do at free to venture investments. Walterhas a, it's almost proprietary in the sense of what he identifies asopportunities in commercial real estate so that people can have a highexpectation of these these returns and safety in a world that may be somewhatnew to them. And the way we do it is, is we have what's called a Buying Criteria.And I'm going to share some of that with you guys. I don't think it's going tobe an overload of information. If you've ever been to the Florida market, andyou've driven past one of those really nice looking apartment complexes,picture that, okay, and what that is for us is, it's it's a property that isclose to a certain employment number. I mean, we need to see good employment inthe areas we invest, obviously, good schooling, because of tenant basegenerally have children, we like areas with low crime, suburban area, we don'tgo in a city, business and landlord friendly states are very important to us aswell, you know, to be able to offer opportunity, I've got to do all the workright in the beginning, to help our investors along. So you know, that's why weinvest in Florida, for example, the opportunity is huge there. But it's also avery landlord and business friendly state. We like a certain populationspecific to a, like a more downtown area, or we call them essays, but there's apopulation that we like and what are called secondary and tertiary markets. Sowhen we identify a location like that, then we start to look at the specificsof the actual properties, right, the amenities. So what we like to focus on andyou know, if I feel like I'm teaching a class, but it's, it's this stuff iswhat I live and breathe, it's what gets me as excited as Kevin is, when he getsto do a, you know, charge for my product, right, because we both see hugeopportunities in these, but we invest in what are called Class B properties.Now a Class B property really means just its age, we like smaller communities,the nicer apartment complexes, maybe 20 to 150 units, not these great bigmonstrosities, we like to focus on those. We like occupancies that are at least90% because now I'm actually buying 10% of free real estate is the way we lookat it when it's not occupied. Because we're going to increase occupancies ifthere is an opportunity to raise rent, and bring it up to market value. That'sthat's a huge strategy for us as well. So when we start layering on all ofthese different pieces of this business model, which each property really is,it's his 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 cashflow 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.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 and 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. He said, But now you're just doingit on steroids, is that correct? And I said, Yeah, man, I said, Yeah, that'sit. And that was a big lesson for me that day, because it was like, he's very,very proficient in law and case law, and, you know, prosecution, etc, etc. Wentto school for that. And yeah, you know, I went to school for commercial realestate investing. And it's interesting that, you know, just making theassumption that everybody knows and understands what you do in life and inbusiness isn't always the case. So going through these steps, I think, isimportant. So we like to do some renovations to them. And then on the financingside, I won't go crazy on that. But we have incredibly great financing optionstoday. Whether you're buying your own primary residence, whether you're lookingto refinance, a loan on a primary residence, or whether you're like meoperating in the in the commercial arena, the final cost of capital right nowis ridiculously low and the Federal Reserve have stated recently that they haveno intention of raising that for probably two years to keep the economy movingduring these crazy times. So you know, just like Kevin was looking at that deadair space, on on the Discovery Channel, we look at all of these options and sayto ourselves, all the ducks are lining up, the stars are lined up for formassive opportunities in the commercial arena. Because if my cost of capital tobuy is low, then my profits are high. It's simple mathematics. At the end ofthe day, we hold these properties for five or six years, and then we sell theassets once we've made them more valuable. I think a good way to wrap your headaround this. If it's a whole new discussion for you, is to think of a guy likeWarren, let's talk about Warren Buffet, right, Warren Buffett, the the oracleof Omaha, you know, everything he touches turns to gold. And what Warrenbasically does at a very, very core level, if you will, is they identifyunderperforming businesses, businesses that are not meeting their potential.And then Buffett would buy that business at its current market value, hire andfire, reposition the business, make it more profitable, and bring it into hisportfolio. That's that's kind of part of what Warren does it outside of hisregular, you know, stock and investing in that area. And that's what we do atfreedom venture investments. You know, we identify underperforming commercialreal estate assets, multifamily assets, and we reposition them and we make themmore profitable. And in 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, I 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 are elite offerings. When you get to talk and meet with Walteron next week's show. Yeah, he refers to the deals that we do as, as CountryClub deals, these are the ones that go down on the 10th Hall of the countryclub and freedom venture investments. We're very, very excited to bring thosekinds of fields to the marketplace. So we're going to take another quick break.When we come back, I'll share with you an opportunity where you two can look atthese investments firsthand, have an opportunity to meet the team face to face,and we'll keep rocking and rolling.

 

Intro Voice Over  39:32

RealEstate revealed We'll be right back. Thinking of purchasing a new home secondhome for 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 Denver is just the loanofficer you will need as Essex County's top loan officer with more than 8000past happy clients in over 30 years experience you And his team will be happyto assist you with rates, the lowest in history Don't hesitate act now, you maybe able to save thousands of dollars call George at 978-777-4663

 

40:11

SteveAlexis of Solaris reality as intimate knowledge of the North Shore market. Withover a decade of experience and record of 300 real estate transactions, whenit's time to buy or sell property, give Steve a call directly at 617-763-1001.That's 617-763-1001

 

Intro Voice Over  40:40

you'relistening to real estate revealed with Dave Seymour from Amy's living Boston

 

Dave Seymour 40:45

Welcomeback. It's an interesting world, it definitely is a dynamic landscape that hasa lot of fluidity to it both from you know, a day to day routine. Watching mybeautiful wife become a homeschool teacher and adjusting to 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 the oneswho should be getting up getting all those outside lamps, they should just shipthem up from Florida, you know, they start wearing fur coats down there, whenit gets when it gets down to 70 degrees. So I think I think they need to startshipping some of those lamps up there. But my point is this, there's a lot ofthere's a lot of movement, there's a lot of movement in our lives, there's alot of movement in the marketplace, which is why, you know, these opportunitiesthat we talk about are so so unique in and of themselves. And I want to touchback if I can on the on that financing piece. In the commercial world, we havegenerally we don't necessarily lock in our investments for for like 30 years,like we do in the residential marketplace. They usually 20 or 25 or 15 yearloans. 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 it sounds corny and I don't mean it to but there really isno I in team you know, every successful deal that I've ever done every, youknow, company that I've that I've built has been built with with other people.And I want to just give a shout out, I think it's appropriate when we'retalking about financing to a very dear friend of mine, an instrumental part ofmy success in business whenever I either one needed a mortgage to buy a pieceof real estate, or number two to find the very, very best buyer for the assetsthat we had fixed up and sold to make sure that we had a good qualified buyerin there. George kudos, George could sauce is with cross country mortgage basedright here in Danvers. And, you know whether you're, whether you're looking topurchase that new home, like I said, or a second home, maybe maybe you got afeel and a flavor after listening to this show that you want to step up to theinvestment game. And financing is a necessity there, maybe get a lower rate,consolidate some debt. Some folks out there we're dealing with PMI privatemortgage insurance. George coats house, the mortgage officer, like I said, withcross country mortgage. He's a performer George has been servicing ourcommunity for decades, over 30 years with 8000 past happy clients, who willtestify to the quality of service that George personally gives all of the dealsthat he does. So reach out to him. If real estate is in your in your you know,on your on your horizon in any capacity. Give George a call, he can service youcan take great care of you and look, as I said with that with the interestrates being where they are today at unprecedented lows, I think evenhistorically low, the potential to save 10s of thousands of dollars in financeexpenditure is potentially there on the table for you as a as a as a homeowner.So give George a call 978-777-4663 George could sauce cross country mortgage,tell him Dave the Englishman center and maybe it'll buy you a gift or somethingI don't know George used to send me like the Red Sox schedule and maybe everynow and again I get a pen or a cup or something. He's a strong, strongprofessional in the in the mortgage industry, and he will take great care ofyou. So look, I wanted to, I wanted to talk about more on these deals, I'velistened so many times in my career to, you know, potential investors, and theystart to look at the start to look at at real estate, and they willconsistently say, you know, real estate is is risky faith, you know, what, whywould I want to be involved in real estate, it's way too risky. And I get alittle bit of a wry smile. And here's why. With respect to those people, it'san uneducated statement. Think about this, what's riskier investing in acompany that you know, absolutely nothing about investing in an individual thatthat somebody knows nothing about? invested in? To Kevin's point, real estatehas always maintained its value and improve the value over a longer period oftime. You know, real estate is not a quick hit for one of a better term. It'snot a, you know, a scratch ticket. It's not a penny stock. Real estate is youknow, it's it's it's real, it's it's tangible, it's it's sticks and bricks, andI pulled up, and this is either going to scare you away, or it's going toentice you more, but I don't care I yeah, I pulled up the disclaimer that weuse whenever somebody looks at a commercial investment. And I'm just going tohit a couple of the high points on there. But listen to this, and tell me ifthis is scary, right? The presentation that shared here is for informationalpurposes only says this isn't in no way considered investment advice of anykind. Freedom, venture investments cannot or will not assess the suitability ofany particular investment to any personal situation. And the reader of thedocument and the information bears complete responsibility for their owninvestment decisions, and should seek professional advice from a qualifiedinvestment advisor and tax professional. It goes on to talk about how ininvesting, there is always the potential to lose principal, it talks about thatthe information contained is provided as is without any warranties of any kind,you know, and what it really does is that disclaimer, in this sandbox in thismature world of investing is designed to scare away the uneducated, it'sdesigned to put the halt on the expectations of you know, huge quick 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 stopping shop, right. ButI worked with stopping shop companies for many years on and off. And, you know,I followed the, the 401k journey. And, you know, I followed the the plan thatwas available to me, as an employee with stopping shop. And guys, I'm not, youknow, I'm not tearing anybody down to build me or my strategies and company up.I share all of this stuff sincerely for informational purposes only. But here'swhat I never received. And maybe you did and you don't, you know, you don'talign or you don't, you know, resonate with what I'm saying? Or maybe I'llmaybe you will when I say this, I would like to know what disclaimers we weregiven when I went through my investment options as an employee. If I rememberrightly, and it was a few years ago now, I think that there weren't anydisclaimers. I was never appraised of the fact that there there was thepotential of small gains, and even some losses inside some of the mutual fundsthat were in my 401k account. I don't remember seeing any of that information.If you did, I'd like to hear about it. But But I don't remember seeing that.And I think about it today. I wonder if there was transparency in everyinvestment, the way that we are transparent, based off of the way that wepresent investments. I wonder what the investment choices would look likenationwide, and I'm just throwing that out there to cause some trouble, right.I'm just I am. I'm just throwing it out there to cause some trouble. I like Ilike a good debate. I don't think there's any real right or wrong. I thinkthere's only left or right. It's it's a tolerance for risk. It's a tolerancefor exposure. But did you get a disclaimer when you signed up for your forumOne K plan. I'm going to give you a little scenario here and see if youresonate Oh, remember this one. I remember somebody saying, Hey, everybodyneeds to go to the conference room. And everybody's like, Well, why would theydo that 401k presentation, we're going to get a half an hour off of work a halfan hour after work with pay, let's go. Oh, by the way, they've also got freebagels and cream cheese, bagels and cream cheese and free coffee, and a half anhour paid. Let's go. And we all went, we all went in droves. And we all we allshowed up in these conference rooms all across America. And somewhere along theline, somebody said this free money. And they said, What do you mean freemoney? Yeah, there's free money in there as well. They call it a company match.They're going to give us free money in a 401k plans. And we signed up. And notjust myself, but millions, if not billions, of other people signed up. And whenI actually got there, and this is my responsibility, I'm guilty as charged,Your Honor. But my responsibility was to do my own due diligence with which Ididn't do. But when I got there, the pitch or the presentation back thenwithout any disclaimers, without any real projections of what my financialfuture would look like, was basically this. It was How old are you? Oh, you'rein this age group. And you go in a higher risk bracket, you're this age, you goin a medium risk bracket, you're older, okay, you're, you're close to the theretirement red line, I think they call it then you go in this bracket. Andreally, that was that was as much of the education as I got going forward. AndI've always looked back on that with two thought processes. One, you know, Iwish I'd have known more. And two, well, who's responsible for me knowing more.And I've carried a lot of that blue collar attitude into this white collarworld of real estate investing today. So then all the disclaimers are there forreasons they show integrity. But it's also part of sec compliance. There arerules and regulations that we have to follow. We can never talk aboutguaranteed returns in real estate, because in life, nothing is guaranteed. Butthe ability to put these kinds of deals together has really been a blessing.Because what I'm now able to do is watch and I get to see investors light up,it's the best way to do it, they light up, they get to see these tangibleassets. If you go to freedom venture.com freedom venture.com and spend sometime there, you'll begin to get a feel and a sense for what it is we're buying,and how the average American investor can now participate in these theseCountry Club type deals. I pulled out one of the one of the properties that wehave that's that's just gone through underwriting. And this is just a just abread and butter deal that we look to do and bring into the fund. But to giveyou some idea of the type of deals that we look at this particular deal, it's a24 unit. So think of a nice 24 unit apartment complex. This one's just north atamper. So now you got a picture to imagine Close your eyes of sunshine in thepalm trees a gently swaying in the breeze, no hurricanes, just gently swayingin the breeze. You know you can you can see that little lizard running acrossthe patio like you do if you get to go down to Florida. So this beautifulproperties quick 25 minute drive from downtown tamper consistent to 12 unitbuildings. So we like that. What's nice about this property is it's it's got aresort style pool and cabana area, it is very vacation. Like, right it's it'sgot that feel about it, which is which is nice. It creates great community forthe tenant base in there. And this is a newer one, this one was built in 2017.All the grounds are in excellent condition. It needs very little in the way ofupgrades. It's in a really nice position, but it's been badly managed. We can purchasethis property for 2.6 million. And this investor, by the way, who actuallybought this property, this is interesting, right? bringing yourself up to speedand being knowledgeable in this business. This investor purchased this from abuilder who just said, Hey, we'll take care of everything. You just buy thisthing. It's all set. And it didn't come to fruition. This guy was an amateurinvestor who purchased this he didn't he didn't execute well. He didn'tunderstand. You know how to how to engage and bring in the right tenant base,etc. and rent collections were low. So when we buy this thing for 2.6 million,we'll bring in our professional management team. We'll get the rent collectionsup to where they need to be the units. The size of the units is is great largerunits, bringing up the rental income on the property about 43,000. Without anynegative impact on occupancy. So the team identified several line items in theexpenses on the expense side that need to be addressed. That gives us anadditional 13,000 in value or income in that year, because we're not spendingthat and expenses. So operating income on this, this little little beauty willbe operating income increase of 56,400. So that creates more value in thebuilding. So it boosts the value of the building by about 146,000 in one year.This is a different game. This is so different from from the single familymarketplace that I've spent a lot of my career in, but I've always been in thecommercial on the back side. So our investors are looking at targeted returnsthat come in on on on on this particular deal. year one, their cash on cash isa 13.54% targeted return. And then as we continue to work these assets, we lovethem, we treat them right, you know, we treat the tenants, right? The cash on cashaccelerates up to 16 and a half percent over five years targeted. And then thevalue of the money working in this deal over the life of the investment comesin at what's called an IRR, an internal rate of return of 24%. But what'sinteresting in this world, we also have what are called equity multiples. Sothe equity multiple on this when we do the math is what's called 3.4 x. Andbasically what that means is for every $1 that goes in, at the time of sellingthe asset sharing in the profits with investors, every $1 that an investor putin, they will get an additional 2.4 dollars back. So I know it's it's kind ofhard in a radio format to picture these deals. But I do I do have some somenews. If you're driving, pull over and get out a pen and paper. If you're ifyou're golfing, put a club back in the bag, that was the wrong iron anyway,you've got way too much of a hook to be using that club. If you're fixing lunchfor the kiddies just stop a second and relax and grab a pen and paper, you'regoing to want to reach out to us I'm going to give you a phone number, thephone number is 781-922-4418. Let me give that to you one more time781-922-4418. If you're not in the mood to pick up the phone, then you can goto info dot freedom venture.com and then put slash palamas palamas. Now, I'mextending an invitation to all of you listening to this show, to come with usto polana Steakhouse on November the seventh, I will buy you lunch. It's aluncheon, investor presentation, where you no longer have to close your eyesand picture and imagine will now show you exactly what it is that we're doingand how we do it. We'll talk a lot about the tax advantages that we as realestate investors have been blessed with in our careers, to be able to shelterexposure to the IRS take take that off a moral ground and put it on a realityif you want to. If you start to look at what the government has done with ourmoney, it hasn't been the best business model in my opinion. So if I can keepmore capital on my side of the equation, I can do more good works with thatcapital, I believe that the government can. So we talked a lot about the taxadvantages. 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, velocity capital, so info dot freedomventure.com slash polana. Pick up the phone, call us at 781-922-4418. And we'llbe able to be able to bring you into into politeness. It will be from 12 tothree. We may very well end earlier than three o'clock. If we answer all of thequestions that the attendees have. I will full disclosure. All right 01 hundredpercent transparency. We are COVID compliant. Danny Mola and his wife Danielle,our very dear friends of mine. We had a pretty intense conversation and wetalked about, you know, the COVID landscape. They follow all of the guidelinesthat are laid out by the great state of Massachusetts. Therefore, we anticipateonly nine family units if you will, attending this event 18 bodies at the atthe luncheon so if you want to learn more, and get some of this This insideinformation I would love to meet you personally I'll be presenting, Kevin willbe Skyping in from Tampa. Walter will also be Skyping in. We also get a chanceto meet Eric Wilson at chief Operations Officer here at freedom ventureinvestments. So one more time info dot freedom venture.com slash palamas 78192to 4418 Thanks for listening every Saturday from 12 to one o'clock 104 pointnine no Sure. I'm your host Dave see my star flip in Boston on a&e and CEOof freedom. Venture investments Catch you next week and the securities being

 

Intro Voice Over  1:00:45

offeredare under an exemption provided by sec regulation D rule 506 c only accreditedinvestors who meet the SEC regulation d 501. accredited investor accreditationstandard often provides suitable verification of accredited status may investinto these offers any historical performance data represents past performancepast performance does not guarantee future results. Soon again next Saturday atnoon for real estate revealed hosted by Dave Seymour, the star of AES live inBoston and CEO of freedom venture investments in Denver.