The American investing industry can be a little bit confusing to get into at first because it's very much its own thing with plenty of unique quirks that require a good amount of study. Despite this, it's certainly not impossible to make sure that you're able to understand what you're doing and all the best ways to go about things. Reed Goossens is a real estate entrepreneur and investor who moved to the USA from Australia. Reed shares his experience with Keith Baker of investing in the US and navigating the industry from what was initially an outsider's perspective. Reed's story is an empowering story of finding success after finally being able to adapt, and it's certainly not to be missed!
The Private Lenders Podcast is the only podcast teaching people how to become passive real estate investors while helping them keeping the money safe in investing in private mortgages to other investors. If you’re looking for practical tips and advice on being a successful private lender and how to successfully build wealth without banks in Wall Street, then you are in the right place. If you are looking to learn from my mistakes and shorten your learning curve, then pull up a chair and pour yourself a few fingers of Scotland’s finest and add a few drops of water, because this podcast is for you.
Several years ago, I began listening to podcasts along with NPR and BiggerPockets. Investing in the US Podcast was one of the few real estate podcasts that I had in constant rotation. Joe McCall was another one, Kevin Bupp as well. I found the story of the host of this podcast, coming from The United States and from Australia, and living off his version of The American Dream, I find it inspiring. I’m happy to have the man himself on the show, all the way from Down Under, Mr. Reed Goossens. I think you’re going to find Reed’s story quite compelling. I hope that you find it as fascinating and valuable as I did. There’s a lot of info that we go into. There are a lot of rabbit holes that we could have gone down, and looking back, perhaps we should have gone down a few of those. In the end, I hope you find the extreme value in this interview. Without any further ado, let’s get down to the brass tacks and straight into the interview with Reed Goossens.
I want to welcome Reed Goossens to the show. Reed, welcome.
Thank you so much for having me.
You're from Southwest, Texas.
Southwest all the way up near Amarillo.
I've already given them a little bit of background, but as we were talking in the pre-interview, your podcast is one of the first that I listened to many years ago when I was kicking around the idea of this show. The reason why I wanted you on is because the older I get, I'm a firm believer that there are two types of people: people that get it done or make progress and people that make excuses. When I look at somebody like you and hear your story, it makes me feel like a slacker. It gives me lots of motivation. For the people in the US that don't know who you are in the real estate investing world, can you give us a little bit of your background? How did you get to Amarillo from Australia?
I live in Los Angeles. The whole premise is that I moved to the United States in 2012 to chase two things. It was both for love. It was to live in New York City. I fell in love with New York City and to chase a girl. I'm married. That was coming over here back in 2012 on a whim to say, “Screw it.” I fear regret and I'd hate to wake up when I'm 70 years of age and go, “I wish I'd lived in the United States for a period of time.” On a whim, I quit my job. I knew there was an awesome visa here for Aussies and rocked up in New York City. My background is in Structural Engineering and I knocked on engineering companies’ doors until someone said yes.
I pounded the pavement in New York City and got a job within two months. I got the visa and then started investing pretty much soon thereafter. That was back in 2012. I've quit the job. I’m the Cofounder of Wildhorn Capital. I control about $175 million worth of a multifamily real estate. I’m a bestselling author and also a podcast host. I don't say it to boast. I say it more to inspire that I, an Aussie, grew up with blue-collar means, my parents both teach. I moved to the United States with a mission to give it a go. If I can do it with limited funds, no established network, no family and give it a crack and achieve financial freedom through US real estate in seven years, then why can't you? I had visa issues, so there's no excuse. If people are reading out there going, “I wish I should get started,” get started because my perspective is that the United States is awesome when it comes to real estate investing, both cashflow and appreciation. You don't realize what you're sitting on. Get off the fence and get going.
I can speak for myself that I'm an American, why isn't everything easy for me? I've then started traveling the world. The last time I went to New York City, I had two Uber drivers. One was from Pakistan and the other one was from The Horn of Africa. I’m like, “What brought you here?" “Opportunity.” They wanted the chance. They didn't want the guarantee to succeed. They wanted the chance to succeed.
It’s the chance for a lot of ex-pats. I didn't come from a war-torn country like The Horn of Africa or anything like that, but it was still a mission for me. I'm sure a lot of people that you meet when you travel are like, “Aussies are everywhere.” They call us JAFAs, Just Another Freaking Aussie. The reason is because we were very isolated down there. We all speak, talk and look the same. It costs a lot of money to get out of Australia. When you go, you want to travel the world and experience it. It's built in our DNA to get at it and give it a crack. A lot of Aussies that do make it to the United States who I've met in my travels and doing business are pretty top-shelf type of people. They’re here and they've got their back against the wall and all they want to do is succeed. It's that ex-pat mentality of the only other option is to move home or you're all in. All the chips are on the table and let's give it a go.
You were an engineer back in Australia. You came to New York for the love of the city.
I’m a structural engineer. I worked pretty much up until 2000 to halfway through 2017 when I got married. I was working a full-time job. The premise was I came to the United States and found an engineering job. I pounded the pavement until someone said yes. I realized in 2012, putting your resume on Indeed.com was not going to cut it. I'd done the suit and knocked, “Who are you?” I've got an interesting story. I'd worked in London for the 2012 Olympic Games back in ‘08 and ‘09. I had some worldly experience that I could offer some people, but I knew that if a company had more than 30 people and don't have an HR, if they see my resume and saw that I was educated in Australia, they’ll chuck it in the bin.
I needed to do something different and that was knocking on doors and eventually, someone said yes. I ended up working for a Russian guy who had a structural engineering firm and half of the people working there were ex-pats as well. New York City is a boiling pot of ex-pats and my whole mindset is like, “I'm not going to get a job because I'm Australian.” That was washed away very quickly because New York City is the boiling pot. I then moved to Los Angeles in 2014, and at that time I had to make a decision, “If I have to stay in a W-2 because I needed a visa to stay in the country, let's use the skills that I have and transition into working for a real estate developer.”
I emailed out a bunch of people that I happened to be working with from the structural engineering firm as a consultant. I was like, “I'm sick of engineering and I want to get into real estate development. Would you have me as a project manager?” I knew I have to surround myself with real estate 24/7. In 2014, I made that transition to a big developer down at Long Beach and work with them for about three and a half years building high-end luxury multifamily apartments. I've come through not only in engineering but through the tools into creating my own business. All of that being said, I was also doing deals on the side the entire way. I started my podcast. I was doing deals in New York. I was doing deals when I moved to LA and started buying multifamily co-syndicating. I was spinning all the plates and pumping. It’s a lot of hard work. It wasn't until I got married in 2017 that I was allowed to legally quit and be my boss.
I’ve got a funny story to tell you. I graduated from university with a degree in German Philosophy. I wanted to teach German Philosophy. I was a research assistant for post-Holocaust literature. I was going to be academic. If you've ever seen Animal House, I wanted to be Donald Sutherland's character who got high with the young coeds and stayed over. In my early twenties, that was the extent of my intellect. I heard a story that Socrates was a bricklayer. One of my philosophy professors said he had a job that paid the bills and took care of his family, and then he had the side hustle, which was philosophy. It turns out twenty years later, I can't find that and I can't prove it, but I believe fervently in having the support system base and then busting your butt and go do something else. There are some parallels here.
I didn't move twelve time zones away. After I finished uni, it was about 90 miles. I love the fact that you had that drive to do it. You found and created a way. Anyone who put a resume out on Indeed or the last time I did, it was Monster, you know you're getting hit by the algorithm. You get to New York, the love of your life and the city you love. You said you started doing deals. Tell me about that. Was that with a single-family or did you jump on to commercial?
Before moving to the United States, in the two years I spent after 2008 when I graduated as a structural engineer, I went to London and worked in the 2012 Olympic Games. In the middle of 2009, I moved to the South of France to be a deckhand. If you've seen the show Below Deck on Bravo, it was exactly that, but I worked for a Russian billionaire. It was in that time when I was in Spain on a weekend trip after running the bulls that I met Erica, who is the American girl that I fell in love with and who's my wife. I say that because I have to put it in context. There's a lot that goes on in this story before moving to the United States in 2012. After those two years of being abroad, I moved back to Australia in 2010. I’m back in an engineering job. I’m back in a cubicle going, “What am I going to do with the rest of my life?”
Like you, I enjoyed studying engineering. I enjoyed the academic side of it and the problem solving but being in the workforce, I was like, “This is crap. This is not what I signed up for.” I felt like a basketball player on the bench watching my life or the game go on in front of me. I was like, “I'm not going to sit in this cubicle for the next 40 years of my life.” That was the desire and that was in 2010. I picked up the book, Rich Dad Poor Dad. That was where it started. It was the a-ha moment that I needed to create financial freedom for myself. How do I go do that? You can do it through real estate. You can go through investing in businesses. You can go through stocks and bonds. I chose real estate because I was like, “I'm a structural engineer. I'd rub shoulders with developers all day long. I should pay more attention to my day job.” It’s like the blinkers came off.
I was educating myself in Australia doing the equivalent of a REIA in Australia, but there was only one of them in the whole country. It happened to be in Brisbane where I was from. I was going to do something in Aussie at the end of 2011 like a flip or a lease option but then decided to move to New York City. Some of the money I did save from my day job was lost moving halfway across the world. It was funny that I was like, “I can spend $38,000 and buy a triplex in Upstate New York and Syracuse. This is crazy.” Moving to New York City from Australia was like taking on information out of a fire hose. It's the Big Apple. It's networking on steroids. In Australia, we didn't have the established network over the REIA associations, which are around the country, which are incredible. Things that are available for $20, $30 door fee, you can get so much great information that I would have had to pay thousands of dollars in Australia or guru too because we don't have the same established education that you do here in the United States. Instantly, I was like a pig at a trough trying to consume all the information I could, nose in a book on the subway to and from work.
Within six months, I had chosen the market in Upstate New York because that's all I could afford. The barriers to entry here in the United States are much lower than they are in Australia. You could not find a property for $38,000. You could have anything. You can find a piece of dirt for $38,000. It was this whole revelation of like, “This is exactly what Rich Dad Poor Dad said, “Buy an asset and cashflow.”” I didn't have a car at the time. I was jumping on the Greyhound bus going to and from Syracuse on the weekends. The brokers would pick me up and go for a little cruise around. Eventually, I bought my first property for $38,000. The reason I had to use all my cash was because the banks weren't lending to me at the beginning. I didn't even know what a credit score was when I first arrived here. I didn't even know what an LLC was. I was learning all this stuff but still wanting to do a deal.
[bctt tweet="If you want to go and scale your business, you need to get into syndication. " username=""]
What it came to in 2010, I picked up Rich Dad Poor Dad and would come to the end of 2012. It’s two and a half years of self-education. It was like, “Come on, Reed, get off the pot. You've got to do something. You can only read so much about doing it. You’ve got to go and get your feet wet.” That's what I did and you don't get to deal number ten without doing that first deal. It was my own money. I was willing to risk it and it was a lot of learning curves along the way. That's the easy light way of saying it, but I'm sure we'll dive into what they were. I've done some flipping and all that good stuff.
I'm curious what was your response the first time you were looking to get some credit and somebody asks you for your Social Security number?
The Social Security number came six months after I even came to the country. It was like, “What?” The credit was like, “You can open up a credit card with your own money. You can put $1,000 down.” I was like, “This is a cool credit card, $1,000 and it was my money.” That was my interaction with the banks when I first got here.
You're close to a decade in and hopefully, you've got your credit score perfect. You're not a true American unless you've got a crappy credit score.
It’s coming through the border security like, “Be prepared, you’re not one of us until you do the rollercoaster ride.”
You get so far in debt and not knowing what you’re going to do. As long as that debt is paying for itself, that's the key. I like your limitations by being illegal or an alien.
That’s true, I'm an illegal alien. That's how exactly it was classified by the border agency. When you come through, “Are you a registered alien or illegal alien?” I said, “Yes. I am.”
It sounds like in a conventional way, you get into the single-family. You already went into more than one door on your first property, even though FHA considers that the 1 to 4 is still a single-family residence. You started there. You've done some flipping. You've been into this since in Australia. Once you got over using your own money and establishing some credit, who funded your deals for you when you're still in the single-family realm?
The first deal was all cash, $38,000. I partnered up with another bloke who brought in $10,000 and we split whatever cashflow is coming through. There was no hard money or private loans at that point. We're 50/50 on this one crappy little deal. From there, I was able to get a line of credit for $28,000, plus I was saving some more money from a day job. I bought deal number two for $45,000 and then started looking to do a flip in Philadelphia. Those first two deals, one was all cash. I proved to a local bank after 3 to 6 months of depositing rental checks that like, “These things are working. Can I please pull some money out or give me some line of credit?” They gave me a business line of credit for $28,000. From there, I was able to buy deal number two. From there, I was able to go and look at a flip in Philadelphia.
That was the extent before I realized my tether was going to be tight. There was a ceiling there. I wasn't probably going to get any more than those two or three deals in Upstate New York plus a flip in Philly with the modest income that I had in New York City. We can talk about the scale of syndication, how I've used that to power the business. That's how I got started in the first couple of deals. It was through my money and through friends and family. For the flip deal, we used construction hard money loans.
How did you get to Los Angeles? Was that your choice or hers?
My wife is originally from here. She was like, “I'll give you a year in New York.” I ended up staying for eighteen months. It’s a little bit under two years. We had a bit of time apart and realized, “She's the love of my life. I better shut up and move to LA,” plus I love stuffing, so this is the place to be.
You said your tether was going to be tight. What was your next move? How did you level up from there?
The big level up was a meeting that I had with a good friend of mine who had studied engineering in Australia. He was a Canadian fellow. He came down at the end of 2013. At this time, I have a couple of little deals. I was looking at this flip that I was about to start doing. I was about to move to LA. I was like, “I’ve got all these cool deals and I'm crushing it and there's $1,000 of cashflow coming in a month, but I’m still working full-time. I'm not actually financially free.” He was like, "That's awesome. I closed on a 70-unit deal." I was like, “How did you in Canada close on 70 units?” He told me about the power of getting a mentor and the power of doing a seller carry-back finance on a multifamily deal.
The thing was in that conversation, those little things that he said to me, I was already doing in the triplexes and the duplexes that I had, except he was at scale. I was reading about the scale part, the commercial side of it, but didn't have the ability or the guts to go out and use other people's money. You’re going to raise capital to do these deals. At the end of 2013, I'd been being pitched by the Rich Dad programs, the mentorship programs and thousands and thousands of dollars. I was very frugal with my money.
I knew I had to get to that next level. Doing it by myself, I was all self-educated at that point. I needed to get a mentor who was going to do it. I said to myself, “I'm going to double down.” I need to put it from third gear to the fourth gear, you need to get away from these races. If you want to go and scale this business, you need to get into syndication. You need to get into commercials. You need someone who can help build your credibility and who's done it before. I went out and found a mentor. I paid $2,500, which he's up more than $2,500. It also gave me permission to invest in myself. I knew I probably had it within me to do it by myself, but I needed that sounding board so I knew that I was on the right track. Being an entrepreneur doing a side hustle is lonely, and you need that checking to make sure that you are going down the right path. That money was more potting ways with the fact that you're investing in yourself. That was the most important rule and a lesson I took out of that. He's not my mentor anymore. We came together for a couple of years. It was important to me to allow me to take that next step and go and scale this business into what it is.
Success leaves clues, but success is also a horrible teacher. That's the dichotomy there. I love the fact that you're talking about that this is in your DNA, you're going to do it. I would not want to get between you and the object of your desire.
There's always nerves, how you deal with it and how you second guess yourself and all that stuff. Let's not BS and beat around the bush here. It was nerve-wracking. The thing that I've realized over time is I am okay with uncertainty. Being uncertain in my life is fine. The move from Australia to the United States, the worst-case scenario is I'd quit, move back to Australia and get another engineering job. If I'm okay with that, then what? I’m doubling down on myself and getting a mentor. I was like, “I’ve come this far, let's do it. What could go wrong? What's the worst case that can happen?” I spent a bunch of money and I didn't get my values worth. At least I had to go because I knew I needed to scratch that itch.
As you said, you went and gave life a crack. I like that. A lot of us in the real estate world, Rich Dad Poor Dad is the beginning of the shift. I was born and raised outside of Houston. My parents were born before the Second World War. Every attitude they had about money or prosperity came from The Depression, from an area of lack, which was great from a defensive standpoint and guarding your eggs. It taught me the importance of saving for the rainy day and investing in the future. It also pigeonholed the thinking, especially from my grandparents. For example, my father was going to be a doctor and his sister was going to be a lawyer, no if and/or buts. Those are two high-paying and respected professions. Education is the only way. Now that I come in, education is still vitally important, not the formal stuff. I like that you got a mentor, someone who's been there and said, “I've screwed up here. Don't do this.” I commend you for that on several levels.
The way which we have been brought up is hugely impactful in how we use money, how we treat money and how we view money. To me, education is important no matter what education you get. I happened to go through university. There's been in the last 20 to 30 years a massive university kick. I think the pendulum needs to swing back the other way for vocational training, which is also very valuable. What the university also allowed me to do was grow up and problem-solve. I love the engineering degree because I can problem solve. I didn't like it in the workforce. What it gave me the ability to do was I know that I'm not an idiot, I can figure this out. The other thing you need is to resolve that you've gone to go and be able to have the resolve within yourself to know that you can go and achieve something.
[bctt tweet="The way that one is brought up is hugely impactful in how one uses, treats, and views money. " username=""]
That came from my upbringing where my parents always taught me, “The world is your oyster, Reed, and ignorance is not an excuse.” They also taught me that money is easily potted. If you are a fool with money, you're not going to have any of it, so be wise. All these things when I was growing up impacted who I am. It impacted me to give life a crack because you only live once. Unfortunately, my mother passed away after my wedding in 2017. It got me to the point where I also realized the importance of the journey in life and being successful in other facets of life. It’s not just business, money and success. Success comes through a lot of other pillars, not just one. There's all that stuff.
I know where you're going with it where you're saying your parents brought you up to be a certain way. You needed to have this education so you get this awesome paying job and that means that you're going to be a success in life. In the last several years, particularly since the downturn, many Millennials my age, probably you’re Gen X, I could imagine, they are questioning the status quo of what your parents and what our parents have taught us. That's fundamentally from a post-World War II era of the Industrial Revolution, and that would become so much more productive, but you've got to be productive in this way. It's about getting a job and working hard and getting your 401(k). We'd been total this stuff and it wasn't until the crash in 2008 that everyone's like, “You told me all this stuff and now this is screwed. I now have got to figure it out for myself.”
That's where this new era of entrepreneurship-ness being the breadmaker, the candlestick maker, going and being good at a specific niche that you can sell on Pinterest or Instagram or whatever it is. You make money from it and you don't need a job. You realize financial freedom is a lot closer than what people told you and that fear of like, “I’ve got to get a job. I’ve got to get a standard job. I’ve got to do this and do that,” then at 65, you retire and you can enjoy your life. That was something I did not subscribe to. That's exactly how I view it.
You have no regrets. You left your corporate gig. I left mine and I remember in one of the podcasts I listened to, talked about human beings are crabs and buckets. When they try to get out, as soon as one looks like they're about to get out of the bucket, the other crabs will pull them back down.
That’s the tall poppy syndrome. It’s an Australian saying that people will cut you down, “Don't be too tall. Come back down to the rest of us.”
I was shocked at the level that I experienced from the office, but I had this great revelation that it was done out of love. It was done out of care for me. It’s like, “How can you do this?” I'm like, “I don't have a choice. If I don't do this, I'll be so full of regret.” What's the worst thing that happens? I have to give the house to the ex-wife. I go move in with my parents begrudgingly and to get back on my feet, but to make sure that my kids are covered and cared for. Anybody would do that. If that's the worst that could happen, then what's the problem? My mom was like, “I don't know why you're doing this.” I'm like, “It’s for peace.”
Fear is such a motivating factor. A lot of politicians use it for good and bad. We’re so fearful sometimes of our own shadow, that you’ve got to learn not to be fearful and it's okay and that uncertainty. Uncertainty is okay and lean into it a little bit. I get it, a lot of people don't like it. That's why they're fearful for you. They want to protect you like, “Keith, you’ve got to go off and stuff it all up. You don't know what you're doing. Come back over here to the safe side.” We know it's safe over here. You’ve got to get comfortable being uncomfortable. That's what life's about. I would love to slide into my grave in many years going, “I had a good life.” At least, there’s no regret as you’re saying. I gave it all I could. I could give it a crack and there's nothing left on the table.
I have a little theory. When you look back on yourself, you've come to the United States. You've gone through all the visa crap. You've become a real estate investor, “What? Somebody who wasn't even born here, coming here and making money?” It’s an American story. Some people I knew who were born here are the bums. Not to say that what you've done is not momentous by any means, but do you ever look back and go, “Moving 12,000 miles.” At the end of the day, it wasn't that big of a deal, was it? Do you look back and go, “That was nowhere near what I fretted about that I was doing?”
I remember being this Nervous Nellie getting on the plane and going, “I’m leaving my family.” My family had all written me these handwritten letters from my mom, my sister and my dad. They're all supportive. They were like, “You're going to do this. You're going to crush it,” but the fear in your mind that you create, it's the reptile brain. It’s that survival mode in the back there that your brain's like, “Don't do that because you're going to get eaten.” That was what we used to think back in the day. You're not going to be able to survive.
When we take a step back in that perspective and giving yourself a pause and looking back in life, these things that I've done, you've done and other people have done. They look at you and think, “How did you do that?” You realize it wasn't that big of a step. It wasn't a rollercoaster. It wasn't anything like that. What you became good at that point when you did take the step was that you backed yourself, you bet on yourself. Taking this step, you're leaving your W-2 job. You’re changing the way in which your mom brought you up to be. You’re taking an initiative and planting the flag and saying, “I’ll back myself on whatever is going to happen is going to happen. For good or bad.”
I'm going to do some insurance adjusting in my day job. I'm going to do some real estate consulting. I'm going to do some private lending and whatnot. For me, it's working less and being home with the kids. How could I be afraid of this? I wonder what was there to fear. I'm not getting rich by any means, but I'm not losing money either.
[caption id="attachment_2745" align="alignright" width="200"] 10,000 Miles To The American Dream[/caption]
What you are getting rich in are the experiences. The most valuable asset you’re getting back is your time. That's the whole reason we do any of this. The widget that we use is real estate. You could be selling something on Amazon and you're trading your money while you sleep. It's that ability to create money while you sleep that helps you free up your time to spend it more with the people that you love, your friends or your family, to work on yourself, to be a better son, husband, dad or brother. All those things are what becomes the “meaning of life.”
Were you born an overachiever? Tell me you were the class clown or something.
Growing up, my dad in high school was the deputy principal, so I had to be well-behaved. I was a B-student. I got some As, probably I got some Cs and English wasn't a great subject for me. The fact that my parents called me Reed, I struggled in primary school to read books. I had to focus going into high school about actually picking up a book and reading it. My parents are both teachers. I didn't come from money. We had a modest upbringing. We were not allowed certain stuff because we couldn't afford it. That's fine. I was taught the value of a dollar. I know that my children, when I do have them, will probably be more fortunate than I was. I hope I can instill in them the same moral core values that my parents instilled in me. It has made me a grinder. It's made me someone that is not afraid to roll up the sleeves. It's made me someone who doesn't question yourself and go out and give it a go and back your intuition that the world is your oyster. When you start having those 5 to 6 core values of what you've been brought up with in life, your perspective starts to change.
To give you a little hint or some unsolicited advice. The best way to instill moral character in the children is by taking their phones away.
Frisbee at them and throw it across the room to be like, “It's 5:00 AM, be quiet.”
Both of my kids, their phones were taken away from them and all of a sudden chores are getting done. The dog bowl has food and water in it. I told my kids, “You don't get paid for chores, but if you do something above and beyond, I'll give you some money,” like washing the car. They wish they got paid for picking up dog poop in the backyard. I'm like, “No, you wanted them. You're picking it up.” As I was telling you in the pre-interview, I hate the word, hack. It is something innate in you or something that you’re like, “I want this. I'm going to have to do whatever it takes. Here's my goal.” I had my own private office and I sat back one day. I was looking at a deal and I realized I made it. I can kick my feet up here on the desk and I can ride this out for the next 20 to 25 years until I retire. I am not trying to be graphic, but the very next image I had was me swallowing a bullet. There's no way I'm going to be able to do that and I have to figure something else out, so here we go.
The answer to that is variety is the spice of life. If you have variety in your life, you get your juices from going to church, being in the community, real estate investing, surfing, climbing a mountain or jumping out of a back of a plane, whatever it is, you want variety in your life. Human beings are made to have a variety. If we do the same thing for too long, we get sick of it and we get bored of it and we need challenges. It's a constant battle because you also got the inner chatter over the brain going, “This is boring. You figured this out or let's go to the next thing,” to also then have the other challenge and be like, “Let's stay in the course because we were trying to build something here.” We constantly have that challenge of walking down a fine line of balancing the two. At a young age, it is about going out and figuring it out. It's about going out and making mistakes.
The number one piece of advice I've got for young kids is go traveling. I went traveling and I left Australia with $3,000 in my pocket and I was away for two years. Go out and learn a bit of life and experience other cultures. Do that and come back and you'll figure it out. I had someone, he's 24 and just finished uni, straight into a job and he's already getting that antsy feeling that I had. I was like, “Save up some money, go quit and travel around the world for a year. Even if you went for two years, you'd be 26 when you get back. You'll get a job when you get back. Trust me, I'll hire you when you get back. You'll be so much more valuable to me because you won't be an idiot. You won’t have to scratch that itch because you scratched it. You'd be more focused at work or whatever you might want to do.” There are a lot of things to unpack there, but there is that variety of the spice of life. Don't be afraid to scratch that itch. If you have an itch, explore it a little bit in terms of being challenged in your life. That's what you're talking about sitting at a cubicle and the thought of sitting in for twenty years doesn't challenge me. That's the problem. It doesn't challenge you, so go off and do something that challenges you. That's the way it’s going to bring you joy.
Speaking of challenges, you've been investing for many years. I'm sure not every deal had been a home run. Would you mind sharing a bad deal? What happened? What mistakes did you make?
Two of the first three deals are bad deals. When I say bad deals, these are things that are out of my control went bad. The first triplex in Upstate New York, I was a bright-eyed, white Australian guy figuring out what a ghetto was. I was in section-A with class-D housing and it was a lesson. On paper, these things were great. They went well for the first six months, and then being a landlord of Section 8 housing came to fruition. We had a drive-by shooting at the place. No one is hurt, but it was outside of my control. I couldn't control the drive-by shooting, but at the time I didn't have the mental awareness to know that. I ended up selling that property. I made a little bit of money on it and made me some cashflow, but it got me going. That was the most important part.
Even if you lose money, it was your first one. It was the first stepping stone.
[bctt tweet="Fear is such a huge motivating factor for one's actions. " username=""]
Imagine if that had happened to the majority of people, Americans, Australians or whoever, will think like, “I'm not doing that ever again.” I doubled down. You're bucked off the horse. I used to ride nags from the race track back in the day because I loved horse riding. The only time I've got to get a horse riding was when I was helping someone else ride their horses, but I've got bucked off all the time. That was what you’re taught. Get back on, you're going to have another go. It’s not like you had your first crack at it and you're going to be successful.
There was that deal, then the flip deal in Philadelphia went absolutely pear-shaped. We've got a good value, good IRV. We thought we had a good contractor on it, but we have to find another contractor because he wasn't doing the right thing. We have to take back all the GC. It’s the first time I brought in capital from outsiders. My dad came on board. What ended up happening was instead of taking 8 to 12 months to get it completed and sold, it took eighteen months and that ate into the profit. I ended up paying my dad what I promised him, which was a 15% return on his money. I did and I promised that but it has to come out of my own pocket, plus we lost money on the flip because of a bad choice of general contracting.
Even though I'd been managing as a structural engineer, many contractors and not understanding what I needed to do and putting in the right contracts in place. What I didn't realize was the vast difference between commercial versus residential contractors. I’m not saying all residential contractors are crap. If you’re in that $100,000 to $150,000 range, you're not getting your top-shelf blokes, unlike doing the multimillion-dollar contracts. There are issues with multimillion-dollar contracts not being from a professional side of it. I've seen the other side as well, but nine times out of ten you get a better-quality contractor.
To cut the long story short, I had to take that job over as a GC remotely. I was in LA at the time and I have to negotiate with the city about he put up all the drywall without getting sign-off for electrical and HVAC. I had to pull down the drywall. Through my day job, I've experienced local municipalities. I knew what they wanted. It’s like, “Let's help each other.” I could be a little bit articulate with them and talk like, “I’m an Australian and this jerk screwed me over,” and blame it on someone else. We got up there in the end and it sold quickly. Everything went well except the timeframe that you had. When you fire someone, the job then slows down. You've got to pick it back up again. You've got to go through the city. You’ve got to get it approved, you’ve got to go to the CMO and then you can sell it.
If it all gone well and we did it in twelve months, we probably would have made $30,000 or $40,000. My dad would have made his money and we would have all gone down. Those couple of lessons at the beginning helped me realize that this isn't an easy game. That’s not to scare people, it means that you've got to understand what you're getting into. When things go wrong and crap will hit the fan, that you have the mental capacity and the resolve to work through it. Know that you can trust yourself and trust your instinct about how to problem solve and get through it. There are all that failures and speed bumps in the road. You've had to sort out something.
A speed bumps come up. You've got to go around the speed bump. How do you conventionally problem-solve to get around it? Some people are like, “There's a speed bump. I can't get over it.” You either jump over or go around it. You'll figure it out. That was all it was. Learning to figure it out are the two biggest lessons from those two “bad deals.” I didn't lose my shirt on either one of them. It was that you learn how to figure it out. You learn how to roll up the sleeves. It was stressful at the time, but I’ve got it done and we got it over the finish line. I'm glad that we got over the finish line without having to hand the keys back to the bank.
Would you say that your father was your first private lender?
You said something that you gave your dad back what you promised him. I'm sure him being your dad had something to do with it, but that attitude is what I look for when I loan to people. I'm developing a relationship with the real estate investor. I'm looking for the guy who's willing to cut his own throat to make me whole or at least make sure that I don't lose money. I know I'm making an investment. No investment is secure and safe. There is risk involved and I accept that. I'll tell you one thing, if you lose money on a deal and you make me whole, I'm going to loan to you on the next one. I will ask you, “What did you learn? What were the mistakes?” That's all part of it. As long as people don't think of my private loan as a blank tuition check to do whatever they want and they're willing to do the right thing to honor the commitment.
That's what that taught me. You can bring on other people's money. This is not your money. You have to treat it better than you treat your own money. Your money is going to sit behind theirs. That means that if you promise them something and you are being transparent and things happen, which they will, this is investing. There are no zero risks. Even when I raised millions of dollars from people and everyone goes, “Is this guaranteed?” It's like, “No, it's not. If you still think it's guaranteed, you should not be investing in this deal.” I've had to fire investors because they come to me with that type of attitude and I'm like, “You don't understand how an investment works. I can't guarantee. I don't have a crystal ball what's going to happen. I can model that out over a period of time and do everything in my power, but things still happen.” If you come to me saying, “Is it guaranteed?” That’s a red flag. “Maybe you need to do some smaller deals, before coming over to here.” I've had to fire investors because they've raised those red flags. I said, “Sorry.” Even as a “borrower” from private money, I have fired private money lenders because I know that our interests don't align.
When you were telling that story, I thought of Joe Pesci in Casino, the banker has $50,000, it’s like, “We're losing some money.” He’s like, “I want my $50,000 back.” It doesn't work that way. He’s like, “You're going to give me my $50,000.” We're coming down to the wire. I don't want to stop this at all because I'm having such a blast. I know you're accepting investors, if you want to invest with Reed. Also, there's a mastermind program that you have for commercial real estate. Do you want to talk about those?
[caption id="attachment_2746" align="aligncenter" width="600"] Investing In The US: In real estate, if someone doesn't take the time to get to know you before jumping into bed with you, run the other way because it's not going to end well.[/caption]
On the business side for people, we didn't get into it. What the business has come into is we buy value-add multifamily deals through syndication. Syndication is the pooling of investor's money together. We’re the business owners. We find the deal. Investors don't have the time or energy. We partner up and we buy big deals. That’s the side of the business and there's also the learning side, which is more the mentorship. When we say mentorship, it's more of a mastermind and we do allow people to come into our mastermind who control $1 million of real estate or more. The reason we have that such high barrier is because we're trying to get people who want to become us or emulate us and not figure out what an IRR is or the cash-on-cash return is.
We've got both sides. If you are interested in investing with me, we've got to get to know one another first. I do have a whole criteria of onboarding investors. This is a relationship business. You've got to get to know one another and you don't jump into bed instantly. If anyone ever does that in terms of real estate, run the other way because it's not going to end well for either people. I'm all about getting to know people who want to get involved in my sphere. If you want to get involved, you head up to ReedGoossens.com. There's Invest With Reed or Work With Reed. You click on either one of those tabs. You can fill out some forms and we get on a phone call and figure it out.
I encourage anyone out there, if you do control $1 million worth of real estate, get into the mastermind because as I've gone down this path, I've learned that real estate investors are notoriously cheap people. The course is $5,000, but at this REIA meeting, it's only for $1,000. Having that high barrier to entry, I've gone to some “masterminds” that I was very excited about and became disappointed because it was a newbie dumping ground, which was good if you're new. If you had some experience already, you didn't get a whole lot out of it. I like the fact that you're putting that up there. I know you've got a couple of books that we haven't talked about. Tell us about your books.
Investing in the US is the first book. It is all the best episodes from my podcast over four and a half years jammed into a book form in and around my story. I'm an engineer as well, so it's laid out in terms of a step-by-step process. That actually went to number one, which was awesome. It was uploaded to Audible. They've got to review it, but Investing in the US: The Ultimate Guide to US Real Estate will be on Audible on Amazon. Check it out there. You can check out the podcast. The second book was released in 2019. It was a collection of me and seven other Aussies that have made the jump across the ditch to the United States. We've all achieve financial freedom through US real estate and different facets of a couple of guys in there talking only about mobile home park investing. Each one of us has a chapter and it's called 10,000 Miles to the American Dream: Our Story of Financial Freedom. Check out that one as well on Amazon or on my website.
ReedGoossens.com, you can find out about the books, invest with Reed or if you want to learn with him. I want to thank you, my friend not only being on my show but for having been one of the first people to put a podcast out there when I started looking around and telling your story and letting people know this can be done. If you want something, go get it, plain and simple.
I also want to reflect a little bit back to you. Thank you for those kind words and you're doing an awesome job. Congratulations with all the success and the fact that you left your W-2 because that's awesome. Keep doing what you’re doing. I love this show. I love this format. I love the jam. We’re like musicians but we're talking about business. It was jamming back and forth.
That's exactly it. I told my mom that I'm going to keep doing what I'm doing because I'm too dumb to do anything else. This is all I know.
You get your juices from it. I bet you love coming off this show and going, “Yes.”
I love insurance and I love investing in real estate. I write reports for insurance, but they're not creative. I’ve got to get uncomfortable. The more comfortable I got doing stuff I don’t like, all of a sudden there's more freedom, all of a sudden there's more opportunity, which all of a sudden brings in more money. Reed, thank you so much. I wish you all the best. I’ll talk to you soon. Take care.
I would like to thank Reed again for coming on the show and sharing his story and his knowledge. For more information about Reed, his investing, his mastermind, his story, his podcast, you can go to ReedGoossens.com. I don’t charge money for this show, but I do ask that you please help me get the word out and increase awareness by leaving me an honest rating and review over at iTunes, Google Podcast or whatever platform you’re using. That is the best way you can help contribute to the show and help me out. I’d be forever grateful if you would do so. In addition, I ask that you please help other people find out about the show, especially if you’re trying to develop your own private lenders for your deals. Please share this episode and help build the Private Lender Nation. I hope everyone is doing well. I wish you all a safe, happy and prosperous private lending. I’ll catch you on the next episode.
My real estate investing journey first started back in 2009 when I picked up the little purple book “Rich Dad Poor Dad” by Robert Kiyosaki. This book opened my eyes to a world of entrepreneurship that I was not aware existed. Up until this point I was a subscriber to the conventional 9-5 career-path. Something inside of me didn’t want to comply to conventional norms, and that I knew I had more to give in my life then just sitting in a cubicle for the next 50 years of my life. I wanted to take control of my life and Rich Dad Poor Dad was the book that changed it all.
My background is in civil/structural engineering and I have over 9 years of professional experience before taking the plunge full time into real estate investing and development. In my former engineering life one of the career highlights was being involved with infrastructure development of the 2012 Summer Olympic Games in London. I have also worked all over the world as an engineer including Australia, NYC, Los Angeles, Fiji and Europe.
I moved to the US in 2011 for the love of two things: Firstly, My wife (at the time my GF) and secondly the big apple, NYC! Within the first year of living in the US I had purchased my first duplex for $38,000. This experience taught me a lot about the benefits of Investing for cashflow here in the US. Barriers to entry are a lot lower compared to my homeland of Australia.
Since this time, I have gone on to start RSN Property Group, a multifamily syndication investing firm which has been involved in the acquisition of over $60 mill worth of real estates to date. I have also launched the podcast Investing in the US – An Aussie’s guide to US real estate in early 2016, wherein I interview the cream of the crop within the real estate industry to better educate other investors who want to break into the US Market.
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