Financing and partnerships
Syndication Lawyer Todd Robinson on the Mistake That Ends Sponsors
Todd Robinson discusses syndication, investor communication, offering documents, and the operational challenges that can follow a closing.
Todd Robinson represented me on my last syndicated deal, and as far as I'm concerned he's the syndication lawyer in the United States: undisputed. He's represented just about everyone who's anyone in this space.
He also isn't just the guy drafting the documents. He's the managing partner of his own firm in Atlanta with about 25 staff, six or seven law partners, and a full title team. And he's sitting on roughly $75 million in assets under management and about 400 units of his own, with more closing before the end of the year.
We're also partnering with him and Caleb Hommel on a 144-unit acquisition right now, which takes the combined teams past 1,000 units.
He's in high demand, so we had about 20 minutes. Here's what we covered.
From social work to law to real estate
Todd describes himself as an entrepreneur who happened to get a law degree.
His undergrad is actually in social work. His dad is a retired psychologist, his mom has a PhD in social work and taught as a professor, and for the longest time Todd was headed toward neuropsychology and testing. Looking back, he thinks the fact his dad had his own practice is what quietly planted the entrepreneurial seed: "If he can do it, I can do it too."
Then he went to law school: five years after undergrad, with no lawyers in the family and nobody to ask. He figured he'd be a hotshot trial lawyer telling stories in front of juries. Then he actually started doing litigation.
"All we're doing is fighting over money, and it's very stressful. It's a gotcha game. Oh, you missed this deadline, you're screwed, I'm going to file this."
He wanted something more exciting and less stressful. So he went after a bank as a transactional client: hustled them into a lunch, cold, where they didn't know him from anybody. He was there to pitch litigation work, suits on promissory notes. Instead they asked whether he knew how to close commercial loans.
He had never closed anything a day in his life. He said, "Oh yeah, sure. We know how to do it."
The royal we. He was at a 200-person law firm at the time, so he brought them in as a client and learned the ropes from the older partners. That's how the transactional practice started.
He always knew real estate was the secret. He'd looked at the founding families of this country (Rockefellers, Morgans) and noticed they all had significant real estate holdings. So he built a niche in multifamily and specifically multifamily syndications for clients around the country and around the world.
About five years ago he realized something about the work he was doing for everybody else: "It's not easy, but it's simple."
Between that and the high-net-worth investors he was already connected to as clients, he started using strategic partnerships to work his way into deals as a silent GP partner, grew the portfolio that way, and eventually started leading as sponsor on certain deals.
This is the pattern I see over and over with people who end up around real estate people. We recently had a broker on who started as a golf coach, and it turns out a lot of people who own a lot of real estate golf. One client said, come work at my firm, I'll teach you to buy real estate while you broker. Now he has a big portfolio.
Can you do good for people and make a lot of money?
I got this question in my mentorship recently and the person asking really struggled to hold both ideas at once. Todd's background made him the right person to ask, since he went from planning to be a therapist to being a significant landlord and a lawyer.
His answer is yes, and he gave two examples.
One is a client of his who does affordable housing specifically and attaches a nonprofit ministry component to every multifamily deal he buys. He keeps the housing affordable on purpose because he wants to give back to the community.
The second is a deal Todd closed himself earlier this summer: an assisted living portfolio: two personal care home assets providing end-of-life care to elderly residents. These are residential houses transformed to meet personal care home requirements. Residents pay $12,000 to $14,000 a month, and the two properties do $144,000 a month in topline revenue between them.
"We're making a ton of money there, but I get so much joy and satisfaction out of going to visit these properties. I've developed personal relationships with all the elderly residents there. It's been really fulfilling."
I've got a version of this too. I own a 55-and-up community, not assisted living, and nothing near $12,000 a month. It's part of the LIHTC program, so we have mandatory subsidized rents. It's affordable housing.
When we took it over, the clubhouse was in disrepair. Beautiful campus, great units, but the little details weren't done. And they had a horrible on-site manager: we read the writeups, just a nasty person.
So we came in and made it a better, cleaner place. We reopened the clubhouse, the Bible studies, and the bingo nights. We're charging exactly zero more dollars in rent, because that's what we're allowed to charge.
The difference between affordable housing and slummy housing
Todd's rule is simple: "The goal is don't be a slumlord."
On his 59-unit deal in Milledgeville, the team spent four months just responding to maintenance requests and doing things the prior landlords wouldn't do. Tenant maintenance requests the prior management and ownership simply weren't answering.
"Tenants are now coming to us like, these guys care about us. They care that I've got mold in my bathroom that needs to be fixed. They care that I've got rats in my ceiling."
When you're doing that, you get a real sense of satisfaction out of being a landlord. Housing is an essential need. Yes, we're in it to make money, but we're also in it to not be a slumlord, and if you can see that intrinsic value it makes the whole thing more worthwhile.
I've bought several properties from slumlords to turn them around, and here's the part people miss: there's a huge difference between affordable housing and slummy housing, and the nicer version makes more money.
You will make a lot more if you can make your place the same price point but just nicer than your neighbors. It's not about decking it out and creating some crazy fancy place to live. If the flooring's nicer, the windows are newer, the ACs are up to date, and the countertops beat the competition, affordable housing can be very nice, and you'll keep all your units full.
Related reading: 413 Units at 23: Caleb Hommel on Senior Housing and Speed
As Todd put it: what's the least amount of rehab we can do to create a nice, clean, safe place that's better than our competition at the same price?
Getting fired was the kick he needed
Todd posted a video recently (true point-of-view footage shot on his Meta Ray-Bans) of walking into his own office, saying hi to the receptionist, walking the hallway, his name on the door. As an entrepreneur I loved it.
The whole point of that video, he said, was that he didn't start out that way.
He started his firm in 2018 with a laptop in his basement, after being fired from his prior law firm. He'd been targeted as a "rogue associate" because he was trying to build his own business while serving his partners, and when he messed a couple of things up by prioritizing his own clients, they let him go. Their message: we want people here who want to do our work, not their own.
Now that he's the partner in charge of associates, he has to strike that same balance from the other side. He's a believer that a rising tide lifts all boats: if everyone is doing well, everyone shares and profits. But you have to do his work first.
I asked whether having your name on the door actually feels as good as it looks.
"It does." His parents were very middle class: his mom from the mountains of North Carolina, his dad from Philadelphia, both well educated but not wealthy. Working hard and seeing what you've accomplished is very satisfying and fulfilling.
It's also a lot of overhead. His payroll runs around $300,000 a month. That's the other struggle entrepreneurs and owners have. The reason it works is that he was strategic about it: he built partners around him who have their own clients and bring in their own revenue, so it's not all on his shoulders. If you want to go fast, go alone. If you want to go far, go together.
Should you run multiple businesses at once?
I've stacked several businesses with different income schedules: the property management company, the education company, the acquisition company. A lot of the most successful investors I know do the same thing. So I asked Todd whether people should try to run both a business and a portfolio, or put all their eggs in one basket.
His answer: it depends on whether the other business is tangentially related. If you can work on both without it feeling like you're choosing one over the other, it works.
The hardest version is the W2 professional doing real estate on nights and weekends. "I've got a W2, I'm making $10,000 a month, I want to replace that income. How do I do that?"
And what we both say is the same: one acquisition fee can change your life. You can get one acquisition fee and not have to work the rest of the year. But taking that leap of faith is really hard for a lot of people.
"I don't know if I ever would have started my own firm had I not been fired. Being fired was the kick in the ass I needed."
So maybe, he joked, the W2 professionals out there who want to get into real estate need to try to get fired.
The stupid tax: lying to your investors
I ask this every episode. When you're new, it's the most expensive it will ever be to do what you're doing, because you just haven't learned something yet. So what's the most expensive mistake Todd has seen?
"If you're in the business of raising capital and getting investors, the stupidest mistake you could make is lying to those investors."
Misrepresenting facts. Misrepresenting the deal. Overpromising and underdelivering. Or straight-up defrauding your investors. And you'd be surprised how often it happens: he'd just gotten off a call with a client about a $6.8 million investment that has vanished. They're not even in the org structure anymore, based on what the sponsor told the lender.
"You're dealing with other people's money. You have to be upfront, honest, transparent to the nines, because the SEC is watching you. State governments are watching you. You're just waiting for a lawsuit."
The mistakes he sees come from people trying to get too cute. It becomes almost a Ponzi scheme: I'll get money over here, pay my earlier investors, and when they need money I'll go buy this deal and take the acquisition fee. It turns into a web of lies.
Stay true. Stay honest. Don't lose investors' money.
How to protect yourself when the deal surprises you
Here's the harder question I wanted his answer on. Say you didn't exaggerate anything. You genuinely believed the asset would perform. Then you get surprised: more vacancy, more deferred maintenance, something missed within reason. What do you do on the front end so you don't get accused of fluffing the numbers?
Two things.
First, transparency with investors, full stop.
Second, this is exactly what the private placement memorandum is for. When Todd's firm prepares offering and syndication documents, the PPM discloses all the business risks and all the potential problems that could go wrong in a deal. So when an investor starts hemming and hawing and pointing fingers, you go back to the document: read this disclosure where we said there's economic risk. Or if the cost of construction skyrocketed and you can't complete renovations: look, it says it right here.
And one more piece of practical advice he added: every time someone buys a deal, there's a dip.
Right when you close, for the next three to four months, there's a dip in tenants and revenue. Residents come out of the woodwork and all need everything done on their unit, because there's new management in town. You have to ride out that dip. As long as you can ride it out, you're going to go up eventually: so have enough working capital reserves to cover it.
Key takeaways
- "It's not easy, but it's simple." Todd got into ownership by noticing the deals he was papering for clients were replicable, then partnering into them as a silent GP.
- You can do good and make money. His assisted living portfolio does $144,000 a month in topline revenue and is the work he finds most personally fulfilling.
- Affordable doesn't mean slummy. Beat your competition at the same price point on flooring, windows, ACs, and counters, and you stay full.
- Ask the operator's question: what's the least amount of rehab that creates a nice, clean, safe place better than the competition?
- The costliest mistake in capital raising is lying to investors. The SEC and state regulators are watching, and getting cute turns into a web of lies fast.
- The PPM is your protection when honest deals go sideways: it discloses the business risks up front so nobody can claim surprise.
- Budget for the post-close dip. Three to four months of revenue softness and a flood of maintenance requests is normal. Carry working capital reserves.
The full conversation, including more on Todd's firm and the 144-unit deal we're working on together, is in the episode at the top of this post.
Todd's firm is Robinson Franzman, and he posts a lot of free content on Instagram as syndication expert if you want to follow along or get in touch.
If you want to go deeper on the acquisition side, my mentorship and a free multifamily course are both at multifamilystrategy.com, and the free Skool community is open to anyone who wants to be around people doing these deals. See you on the next episode.
Read the episode transcript
0:00 Welcome back to the owner meeting 0:01 podcast hosted by multif family 0:02 strategy. I'm your channel host 0:04 Christian Osgood joined today once again 0:06 by Todd Robson the best lawyer for all 0:08 real estate in the United States 0:10 undisputed 0:11 champion. Seriously, this guy has 0:13 represented everyone who's everyone. He 0:15 represented me on my last syndicated 0:16 deal. He is the syndication lawyer. 0:19 Todd, awesome having you back on the 0:21 channel. 0:22 Hey man, thanks it. Happy to be here. 0:24 He's happy to be here, but we're limited 0:26 to about 20 minutes with Todd because he 0:28 is in such high demand. So, we are going 0:30 to rip through today's questions on the 0:33 owner meeting podcast. Todd, for those 0:35 who didn't catch your first episode or 0:37 who are newer, give us a little 0:39 backstory of you are a full-on 0:43 real estate lawyer, significant 0:45 investor. You've worked with all the big 0:46 names. Where did you get your start in 0:49 real estate? 0:50 That's a good question. And you know, I 0:52 started really through my legal career. 0:54 I mean, being, you know, what I'm what 0:56 they call an entrepreneur that just 0:58 happened to get a law degree. And so, 0:59 when I when I went into law school, um, 1:01 I I knew I wanted to have my own firm 1:04 and be entrepreneurial and and I always 1:06 knew real estate was kind of, you know, 1:08 the secret to success in a lot of in a 1:11 lot of ways. I mean, I I looked up to a 1:12 lot of the founding families of this 1:14 country, you know, Rockefellers, the 1:15 Morgans, the all of these families. They 1:18 have significant real estate holdings. 1:19 And so I thought, well, I need to get 1:21 into real estate. And so I I kind of 1:23 pivoted my career into a transactional 1:26 practice. Uh, and started developing a a 1:29 real niche in multif family and 1:31 specifically multif family syndications 1:32 and started doing syndications for, like 1:35 you said, clients really around the 1:36 country and around the world that are 1:37 investing here in in the United States. 1:39 And then, you know, probably 5 years 1:40 ago, I realized, you know what, this is 1:42 pretty easy to do. I mean, it's hard. 1:44 It's it's it's not I shouldn't say easy. 1:45 I mean it's it's it's hard to it's hard 1:48 stuff 1:49 but it's simple to do. It's not easy but 1:51 it's simple. 1:52 It's simple. Exactly. And so I was also 1:54 making a lot of connections with high 1:56 net worth investors, individuals, 1:58 clients of mine. And so by using a lot 2:01 of these what I call strategic 2:02 partnerships, I was a able to work my 2:04 way into various deals really as kind of 2:06 a silent GP partner and grew my 2:09 portfolio that way and then eventually 2:12 started being a lead sponsor and on on 2:15 certain certain deals. And so now we're 2:17 I'm about $75 million of assets under 2:20 management. Um and we have about I think 2:24 about 400 units including some some 2:26 senior housing and a bunch more to close 2:28 before the end of the year. Oh, that is 2:30 just absolutely incredible. And it this 2:33 is where I find most people who are 2:35 around real estate people. This is where 2:36 they end up. We recently had Eric Bubell 2:39 is one of my favorite brokers of all 2:40 time. He started out as a golf coach. 2:43 And guess who happens to do quite a bit 2:46 of golfing? People who own a lot of real 2:48 estate. 2:49 Yeah. Yeah. 2:49 And he gets around that he's like, "Hey, 2:51 wait a second. I'm not making enough to 2:52 to support all my dreams coaching golf." 2:54 Even though he was quite good. He's like 2:56 found one client. He was like, "Come 2:58 work for my firm, man. Just just just 3:00 come on in. I'm going to teach you to 3:01 buy real estate while you broker." And 3:03 now he has same thing. He has a big 3:05 portfolio. He has a lot of practice. 3:07 This tends to be the backstory. How did 3:10 you get what was your start getting into 3:11 law? Because you found real estate after 3:14 you were a lawyer, right? So, 3:16 yeah, that's right. Yeah. 3:17 Interesting. Yeah. Interesting story. 3:19 And I do, you know, I am the managing 3:20 partner of my own firm here in Atlanta, 3:22 Georgia. We've got about 25 uh staff 3:25 members that work with us and for us. 3:27 I've got six or seven law partners and 3:29 then uh we have a whole title team. So 3:31 we I'm still running a fullfledged 3:34 full service law firm as well and having 3:36 the real estate, you know, it's not 3:38 really on the side anymore. It's kind of 3:39 more front and center, but it's it's 3:41 taking up a lot of my time as well, 3:44 which is a good thing. Interesting 3:45 backstory. My undergrad degree is 3:47 actually in uh social work, and it's 3:50 it's it's really a a 180 from, you know, 3:54 where where I thought I would be in 3:56 life. So my my dad is a psychologist 3:58 retired. My mom has a PhD in social 4:01 work. She was a social work professor. 4:03 And so for the longest time I was going 4:05 to go be a therapist honestly and and 4:06 and be a be a be a I was going to go go 4:09 into neurossychology 4:10 and do testing and things like that. And 4:13 like my dad and my dad actually had his 4:14 own practice. And so I and looking back 4:16 on it, I think now because he was an 4:18 entrepreneur, even though I never I 4:19 didn't see him that way as a kid, it 4:21 really kind of sparked like, hey, if he 4:24 can do it, I can do it, too, right? But 4:27 so when I got into law school, I, you 4:29 know, I I have no lawyers in my family, 4:32 you know, no one that I could really 4:33 talk to or rely on. I just knew I needed 4:36 to go to grad school and I wasn't going 4:37 to go to four years to get a PhD because 4:38 I was getting up there in age. I I it 4:40 was five years in between undergrad and 4:42 law school. So, I went when I went into 4:44 law school, I didn't really know what I 4:46 I thought I was going to be some hot 4:47 shot trial lawyer, you know, I I thought 4:49 I was going to be out there trying 4:50 cases, you know, telling telling stories 4:53 in front of juries and whatnot. And uh 4:55 and then when I got in and started doing 4:57 litigation, I was like, man, all we're 5:00 doing is fighting over money and it's 5:02 very stressful because 5:04 there's so many deadlines and it's a 5:06 gotcha game, right? It's like, you know, 5:10 it's like, oh, you met you missed this 5:11 deadline. You're you're screwed. I'm 5:12 going to file this, right? So, I was 5:14 like, I want something a little more, 5:17 you know, exciting than not and less 5:19 stressful. So, then I I I kind of my my 5:21 first transactional client was actually 5:23 a bank and I went to lunch with the 5:26 bank. I actually, you know, hustled them 5:27 to a lunch. They didn't know me from 5:29 anybody. And I was trying to get their 5:31 trans their their litigation worked at 5:33 the I wanted to I wanted to, you know, 5:34 represent the bank in litigation, like 5:36 suit on promisory notes stuff. And they 5:38 were like, "Well, do you know how to 5:39 close commercial loans? I never closed 5:42 anything a day in my life." And I was 5:43 like, "Oh, yeah, sure." Yeah. The Royal 5:44 I was like, "We know how to do it. We 5:46 can do it." I was at like a 200 person 5:47 law firm at the time, right? 5:48 Yeah. So using the Royal Wii, I was able 5:52 to bring them in as a client, learn the 5:55 ropes through from older lawyers and 5:57 older partners uh at the firm at the 5:59 time and then developed kind of the 6:01 transactional practice that way. But it 6:04 was a 180 from from social work to to 6:07 law school for sure. 6:08 See that that that's interesting and 6:09 social work obviously a very that type 6:11 of work is a very fulfilling like hey 6:13 you get to do a lot of good for a lot of 6:14 people. I got this question recently my 6:17 mentorship and I used a couple of 6:19 examples for my career but the question 6:20 that they asked me is like hey can you 6:22 do good for people and make money at the 6:24 same time and they had a really hard 6:26 time wrapping their head around that 6:29 in your experience you had a degree that 6:30 was very much like hey you know going 6:32 from hey I think I want to be a 6:33 therapist to I am a you're a very 6:36 significant landlord 400 units is not 6:38 small uh you're a lawyer people have 6:41 mixed opinions on lawyers how do you 6:44 balance How do you balance the two? And 6:46 what is your answer to? Can you be a 6:48 good person and do good while also 6:50 making a boatload of money? I've seen a 6:52 picture of the house that you moved 6:53 from, 6:56 you make some money. 6:57 Yeah. Yeah. Well, well, yeah. The answer 7:00 is yes. And I found a couple of ways to 7:02 do that. One, in multif family, I 7:04 actually have a client that that does 7:05 this. He's got he does affordable 7:07 housing specifically and he's got some 7:11 nonprofit ministry type thing that he 7:14 basically attaches to every multif 7:17 family deal he buys. So he buys the 7:19 affordable housing, he keeps it 7:21 affordable on purpose because he wants 7:22 to give back to the community, but he 7:23 also has some ministry type component uh 7:27 to his acquisition strategy. So that's 7:28 that's one way. And the second way is we 7:31 also bought um an assisted living 7:34 portfolio recently and it's actually two 7:36 personal care home assets uh where we 7:39 provide really end of life care to 7:42 elderly residents 7:45 elderly residents I should say because 7:46 they're paying you know 12 to you know 7:48 $14,000 a month to stay here right these 7:52 are just these are just residential 7:53 houses I mean a lot they're they're 7:55 they're transformed into having the 7:57 personal care home requirements But, you 8:00 know, it's it's it's $144,000 a month in 8:03 topline revenue from both of these 8:05 properties. But so so we're making a ton 8:08 of money there, but I get so much joy 8:09 and satisfaction out of going to visit 8:12 these properties and I've developing 8:14 personal relationships with all the 8:15 elderly patients there and it's it's 8:17 been really fulfilling. That's just been 8:19 we closed that uh earlier this summer, 8:20 but it's been really great. 8:21 That see that that is the type of stuff 8:23 that I I think people need to hear more 8:25 about. Like there's so many different 8:27 ways that you can do affordable. you can 8:28 tie it to other objectives or like 8:31 elderly care. I have a 55 up community. 8:32 It's not assisted living, 8:34 right? 8:34 So, we certainly they're not, you know, 8:36 it's not $12,000 a month. Uh but it's 8:38 part of the LITC program. So, we have 8:40 mandatory subsidized rents. It's 8:42 affordable housing. And we came in and 8:45 we just did 8:46 the clubhouse was in disrepair. You had 8:48 this beautiful campus, great units, but 8:52 some of the little details weren't done. 8:53 And they had a horrible on-site manager. 8:56 We looked at some of the writeups that 8:57 they had. Just like nasty, nasty person 9:00 in there. 9:01 Yeah. 9:01 We came in and we just made it a better 9:03 place, a cleaner place. We We're 9:06 reopening the the Bible studies and 9:08 bingo nights and the clubhouse. 9:10 It's the little stuff you can go a long 9:12 way. We're charging exactly zero more 9:15 dollars in rent. 9:16 Yeah. 9:16 Because what we're allowed to charge. 9:19 Yeah. The goal is do not be a slum lord, 9:21 right? I mean, that's if you're if 9:22 you're not a slum lord and you care 9:24 about your residents, like when we 9:26 bought our 59 unit deal here in 9:27 Milligville, we have spent 9:29 4 months just responding to maintenance 9:31 requests and doing things that the prior 9:34 landlords just wouldn't do. Like tenant 9:36 tenant maintenance requirements that 9:38 again, the prior management and 9:39 ownership just were not responding to. 9:41 And so tenants are now coming to us and 9:42 being like, "Oh man, these guys care 9:44 about us, right? They care. They care 9:46 that I've got mold in my bathroom that 9:48 needs to be fixed, right? they care that 9:49 I've got rats in my ceiling, you know, 9:52 like so when you and so and when you're 9:54 doing that, you do get a sense of 9:55 satisfaction and joy out of being a 9:57 landlord, you know, and providing I 9:59 mean, housing is is an essential need, 10:00 right? So, you do have to balance that, 10:03 you know, yes, we're in it to make 10:05 money, but also we're also in it to not 10:06 be a slum lord. If you can see that 10:08 intrinsic value, it's it just makes it 10:10 more worthwhile. 10:12 Yeah. And I've bought several properties 10:15 from slum lords to turn them around. 10:16 There is a huge difference between 10:18 affordable housing and slummy housing. 10:21 In fact, you will make a lot more money 10:23 if you can make your place the same 10:25 price point but just nicer than your 10:28 neighbors. It's not about decking it out 10:29 and creating this crazy fancy place to 10:31 live. If the flooring's nicer, the 10:34 windows are newer, the ACs are up to 10:36 date, the kitchen countertops are nicer 10:37 than your neighbors, affordable housing 10:39 can be very nice and you'll keep your 10:41 all of your units full if you just out 10:43 compete your competition at the same 10:45 price point. Yeah, 10:46 that's the that's the name of the game. 10:47 What's the least amount of rental we can 10:48 do to create a nice, clean, safe place 10:50 that's better than our competition at 10:52 the same price. 10:53 Yep. Yep. Couldn't agree more. 10:56 You had a video recently on your YouTube 10:58 of walking into your office and I loved 11:00 this as an entrepreneur. This was like 11:02 the I'm like this is the dream. You come 11:04 in and it's your name and your partner's 11:07 name on the on the thing. You're walking 11:09 in. How did you get that that piece of 11:11 footage? because that was like a a 11:13 perfect POV of 11:16 I made it as an entrepreneur. I loved 11:18 that video. How did you film that? 11:20 Well, we, you know, through I just 11:22 bought these Meta glasses, right? So, so 11:24 these RayBan partnered with Meta to 11:26 create these Meta glasses and I just had 11:30 the idea of, hey, I'm going to I'm going 11:32 to walk into the office and just sort of 11:34 look around, show people the video. I 11:36 mean, it is true POV footage, right? My 11:38 point of view. and you know say hi to my 11:41 receptionist and you know walk walk up 11:44 and down the hallway and the whole point 11:46 of that was you know you know yeah my 11:48 name's on the door but I didn't start 11:49 out that way right I mean I you know I 11:51 started my firm in 2018 with a laptop in 11:53 my basement and I was actually fired 11:56 from my prior law firm uh because I was 11:59 I was targeted as like a rogue associate 12:02 because I was out here trying to build 12:03 my own business at the same time trying 12:05 to serve my partners right 12:08 and when I didn't you know when I messed 12:10 a couple things up because I prioritize 12:11 my own clients over my partner's 12:13 clients. Um, they fired me. They were 12:16 like, "We don't, you know, we don't want 12:18 we just want people here that want to do 12:19 do our work, not not your own work." 12:22 And so, even now as a partner and and 12:24 you know, in in charge of of of 12:26 associates, I really have to strike a 12:28 balance of like, yeah, we want you to 12:30 build your own business like we do 12:31 because I I'm I'm very much a believer 12:32 in, you know, a rising tide lifts all 12:35 boats, right? So if everyone is doing 12:37 well and being successful, then everyone 12:38 will share and and profit. 12:40 But at the same time, you got to do my 12:42 work first, right? So cuz I cuz I'm the 12:45 partner. But yeah, so that footage was 12:46 that was kind of cool. I wanted to kind 12:48 of tell the story of like, hey, this is 12:49 where I'm at, but look, I didn't start I 12:50 didn't start out this. 12:51 What does it feel like today to to walk 12:53 in and I know it's not everything having 12:54 your name on the door. Ego aside, how 12:57 does it feel being like, hey, I I didn't 12:59 come from this and I walk into the 13:00 office and actually having that moment. 13:02 What What is that? Does that actually 13:04 feel as good as it looks? When you walk 13:05 into the office, you're like, you know, 13:06 I did it. That is my name on the door. 13:08 And I and I worked hard to get it there. 13:10 Exactly. And it does. And I didn't I 13:12 mean, like I said, my my parents were 13:13 very middle class people, right? I mean, 13:16 from my mom's from like the mountains of 13:18 North Carolina. My dad's from 13:19 Philadelphia. Like, yeah, they're well 13:21 educated, but they're not they're not 13:23 they're very middle class. And to to 13:26 work hard and kind of see what you've 13:27 accomplished, it's it's very satisfying 13:29 and fulfilling. At the same time, it's 13:32 it's a lot of overhead. So, it's it's, 13:34 you know, that that's the other struggle 13:36 that entrepreneurs really have and and 13:37 owners is like, yeah, you need to build 13:39 your company, but you know, my payroll 13:41 is like, you know, 300 grand a month in 13:44 in in what we need to to pay for 13:46 everybody, right? And and luckily, but I 13:48 was strategic like I I have built 13:50 partners around me that also have their 13:52 own clients and also were bringing in 13:54 revenue. So, it's not all on my 13:55 shoulders. And that was part of the 13:57 strategy of like, you know, I can't do 13:59 all this myself. I have I have to bring 14:00 other people in. I mean, you know, you 14:02 know the saying, if you want to go far, 14:04 what is it? If you want to go fast, go 14:05 alone. If you want to go far, go 14:06 together, right? So, that that's I think 14:09 that's true in in legal practices or any 14:11 any type of business that you want to 14:12 develop. Now, you did one thing that 14:14 I've seen a lot of very successful 14:16 investors do. Uh, in my business, I have 14:19 the property management company, I have 14:21 the education company, I have the 14:22 acquisition company. Like, I I've 14:23 stacked multiple businesses that have 14:25 different schedules of income streams. 14:27 Would you recommend that most people 14:29 when building their portfolio because 14:30 you have 400 units in your portfolio 14:32 right now? And I happen to know that 14:34 you're under contract for at least 144 14:36 more because we're working on a project 14:38 together that we're taking out right now 14:40 in real time. So you'll be over 500. 14:42 Yeah. 14:42 As you're building this portfolio, many 14:44 of the most successful real estate 14:46 investors also have other businesses. Do 14:48 you recommend trying to run both at the 14:50 same time because they both takes time 14:51 and it both takes effort. Is that 14:53 something that you think people should 14:54 do or should people put all their eggs 14:56 in one basket and just focus on the one 14:58 thing? 14:59 That's a good question. I mean, I think 15:01 it kind of depends on what that other 15:04 business is. If that other business is 15:05 tangentially related 15:07 and you can kind of work on both, you 15:11 know, but it doesn't seem like you're 15:12 working on one or the other, then I 15:15 think it works, right? But if if it's 15:16 it's hard to especially those that are 15:18 that are trying to, you know, they have 15:21 a W2 and they're doing real estate by on 15:23 nights and weekends, 15:24 you know, that's that's the hardest 15:26 struggle is like, okay, I've got a W2. 15:28 I'm making, you know, 10 grand a month. 15:30 I want to replace that income. How do I 15:32 do that? You know, and you go out and 15:34 buy deals. And what we always say, and 15:36 I'm sure you say the same thing, is 15:37 look, one acquisition fee can change 15:39 your life, right? You can quit your job, 15:41 you get one acquisition fee, and you 15:43 don't have to work the rest of the year, 15:45 right? But but taking that leap of faith 15:47 is really hard for a lot of people. And 15:49 it's almost like I I don't know if I 15:50 ever would have started my own firm had 15:52 I not been fired. Like being fired was 15:54 the kick in the ass that I needed to be 15:56 like, you know what, I'm I'm going to do 15:58 this. 15:58 I love that. 16:00 So sometimes, you know, and maybe th 16:03 those W2 16:05 professionals out there, you know, maybe 16:06 they need to try to get fired if they 16:07 want to start get into real estate. I 16:08 don't know. 16:09 There we go. That's the that's the piece 16:10 of advice we'll take from this podcast. 16:12 If you're not get fired, get fired. get 16:14 fired. 16:16 That's 16:18 I know we have limited time with you 16:20 today and I ask this every episode. 16:21 You've shared this uh before, but I'm 16:23 going to try to ask it a slightly 16:24 different way. So, I always share the 16:25 stupid tax the whenever anyone's new, 16:28 it's the most expensive it'll ever be to 16:29 do what it is you're doing because you 16:31 just haven't learned something. For the 16:32 things you can share, you or your 16:34 clients, what is the most expensive 16:37 mistake that you have seen made and how 16:39 can someone avoid it? Oh gosh. You know, 16:43 I would say if you're in the business of 16:45 raising capital and getting investors, 16:48 the stupidest mistake you could make is 16:50 lying to those investors, right? 16:52 Misrepresenting facts to the investors, 16:54 misrepresenting the deal, overpromising, 16:57 underdelivering, or just straight up, 17:00 you know, defrauding your investors. 17:02 You'd be surprised how often that 17:04 happens. I just got off a call with 17:05 another with one of my clients about, 17:07 you know, like a six $6.8 $8 million 17:09 investment that they made that has 17:11 vanished, right? They they're not even 17:12 in the in the org structure anymore 17:14 based on what the sponsor is saying to 17:16 the lender, right? So, so you have to be 17:20 upfront. I mean, you're dealing with 17:21 with other people's money. You have to 17:23 be upfront, honest, transparent, you 17:26 know, to the nines because the SEC is 17:29 watching you. State governments are 17:31 watching you. You're just waiting for a 17:33 lawsuit. So that's the biggest I would 17:35 think the biggest takeaway is the 17:36 mistakes I've seen people make are those 17:39 that they try to get too too cute, 17:41 right? They try to get and it's almost 17:42 it becomes a Ponzi scheme like, "Oh, 17:44 I'll just get money from over here. I'll 17:45 pay my back invest. I pay my investors 17:47 over here, but then when they need 17:48 money, I'll go buy I'll go buy this deal 17:50 and get this acquisition fee." I mean, 17:51 it's just becomes a web of lies. And so 17:54 stay true, stay honest, um, and don't 17:57 lose investors money. How do you how do 18:00 you handle the situation when you do 18:02 have a deal and maybe so let's let's 18:04 make the base assumption we didn't 18:06 exaggerate our numbers we really came in 18:08 and we truly believe this asset should 18:10 do whatever and we get surprised 18:12 we have more vacancy there was more 18:14 deferred maintenance we didn't find 18:16 something something was missed within 18:17 reason 18:18 what do you do on the front end to 18:20 protect yourself so you don't get 18:21 accused of doing exactly what other 18:24 people do which is lie on the numbers or 18:26 fluff them up someone's like hey I feel 18:28 like ripped me off. What do you do to 18:30 protect yourself? 18:31 Well, you have to be transparent with 18:34 with the investors, number one, and 18:36 number two, that's why we when we 18:38 prepare offering documents and 18:39 syndication documents, we have what's 18:40 called the private placement memorandum. 18:42 In that PPM, you disclose all the 18:44 business risks, right? You disclose all 18:46 of the potential problems that could go 18:49 wrong in a deal. And so if an investor 18:51 comes back and starts hemming and hawing 18:53 and and and and and pointing fingers, 18:55 you can just go back to that document 18:56 and say, why don't you read XYZ 18:58 disclosure where we said there's 19:00 economic risk or let's say the cost of 19:02 construction skyrocketed and we can't we 19:04 can't do our renovations now. Well, 19:06 look, it says it right here in the PPM. 19:08 So that's that's the biggest I think 19:11 that I would do in that in that 19:13 situation. The other thing I was going 19:14 to say is every time every time someone 19:16 buys a deal, there's always a dip, 19:18 right? Right when you right when you 19:19 close the next three to four months, 19:21 there's a dip, right? There's a dip in 19:23 tenants, revenue, all of a sudden, they 19:26 come out of the woodworks and they all 19:27 need everything done on their property 19:29 because there's new management in town. 19:31 You've got to ride out that dip. As long 19:33 as you can ride out that dip, you're 19:34 going to go up eventually. Have enough 19:36 working capital reserves to cover those 19:38 things. That's probably another another 19:39 piece of advice. Just be honest with 19:41 your investors 100%. 19:43 Love it. All right. I know you have to 19:45 run to the next call. So, how do people 19:46 find you? Because it sounds like the 19:47 answer to this question is you need to 19:49 have a great lawyer who writes the uh 19:50 the contract, right? 19:51 Yeah. You do this. You have a community. 19:53 I know people can follow you as 19:54 syndication expert on Instagram, which 19:57 Todd posts some great content for free 20:00 there. Shares a ton. 20:01 But if someone wants to get in contact 20:03 with you either to learn how to do this 20:05 or just to use your firm's legal 20:07 services, how do they best get a hold of 20:08 you? 20:08 Yeah. So, Robinson Fransman is the name. 20:10 F R A N Z M. 20:14 Um, and my email is, you know, just Todd 20:16 at RF LLP L A W. And then find me on 20:18 Instagram as well, like you said, 20:20 syndication expert. I'm on there quite a 20:21 bit and we can we can get in touch that 20:23 way. 20:24 Awesome. Todd, thank you for joining. 20:26 You have a fantastic rest of your day. 20:27 Everyone else, we'll see you on the next 20:28 episode. 20:29 Thanks, Christian. Absolutely.
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