“You have to understand what you are good at, and what brings you passion and energy and joy.”

-Logan Freeman

 

Logan Freeman is a key principal co-founder and chief Development Officer of FTW investmentsPrior to FTw investments, Logan was the director of acquisitions for a fund where he originated the concept, developed the operating plan and created the company’s products worth over $50 million. He has also acquired over 1100 doors and a little over a year and completed a portfolio refinance returning all of the investors capital as well as maintaining a positive cash flow. Prior to working with the Real Estate Investment Group, Logan worked as a director of sales for a service management group.

 

In this episode, Trevor and Logan discuss:

  • How Logan started in real estate investing and his strategies.
  • The process of raising capital for the deals.
  • The process of building an extensive network.
  • The difficult experiences in real estate investing and how to overcome them.
  • What the Kansas City Market looks like.
  • Why focus on Class C space?



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GreenLights | The Millionaire Fastlane | Poor Charlie’s Almanack | Atomic Habits

 

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Email us: Trevor@podcastingyou.com

Full Transcription Of Today’s Episode

Trevor Oldham  00:46

Hey, everybody, welcome back to the real estate investing exposure podcast and today on the show, we have Logan Freeman. He is a key principal co-founder and chief Development Officer of F TW investments. Logan oversees the company’s acquisitions and investment strategies. He also personally selects all key investment markets and asset classes to meet the goals of investors. He also brings to the company over six years of real estate investing experience. Prior to F Tw investments, Logan was the director of acquisitions for a fund where he originated the concept, developed the operating plan and created the company’s products worth over $50 million. He has also acquired over 225 doors and a little over a year and completed a portfolio refinance returning all of the investors capital as well as maintaining a positive cash flow. Prior to working with the Real Estate Investment Group, Logan worked as a director of sales for a service management group. This position involves working with startup medium sized service and consulting companies in and around Kansas City. And one of the coolest things about getting to know Logan is his background is that he was also an all American collegiate football athlete at the University of Central Missouri, where he graduated from in 2013. And after his final season in college, he’s actually picked up as an undrafted, free agent by the Las Vegas Raiders for back then there’s the Oakland Raiders logo. Exciting. Super excited to have you on the show today.

 

Logan Freeman  02:17

Well, Trevor, thanks for having me, man. In those numbers, I need to update because we are past 1100 doors now in Kansas City. But an awesome intro I think that’s a great background. And I’m very excited to be here with you today.

 

Trevor Oldham  02:31

Yeah, and Logan, it’s been great following along in your story. And for the audience that may be knowing you for the first time, I’d love for you to just dive in a little bit further into your background. I know you have that gold, I believe it will reach $100 million this year. I’d love for you to hop into that I saw on LinkedIn that you believe 50.6 million and love a few just to go through those numbers and the real estate field and just share with our audience.

 

Logan Freeman  02:54

Yeah, man. So the whole goal around the 100 million dollar mark is I took the last kind of three years of production that I had on acquisitions and brokerage. I was somewhere between 20 and 35 to 40, every single year. And I said I posed myself a new question. I said, Well, what if I could make 100 million in one year? Right? It stemmed from Tim Ferriss, like what can you do if you could only work five hours a week. Something like that was if I’m gonna actually do 100 million in a year, what do I need to build? How do I need to get there? What do I need to do differently, and that kind of created this idea of, of compression. And that’s what I have created a podcast around was was just trying to, you know, bring people along this journey that I’m on and what I’ve tried to accomplish my background is is interesting, it’s uh, you know, I was in Jefferson City, Missouri, and, you know, small town farm boy that was throwing hay on the back of a trailer to make money. And I was big enough and good enough to get a collegiate scholarship. And then, like you mentioned, went out to the Raiders for a little bit. But, you know, when I got cut from the Raiders, I just decided that it was time for me to do something different. And what I wanted to do differently was use my brain and not necessarily my brawn to try to make some money in a living. And that’s what I did. And so I, I got to Kansas City, and I started working and then we started to, you know, have some success. And I just always knew real estate was what I wanted to be in and, and I’ve read a lot of books around it. And then I started putting myself around the right people, which has created what is now f Tw investments, which is a private equity real estate firm, here in Kansas City focused on multifamily. And so that’s what I’m doing. Now, there’s a lot to unpack in that story. A lot of things that happened, but I’m gonna let you take it wherever you want to Trevor.

 

Trevor Oldham  04:38

Yeah, I’d love for you just to take the audience through that you’re working for another investment firm. And it’ll take a short while later, three, four years. Now you’re running your own private equity firm. What was that process like running, you know, working for someone else’s for him to know, other than running your own firm and everything’s on you?

 

Logan Freeman  04:55

Yeah, no, great question. You know, I think that when I think about this I have to learn by working with experienced sponsors, and, you know, people that had done this before. And so I wasn’t investing in those deals, I didn’t know how it was set up, I was green and new into real estate, I got to get in, do transactions, learn how to understand how to find off market deals, underwrite deals, do it all, you know, and I got a lot of experience on that front. With that being said, when we finished that $50 million fund, you know, in real estate, you have to be willing to pivot, and you have to understand what’s going on in the marketplace. And so what we did is, you know, I saw that single family homes were really getting hot. And it was time for me to, I always wanted to get into larger scale buildings. And so I started to, you know, learn about multifamily syndication. And this is where, you know, I brought my idea to the current group I was working with, and it was of interest to them. So I said, Okay, that’s fine. I’m going to go build this thing myself. So I moved my license over to commercial multifamily brokerage and started helping out of state investors buy, you know, properties doing 1031 exchanges. And then I started to acquire some assets myself, I learned along the way that it’s a team sport, and it’s very difficult to do everything well, yourself. And so that, that got me thinking about how to build an actual business around this, and find some partners that would allow us to scale up and so you know, now running f Tw investments, being a part of the the ownership group, and, and focused on what we are, is great, because we have three principles at the business that all have diverse backgrounds, that allows us to utilize a collective base of knowledge that can take us farther faster than if all three of us were out there trying to do it ourselves. And we’ve got employees Now, obviously, and it’s really exciting to see that grow as well.

 

Trevor Oldham  06:45

And for the, you know, when you’re building a real estate company, and obviously, there’s quite a bit of different asset classes in the real estate investing space for themselves, what led you to going more towards multifamily than, say, a self storage or mobile home park?

 

Logan Freeman  06:59

Yeah, you know, I think that I listened to the market. I heard everything that, you know, people were talking about in regards to multifamily that piqued my interest, you know, then you build an investment thesis, right. So you start with the market while I’m in Kansas City, then you start with the asset class, and what has proven to be successful over multiple recessions? Well, self storage, mobile, home parks, multifamily, those all performed pretty well in recession. So we were looking for something that was recession resistant, right. And then we look at, you know, obviously what’s available, so what’s available in the market that you live in. And frankly, we just thought there was an opportunity, it was a fragmented market, in regards to class C multifamily that we could really step into, and create an institutional style investment vehicle for folks that don’t have access to these real estate deals. And the private equity firms that are much larger than us, we’re not focused on older products, 6070s, they want to 1000s you know, they want the newer stuff that is a little bit nicer. And so we just saw that perfect opportunity for us to step into that space to create some value for our investors. That’s kind of how we got into it. We also have some hospitality and some office buildings and neighborhood retail shopping centers, but the bulk of it is, is classy multifamily.

 

Trevor Oldham  08:12

As you’re raising the capital for the deals, what has that process been? Like? Let’s say that someone’s out there, and they’re going to real estate, they’ve done a couple, let’s say a small multifamily, they’ve done two to four units. Now they want to go out and they found a great deal. It’s a 50 unit, multifamily property, or commercial property, and they want to invest in it. And obviously, that’s gonna require some additional capital from outside investors. How are you able to find your investors as you just continue to go to like, networking groups podcast? What was that whole process like to build that extensive network?

 

Logan Freeman  08:44

Well, it takes time, it takes a lot of time. And so I think it’s understanding, you know, the thesis around what you’re, what you’re, you’re pitching, but there’s a lot of facets to capital raising. And, you know, being in front of the right people is very important, whether that be, you know, on a camera or in person, you know, and I think that, for me, success begets more success. The investors that were with us, when we first got started, they really, really took a leap of faith, and they invested in us, you know, the people behind the real estate now that we’ve proven out that process that model, the referral, start to come run the business journal, now people are starting to see us grow and want to be a part of something that’s really, really interesting. So it hinges on the principles of the business. You know, when somebody asks me about the economy or Class C multifamily or, you know, Kansas City Market, it’s up to me to be able to get them from where they are to where they need to be, and that you can only do that if you’re knowledgeable about that. And if you see how much time we spend on the economy in Kansas City on multifamily, you know, there’s less, there’s less and less people that are willing to go as deep as we are. And then you see somebody that’s putting the operations behind that, that gives a lot of people trust. So there’s usually three trust curves. When you start raising capital, you have to get past its leadership, it’s the industry. And then it’s the operations. And so you got to build trust with these people. You know, there’s the know, like, and trust, obviously, that everybody talks about, but you have to be known before you can be liked and trusted. So you have to have a brand, you have to have a presence, you have to be out there, you have to be willing to put yourself out there. And COVID-19 allowed a lot of people to do that, right. But I was doing that preset with you, believe it or not, we were getting on shows, we were sharing the story, we were doing all of this. And that’s really, really important as well. And then you have to do what you say you’re going to do. Right. So if somebody you know takes the leap of faith and invests with you, that’s your fiduciary responsibility to take care of that. So, you know, there’s some really great books around raising capital that I could I can allude to, if you would like me to that have helped me understand all the different facets of attracting investors, but you have to position yourself as a leader in the space, and then that starts to be magnetic towards you, instead of having to prospect all the time, but it’s not easy. Anybody that tells you raising capital is easy, has not done it before, it takes a lot of time, a lot of meetings, a lot of trust, and you have to have a great product to get around that. So you know, frankly, I think it’s a you know, once you’re successful, it’s a lot easier. But at the end of the day, it has to be a main focus for you. And your business, if you’re going to want to get to scale, you have to have investors that are willing to take a leap of faith with you if you’re just getting started. But we did that, you know, we thought about the questions that they would ask us and then we solved those, right? It’s like, Okay, well, great. f Tw is pretty new. But what’s the experience that you’ve had in the background? Well, you know, we’ve had, you know, we’ve had a guy on our team that’s taking a company from 550 units to 5700 units. You know, I’ve been doing real estate for seven years, Parker’s been doing real estate for eight years. So, you know, I think that if you can answer those questions intelligently, people want to know that you’ve thought through the thought process of answering those questions. And that’s pretty well, the fact of the matter how to get people on that trust curve or past those trust curves, I think it’s so so important. So, but it does take time, and it’s definitely not an easy thing to do, you have to be a good communicator, and you have to have a good deal. But, you know, I would say it’s made me grow, more than anything that I’ve ever been a part of is getting people on board with a new idea, per se is not an easy thing to do. And you’ll learn a lot through that process.

 

Trevor Oldham  12:28

I can even see no being from Massachusetts, not not enjoying the Chiefs rise over the last couple years. But I know that you you even been able, I believe position yourself as the King of Kansas City outside of Patrick mahomes, even like that, I think is is actually is great for yourself, because I feel as though someone is coming in, they want to invest in Kansas City, and they see that title attached to your name through all this brand presence you’ve built up over the last couple years, they’re gonna trust someone more like yourself, and someone that, you know, maybe only has one or two properties in Kansas City.

 

Logan Freeman  12:58

That’s right. It’s all about the brand, you know, and it’s all about being out there. And I’ve had so many people say, Hey, you know, Logan Freeman, he’s the Kansas City King, you know, Mr. Kansas City, you know, whatever. It’s just, it’s a fun thing. I’m definitely not Mr. Kansas City when it comes to being the most well known person. But if you embody that, and you put it out there, people will see that and that’s interesting. So you have to have a curiosity, you got to have something that triggers somebody to say, I like to learn more about that, I’d like to see what that person is doing. And the only way to do that is to be intelligent with the messaging that you’re putting out there. That’s excellent.

 

Trevor Oldham  13:34

And we’ve talked a lot about the success you’ve had in real estate. Now I want to turn over to the flip side, and I don’t want it to be all. What’s that? Sylvester Stallone, quote, he says the world is all sunshine and rainbows. And I’m here to just hop into what some of the difficult challenges that you’ve experienced as an investor are some paths that you wish you took a little bit differently as you’ve been building up your business. And sure, raising all this capital.

 

Logan Freeman  13:57

I think the main one is, when I first got started, I tried to do everything myself. And you know, depending on how fast you want to grow, and how much experience you have, that will be the one thing that is hamstringing you to growing your business. So when I first got started, man, I lost a lot of money with my own money on projects, you know, everything I had touched to that point, turned to gold, you know, and when I started trying to wear all of the hats, meaning I was the acquisitions guy, I was the leasing guy, I was the project manager, the construction manager, all of it is when stuff started to fall through the cracks. And so I just take a step back and say, What am I good at? What should I focus on? What’s my sweet spot, and then I operate in that if I could go back, you know, three or four years, I would definitely tell myself that however I’ve learned a lot from those mistakes, but they’ve been costly mistakes as well. And so having a team you know, that can help you understand what to do, what not to do, and you know operating in your sweet spot, man, that’s the that’s the hardest thing I had to learn now letting go of the control of every single aspect is super important for me because I know I have other people that are better at certain aspects of the job that are the or the business that I’m not. And so I’m going to focus on my sweet spot. And that took some time for me to learn. And that was definitely some costly mistakes for me early on in my career.

 

Trevor Oldham  15:17

I know, earlier in our conversation, you had mentioned about different principles within your business and having a couple of different people helped run the company. How do you divvy up the roles and I know, you, and the audience has ever read the E myth? You know, everyone should have a specific role and how does your company deviate between each other to make sure that you’re not stepping on each other’s toes and, and have that one specific task or specific tasks that you each do to push the company forward?

 

Logan Freeman  15:42

Well, self awareness is the most important thing. So you have to understand what you are good at, and what brings you passion and energy and joy. And so when you break down commercial real estate, you’ve got, you know, acquisitions, you have finance, you’ve got due diligence, you’ve got project management, you’ve got asset management, you have dispositions, and 1000, other things in between that. So you can break that up and say, Look, you know, your strengths, and what you enjoy doing, or what you’re good at overlay with these three or four things. So let’s have you focus here, this is where you should be focused on. Now. That’s an organic process. That takes time, you know, but I know that my partners do not want to be on a bunch of podcasts, they do not want to be, you know, in front of a lot of people all the time, guess what, that fills me up. I’m good at it, it works. But guess what, I don’t like managing operations. I don’t like accounting, I don’t like necessarily all the financing that goes into everything. So I think if you can find your sweet spot, understand what you’re good at and what your partners are good at, overlay that with all the functions of the business, and then figure out which ones each person should be doing. That’s the most important thing. Now, when you first get going first get started, you’re not going to be able to see that very clearly, that takes a little bit of time, and there’s still going to be items and, and jobs, you know that you have to do that you don’t enjoy doing. But at a certain level, you can use leverage through technology or other people to take that off of your plate. And so that’s the first thing I think the second one would be, you got to spend a lot of time with the people that you’re doing business with. So you’ve got to have time where you can, you can zoom out, and you can say, okay, when instead of working in the business, right now, we are going to work on the business for two hours every single week, from on Thursdays from two to four, I have a two hour meeting with my my business partners. And we are not working in the business per se. We’re working on the business. And that is so important. And we are able to check in with each other, see what’s going on. Now we have an office. So I see him all the time as well. But at the end of the day, it’s very important to zoom out, see it holistically, objectively and be able to make changes and pivot based on what you find in those meetings.

 

Trevor Oldham  17:50

That’s an excellent point. And I want to hop over into the Kansas City Market. And I know being in Massachusetts, I’ve seen housing prices increase quite a bit to the point where it’s myself that’s trying to buy my first real estate investment property. The numbers don’t make sense unless I want to go far and Western Mass, right. I would prefer not to because I don’t have any family out there. And that’s what I’m seeing there. What’s the Kansas City Market like? How quickly are our prices going up? Are the rents stabilizing? Are people even paying their rents, obviously, what happened over the last year has been very unprecedented.

 

Logan Freeman  18:20

Kansas City has been insulated very well, from COVID-19, we were not as impacted from a shutdown standpoint is more or less the coasts I would say that being said, that has attracted a lot of investor capital, we’ve had a lot of worker migration, we’ve had a lot of tech migration. And it’s also, you know, we’re seeing it in the venture capital space as well. And so the real estate development has not stopped here, we have continued to build new deals downtown in our central business district. Year over year rent growth was some of the highest in the country here in Kansas City, I think because of the affordability, still, we’re at about a 21% average price to rent ratio, you know, widely accepted as 30% of your income should be allotted to your housing. So we still have a long, long way to go on that spectrum, which I think is really, really great. We still had some issues with you know, evictions and, and, you know, that part part of the business but, you know, with where all the the the migration and and the, I would say the, you know, the impact of COVID-19 had, I mean, Kansas City was a beneficiary of a lot of that. And so, I think we’ve seen you know, rent over year over year rent growth continues to increase, I think two bedrooms were at 10.2%. And one bedroom was at 4.2%. So that’s pretty good numbers here in Kansas City, and they’re not building any more classy or, you know, product, which you know, that’s kind of what we focus on. So there’s a big laundry list of people waiting to get into those spaces. So there’s good demand for it as well.

 

Trevor Oldham  19:49

And as you mentioned, the class C properties. Why did you decide to go with Class C instead of say Class B or A or D, just have the class C and then move them up to you know, closer towards a B or do you just keep them at Class C and, and, you know, make some good renovations for them.

 

Logan Freeman  20:02

Yeah, I would say most of them stay in the class C space, these are not highly amenitized, you know, products. And so we don’t have a lot of pools we don’t have, you know, dog washing stations and that type of stuff. The reason we focused on it was the fragmentation that I mentioned before, in regards to a lot of fragmented owners, which, you know, led to better pricing and opportunities to force appreciation through operational efficiency or cosmetic rehab. And then there’s less competition from larger, you know, private equity firms and institutional capital chasing 1960s and 70s products. So the pricing, you know, from a cap rate standpoint, was a little bit better when we were evaluating Class B assets. So we just saw the opportunity to add more value in that space. I’m not against Class B or Class A, I would like to get into class B and some nicer assets, but where the pricing is landing right now, a lot of people are chasing that. And that doesn’t lend well to being able to force appreciation through our business plan. So we’ll continue to monitor the market. And if that changes, we’ll make a change. But as now we see the opportunity being in the workforce housing space.

 

Trevor Oldham  21:07

That’s a perfect, excellent answer. And I’m gonna hop into the investor mindset. And I know I’ve seen you post a couple of times, I believe you’re using the Brendon Bouchard, high performance planner, and I’d love for you to to go into how goal setting and just planning your day has allowed you to become a better investor, and then also to grow the business?

 

Logan Freeman  21:26

Yeah, it’s a great question, you know, I think you have to plan the work. And then you got to work on the plan. and spending time self reflecting, understanding what you’re trying to accomplish the day before the day gets a hold of you, is one of my main success habits. I’m less regimented on the high performance planner that I was earlier this year. And if you want to learn more about that, I could talk about that a little bit. But at the end of the day, I still use journals every single morning, I’m still very scheduled and disciplined, I wake up at 4am. And from four to six, I’m working on myself, and making sure that I’m putting the inputs in that are going to allow for the outputs that I’m going for goal setting is so important. If you don’t know, you know, where you’re going, how are you going to get there, you know, you have to have some sort of a plan to be able to go there. And you know, when you start asking yourself different questions like the question I asked about, how do I get to 100 million, you start getting different answers, you start getting different perspectives. And that’s what that has created. For me. It also helps to inspire that why, you know, it helps inspire that, hey, why are you continuing to get up? Why do you continue to try to, you know, be better every single day? And if you can reinforce that why, with your subconscious mind, you’re going to start to have a little bit more inspiration, not have to rely on motivation as much. And so, goal setting, staying disciplined with my journals, understanding where I’m going, pivoting fast, has created awareness, but it also creates a very inspiring fire that is ignited in me every single day. And that’s what it takes to be sustainable. I think,

 

Trevor Oldham  22:54

Logan, that’s a phenomenal answer. But I want to be respectful of your time. I just have a couple additional questions I wanted to ask you, let’s do it. Do you happen to have a favorite real estate investing or business book that you’d recommend to our audience? And if you have more than one, feel free to feel free to tell us off a couple if you have them?

 

Logan Freeman  23:11

All right. Well, I have a lot. But I will say this, just because this is my favorite book of this year, because if you’re watching this, there’s, you know, almost 700 books behind me. But it’s greenlights by Matthew McConaughey. And it’s not necessarily an investing book, but it’s a life principles book that I really, really respect. The diligence that he went into creating that the big takeaway for me was, life does not have to be a means to an end. It can be art, it’s up to you to make that art every single day. So that’s my favorite book, just generally speaking of this year, entrepreneurship book, MJ DeMarco is millionaire Fastlane change the world changed the game for me productivity book, the one thing and essentialism by Gary Keller helped me to subtract and subtract and subtract a little bit more until I got to the point where I knew what I was I was actually focused on was was yielding those, you know, positive results. So I read a lot of books about the economy around macroeconomics, microeconomics. Poor Charlie’s Almanac by Charlie Munger is one of my favorite books in regards to mental models. I love reading about mental models, James Clears book, atomic habits. I mean, that is a game changer as well. So I’ll stop there because I just dropped five or six. But those are all some of my favorite books that I recommend people reading for sure.

 

Trevor Oldham  24:31

Yeah, those are excellent recommendations. I know. I read the Matthew McConaughey book and for those of you who are listening, who may think like oh, I’m not gonna read this book about this actor, you may think they also only want to do business they’re investing books and Tony you guys got to read it or just a phenomenal phenomenal book and it’s just so much inspiration and, and wisdom and I find that him himself as an actor. He’s just so relatable and open and honest about his journey about how he became successful. He doesn’t brag or anything, which is Yeah, you don’t see you. Don’t use A lot of actors and actresses. So it’s nice to see someone that you can relate to and see his full journey of success. It’s phenomenal. Absolutely. Absolutely agree. And Logan, last question of the day, where can the audience find you?

 

Logan Freeman  25:13

Highly active on LinkedIn. So if you find the, you know, Mr. Kansas City on LinkedIn, Logan Freeman, but my website I appreciate this is f Tw investments llc.com. We’ve got a lot of great content up there to consume. Thanks, Trevor.

 

Trevor Oldham  25:27

Thanks, Logan. And I’ll make sure to include that in the show notes. And thanks for your time today.

 

Logan Freeman  25:31

I really appreciate you man. Thanks for having me on.