Ep #594 – MFRS – Financial advisor “saw the light” on Multifamily investing
Warrior Paul Hassebroek developed a love of entrepreneurship at an early age, growing up working in a family-owned repair shop in rural Iowa where his parents owned several rental homes. His portfolio currently holds 521 units, all in a sponsor/GP capacity.
Here’s some of the topics we covered:
- Work life balance
- The secret to raising money
- How to build your investor network when just starting out
- How to work with a Family Office
- The advantage of being with like minded people
- The importance of being resourceful
- Vision boards
- Know where you are going
For more information on our guest, please visit:
Full Transcript Below:
Rod: Welcome back to Multifamily Rock Stars. So as you guys know, this is where we interview people that are crushing it in this business and we show you the inside scoop into how multi-family investors are not just creating massive success in their businesses, but also in their lives. And it’s also, as always, rather, I’ve got my co-host, the director of my massive action team for my Warrior Mentorship Program, Mark Nagy on the call. Mark, what’s up with you, bro?
Mark: Hey, not much Rod. I’m– for people listening. Just keep an eye out on this podcast. We have got so many good episodes coming out over the next few weeks. And so just keep refreshing and excited to add another good one here today.
Rod: Yeah. And let me say this before I introduce Paul. You know, we’ve got a couple of boot camps coming up, and one of them is virtual and one of them is live. And so I decided, you know, I’m not sure I’m going to continue to do the virtual ones because I love the live ones so much. And so we’re doing a two for one on both. So one is and this episode, you’ll have plenty of time to do both. August 28th and 29th is a virtual boot camp. And then the live one is in Orlando, December 3rd, 4th and 5th. And so you know it’s a hell of a deal 297 for both of them, which is cheaper than most people charges for one. And so kind of a no brainer. And if you’re interested in that, text “Rod in Orlando” to “72345”, or you can just go to “rodinorlando.com” and it’s got the two for one deal there. So let me introduce my friend Paul Hassebroek. And now Paul was already a pretty significant success in life. He’s been a financial planner and been in the family office field. And, you know, and he’s done a lot of private equity and real estate projects. And when he came into the Warrior program, he had over 120 doors. Now he’s done $85 million worth of projects. And he’s in 521 GP now. But Paul’s a great guy, super motivated and excited to dig in with him. Paul welcome, brother.
Paul: Thank you. Thanks for having me.
Rod: Yeah, let’s have some fun today, so I kind of glossed over your bio there. Could you give a little more meat and just talk about your progression into this business and–
Rod: Do a little better job than I did?
Paul: Yeah, no, I’m from the Midwest and I had a financial planning business there for 15 years that sort of morphed into a family office practice. What we were doing a lot of different work for high net worth families, including due diligence on private equity stuff. And 2016, I helped put a deal together on our first multi-family project and was instantly hooked on the asset class. So I ended up exiting that business in 2019 to pivot full-time into commercial real estate. And I’ve just been focused on multi-family since that time frame.
Rod: How long ago did we meet? Where did we connect and when did you get–
Paul: You know, I ended up finding the Warrior Program because I was trying to listen to a bunch of different podcast and I found this podcast. And you know, your message really resonated with me. I was trying to build a business, you know,talk about designing your life and building a business that gives back to you what you want. So that was how I ended up going to the first conference and joining the program.
Rod: Was that virtual or a live one?
Paul: That was a live one. I actually signed up for the program in 2019. And so I think you were in– we went to Baltimore–
Rod: Baltimore. I just you know, I like to vicariously remember the events. That’s why I asked the question because I miss it. I’m so, freaking excited about the Orlando coming up.
Paul: Me too brother. I cannot wait to be in person again.
Rod: Alright. It’s going to be a big one, I think, because there’s a lot of pent up demand. The goal is a thousand people. And, you know, I usually reach my goal, so I’m pretty excited about it. But so anyway, did I cut you off when you’ve finished with your– what you were saying?
Paul: Yeah. no, I just I ended up moving to South Florida where I’m based now, and I went through the Warrior program in 2019 and I’ve been focused on multi-family acquisitions here in the Southeast and in the Midwest since that time.
Rod: Where in the Midwest?
Paul: I’m from Iowa and so we’ve got assets in Iowa and Wisconsin.
Rod: Oh fantastic markets. We have a lot of warriors up there too. That’s awesome. So let me ask you this. You– what you’ve done, it’s been a little bit different. In fact, you know, I’m always touting that this thing’s a team sport and you have kind of created your teams one-off asset specific. Is that correct?
Rod: Rather than putting together a team to go after deals, one right after another, as you encounter an asset, you put together the team to take down that asset. Yes?
Paul: Yes. Yeah. You know, I had a partner in my previous business and I just felt like for right now, I wanted to really what I got out of the program was really the due diligence side of it, like especially the physical stuff, because I came in from the investment analysts in capital raising side of it. And so I’ve really focused on that part of it. And you know, so far I’ve done four deals. And each time I just– I’ve had different partners on each deal.
Paul: It’s definitely a team sport or as you say, I just haven’t found like my exact team that we’re out replicating deals. Yeah.
Rod: Long term team. Yeah, got it.
Paul: Still dating.
Rod: But you are looking for it then. So you would love to have you know, a core nucleus of you and one or two other people. So you’re not killing yourself for every deal. Is that an accurate statement?
Paul: That’s very accurate. I don’t think I can achieve the scale that I’m seeking completely on my own.
Rod: Right. Okay, so, you know, I don’t remember. Forgive me. What’s your personal situation? Married, kids? Just refresh my memory.
Paul: I’ve got a daughter and I’m dating someone right now, so.
Rod: Okay. Well.
Paul: I’m in a relationship.
Rod: I was leading my– I was leading up to another question and that was, what have you had to sacrifice to achieve the success that you’re blessed to have so far?
Paul: That’s a really hard question.
Rod: If anything–
Paul: Well, I think in my situation, a lot of sacrifice occurred with my previous business and that business sort of set me up for where I am right now. And so you know, what I took away from that was– I wouldn’t say I was exactly burned out, but I sort of felt like I was running too hard. And so when I was talking about work life balance, like what I’ve been trying to do right now is really build out the systems, so that this business can grow without just absolutely killing myself.
Rod: Yeah, good. Yeah. Good.
Mark: So I want to dive into money raising here because I know that’s a big part of your background and what you do here. And frankly, that’s probably the number one biggest concern that I get from people jumping into this business is how am I going to raise the money? So, where do you even think just people should start, you know, when getting started raising money? Where should people start when they’re looking to raise money for their deals?
Paul: I think the secret to raising a lot of money is having a lot of experience and success. And so I would imagine for Rod, it’s a lot easier than it is for me. For people just getting started, I think you end up starting with your personal network. I started by going through my address book on my phone and contacting everybody that I was connected with professionally on LinkedIn, which is simple messages reaching out to say, here’s what I do. If I had a real estate investment that looked really interesting, would you take a look at it for your own portfolio?
Rod: Good message.
Mark: Did you find that to be successful?
Paul: Yeah, very successful. That’s how I got to where I am today.
Rod: Wow. Well, there’s a great thing.
Paul: The thing was that I had a network with that family office business that we sold. Right? But when I sold it, I got into a non-compete situation where I can’t talk to any– to my best investors. So I when I started in 2019, I really started it you know, at zero and really focused it. So last year when I had some downtime during covid, I really amped up my LinkedIn marketing and I think I started with like 300 qualified investors in my CRM system and I wanted to grow it to 800 by the end of the year. And I think I landed at like 450. So I came up short of my goal, but I increased by 50% the number of people that I can talk to about a deal when I have it.
Rod: You shoot for the stars. If you hit the moon, you’re still doing okay, right. And that’s what you’ve got to do. I love it. So that was a great tip on the LinkedIn just outbound message strategy. That’s super powerful. Now, did you– let me ask you this. Did you sort through those investors to select the ones you were going to target? And if so, how?
Paul: That’s– I did sort through them. The criteria was a little bit profession focused. So I had a lot of connections to medical professionals, so I kind of focused on that as one of my niches and then just anybody else that I knew was a you know, business owner or maybe they had posted about investing before. So I did try to qualify people a little bit.
Paul: And there are ways to automate LinkedIn. But I didn’t do that. I chose to just organically sit down like each night and just kind of pluck away at sending out a bunch of DM’s and trying to contact people and you know engaging. Getting them to opt in that way.
Rod: I will tell you, I think that’s much more effective. That’s how I built my podcast. I literally sat and I messaged everybody on my Facebook profile. People had maybe seen three years ago, four years ago. And I said, hey, I’m sure you remember me, blah, blah, blah, and just started a real conversation and it worked. So let me ask you this, because you’ve got some family office experience, and it’s been a while since I’ve had the family office gurus names escaping me right now. And it’s embarrassing. But you know, what I’m talking about the guy that runs the family office club?
Paul: Yeah, down here, he’s in Miami.
Rod: I remember his name though.
Paul: Is that Richard. Richard Wilson.
Rod: Richard Wilson, thank you. Thank you. I’ve spoken to my mastermind, everything else. But since you’ve got experience in that and I know you just did a deal with a family office, can you talk about how that happened and maybe give some tips or strategies for someone? Probably not on their first deal, obviously, but unless they align with someone that’s done some deals like you’ve done. How can you get a family office interested and how might you approach them and just some tips there.
Paul: So I think, first of all, what is a family office? So there’s a lot of financial advisers around the country that you can reach out to and try to introduce yourself. And I think a lot of them are their hands are tied with their compliance departments. So I had less success there. A family office is a family or a group of families that are wealthy enough that instead of hiring a CFP, you know,they build their own financial advisory practice for their own wealth. And I connected with them through LinkedIn, through associations. There’s –and at least around me and there’s a couple of different groups and they have like networking events or you can sponsor conferences.
Rod: And Richard does as well. I know that, but so there’s others as well. Then, okay.
Paul: Yeah he has one in Miami and then there’s one– there’s a separate family office group in Palm Beach that I’ve gone to some of their events for. And so a lot of it is just talking, talking to– it’s almost like– for me it’s been asking for referrals. So when you ask someone, do you ask someone who’s already written a check for a referral? Most of the time they’ll like their head, goes to who they know that’s wealthier than them. You know, they don’t– they want to– I don’t know why this is, but if you ask someone for a referral, you know, they’re going to turn you on to someone that they perceive as successful because they want to give you a good lead. And so the family office, we did the deal with them on the Fort Lauderdale acquisition earlier this year. I got introduced to them, started talking about what they were looking for. The advantage to me is that there’s these institutional investors like family offices that can write bigger checks. So you know, having the ability to find bigger pools of money allows me to grow faster.
Rod: Sure. And, you know, the thing that you need to be aware of, guys, is if you’re going to deal with an institutional investor or private equity firm, a family office, you’re going to give up something. It could be some control, some decision making. You could give up a piece of the general partnership, piece of the GP. And I know you know, that that’s very common. And just expect that they’re going to want a little more if they’re putting their stroke in a big check. So that’s important.
Paul: I think the sponsor needs to know what they need out of the deal because sometimes there’s things attached to that check that make it not worth it. And so you have to know what you’re–
Paul: What you’re getting yourself into and what you’re willing to do.
Rod: One of the assets we bought in Kentucky, the guy didn’t want to sell it. It is a great asset that we owned that we’re I think we well, I don’t want to say what I was about to say. A great asset that we own and the– I lost my train of thought because that I almost said something, but– the seller had to sell because he had private equity involved and made himself and he didn’t want to sell. So there’s an example of that control that you want to be careful of. You just read the fine print and be very, very clear on what you’re getting as well as what you’re giving away in that. Do you agree Paul?
Paul: I agree completely. Yeah.
Rod: Love it.
Mark: I know when we were talking earlier, you had mentioned that this year, right after covid and everything’s kind of open back up, you’ve been crushed. And I think you said over three 350 doors just this year.
Mark: I love it.
Paul: Yes. Things are going great. Yeah. I got to keep going.
Mark: Yeah. What’s got you excited looking into– to next year. Right, in 2022? What’s got you excited about the market here. Looking forward.
Paul: I think for me personally, I want to keep doing what I’ve been doing, I want to keep replicating what’s worth, I do have a couple of people working for me now on a contract basis, and that’s helping things go faster. So I feel like I’m getting my feet underneath me and getting some positive momentum where I’m at. I would love to buy some stuff locally in South Florida, but the market is extremely, extremely challenging to find deals. So I’m trying to move a little bit further north into– we did a deal in College Park, Georgia in March. And so we’re looking at some stuff around there in South Carolina. So for me, it’s focusing on kind of the basic blocking and tackling with my team, like making sure I’m underwriting deals quickly and getting offers out to get stuff under contract and then using, like you know, I was talking about, a system to help get the rest of the transaction going, so that I’m free to focus on finding the next deal and raising capital.
Rod: Got it. Now, I know that you are again, came with a lot of experience to our Warrior Program, and I think you mentioned– I don’t know if you did it while we were recording or not, that the biggest value for you was the due diligence, I believe, and having access to your coach to run questions by and I know you had a kick-ass coach in our team. Is that an accurate statement?
Paul: Yeah. You know, like I said, the first three multi-family deals I did. I came in as a partner responsible for raising the capital. But a really good partner, developer partner was they were new construction stuff. And you know, I didn’t know– there were some parts of that where I just didn’t know what I didn’t know because he had always placed the debt in and you know, he had put arranged for all the debt. I was arranging all the equity. You know, we had our different roles there. And then when it came to existing, you know, what I was looking– really looking forward helped with was just what to look for and you know, what do we need to do when we’re examining a building? What do we need to watch out for in the contracts and vendors and et cetera.
Rod: So it wasn’t just the due diligence, it was actually the deal, the deal flow and managing the deal through to closing as well.
Paul: Yeah, it was everything from once they, I had– when I started, I had zero experience with what happens from the point they accept the LOI until we actually close. I mean, I have a lot of experience operating businesses and systems and feel really confident about turning these buildings around and having a good experience once we close. But I didn’t have any experience with it before I joined the program.
Mark: Is there any–I was gonna say, were there any memorable hurdles in that process that you could share with the people listening that you remember?
Rod: I don’t have that much time. We probably don’t have that much time. Right, Paul?
Paul: Yeah. The answer is it’s been different on every deal, like something always pops up. And I had my last deal. The whole process to try and get it close was just a giant headache. It felt like I was constantly trying to keep everyone on the same page. And so I have this person working for me now, and her job is to manage you know,all of our acquisitions in the closing part of it. And we’re in the middle of an acquisition right now. And it’s been a breeze. She’s kind of like, you know, this isn’t that–
Rod: She’s like a closing coordinator–
Rod: And just making all the requests like I just saw in my email. I just got a request for some more documents on the San Antonio deal we’re doing. And so it’s doing that stuff and following up on that. And that’s awesome. Well, guys, by the way, if you’ve heard us talk about the Warrior Program, if you’re interested in applying for that, text the word “CRUSH”, we like that word because we want to help you crush it in this business. And frankly, our warriors are crushing it. We’re approaching 46,000 units owned and I’ve only been teaching for four years, which I’m super proud of. So text the word “CRUSH” to “72345” to apply for the program. Again, that’s “CRUSH” to “72345”. And then we’ll see if you’re fit for us and vice versa. You can see if we’re fit for you. But I’m really proud of what we’re accomplishing. So let me ask you this. You know, what words of wisdom would you share with an aspiring investor? And there’s lots of them that listen to and watch this show on YouTube and all the other platforms. But what would you tell them, Paul?
Paul: I think having you know, people to talk to that are interested in the same things, you are so valuable. People that are going through the same experiences. My favorite quote is that Jim Rohn quote about “You are the average of the five people you hang around with”. And so I think even if I don’t have a– like a permanent long term partner right now. I definitely have a lot of people I consider my partners. And I’ve really enjoyed some of the people I’ve met at conferences and through the program ,because I– some of the people we just talked about earlier, like I call them, to share ideas and say, hey, especially if they’re local. Have you seen this deal? What did you come up with? So it’s really valuable to share ideas and ask questions.
Mark: Well, I know you mentioned you had obviously this year, it’s been great for you, but you know, it’s not all been daisies and roses it sounds like. You’ve had some down times as well to where maybe deal flow hasn’t been as strong. Well, what in your opinion, what do you think is the biggest or most common reason for people failing in this business when they’re getting into it?
Paul: Actually, I don’t know, I think you have to have a certain amount of drive and you can’t give up and you have to be resourceful. So you may not have all the resources that you think you need, but it’s not always about resources. It’s about being resourceful. And sometimes that means putting your hand up and saying, hey, I need help. I’m trying to get this done. Have you ever run into this? I’ve texted Rod before and said, hey, on that family office deal. I said, hey, these guys want to write a big check, what do you think you know, and get a little nugget of wisdom from someone else who’s maybe seen something before. And there’s been deals. I had a deal fell apart last March when covid was starting. I had some investors bail and some partners didn’t get along with each other. And the whole thing kind of fell apart. And I was left with you know, no income after three months of work, wondering what am I going to do next? And I would just– via reaching out. We ended up getting our next deal under contract a couple of months later. And I had two new partners on that deal that I didn’t even know at the time that the previous deal fell apart just because I reached out and networked and ask for help.
Rod: Because you landed like a cat and you took action. You know, whatever it took. Let me ask you this. What questions do you think someone should ask themselves that are important if they’re considering this business? I don’t–we didn’t prep you for any of this.So you’re landing like a cat right now.
Paul: Yeah. No. You know, one thing I really like about your conferences and the program is when you take some time to think about where you’re going. Because I think if you get that vision and that’s actually– this is my one of my vision boards right here behind me, you know, when you it’s hung up so that I can see it every day. And I think when you know where you’re going, it’s easier to achieve what you want to achieve. So you know, the question you ask yourself is, do I have the right, especially for people that are married, like does my partner understand what I’m trying to achieve here? Are they supportive, do I have the right support system around me? And you know, am I going to see this through to the end?
Rod: Yeah, awesome answer.
Mark: Yeah, absolutely. Love that. So the last one here for you, Paul, for people listening that have not yet started. They’ve been listening to the podcast. They’re learning. They’re learning in 30 seconds or less. What’s one thing– what’s the message that you want to give to these people that haven’t yet started?
Paul: You have to take the first step. And I really think anybody can build the life that they want and achieve what they want to achieve. They just take that first step and start taking action. So when you take massive action, you get massive results. I’m a big student of Tony Robbins. I really believe in this mindset, mentality that helps you achieve what you want to achieve. And I have been listening to a whole bunch of podcasts because I didn’t know what a real estate syndicator was. You know, I came with this financial advisory private equity background. And I was immediately attracted to your message because I know you’ve implemented a lot of that. It’s not just about the material, you know, it’s about the–your belief system. And so being on your podcast was one of my career goals, something that I really wanted to achieve. And so this is a great honor for me. And I appreciate it.
Rod: Thank you, buddy. That’s awesome. That’s freaking awesome. So I can’t wait to hear what the next big milestone is for you, my friend. So make sure you email it to me.
Paul: I will.
Rod: All right. Well, take care, guys. We’ll see you later. Thanks, Paul. See you.