February 19, 2025 • 37 mins
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ABOUT DAVE SEYMOUR
Dave Seymour, a retired 16-year veteran of the Fire Service launched his Real Estate career during the last market crash, rapidly becoming one of the Countries top investors. Dave is considered a leading expert in commercial multi-family and ground-up development transactions. His success in business and Real Estate put him on the radar of A&E television network as well as multiple news organizations like CBS, ABC, CNBC,and FOX News.“FlippingBoston” aired on A & E for multiple seasons. He has helped accredited investors on their very first deal as well as guided large investment firms through complex transactions. Dave’s unwavering commitment to success is why investors seek his advice and choose to invest alongside his team at Freedom Venture Investments.
THIS TOPIC IN A NUTSHELL:
Dave's Journey from Firefighting to Real Estate Investing
Foreclosure, Wholesaling and Flipping
Capital Raising Strategies
Operational Structure and Management
Market Trends and Dynamics
Rent Increase Strategies and Market Insights
Discretionary Spending
Investor Engagement and Market Exploration
Personal Experiences and Career Transitions
Connect with Dave
KEY QUOTE:
“It goes back to the firefight. Looking to your left and right and knowing that you've got a massive skill set and capacity around you. One of the things I learned a long time ago was don't be the smartest person in the room because if you are, you're in the wrong room. “
SUMMARY OF BUSINESS:
Freedom Venture - We are a private equity real estate firm offering investment opportunities for accredited investors. We specialize in multifamily acquisitions and development.
ABOUT THE WESTSIDE INVESTORS NETWORK
The Westside Investors Network is your community for investing knowledge for growth. For real estate professionals by real estate professionals. This show is focused on the next step in your career... investing, for those starting with nothing to multifamily syndication.
The Westside Investors Network strives to bring knowledge and education to real estate professionals that is seeking to gain more freedom in their life. The host AJ and Chris Shepard, are committed to sharing the wealth of knowledge that they have gained throughout the years to allow others the opportunity to learn and grow in their investing. They own Uptown Properties, a successful Property Management, and Brokerage Company. If you are interested in Property Management in the Portland Metro or Bend Metro Areas, please visit www.uptownpm.com. If you are interested in investing in multifamily syndication, please visit www.uptownsyndication.com.
#RealEstateInvesting #RealEstate #CreatingWealth #FireFighter #FireFighting #CommercialRealEstate #Foreclosure #Multifamily #MultifamilyInvesting #FreedomVenture #GroundUpDevelopment #Construction #CapitalManagement #RaisingCapital #Wholesaling #Flipping #InvestmentOpportunities #MarketConditions #FreedomVenture #Florida #Acquisition #RealEstateInvestments #InvestmentOpportunities #SteadyCashFlow #LatestPodcastEpisode #PassiveWealth #JoinTheWINpod #DealDeepDive #WestsideInvestorsNetwork
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Episode Transcript
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Intro speaker (00:03):
Welcome to the Westside Investors Network. Win,
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Trent Werner (00:40):
Welcome back to another episode of the Deal Deep
Dive segment on the WestsideInvestors Network podcast. I'm
your host, Trent Werner. In thissegment, our featured guests
will share their unique storieson a specific deal they've
invested in. We will dive deepinto finding the deal, financing
the deal, writing an offer, andthe due diligence. Do us a solid
and smash that subscribe button,leave us a rating, and share
(01:03):
this episode.
And now let's dive deep. Welcomeback to the Westside Investors
Network podcast. I'm your host,Trent Warner. On today's
episode, we're joined by DaveSeymour of Freedom Venture
Investments. Dave's gonna sharehis story about how he turned a
sixteen year firefighting careerinto a wholesaling and house
flipping business that has nowcatapulted into a large
(01:23):
multifamily syndication thatfocuses on development.
We're also gonna hear about howDave's career as a firefighter
has transitioned into his realestate career and the skills
that he took from his previouslife into the current one. Now
let's welcome Dave Seymour.Alright. Dave Seymour joining us
today. Dave, thanks so much fortaking the time to chat with us.
Dave Seymour (01:44):
Yeah, Trent. I appreciate it, man. Let's, let's
get down and dirty as we say.I'm into it, man. Whatever you
need.
Let's go.
Trent Werner (01:50):
Well, Dave, I know, you weren't in real estate
for your entire career. I dothink it would be interesting
for our listeners to hear howyou went from something
completely not unrelated to realestate and then got into real
estate. So what'd you do priorto becoming a big time real
estate investor?
Dave Seymour (02:08):
Yeah. Look, man. I, I followed the the the
formula that was given to me bymy father, right, which was I'm
from a working class backgroundin in the East End Of London.
And, you know, I was always toldas a kid you just work hard,
right? You trade your time forsomebody else's money.
Then in a set of circumstances,I immigrate to The States. I was
a young gun, I was only 20 yearsold following my, the love of my
(02:31):
life at the time. I was anAmerican, so I followed her all
the way to the other side of theworld. And, a friend of mine
said to me, he said, why don'tyou get one of those government
jobs, Dave? And I'm like, Leon,what are you talking about?
And, I started testing for, youknow, a couple of different
government positions. I I wasalways attracted to the
camaraderie of of police workand and firefighting. And, you
(02:54):
know, I was blessed in, 1997. Iwas hired onto, the Lynn Fire
Department here inMassachusetts. I live just North
Of Boston.
And, you know, I spent sixteenyears in that career, man, and I
I freaking loved it. I did,brother. I I tell you, there
there's something about, youknow, the the rush, obviously.
You've gotta be a little bitbroken upstairs to to do to do
(03:17):
that kind of work. Right?
But a lot of the parallels fromfirefighting, you know, are are
applicable in real estateinvesting today, and we'll we'll
unpack that in a minute. But,yeah, sixteen years in the fire
department, and, I workedconstruction on my days off, as
most firefighters do. Littleplug to your local fire
department. If you need aplumber, an electrician, a GC, a
(03:40):
deck man, a brickie, a bookienot a bookie. If you need any of
those those, career, you know,careers or services, give the
guys at the firehouse a shot.
But I went construction on mydays off, and it was that
exposure to the constructionworld that eventually led me
over to, to real estate. So thatwas kind of the transition. But
(04:00):
Firefly was awesome, man. Infact, I was paramedic in the
city. You know, if you're gonnado the job, do the job.
Don't be a lookie loo. You knowwhat I mean? Don't be on the
outside looking in if you canget deep in the in the mud. And,
we we we fought some good rips.We saved a few lives.
We lost a few. But, you know, Ireally enjoyed it. I enjoyed,
(04:23):
like, again, the camaraderie,looking to the left and the
right and knowing that you cango to war and be okay, you know?
So that was important.
Trent Werner (04:30):
And did you because I mean, you already
talked about how a lot offirefighters have something else
that they're doing at the sametime. Did you I know you worked
construction, but did you startinvesting in real estate when
you were still firefighting?
Dave Seymour (04:41):
Yeah. Yeah. Again, long story short, I know time is
tight, but, I was, I was goingthrough the financial crisis
really kicked me in the teeth,because I I I I did everything
this what everybody else did. Iwas a sheep. I'll be I'll be
frank with you.
Right? Four zero one k's,government pensions, do the
right thing, blah blah blah blahblah. But I I didn't have a lot
(05:03):
of, financial literacy behindme. Therefore, I was carrying a
lot of unsecure credit carddebt. So I'm working hours and
hours and hours and hours andhours, and I'm never catching up
because I'm playing the game thewrong way.
And, it took me to a point whereI was almost losing my primary
residence. I'm a man of faith,believe it or not, and I'm
screaming and shouting at godone day. And I'm like, dude, I
(05:24):
don't wanna lose my house. Iwork hard. I'm up to I was doing
three full time jobs at the endabout a hundred and twenty hours
a week, you know, family athome, and it it just sucked.
It really sucked. I was workinghard, not smart. And I'm
screaming and shouting, my god.And he's like, nothing. Silence.
I was in my f one fifty pickuptruck. Anyway, I turned the
(05:45):
ignition on, and a commercialcame over on the radio. Teach me
foreclosure. A free one and ahalf hour seminar coming to your
neck of the woods. And I'm like,okay.
And that was my road in. I was aa student. Now I was a student
in the seminar world, and I Isat in a class, and somebody
taught me the first strategy Iused, which was the wholesaling
(06:06):
strategy, controlling a piece ofreal estate with a contract.
And, I thought to myself, thatcan't be legal. It can't be
legal.
I don't even own the house. Whatare you talking about? And then
a guy said to me, hey, have youever had a primary mortgage on
your residence? I go, yeah. Hegoes, and did you get a notice
within two weeks saying thatsomebody else is now servicing
(06:26):
your mortgage?
I go, yeah. He said, they soldyour paper. That's all you're
doing as a real estate investoras long as you know how to do it
legally, honestly, andethically, and don't do it to
hurt anybody else. Don't be agreedy pig. And, you know, I
learned those techniques, andthose techniques, you know, pole
vaulted me forward and, youknow, I started I was known as
(06:48):
one of the top distressed realestate investors in in in my
market up here in Boston duringthe crash.
You know, we learned to shortsell properties. We learned loan
modifications. I ran a littleclean out business as well as my
construction business. I mean,you know, I got deep, man. I I
got I'm I'm a ground up guy.
You know what I mean? And,that's how I transitioned in,
(07:10):
And that's what eventuallyactually got me the exposure
with the TV show was because Iwas good at what I was doing, so
I started teaching it. And nowwhen you're teaching it, I'm on
the other side of that equation,and my my influences change.
Right? There's five guys in afirehouse, and we're all
complaining about the same crap.
But then you're in a room withfive millionaires, and one of
(07:31):
them was was even a, you know, abillionaire. Once you're in that
environment, you know, yourperspective changes
dramatically, and that that waspart of the trajectory from from
the fire department to be wherewe are today.
Trent Werner (07:44):
So how long did you specifically focus on
wholesaling before, I guess,getting into the flipping world
that you, you know, that had aTV
Dave Seymour (07:53):
show on? Look. But to be a a good wholesaler, you
gotta be an excellent houseflipper because it's it's
contractual. It's understandingthe numbers. Right?
Nothing worse than a than awholesaler who comes to you with
with garbage numbers. They don'tknow the construction numbers.
They don't know the repairnumbers. They don't know their
after repair value. They'reputting in offers on MLS.
They've got no marketing. Youknow, it's it's amateur hour. So
(08:16):
for me, I I was trained well anddeployed the systems that were
proven. So I probably spent sixmonths in the wholesaling game
before I locked out my firstflip. And then I actually, I'm
closing here if you're ready.
Today is January 2025, andthere's a check coming in the
(08:37):
mail today for for a flip, acontract that I flipped, in the
past twenty days. Right? So I'mjust I'm I'm not gonna walk away
from from my skill sets. Right?That that's that's just extra
cash coming into the company.
So you don't lose those skills.It's, taking those fundamentals
of underwriting and beingconservative and then transition
(08:59):
then into, you know, a flip, aretail flip, into maybe a small
multifamily, into a largermultifamily. And for me, there
was a, you know, a naturalprogression that that just took
off from there.
Trent Werner (09:12):
Yeah. And so now, obviously, you're you're still
doing wholesaling when you whenyou can, but you're also
focusing on multifamily now.Right?
Dave Seymour (09:19):
Yeah. So, you know, I don't I don't know that
everybody needs to, you know,have a trajectory and and invest
in some people get verycomfortable and overly
proficient, I think, at onestrategy. Like, I know guys have
been just wholesalers, forexample, in the Tampa market.
I'm up in Boston. But in theTampa market, you know, they're
(09:40):
flipping 50 to a hundredcontracts a year, ten to thirty
thousand a contract.
It's a solid, stable businessthat, you know, they just feed
off of that. But but that's ajob. Right? Mhmm. Because if you
don't flip a contract, if youdon't flip a house, you don't
make any money.
So that's still trading time formoney. Yeah. The ROI is a little
(10:01):
sweeter than sitting in thefirehouse waiting for an
overtime, but, you know, itstill works. So for me, I looked
at that, and then again, theinfluences I had around me, I
started to, spend time with theguys who were, you know, up to
500 doors, multifamily investingdoors, up to 10,000 doors. And I
(10:21):
started again to elevate andlearn a different strategy for
real estate.
So we went from the the flippingof houses to owning, you know,
our first two family to a fourunit property. I, progressed
that up to, about 80 to ahundred, I think we've had,
doors in Sanford, Maine of allplaces, which is like the, the
(10:44):
meth capital of of Maine. And,you know, it was some hardcore
multifamily investing in thosemarkets. You know, I got stories
that make the, your your beardgo from red to gray in in a
couple of minutes. And I meanbut, you know, all of all of
those scars from investing havea a dollar value attached to to
(11:04):
them.
You know what I mean? There's alot of value in making mistakes.
There's a lot of value ininvesting in in in tougher
properties and tougher rentaldemographics. Right? So, anyway,
we we went through that phase.
We liquidated out of that, spentsome time in the, capital side
of things. Hot money lending,private money lending. COVID was
(11:28):
was an incredible awakening forme personally because what it
did was was it took me out ofthe private lending well, not
private lending, but it took meout of the hard money lending
game because I was working witha line of credit from from Wall
Street, and then we were turningover multiple loans to the
database of house flippers andinvestors that that knew me and
(11:50):
knew of of my track record. Sothey were coming to us for
capital, but COVID took us outof the game because the line of
credit that we were working on,was was shut down. Kinda like an
awakening in the sense for me.
It was, okay. I gotta controlthe capital. If I'm gonna be in
this game at a higher level, ifI'm gonna elevate, I can't be
relying on, you know, the localbank that's too slow. I can't be
(12:13):
relying on somebody else's lineof credit. I wanna be in control
of that credit.
And, I I reconnected with afriend of mine, a guy by the
name of Walter O'Bicke, who's,about my age, you know, been a
warrior in real estate, beenthrough a few cycles. And, you
know, we came off, maybe six,eight weeks into the COVID BS,
(12:36):
and we're like, you know, what'swhat's the play, man? What's
next? And Walter said to me, hesaid, you know, I've been
raising capital for apartmentcomplexes and doing what's
called a repositioning.Repositioning meaning, you know,
you raise rents, you decreaseexpenses, maybe you do some
repair work on the assets, youincrease the net operating
income, that increases the valueof an asset.
(12:56):
He said, I've been doingonesies, twosies. I said, you
know, do you think you couldraise capital, and we'll we'll
escalate that. You know? We'llwe'll we'll begin to scale that
up. And that's what took uswhere we are today.
So today, you know, there'squite a few million in assets
under management. We do a lot ofground up development work now
down in Southwest Florida, CapeCoral, Fort Myers. Doing it down
(13:19):
there because I don't wanna bein, no offense, Oregon, I don't
wanna be in Massachusetts.Right? I don't wanna I don't
wanna be in the markets where,respectfully, again, to my state
annuals, where I'm not welcome.
You know? I don't I I I I'm aninvestor. Right? And I'm I'm a
steward of other people'scapital, so I have to invest it
where I know I can volatilizethat those investments, and
(13:41):
those are in markets that makesense for us. So, yeah, today,
that's where we're at, man.
I I mean, I'm wrapping up a$20.26 and a half million dollar
project, a hundred and sixstores in Cape Coral, Florida.
We're looking to get intooccupancy on that within the
next ninety days. There's alittle bit of a raise left on
that one. I got a nice 16 unitproperty that we're doing in
(14:03):
Rotunda West. That's about a 4and a half million dollar
project all in.
That's like a three equity,three x return on capital for
investors on that. And, we'rewe're transitioning into the
pickleball business because of asuccess circumstances where, you
know, you you think you'refalling in the doo doo doo kaka
and you come up smelling likeroses. So we're building a
(14:26):
pickleball facility in, in FortMyers. My partner's actually
signing some paperwork as wespeak, I think. He's in a
meeting today.
So, you know, we we go wherewhere it makes sense and where,
again, where I can put myinvestors in a position where
they can three times theirinvestment capital over a three
to five year hold period is iskind of the thesis by which we
(14:48):
work on today. So it's adifferent game. I'm I'm more in
the money game than the realestate game today, which is some
days that's good. Some daysthat's boring. A lot of ego in
money.
You know what I mean? All theseswinging you know what's
Thinking just because they canwrite a fat check. So you still
gotta put the money somewherethat makes sense. So we're just
so radical.
Trent Werner (15:07):
That's an interesting transition in
itself. You went from reallyhands on real estate focus to
the capital focus. I know youtalked about COVID, you know,
drying up the line of credit andthat sort of stuff. But
Dave Seymour (15:19):
Yeah.
Trent Werner (15:20):
Did you ever see yourself focusing more on the
capital side instead of the realestate side, which you had done
Dave Seymour (15:25):
for solar? No. I didn't. Not that you don't have
to be all in on just onecomponent of it. Like, the the I
the biggest kick I get is goingto our job sites and seeing the
the progression.
You know, seeing a hundredconstruction workers on-site
knowing that, you know, the workthat we've done in the
background feeds their families.That's that's a good feeling.
(15:48):
I've always I've always lovedthat part of it. So I still get
to taste that, but, you know, inthe capital raising world, I'm
gonna say it again, it's so egodriven. It's unbelievable.
And, you know, I'm at a place inmy life today where other
people's opinions are me andnone of my business. Yeah. So I
don't, you know, I don't I don'twalk in with any trepidation,
(16:09):
fade out, or insecurity. Right?I I go into those financial
scenarios with my palms up.
We always, you know, stress testour pro formas so that if
something goes in a directionthat we didn't anticipate, what
could it look like? Does itstill work? It's a different
world. And and to be frank withyou, my other partner is a
(16:30):
younger gentleman. His name'sEric Wilson.
He's 30 years old. He's probablythe smartest human being I know.
And, you know, he delves helives and breathes data. He
lives in that world. So whenhe's hanging out in the data
driven world, he, he comes upand I say to him, okay.
Show me the bot the bottom righthand corner of that spreadsheet.
Does it make sense? And he'slike, yeah. I go, okay. You
(16:52):
know, you trust.
Again, it goes back to thefirefight. Right? Looking to
your left and your right andknowing that you've got massive
skill set capacity around you.And one of the things I learned
a long time ago was don't be thesmartest person in the room
because if you are, you're inthe wrong room. Right?
Don't don't don't let that bethe case. So I I've learned to
listen as I've got older in mycareer, and, you know, listening
(17:14):
has offered me a lot of goodopportunities as well rather
walking in and talking all thetime, which is what I'm doing
right now.
Trent Werner (17:23):
So for this for this $26,000,000 deal,
obviously, you had to raisecapital for it. You had to place
a capital in the deal. Yeah.Yeah. How did that deal get
presented to you, and what madeyou ultimately I know you said
you stress test underwriting andall that, but what made you
ultimately wanna place capitalwith that deal?
Dave Seymour (17:39):
Yeah. Look, at the end of the day, it's the market.
Is it in the right market? Asstudies in Southwest Florida,
even with hurricanes and thechallenges that that market has
faced, it's still got massiveamount of population growth,
it's got rent growth, it's gotundersupplied construction. You
know, with the the state of theeconomy as it is today, with the
(18:02):
cost of single family housing,it's driven up the amount of
renters throughout the Floridamarket.
So number one, it's in the rightmarket. Number two, the Dyrd
acquisition made sense for us.We I think we came in at 14,000
per door and a hundred and sixunit build, which was a a great
price. That came throughrelationships. You know, again,
(18:25):
Walter being in that market forthirty years, he knows what's up
and what's not.
He knows who's facing somechallenges and who isn't. You
can't buy that experience. Youknow, that's just thirty years
of grinding it out. And then westarted looking at the, the
capitalization side of it and tobring investors in. So we raised
about 6 on that, put in a 19.6loan, and, you know, we're we're
(18:48):
right there now.
We we've got about a millionleft in the equity raise. It's
the last of the equity becausewe thought we could get some
better pricing at the beginning,you know, and that changes over
time. That just is what it is.But those are built in stresses
into into a pro form a to getyou to that finish line. But
even that last million dollarsthat's on the table right now is
still looking at a three equity,you know, a hundred thousand in,
(19:11):
get that hundred thousand backplus 200,000 over maybe a five
to seven year run.
Still not a bad investment whenyou look at what's out there.
And and at the end of the day,where is the money sitting? It's
sitting in sticks and bricks.It's tangible. You know what I
mean?
I used to I always used to jokein my single family days. I love
mold because I can see it, I cantaste it, and I know there's
(19:32):
value in it. You know what Imean? It's the same thing on on
this side. I can see the thestucco finish.
I can see, you know, the, thethe the work that's being done.
I could you know, when you seethe foundations going in,
etcetera, etcetera. So that'swhy it made sense and continues
to make sense in that market,and we're still aggressively
buying in that market as wespeak. And now here's a word
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uptownsyndication.com today tolearn more. So how does it work
with you guys or on theoperation side of the
construction side when you aregoing ground up?
Are you Yeah. Hands on with theconstruction and operations as
well, or do you have someoneelse that does that?
Dave Seymour (21:01):
Yeah. So the way we structure it out is is
there's what's called the GP andthe LP. The GP is the general
partner position, which is thethree of us, Freedom Venture
Investments. And then what we dois is Walter is in that market.
Eric is doing underwriting.
I'm up here in Boston raisingthe capital. So Walter is, feet
on the street in the marketprimarily, but what we do is is
we we then subcontract out. Wego into what's called an AIA, an
(21:24):
architectural, constructionagreement with we have a
national builder on thisparticular project. You know,
they make a little extra moneyfor managing the construction.
We come in and have to put outfires.
It is what it is. It'sconstruction. It's never
perfect. But there's a, youknow, there's a a pyramid, if
you will, of the GP at the topoverseeing the the operations.
(21:49):
And where we're at today is aswe move into stabilization and
renting up, we're working withHawthorne, which is a pretty
prominent management companythat'll manage the asset for us,
once we turn it over out ofconstruction through bridge
financing into, into permanentfinancing.
So it's it's managing peoplerather than, you know, picking
(22:10):
up a a chop saw. I I'd like topick up a chop saw every now and
again, but I think those daysare done. I wasn't any good on
the chop saw anyway. I don'ttell anyone.
Trent Werner (22:19):
So the, so the construction side of it, they're
not necessarily in the GP stack.They are they're on track is
being paid for their work. Yeah.Yeah. Yeah.
Right. In the GP stack. Okay.
Dave Seymour (22:30):
Yeah. Yeah. Yeah. Yeah. We maintain the GP stack,
GPLP.
Our investors come in, fill outthe equity position, the limited
partner position, and then we goout and secure the, the
construction financing to finishout the rest of the deal. So,
yeah, that that you know, it'sthe employees of the company, if
you will, to execute on thebusiness plan. Yeah.
Trent Werner (22:50):
And then once you once you get to that
stabilization period, I know yousaid you turn the asset over to,
you know, Hawthorne to manageit. How long are you so and then
you you get permanent financingon it, permanent debt on it. How
long are you holding that beforedisposition?
Dave Seymour (23:06):
Yeah. Great question. So most of the, ground
up construction opportunities inSouthwest Florida have a three
to five year run for dispositionand exit. Usually, two years to
build, eighteen months to build,another six, eight months to
stabilize, and then work thatproperty, work that asset for
(23:26):
the next three to five years tomaximize the net operating
income so that you can exit outat those targeted numbers that
you, you put on there at thebeginning. What we are seeing
now is little softening in themarket, nothing to to ring alarm
bells.
So maybe we'll exit out at aseven year horizon instead of a
(23:47):
five year horizon. Right. Thething around that is is our
investors don't want us bailingjust because we said it was five
years and then getting out ofthat asset at a reduced return.
Right? They're intelligentinvestors, accredited investors
who put up capital and know thatwe're doing a % of the work, and
they're taking about 70% of theprofits at the end of the day.
Right? So they're okay sittingin a little longer if we're
(24:10):
sitting in a cash flow. Now theother side of that is I might
get to CEO. Somebody from WallStreet shows up and says, I'll
buy that at a two and a half caprate, and we say, okay. And
we're selling now because now myinvestment yep.
See you. Right? And we're seewe're still seeing that in the
Florida market now. We're seeingsome of the the bigger players
from from Wall Street, somehedge fund type guys that are
(24:31):
coming in, and they still wannajust you know, we're seeing
these insurance companies withthe cost of insurance and
everything. They're coming inand they're saying, okay.
We need to diversify even moreand get this money working so
that we can make, you know, makeour payments that they need to
make. So, you know, they'recoming in, you know,
undercutting the market, if youwill, in the sense that they'll
come in at a lowercapitalization rate, which is
(24:53):
good for us, because if we'reunderwriting them at a, you
know, five, six cap, if somebodycomes in at a two and a half
capitalization rate, then hello.Thank you. Next. You know what I
mean?
I don't need to sit in there toto for an ego run. So, yeah,
that's that's how the game'splayed.
Trent Werner (25:09):
And when you when you guys I mean, obviously, you
run you run all yourunderwriting. What's your
projected, I guess, value atthat five year mark on something
like this?
Dave Seymour (25:18):
Yeah. So this one, pro form a's out. So we're all
in for '26. This pro form a andnow depending on the cap rate
and rent increases over thatfive year period of time, but
we're probably exiting out at a35 to 37 mil on that number. So
there's a there's a nice marginin there to get things right and
to also absorb things that couldgo wrong.
(25:39):
So that's that's the projectionon this one.
Trent Werner (25:42):
And have I know you said there was some
softening in the market. We'rewe're feeling it here, I think,
across the country's feeling it.Where have the cap rates gone
from when you first got youreyes on a deal this deal to, you
know, as we're talking today on01/10/2025?
Dave Seymour (25:57):
Yeah. That delta shifted. So, you know, when we
first came into this thing, caprates were, you know, retail cap
rates were probably aroundthree, three and a half. Now
they're at five. So, you know,if you're still buying at a
seven and your constructioncosts loaner cost still comes in
at a seven, you know, that 2%cap rate margin is more than
(26:21):
enough to to get you in a in astrong position.
So that's what we've seen. But,you you know, it's gonna be an
interesting year. You know, newnew new administration, new
mindset. Let's, you know, let'ssee where it goes. It's you know
what's crazy about this stuff?
Even at this scale, on thehighest scale, in the millions
of dollars, it's still thefundamentals. Buy it right.
(26:43):
Yeah. Buy it right. You know?
So many syndicators, they'recalled, have been wiped out in
the market because they were,you know, they were pro form a
in on BS numbers. Just becauseyou saw a 7% increase in rent
last year doesn't mean you couldperform around 7% for the next
ten years, year after year afteryear, you a hole. You know,
that's that's that's that'sstealing. You know what I mean?
(27:04):
And we saw we saw a ton of thatwhen, you know, when Biden
started throwing all the COVIDmoney into the market and, you
know, we thought we were gonnasee a different landscape than
than we saw.
You know, that just that justchanges. So, you know, don't get
over your skis as best you can.Don't get over your skis, but
don't walk away fromopportunities either just
(27:25):
because of fear. You know, havefaith in you. Have faith in your
underwriting and and your andyour projections are based on
fundamentals.
So we can take a little youknow, we started at our
underwriting for our rents forthis particular deal started at
$14.50, I think. We've seen thatrent move as much as from $14.50
to 2,100 justifiably, you know,based on market, analysis. And
(27:50):
now we're at, like, $19.80. Butit's still better than $14.50
when I started. You know what Imean?
But even if even if it softeneddown to $13.50, maybe it's not a
three x anymore. Maybe it's onlya two x. So the investor needs
to make a decision. You know, ifit softens to that point, am I
okay doubling my money in fiveyears? Right?
(28:12):
Am I okay doubling it in in, youknow, seven years? So it's a
case of really, really lookingat that to to determine whether
an investor wants to put capitalinto these kinds of alternative
assets. It's a decision. That'sall. But I tell you what, the
big players are doing it everysingle day, day in, day out.
You know? So I've always I'vealways philosophized along those
(28:32):
lines that there's no new andimproved idea. There's no secret
sauce. That's all that's alljust marketing BS. But there is
fundamentals.
You know what I mean? Therethere is just good solid
business, and do as much of thatas you can. You know, you get
the results.
Trent Werner (28:48):
So one question I have just more so out of
curiosity because Oregon Yeah.Portland Metro specifically has
some pretty strict rent control
Intro speaker (28:56):
rules Yeah.
Trent Werner (28:56):
Regulations and everything like that. And so
what we see here is a lot ofinvestors or property owners,
whether it's a single family or,you know, multifamily property,
we're just seeing max rentincreases. If something is below
market, we're hitting the maxalmost every single time because
that's all we can do. And if wedon't do that, then we get
caught behind the eight ballbecause we're playing catch up
(29:17):
until that unit finally turnsover.
Dave Seymour (29:20):
Yeah.
Trent Werner (29:20):
In Florida, in this market that you the markets
that you invest in, which aremore business friendly and I
guess free markets. What, whatdoes a a rent increase cycle
look like? Is it, you know, 7%?That's what we're gonna get. Is
it 3%, or is it 15% on a year?
Dave Seymour (29:37):
Three. No. We'll do it. We'll do a 3%. So we'll
pro form a out of the 3%.
Look. Tenants expect you toraise the rent every year. Don't
disappoint them. Okay? Don't letthem down.
You know what I mean? This is abusiness. But in return for that
3% increase, you better begiving them a lifestyle that
that they expect. Right? Qualityof servicing, you know, repair
(29:59):
servicing, customer servicing,you know, quality control
throughout the throughout thecomplex.
People and as we go into thenext phase, I think what we're
also gonna see is, you know,discretionary spending is gonna
reduce. It's still out thereright now. You know, people are
still eating steaks that theycan't afford. But when that
discretionary spending beginsbegins to reduce, statistically,
(30:23):
it's shown that then, you know,shelter is always gonna be the
first bill that's paid. Right?
No roof over your house overyour head. Forget about it. So
because it will focus in onshelter being number one,
that'll be a little bit of abump, I think, in rents because
it's the old supply and demandscenarios all over again. So,
you know, don't be aggressive,man. Don't be don't be stupid
(30:46):
with the numbers.
Okay? We'll we'll also lend orraise capital for other, other
GP deals that that we like. AndI can't tell you how many times
it goes through our underwritingprocess, and we look at each
other and we go, scumbag. Yes.You know?
It's not gonna work. They'regonna go raise the money from
(31:06):
somebody, but it won't be fromour guys. You know what I mean?
Because, you know, they're outthere right now looking for fee
structure rather thanperformance. So, you know, just
just beware.
Just beware. But, yeah, we don'twe don't go crazy on rent
increases. We use a 3% standardratio unless we've got data to
(31:26):
support less or more, and thenwe'll plug that in. Right? Same
on the expense ratio side.
So
Trent Werner (31:32):
And then when it comes time for at, you know,
actually doing the rentincreases, are you are you
telling your management company,hey. We're only raising 3%, or
if if they feel like they canget 7%, are you giving them the
free rein to do that?
Dave Seymour (31:46):
Yeah. Great question. So we all know that
turnover is the biggest expenseonce we're stabilized. Right? So
we don't wanna lose tenants.
So, you know, if we're in aposition where, you know, we
have our our quarterly meetingwith the with the management
company and they say we'reseeing, you know, aggressive
rent increases in the market,you know, we think 4%, four and
a half, 5% is is a fair rentraise at this time without, you
(32:11):
know, causing disruption withinthe within the cash flow, then
we come to to you know? Again,I'm I'm not the expert at
everything. Right? I managepeople. So why would I hire a
professional company and thenignore their advice?
You know? Yeah. I'm gonna q anda with them. I I wanna know why
you're giving me the informationyou're giving me and and what
(32:33):
it's based on. But at the end ofthe day, if they turn around,
they say, David, it's a four anda half in this market all day
long, then we'll go on a fourand a half.
If I say I want I wanna raise itto 5%, and they go, it's not
gonna work. We're only seeingthree and a quarter. We're only
seeing two and a half. What am Igonna do? Right?
Put put again, my my investors'capital has to be priority. That
(32:56):
capital for my investors, theyonly make their money if I'm
bringing in rents on theproperties. So, you know, that's
that's that's the formula allthe way down. Invest the capital
first. Service that capital thebest way we know how with the
right people.
And, you know, it works.
Trent Werner (33:13):
Yeah. And then I was talking to someone else the
other day about this speaking ofdiscretionary spending and it
Dave Seymour (33:19):
Yeah.
Trent Werner (33:19):
I mean, in our market, it seems like it is
kinda slowing down a little bitjust given our
Dave Seymour (33:23):
Yeah.
Trent Werner (33:23):
Our portfolio and things that we've seen. And
housing typically should comefirst, but in Oregon where you
have tenant favored laws, itthere's Yeah. You know, we see
all the time people are$1,015,000 dollars behind, and
then it takes us six months toevict them. And so they feel
like they're untouchable and allthese things. What are what are
(33:44):
your thoughts on thediscretionary spending and
what's causing people to, maybenot in your market specifically,
but across the country, notprioritize their housing expense
because of utilities going up,insurances going up, groceries,
all these other expenses thatare falling on them.
And, you know, I've seen peoplemake decisions where they could
(34:06):
care less about their housingexpense, especially here because
they know, you know, it's gonnatake them six months to get us
out.
Dave Seymour (34:12):
Professional tenants, brother. Professional
tenants. Been there, done that,climbed that mountain, got the t
shirt. Look, dude. Learn therules of the game from both
sides of the equation.
Learn the rules of the game fromthe investor side and learn the
rules of the game from theprofessional tenant side. Then
you make a decision where youwanna invest your capital and
who you wanna invest it with. Iwill I will not buy a
(34:33):
multifamily, residential unit inMassachusetts. I won't buy it.
Now I might train my 30 year oldson to get, you know, a a three
family to a two family to asingle so that he can live rent
free.
Simple little strategy. You'reonly dealing with, you know,
five tenants at the end of theday. But you know, for a
scalable business with investorcapital, you know, having
(34:56):
potential exposure, then I'mgonna go where it makes sense.
I'm going to the Texas market,the Carolina market, the Florida
markets. I'm going where, whereTrump's the where Trump's the
where Trump's the loves me.
You know what I mean? Ratherthan rather than where he
doesn't. That's that's all thepolitics will do today. Let's
just use that common sense,though.
Trent Werner (35:15):
And then when it comes to investing out of state,
I know you said you have bootson the ground in in Florida, but
if you're gonna go to adifferent market, maybe you
don't have boots on the ground.Are you still seriously
considering investing in thosemarkets?
Dave Seymour (35:27):
Yeah. I am. But here's here's the the advantage
that I personally might haveover somebody else is due to the
the years that we did on the,the TV show, that's attracted a
lot of attention. Right? So I Iknow that I could pick up the
phone and call a decent, solidinvestor who can give me
(35:47):
guidance, relationships inpretty much any market that I
wanted to invest in.
Right? So that's one advantagethat I have. But the other thing
is is I might go in and co GP ina market just to test the waters
and see what's going on and howit's operated. So I might I
might look at that strategy aswell. You know, it's not easy,
(36:07):
you know, property management,construction management, good
systems.
That's that's what's going tosave your ass at the end of the
day.
Trent Werner (36:15):
Well, Dave, I appreciate you sharing your
insights and your experienceswith us. Is there anywhere that
people can connect with you moreafter the show?
Dave Seymour (36:23):
Yeah. I'm, I'm old school. We've got a phone. It
actually rings and somebody willanswer it. God will.
It's (781) 922-4418. We areraising on a couple of deals
right now. So if you're anaccredited investor and you
wanna look at some opportunitieswith us, more than happy to have
a conversation with you. You canfind me on LinkedIn, or you can
go to, info, I n f o, atfreedomventure.com, freedom
(36:47):
venture Com. Or just hit us upon the website,
www.freedomventure.com.
You'll find me. You'll find me.I'm out there.
Trent Werner (36:57):
You're recognizable enough. Google
Google likes you guys enough.They'll they'll pop you up.
Dave Seymour (37:01):
There you go. There you go. Google. GTS.
Google that stuff, man.
You'll find me.
Trent Werner (37:06):
Well, Dave, thank you so much for joining us
today.
Dave Seymour (37:09):
Alright, brother. God bless. I appreciate you.
Intro speaker (37:11):
Thank you for listening to this episode of the
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(37:32):
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Thank you again, and enjoy yourday.
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or take any other action.
Trent Werner (00:40):
Welcome back to another episode of the Deal Deep
Dive segment on the WestsideInvestors Network podcast. I'm
your host, Trent Werner. In thissegment, our featured guests
will share their unique storieson a specific deal they've
invested in. We will dive deepinto finding the deal, financing
the deal, writing an offer, andthe due diligence. Do us a solid
and smash that subscribe button,leave us a rating, and share
(01:03):
this episode.
And now let's dive deep. Welcomeback to the Westside Investors
Network podcast. I'm your host,Trent Warner. On today's
episode, we're joined by DaveSeymour of Freedom Venture
Investments. Dave's gonna sharehis story about how he turned a
sixteen year firefighting careerinto a wholesaling and house
flipping business that has nowcatapulted into a large
(01:23):
multifamily syndication thatfocuses on development.
We're also gonna hear about howDave's career as a firefighter
has transitioned into his realestate career and the skills
that he took from his previouslife into the current one. Now
let's welcome Dave Seymour.Alright. Dave Seymour joining us
today. Dave, thanks so much fortaking the time to chat with us.
Dave Seymour (01:44):
Yeah, Trent. I appreciate it, man. Let's, let's
get down and dirty as we say.I'm into it, man. Whatever you
need.
Let's go.
Trent Werner (01:50):
Well, Dave, I know, you weren't in real estate
for your entire career. I dothink it would be interesting
for our listeners to hear howyou went from something
completely not unrelated to realestate and then got into real
estate. So what'd you do priorto becoming a big time real
estate investor?
Dave Seymour (02:08):
Yeah. Look, man. I, I followed the the the
formula that was given to me bymy father, right, which was I'm
from a working class backgroundin in the East End Of London.
And, you know, I was always toldas a kid you just work hard,
right? You trade your time forsomebody else's money.
Then in a set of circumstances,I immigrate to The States. I was
a young gun, I was only 20 yearsold following my, the love of my
(02:31):
life at the time. I was anAmerican, so I followed her all
the way to the other side of theworld. And, a friend of mine
said to me, he said, why don'tyou get one of those government
jobs, Dave? And I'm like, Leon,what are you talking about?
And, I started testing for, youknow, a couple of different
government positions. I I wasalways attracted to the
camaraderie of of police workand and firefighting. And, you
(02:54):
know, I was blessed in, 1997. Iwas hired onto, the Lynn Fire
Department here inMassachusetts. I live just North
Of Boston.
And, you know, I spent sixteenyears in that career, man, and I
I freaking loved it. I did,brother. I I tell you, there
there's something about, youknow, the the rush, obviously.
You've gotta be a little bitbroken upstairs to to do to do
(03:17):
that kind of work. Right?
But a lot of the parallels fromfirefighting, you know, are are
applicable in real estateinvesting today, and we'll we'll
unpack that in a minute. But,yeah, sixteen years in the fire
department, and, I workedconstruction on my days off, as
most firefighters do. Littleplug to your local fire
department. If you need aplumber, an electrician, a GC, a
(03:40):
deck man, a brickie, a bookienot a bookie. If you need any of
those those, career, you know,careers or services, give the
guys at the firehouse a shot.
But I went construction on mydays off, and it was that
exposure to the constructionworld that eventually led me
over to, to real estate. So thatwas kind of the transition. But
(04:00):
Firefly was awesome, man. Infact, I was paramedic in the
city. You know, if you're gonnado the job, do the job.
Don't be a lookie loo. You knowwhat I mean? Don't be on the
outside looking in if you canget deep in the in the mud. And,
we we we fought some good rips.We saved a few lives.
We lost a few. But, you know, Ireally enjoyed it. I enjoyed,
(04:23):
like, again, the camaraderie,looking to the left and the
right and knowing that you cango to war and be okay, you know?
So that was important.
Trent Werner (04:30):
And did you because I mean, you already
talked about how a lot offirefighters have something else
that they're doing at the sametime. Did you I know you worked
construction, but did you startinvesting in real estate when
you were still firefighting?
Dave Seymour (04:41):
Yeah. Yeah. Again, long story short, I know time is
tight, but, I was, I was goingthrough the financial crisis
really kicked me in the teeth,because I I I I did everything
this what everybody else did. Iwas a sheep. I'll be I'll be
frank with you.
Right? Four zero one k's,government pensions, do the
right thing, blah blah blah blahblah. But I I didn't have a lot
(05:03):
of, financial literacy behindme. Therefore, I was carrying a
lot of unsecure credit carddebt. So I'm working hours and
hours and hours and hours andhours, and I'm never catching up
because I'm playing the game thewrong way.
And, it took me to a point whereI was almost losing my primary
residence. I'm a man of faith,believe it or not, and I'm
screaming and shouting at godone day. And I'm like, dude, I
(05:24):
don't wanna lose my house. Iwork hard. I'm up to I was doing
three full time jobs at the endabout a hundred and twenty hours
a week, you know, family athome, and it it just sucked.
It really sucked. I was workinghard, not smart. And I'm
screaming and shouting, my god.And he's like, nothing. Silence.
I was in my f one fifty pickuptruck. Anyway, I turned the
(05:45):
ignition on, and a commercialcame over on the radio. Teach me
foreclosure. A free one and ahalf hour seminar coming to your
neck of the woods. And I'm like,okay.
And that was my road in. I was aa student. Now I was a student
in the seminar world, and I Isat in a class, and somebody
taught me the first strategy Iused, which was the wholesaling
(06:06):
strategy, controlling a piece ofreal estate with a contract.
And, I thought to myself, thatcan't be legal. It can't be
legal.
I don't even own the house. Whatare you talking about? And then
a guy said to me, hey, have youever had a primary mortgage on
your residence? I go, yeah. Hegoes, and did you get a notice
within two weeks saying thatsomebody else is now servicing
(06:26):
your mortgage?
I go, yeah. He said, they soldyour paper. That's all you're
doing as a real estate investoras long as you know how to do it
legally, honestly, andethically, and don't do it to
hurt anybody else. Don't be agreedy pig. And, you know, I
learned those techniques, andthose techniques, you know, pole
vaulted me forward and, youknow, I started I was known as
(06:48):
one of the top distressed realestate investors in in in my
market up here in Boston duringthe crash.
You know, we learned to shortsell properties. We learned loan
modifications. I ran a littleclean out business as well as my
construction business. I mean,you know, I got deep, man. I I
got I'm I'm a ground up guy.
You know what I mean? And,that's how I transitioned in,
(07:10):
And that's what eventuallyactually got me the exposure
with the TV show was because Iwas good at what I was doing, so
I started teaching it. And nowwhen you're teaching it, I'm on
the other side of that equation,and my my influences change.
Right? There's five guys in afirehouse, and we're all
complaining about the same crap.
But then you're in a room withfive millionaires, and one of
(07:31):
them was was even a, you know, abillionaire. Once you're in that
environment, you know, yourperspective changes
dramatically, and that that waspart of the trajectory from from
the fire department to be wherewe are today.
Trent Werner (07:44):
So how long did you specifically focus on
wholesaling before, I guess,getting into the flipping world
that you, you know, that had aTV
Dave Seymour (07:53):
show on? Look. But to be a a good wholesaler, you
gotta be an excellent houseflipper because it's it's
contractual. It's understandingthe numbers. Right?
Nothing worse than a than awholesaler who comes to you with
with garbage numbers. They don'tknow the construction numbers.
They don't know the repairnumbers. They don't know their
after repair value. They'reputting in offers on MLS.
They've got no marketing. Youknow, it's it's amateur hour. So
(08:16):
for me, I I was trained well anddeployed the systems that were
proven. So I probably spent sixmonths in the wholesaling game
before I locked out my firstflip. And then I actually, I'm
closing here if you're ready.
Today is January 2025, andthere's a check coming in the
(08:37):
mail today for for a flip, acontract that I flipped, in the
past twenty days. Right? So I'mjust I'm I'm not gonna walk away
from from my skill sets. Right?That that's that's just extra
cash coming into the company.
So you don't lose those skills.It's, taking those fundamentals
of underwriting and beingconservative and then transition
(08:59):
then into, you know, a flip, aretail flip, into maybe a small
multifamily, into a largermultifamily. And for me, there
was a, you know, a naturalprogression that that just took
off from there.
Trent Werner (09:12):
Yeah. And so now, obviously, you're you're still
doing wholesaling when you whenyou can, but you're also
focusing on multifamily now.Right?
Dave Seymour (09:19):
Yeah. So, you know, I don't I don't know that
everybody needs to, you know,have a trajectory and and invest
in some people get verycomfortable and overly
proficient, I think, at onestrategy. Like, I know guys have
been just wholesalers, forexample, in the Tampa market.
I'm up in Boston. But in theTampa market, you know, they're
(09:40):
flipping 50 to a hundredcontracts a year, ten to thirty
thousand a contract.
It's a solid, stable businessthat, you know, they just feed
off of that. But but that's ajob. Right? Mhmm. Because if you
don't flip a contract, if youdon't flip a house, you don't
make any money.
So that's still trading time formoney. Yeah. The ROI is a little
(10:01):
sweeter than sitting in thefirehouse waiting for an
overtime, but, you know, itstill works. So for me, I looked
at that, and then again, theinfluences I had around me, I
started to, spend time with theguys who were, you know, up to
500 doors, multifamily investingdoors, up to 10,000 doors. And I
(10:21):
started again to elevate andlearn a different strategy for
real estate.
So we went from the the flippingof houses to owning, you know,
our first two family to a fourunit property. I, progressed
that up to, about 80 to ahundred, I think we've had,
doors in Sanford, Maine of allplaces, which is like the, the
(10:44):
meth capital of of Maine. And,you know, it was some hardcore
multifamily investing in thosemarkets. You know, I got stories
that make the, your your beardgo from red to gray in in a
couple of minutes. And I meanbut, you know, all of all of
those scars from investing havea a dollar value attached to to
(11:04):
them.
You know what I mean? There's alot of value in making mistakes.
There's a lot of value ininvesting in in in tougher
properties and tougher rentaldemographics. Right? So, anyway,
we we went through that phase.
We liquidated out of that, spentsome time in the, capital side
of things. Hot money lending,private money lending. COVID was
(11:28):
was an incredible awakening forme personally because what it
did was was it took me out ofthe private lending well, not
private lending, but it took meout of the hard money lending
game because I was working witha line of credit from from Wall
Street, and then we were turningover multiple loans to the
database of house flippers andinvestors that that knew me and
(11:50):
knew of of my track record. Sothey were coming to us for
capital, but COVID took us outof the game because the line of
credit that we were working on,was was shut down. Kinda like an
awakening in the sense for me.
It was, okay. I gotta controlthe capital. If I'm gonna be in
this game at a higher level, ifI'm gonna elevate, I can't be
relying on, you know, the localbank that's too slow. I can't be
(12:13):
relying on somebody else's lineof credit. I wanna be in control
of that credit.
And, I I reconnected with afriend of mine, a guy by the
name of Walter O'Bicke, who's,about my age, you know, been a
warrior in real estate, beenthrough a few cycles. And, you
know, we came off, maybe six,eight weeks into the COVID BS,
(12:36):
and we're like, you know, what'swhat's the play, man? What's
next? And Walter said to me, hesaid, you know, I've been
raising capital for apartmentcomplexes and doing what's
called a repositioning.Repositioning meaning, you know,
you raise rents, you decreaseexpenses, maybe you do some
repair work on the assets, youincrease the net operating
income, that increases the valueof an asset.
(12:56):
He said, I've been doingonesies, twosies. I said, you
know, do you think you couldraise capital, and we'll we'll
escalate that. You know? We'llwe'll we'll begin to scale that
up. And that's what took uswhere we are today.
So today, you know, there'squite a few million in assets
under management. We do a lot ofground up development work now
down in Southwest Florida, CapeCoral, Fort Myers. Doing it down
(13:19):
there because I don't wanna bein, no offense, Oregon, I don't
wanna be in Massachusetts.Right? I don't wanna I don't
wanna be in the markets where,respectfully, again, to my state
annuals, where I'm not welcome.
You know? I don't I I I I'm aninvestor. Right? And I'm I'm a
steward of other people'scapital, so I have to invest it
where I know I can volatilizethat those investments, and
(13:41):
those are in markets that makesense for us. So, yeah, today,
that's where we're at, man.
I I mean, I'm wrapping up a$20.26 and a half million dollar
project, a hundred and sixstores in Cape Coral, Florida.
We're looking to get intooccupancy on that within the
next ninety days. There's alittle bit of a raise left on
that one. I got a nice 16 unitproperty that we're doing in
(14:03):
Rotunda West. That's about a 4and a half million dollar
project all in.
That's like a three equity,three x return on capital for
investors on that. And, we'rewe're transitioning into the
pickleball business because of asuccess circumstances where, you
know, you you think you'refalling in the doo doo doo kaka
and you come up smelling likeroses. So we're building a
(14:26):
pickleball facility in, in FortMyers. My partner's actually
signing some paperwork as wespeak, I think. He's in a
meeting today.
So, you know, we we go wherewhere it makes sense and where,
again, where I can put myinvestors in a position where
they can three times theirinvestment capital over a three
to five year hold period is iskind of the thesis by which we
(14:48):
work on today. So it's adifferent game. I'm I'm more in
the money game than the realestate game today, which is some
days that's good. Some daysthat's boring. A lot of ego in
money.
You know what I mean? All theseswinging you know what's
Thinking just because they canwrite a fat check. So you still
gotta put the money somewherethat makes sense. So we're just
so radical.
Trent Werner (15:07):
That's an interesting transition in
itself. You went from reallyhands on real estate focus to
the capital focus. I know youtalked about COVID, you know,
drying up the line of credit andthat sort of stuff. But
Dave Seymour (15:19):
Yeah.
Trent Werner (15:20):
Did you ever see yourself focusing more on the
capital side instead of the realestate side, which you had done
Dave Seymour (15:25):
for solar? No. I didn't. Not that you don't have
to be all in on just onecomponent of it. Like, the the I
the biggest kick I get is goingto our job sites and seeing the
the progression.
You know, seeing a hundredconstruction workers on-site
knowing that, you know, the workthat we've done in the
background feeds their families.That's that's a good feeling.
(15:48):
I've always I've always lovedthat part of it. So I still get
to taste that, but, you know, inthe capital raising world, I'm
gonna say it again, it's so egodriven. It's unbelievable.
And, you know, I'm at a place inmy life today where other
people's opinions are me andnone of my business. Yeah. So I
don't, you know, I don't I don'twalk in with any trepidation,
(16:09):
fade out, or insecurity. Right?I I go into those financial
scenarios with my palms up.
We always, you know, stress testour pro formas so that if
something goes in a directionthat we didn't anticipate, what
could it look like? Does itstill work? It's a different
world. And and to be frank withyou, my other partner is a
(16:30):
younger gentleman. His name'sEric Wilson.
He's 30 years old. He's probablythe smartest human being I know.
And, you know, he delves helives and breathes data. He
lives in that world. So whenhe's hanging out in the data
driven world, he, he comes upand I say to him, okay.
Show me the bot the bottom righthand corner of that spreadsheet.
Does it make sense? And he'slike, yeah. I go, okay. You
(16:52):
know, you trust.
Again, it goes back to thefirefight. Right? Looking to
your left and your right andknowing that you've got massive
skill set capacity around you.And one of the things I learned
a long time ago was don't be thesmartest person in the room
because if you are, you're inthe wrong room. Right?
Don't don't don't let that bethe case. So I I've learned to
listen as I've got older in mycareer, and, you know, listening
(17:14):
has offered me a lot of goodopportunities as well rather
walking in and talking all thetime, which is what I'm doing
right now.
Trent Werner (17:23):
So for this for this $26,000,000 deal,
obviously, you had to raisecapital for it. You had to place
a capital in the deal. Yeah.Yeah. How did that deal get
presented to you, and what madeyou ultimately I know you said
you stress test underwriting andall that, but what made you
ultimately wanna place capitalwith that deal?
Dave Seymour (17:39):
Yeah. Look, at the end of the day, it's the market.
Is it in the right market? Asstudies in Southwest Florida,
even with hurricanes and thechallenges that that market has
faced, it's still got massiveamount of population growth,
it's got rent growth, it's gotundersupplied construction. You
know, with the the state of theeconomy as it is today, with the
(18:02):
cost of single family housing,it's driven up the amount of
renters throughout the Floridamarket.
So number one, it's in the rightmarket. Number two, the Dyrd
acquisition made sense for us.We I think we came in at 14,000
per door and a hundred and sixunit build, which was a a great
price. That came throughrelationships. You know, again,
(18:25):
Walter being in that market forthirty years, he knows what's up
and what's not.
He knows who's facing somechallenges and who isn't. You
can't buy that experience. Youknow, that's just thirty years
of grinding it out. And then westarted looking at the, the
capitalization side of it and tobring investors in. So we raised
about 6 on that, put in a 19.6loan, and, you know, we're we're
(18:48):
right there now.
We we've got about a millionleft in the equity raise. It's
the last of the equity becausewe thought we could get some
better pricing at the beginning,you know, and that changes over
time. That just is what it is.But those are built in stresses
into into a pro form a to getyou to that finish line. But
even that last million dollarsthat's on the table right now is
still looking at a three equity,you know, a hundred thousand in,
(19:11):
get that hundred thousand backplus 200,000 over maybe a five
to seven year run.
Still not a bad investment whenyou look at what's out there.
And and at the end of the day,where is the money sitting? It's
sitting in sticks and bricks.It's tangible. You know what I
mean?
I used to I always used to jokein my single family days. I love
mold because I can see it, I cantaste it, and I know there's
(19:32):
value in it. You know what Imean? It's the same thing on on
this side. I can see the thestucco finish.
I can see, you know, the, thethe the work that's being done.
I could you know, when you seethe foundations going in,
etcetera, etcetera. So that'swhy it made sense and continues
to make sense in that market,and we're still aggressively
buying in that market as wespeak. And now here's a word
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Trent Werner (20:26):
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uptownsyndication.com today tolearn more. So how does it work
with you guys or on theoperation side of the
construction side when you aregoing ground up?
Are you Yeah. Hands on with theconstruction and operations as
well, or do you have someoneelse that does that?
Dave Seymour (21:01):
Yeah. So the way we structure it out is is
there's what's called the GP andthe LP. The GP is the general
partner position, which is thethree of us, Freedom Venture
Investments. And then what we dois is Walter is in that market.
Eric is doing underwriting.
I'm up here in Boston raisingthe capital. So Walter is, feet
on the street in the marketprimarily, but what we do is is
we we then subcontract out. Wego into what's called an AIA, an
(21:24):
architectural, constructionagreement with we have a
national builder on thisparticular project. You know,
they make a little extra moneyfor managing the construction.
We come in and have to put outfires.
It is what it is. It'sconstruction. It's never
perfect. But there's a, youknow, there's a a pyramid, if
you will, of the GP at the topoverseeing the the operations.
(21:49):
And where we're at today is aswe move into stabilization and
renting up, we're working withHawthorne, which is a pretty
prominent management companythat'll manage the asset for us,
once we turn it over out ofconstruction through bridge
financing into, into permanentfinancing.
So it's it's managing peoplerather than, you know, picking
(22:10):
up a a chop saw. I I'd like topick up a chop saw every now and
again, but I think those daysare done. I wasn't any good on
the chop saw anyway. I don'ttell anyone.
Trent Werner (22:19):
So the, so the construction side of it, they're
not necessarily in the GP stack.They are they're on track is
being paid for their work. Yeah.Yeah. Yeah.
Right. In the GP stack. Okay.
Dave Seymour (22:30):
Yeah. Yeah. Yeah. Yeah. We maintain the GP stack,
GPLP.
Our investors come in, fill outthe equity position, the limited
partner position, and then we goout and secure the, the
construction financing to finishout the rest of the deal. So,
yeah, that that you know, it'sthe employees of the company, if
you will, to execute on thebusiness plan. Yeah.
Trent Werner (22:50):
And then once you once you get to that
stabilization period, I know yousaid you turn the asset over to,
you know, Hawthorne to manageit. How long are you so and then
you you get permanent financingon it, permanent debt on it. How
long are you holding that beforedisposition?
Dave Seymour (23:06):
Yeah. Great question. So most of the, ground
up construction opportunities inSouthwest Florida have a three
to five year run for dispositionand exit. Usually, two years to
build, eighteen months to build,another six, eight months to
stabilize, and then work thatproperty, work that asset for
(23:26):
the next three to five years tomaximize the net operating
income so that you can exit outat those targeted numbers that
you, you put on there at thebeginning. What we are seeing
now is little softening in themarket, nothing to to ring alarm
bells.
So maybe we'll exit out at aseven year horizon instead of a
(23:47):
five year horizon. Right. Thething around that is is our
investors don't want us bailingjust because we said it was five
years and then getting out ofthat asset at a reduced return.
Right? They're intelligentinvestors, accredited investors
who put up capital and know thatwe're doing a % of the work, and
they're taking about 70% of theprofits at the end of the day.
Right? So they're okay sittingin a little longer if we're
(24:10):
sitting in a cash flow. Now theother side of that is I might
get to CEO. Somebody from WallStreet shows up and says, I'll
buy that at a two and a half caprate, and we say, okay. And
we're selling now because now myinvestment yep.
See you. Right? And we're seewe're still seeing that in the
Florida market now. We're seeingsome of the the bigger players
from from Wall Street, somehedge fund type guys that are
(24:31):
coming in, and they still wannajust you know, we're seeing
these insurance companies withthe cost of insurance and
everything. They're coming inand they're saying, okay.
We need to diversify even moreand get this money working so
that we can make, you know, makeour payments that they need to
make. So, you know, they'recoming in, you know,
undercutting the market, if youwill, in the sense that they'll
come in at a lowercapitalization rate, which is
(24:53):
good for us, because if we'reunderwriting them at a, you
know, five, six cap, if somebodycomes in at a two and a half
capitalization rate, then hello.Thank you. Next. You know what I
mean?
I don't need to sit in there toto for an ego run. So, yeah,
that's that's how the game'splayed.
Trent Werner (25:09):
And when you when you guys I mean, obviously, you
run you run all yourunderwriting. What's your
projected, I guess, value atthat five year mark on something
like this?
Dave Seymour (25:18):
Yeah. So this one, pro form a's out. So we're all
in for '26. This pro form a andnow depending on the cap rate
and rent increases over thatfive year period of time, but
we're probably exiting out at a35 to 37 mil on that number. So
there's a there's a nice marginin there to get things right and
to also absorb things that couldgo wrong.
(25:39):
So that's that's the projectionon this one.
Trent Werner (25:42):
And have I know you said there was some
softening in the market. We'rewe're feeling it here, I think,
across the country's feeling it.Where have the cap rates gone
from when you first got youreyes on a deal this deal to, you
know, as we're talking today on01/10/2025?
Dave Seymour (25:57):
Yeah. That delta shifted. So, you know, when we
first came into this thing, caprates were, you know, retail cap
rates were probably aroundthree, three and a half. Now
they're at five. So, you know,if you're still buying at a
seven and your constructioncosts loaner cost still comes in
at a seven, you know, that 2%cap rate margin is more than
(26:21):
enough to to get you in a in astrong position.
So that's what we've seen. But,you you know, it's gonna be an
interesting year. You know, newnew new administration, new
mindset. Let's, you know, let'ssee where it goes. It's you know
what's crazy about this stuff?
Even at this scale, on thehighest scale, in the millions
of dollars, it's still thefundamentals. Buy it right.
(26:43):
Yeah. Buy it right. You know?
So many syndicators, they'recalled, have been wiped out in
the market because they were,you know, they were pro form a
in on BS numbers. Just becauseyou saw a 7% increase in rent
last year doesn't mean you couldperform around 7% for the next
ten years, year after year afteryear, you a hole. You know,
that's that's that's that'sstealing. You know what I mean?
(27:04):
And we saw we saw a ton of thatwhen, you know, when Biden
started throwing all the COVIDmoney into the market and, you
know, we thought we were gonnasee a different landscape than
than we saw.
You know, that just that justchanges. So, you know, don't get
over your skis as best you can.Don't get over your skis, but
don't walk away fromopportunities either just
(27:25):
because of fear. You know, havefaith in you. Have faith in your
underwriting and and your andyour projections are based on
fundamentals.
So we can take a little youknow, we started at our
underwriting for our rents forthis particular deal started at
$14.50, I think. We've seen thatrent move as much as from $14.50
to 2,100 justifiably, you know,based on market, analysis. And
(27:50):
now we're at, like, $19.80. Butit's still better than $14.50
when I started. You know what Imean?
But even if even if it softeneddown to $13.50, maybe it's not a
three x anymore. Maybe it's onlya two x. So the investor needs
to make a decision. You know, ifit softens to that point, am I
okay doubling my money in fiveyears? Right?
(28:12):
Am I okay doubling it in in, youknow, seven years? So it's a
case of really, really lookingat that to to determine whether
an investor wants to put capitalinto these kinds of alternative
assets. It's a decision. That'sall. But I tell you what, the
big players are doing it everysingle day, day in, day out.
You know? So I've always I'vealways philosophized along those
(28:32):
lines that there's no new andimproved idea. There's no secret
sauce. That's all that's alljust marketing BS. But there is
fundamentals.
You know what I mean? Therethere is just good solid
business, and do as much of thatas you can. You know, you get
the results.
Trent Werner (28:48):
So one question I have just more so out of
curiosity because Oregon Yeah.Portland Metro specifically has
some pretty strict rent control
Intro speaker (28:56):
rules Yeah.
Trent Werner (28:56):
Regulations and everything like that. And so
what we see here is a lot ofinvestors or property owners,
whether it's a single family or,you know, multifamily property,
we're just seeing max rentincreases. If something is below
market, we're hitting the maxalmost every single time because
that's all we can do. And if wedon't do that, then we get
caught behind the eight ballbecause we're playing catch up
(29:17):
until that unit finally turnsover.
Dave Seymour (29:20):
Yeah.
Trent Werner (29:20):
In Florida, in this market that you the markets
that you invest in, which aremore business friendly and I
guess free markets. What, whatdoes a a rent increase cycle
look like? Is it, you know, 7%?That's what we're gonna get. Is
it 3%, or is it 15% on a year?
Dave Seymour (29:37):
Three. No. We'll do it. We'll do a 3%. So we'll
pro form a out of the 3%.
Look. Tenants expect you toraise the rent every year. Don't
disappoint them. Okay? Don't letthem down.
You know what I mean? This is abusiness. But in return for that
3% increase, you better begiving them a lifestyle that
that they expect. Right? Qualityof servicing, you know, repair
(29:59):
servicing, customer servicing,you know, quality control
throughout the throughout thecomplex.
People and as we go into thenext phase, I think what we're
also gonna see is, you know,discretionary spending is gonna
reduce. It's still out thereright now. You know, people are
still eating steaks that theycan't afford. But when that
discretionary spending beginsbegins to reduce, statistically,
(30:23):
it's shown that then, you know,shelter is always gonna be the
first bill that's paid. Right?
No roof over your house overyour head. Forget about it. So
because it will focus in onshelter being number one,
that'll be a little bit of abump, I think, in rents because
it's the old supply and demandscenarios all over again. So,
you know, don't be aggressive,man. Don't be don't be stupid
(30:46):
with the numbers.
Okay? We'll we'll also lend orraise capital for other, other
GP deals that that we like. AndI can't tell you how many times
it goes through our underwritingprocess, and we look at each
other and we go, scumbag. Yes.You know?
It's not gonna work. They'regonna go raise the money from
(31:06):
somebody, but it won't be fromour guys. You know what I mean?
Because, you know, they're outthere right now looking for fee
structure rather thanperformance. So, you know, just
just beware.
Just beware. But, yeah, we don'twe don't go crazy on rent
increases. We use a 3% standardratio unless we've got data to
(31:26):
support less or more, and thenwe'll plug that in. Right? Same
on the expense ratio side.
So
Trent Werner (31:32):
And then when it comes time for at, you know,
actually doing the rentincreases, are you are you
telling your management company,hey. We're only raising 3%, or
if if they feel like they canget 7%, are you giving them the
free rein to do that?
Dave Seymour (31:46):
Yeah. Great question. So we all know that
turnover is the biggest expenseonce we're stabilized. Right? So
we don't wanna lose tenants.
So, you know, if we're in aposition where, you know, we
have our our quarterly meetingwith the with the management
company and they say we'reseeing, you know, aggressive
rent increases in the market,you know, we think 4%, four and
a half, 5% is is a fair rentraise at this time without, you
(32:11):
know, causing disruption withinthe within the cash flow, then
we come to to you know? Again,I'm I'm not the expert at
everything. Right? I managepeople. So why would I hire a
professional company and thenignore their advice?
You know? Yeah. I'm gonna q anda with them. I I wanna know why
you're giving me the informationyou're giving me and and what
(32:33):
it's based on. But at the end ofthe day, if they turn around,
they say, David, it's a four anda half in this market all day
long, then we'll go on a fourand a half.
If I say I want I wanna raise itto 5%, and they go, it's not
gonna work. We're only seeingthree and a quarter. We're only
seeing two and a half. What am Igonna do? Right?
Put put again, my my investors'capital has to be priority. That
(32:56):
capital for my investors, theyonly make their money if I'm
bringing in rents on theproperties. So, you know, that's
that's that's the formula allthe way down. Invest the capital
first. Service that capital thebest way we know how with the
right people.
And, you know, it works.
Trent Werner (33:13):
Yeah. And then I was talking to someone else the
other day about this speaking ofdiscretionary spending and it
Dave Seymour (33:19):
Yeah.
Trent Werner (33:19):
I mean, in our market, it seems like it is
kinda slowing down a little bitjust given our
Dave Seymour (33:23):
Yeah.
Trent Werner (33:23):
Our portfolio and things that we've seen. And
housing typically should comefirst, but in Oregon where you
have tenant favored laws, itthere's Yeah. You know, we see
all the time people are$1,015,000 dollars behind, and
then it takes us six months toevict them. And so they feel
like they're untouchable and allthese things. What are what are
(33:44):
your thoughts on thediscretionary spending and
what's causing people to, maybenot in your market specifically,
but across the country, notprioritize their housing expense
because of utilities going up,insurances going up, groceries,
all these other expenses thatare falling on them.
And, you know, I've seen peoplemake decisions where they could
(34:06):
care less about their housingexpense, especially here because
they know, you know, it's gonnatake them six months to get us
out.
Dave Seymour (34:12):
Professional tenants, brother. Professional
tenants. Been there, done that,climbed that mountain, got the t
shirt. Look, dude. Learn therules of the game from both
sides of the equation.
Learn the rules of the game fromthe investor side and learn the
rules of the game from theprofessional tenant side. Then
you make a decision where youwanna invest your capital and
who you wanna invest it with. Iwill I will not buy a
(34:33):
multifamily, residential unit inMassachusetts. I won't buy it.
Now I might train my 30 year oldson to get, you know, a a three
family to a two family to asingle so that he can live rent
free.
Simple little strategy. You'reonly dealing with, you know,
five tenants at the end of theday. But you know, for a
scalable business with investorcapital, you know, having
(34:56):
potential exposure, then I'mgonna go where it makes sense.
I'm going to the Texas market,the Carolina market, the Florida
markets. I'm going where, whereTrump's the where Trump's the
where Trump's the loves me.
You know what I mean? Ratherthan rather than where he
doesn't. That's that's all thepolitics will do today. Let's
just use that common sense,though.
Trent Werner (35:15):
And then when it comes to investing out of state,
I know you said you have bootson the ground in in Florida, but
if you're gonna go to adifferent market, maybe you
don't have boots on the ground.Are you still seriously
considering investing in thosemarkets?
Dave Seymour (35:27):
Yeah. I am. But here's here's the the advantage
that I personally might haveover somebody else is due to the
the years that we did on the,the TV show, that's attracted a
lot of attention. Right? So I Iknow that I could pick up the
phone and call a decent, solidinvestor who can give me
(35:47):
guidance, relationships inpretty much any market that I
wanted to invest in.
Right? So that's one advantagethat I have. But the other thing
is is I might go in and co GP ina market just to test the waters
and see what's going on and howit's operated. So I might I
might look at that strategy aswell. You know, it's not easy,
(36:07):
you know, property management,construction management, good
systems.
That's that's what's going tosave your ass at the end of the
day.
Trent Werner (36:15):
Well, Dave, I appreciate you sharing your
insights and your experienceswith us. Is there anywhere that
people can connect with you moreafter the show?
Dave Seymour (36:23):
Yeah. I'm, I'm old school. We've got a phone. It
actually rings and somebody willanswer it. God will.
It's (781) 922-4418. We areraising on a couple of deals
right now. So if you're anaccredited investor and you
wanna look at some opportunitieswith us, more than happy to have
a conversation with you. You canfind me on LinkedIn, or you can
go to, info, I n f o, atfreedomventure.com, freedom
(36:47):
venture Com. Or just hit us upon the website,
www.freedomventure.com.
You'll find me. You'll find me.I'm out there.
Trent Werner (36:57):
You're recognizable enough. Google
Google likes you guys enough.They'll they'll pop you up.
Dave Seymour (37:01):
There you go. There you go. Google. GTS.
Google that stuff, man.
You'll find me.
Trent Werner (37:06):
Well, Dave, thank you so much for joining us
today.
Dave Seymour (37:09):
Alright, brother. God bless. I appreciate you.
Intro speaker (37:11):
Thank you for listening to this episode of the
Real Estate ProfessionalsInvesting podcast on Wynn, your
community of investing knowledgefor growth. We hope that this
episode has increased yourknowledge and added value to
your path to freedom. If youwould, please take a second to
rate us so that we can get moregreat investors to interview. If
you or someone that you knowwants to be on, please visit
(37:32):
westsideinvestors.com and fillout our form to be on the show.
Thank you again, and enjoy yourday.
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