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March 22, 2023

Ep 361: Creating My Freedom Through Apartments With Jarod Alexander

Ep 361: Creating My Freedom Through Apartments With Jarod Alexander
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0:01 Hey, welcome to today's episode of the high widows podcast. I'm your host Daniel Martinez. Today I have a special guest, Mr. Jared Alexander from one of the country you from today. 0:12 So I'm from Phoenix, Arizona. Yeah, 0:15 Phoenix, Arizona. Phoenix, Arizona is one of my favorite like city. I like visiting. It's dope. It's dope. 0:23 This time of year. Yeah. 0:26 That's the coolest time of year. 100%. Yeah. Holly been in Phoenix. 0:29 About nine years now. 0:32 Yeah, I knew from Phoenix where we would you grew up. 0:36 North Carolina. North Carolina. Yeah. 0:40 You have a little bit accent? Still? 0:42 A little bit? Yeah. Stick with me. I don't think it's going anywhere. 0:47 So one of the questions I always like asking is how he had been a real estate, a lot of people have different stories of maybe they fell into it. Maybe it was a parent or sibling, but everyone's different story. So what's yours? 0:58 Yeah, so um, I fell into real estate. So actually, early on, really, before I even knew what I was going to do, you know, going through high school, my mom done a couple rental properties. And then I saw my grandfather retire at the age of 50, based on his commercial property. So what he did, he started a flooring business, and ended up buying the building and in developing the land around that and built up some more commercial buildings. And then he ended up Yeah, passing the business down on my mom and just took off to Arizona, which is a big reason I'm out here now. And he's been living off the income, you know, from that property ever since. So, that kind of opened my eyes a little bit, but still really not knowing exactly what I wanted to do. You know, I kind of how we, you know, how we all grow up, you know, as graduate college, get a job 401k Right, or card to your 65 That was kind of the mentality, I did have plans on possibly owning that business one day, but you know, I really didn't wasn't sure which route I was gonna go. And so anyways, yeah, fast forward. As far as how I got more active in it, I actually came out here to Arizona, as I mentioned nine years ago, and a friend introduced me to the book Rich Dad, Poor Dad. And I'm sure you probably hear that a lot. You know, they talked about that, that purple book there. It totally changed my whole outlook, my perspective on you know, my career, where I was going, what I was doing, and I, I yeah, just started looking into real estate. And, you know, next thing, you know, here I am, started with a single family, and don't want to jump in too much to it. But yeah, just started with the single family and ended up buying out of state rental property. And then the whole, you know, I had to really determine why why I wanted to do this right, you know, what was my why, you know, you hear that question a lot. And, and for me, you know, I wanted to create financial freedom, I wanted to, you know, support my w two income, you know, replace my W and W two income passively. And so real estate was the best way to do that. And other than like the stock market, I mean, real estate for me, I just, I grew up in a flooring business I construction background, as you know, really resonates with me, so that just that brick and mortar physical asset, investing in something that creates value over time, I could sell it for profit, or rent it out and gain income based on that. So yeah, that's kind of how I got started. 3:53 So started a single family. Are you still doing single family right now? Or do you kind of pivot into other asset classes? 3:59 pivoted other asset classes? Yeah. So right now I'm in apartment syndications. 4:07 Okay, awesome. Awesome as up 4:10 I'm so happy to report I will be doing my first GP probably close on that in the next week or so. So 4:20 what's the deal? What's the deal? What is he talking about it? 4:22 Yeah, so I just started my business optimal equity group about about three months ago and so personally, I ended up got I had a mentor in this space and it was kind of fall on his coattails and and you know, getting started with a single family and then heard about apartment syndication, which honestly, I'd never heard of, probably until about two and a half years ago. And what it is is, you know, they operators go out and invitees buy these apartment buildings and they raise The capital from investors, you know, for the downpayment, renovation costs of the property, and you know, the investors get a return. So essentially, you can double your money in three to five years, depending on how the deal is structured, I'm primarily focused in value add, which to sum it up pretty quickly as flipping apartments. And so they go in, you know, raise, renovate the units raise the forced appreciation on the apartment building and ended up selling it for a profit. And so I started out investing and five of those actually here in Phoenix, Arizona, personally, and then quickly realized, like this is a great way to invest in you know, a non traditional way other than the stock market, right? And you get, I mean, you get great returns on making the same amount of money as I did on that single family cash flow without having to worry about a you know, sump pump going out, which I'll save that for a story that little later, but you know, and, and so and I get to really just do the due diligence on operator wire, the money, and I'm collecting a check every month. So anyways, that's what really encouraged me to start my business around those same lines. And so I partner with the general, the GPS or the the syndicators that go out and find these deals, and I'm helping them raise capital for it. 6:36 So what's your role right now in your GP deal? Are you capital raising, or did you find the deal? Or what's your role in this? 6:43 capital raising? Yeah, 6:45 okay. Yeah. Okay. Yeah, and this is feminism, feminism. There's different facets of that of that syndication that everybody brings their own tool or their own skill set to the to the deal to, to make that deal happen. And I think the bigger the deal, the more optimized, you can make it because there's less there's more, there's more equity to pass around. And there's less, there's less, there's, there's more of a spread, so you can pass around different duties to different parts of different people to carry that responsibility. 7:16 Yeah, absolutely. They say what's your superpower? Right? And, you know, for me, I'm actually, you know, working in my w two, you know, I'm in sales. So that kind of transitions into that just raising capital. And, yeah, just, 7:32 you still have your W two, 7:34 you still have my w two. Yeah. 7:37 I don't knock that I don't, I don't like being a real estate investor and having to be too because it makes you more lendable. Most most investors like me, I can't get a bank loan. If I asked for one and give them $1,000 $10,000. They don't even care like me sideways. Yeah. This is why it's important for me, because I have people that I raise capital with to that they're more lendable. Okay. I can't I can't I can't get a loan, but you can get us we can be a value. 8:09 Absolutely. Yeah. And that's the cool thing with real estate is there's so many different ways, you know, you can bring value to a deal, right? Yeah. 8:19 So, what's the deal itself? Is it uh, how big is that? How big the units are just trying to stay in that middle? 20 To 50 unit Mark, are you going after some bigger? 8:26 Well, yeah, so these are like most of these are gonna be 100 plus units. Yeah, and so like this particular ones in the Dallas, I can't get into too many details because it hasn't, you know, closed it and just with SEC regulations and all that, but this is in the Dallas market, Dallas, Texas area. But so stay really sticking to the hot markets, right, Dallas, Houston, Phoenix, are probably the primary markets I'm really honing in on right now. 8:59 How many partners are usually in a syndication because I know it can vary depending on how much weight people can bring to the table because some some people might be doing this for a while they might have the capital already, they might have the balance sheet ready. And they're just looking for somebody to find the deal or somebody bring bring the management or something to that case. However, how many partners do you normally work with on a syndication? 9:22 Well, so it definitely varies. And now if you were to ask this question, probably six to eight months ago, very, very little right? You know, you got some that just had three or four, you know, initial partners that are like you know, the full GPS that are going out, you know, doing broker relations, finding the deal acquisition, managing a property, but and then they partner with like capital raisers like myself to go out and raise capital. But I'll tell you some of these deals Daniel, I seeing when everything was really hot, and interest rates were really low, they'd fill up in hours and I mean, literally talking 1015 $20 million rate is in a matter of hours? Fill up the deal. So now today of course, that's that's turned a little bit. So it's a little harder to find capital. Now, so you know, you can, that general partner can partner with 10 Capital raisers, you know, or five or, you know, whatever makes sense to them, depending on what they need for the raise. Yeah. 10:25 So usually for accredited investors with usually 100,000, is that usually the case? Are you trying to get more more more more money with less people or less people? Doesn't really matter? Yeah, so 10:37 typically, they're about at least $50,000 minimums? You know, that's a benefit of going with me too, because a lot of these deals are 100,000. But I can open it up for, you know, for a little less. And, you know, it all depends on how to deal with structured, you know, so this particular deal was a 506. B, which is why I can't really get into too many of those specifics with it, but they was takes non accredited investors. So yeah, just again, depends on each deal and how it's structured. But I like open it up to non accredited just to give those people that, you know, because you gotta meet certain requirements to be an accredited investor, right? You got to have at least a million dollar net worth for two years and your W two, or, you know, have a household income of $300,000. With your 11:28 Yeah, yeah, I gotcha. It's a it's definitely a small list of people that can hit that accredited investor. So if you can open that Bible says be the target, everybody else kind of opens up the doors, just because most people never even touch the multifamily deal, because it's just so it's too big. It's too big to touch. The beauty of fundraising and bringing in a lot of Capital Partners. What tips can you give to capital raisers? Where to Find Them? How to find them? What do you ask? What do you bring to the table? 11:59 Yeah, well, you know, so the best way to learn is by doing it right, and then taking action, right, which I, I found this one out with, with the last year live I've been raising on and, you know, really, you know, because I'm gonna tie by, I jump in, and what's that saying, you know, you jump out of the plane and build your beard, build your parachute on the way down, right? That's, that's my mentality. And, you know, with this, looking back, I wish I would have built my brand a little bit more, I guess, you could say, and just kind of, you know, found the investors first because you kind of had this idea, oh, if I find a good deal, the investors will come? Well, you know, and I'm in I'm in sales myself, but it's a little different than actually, it's a lot different than going out and asking somebody for, you know, $50,000 to invest in a deal than it is, you know, I'm in flooring still. So going out and, you know, selling 10 $20,000 worth of flooring, right? But so it's, you know, people got to know, like, and trust you, you know, so you got to put yourself out there. And I really think and this is how I based my w two sales career too, is really just going at it from a mindset of how can I help this person? Right? How can I educate and make sure they know what they're getting into? Make sure they know what it is because, again, a lot of people don't even know about apartment syndications. You don't just walk out your front door and says, Hey, Bernie, did you hear about it? And apartment syndication? They did other day. Right? Like, no, you know, they got to be in that room. You got to be in the room. Yeah. I mean, you know, it's not like the stock market where you know, they it's all over the news and everything, you know, everybody hears about that. So it's just putting education content out there. Getting in front of people networking. You know, this space is really built on partnerships, and just seeing how you can add value going back to what we were talking about before. 13:56 Do you have like educational materials that you show like every single person, here's what the basic syndication is. And then here's the deal itself of what it is and what the return is an IRR and all that jazz. 14:06 Yeah, so I ended up you know, typically have like a sample deal, I'll show them say, Hey, this is what a deal looks like, this is what the returns, you know, this is what they're gonna go and do and update the property, add value to it, renovate it, you know, so, I do that. And then for the people who are brand new, you know, first started out with some education content of really what's apartment syndication, how it works. I mean, there's a lot of benefits, you know, it's recession resistant, you can save a lot of money with taxes, you know, you can defer all the cash flow or write that off and the losses and the bonus depreciation. So just kind of explaining the benefits of why you would choose to invest in a real estate or, you know, apartment syndication instead of the stock market, right. Or not instead, but just an alternative investment, you know, 14:58 sort of investment. Yeah, I'm talking about, I'm on Twitter and I talk a lot. There's a lot of dividend investors in the stock market investors on Twitter and online. So I'm always talking about like, I'm always making fun of their 4% returns, because it's too close to inflation for me. 15:11 Yeah, absolutely. I mean, you could argue they're losing money, really, you know, with inflation, right? 15:18 Yeah, it's a crazy thought to me, my partner tweeted out the other day is like, dividend investors are out there, because they're bad at math. It's such a crazy thing to me, but like, like, I don't knock like, there's ways to monetize dividends as ways to monetize everything. But it's one of those things where like, if you really think about investing, investing is about ROI. And the timeframe, you can recoup that ROI, because that increases your, your total ROI, like you'd be getting 20 20% return, and you can get that in three months, well, you got a 60% return, or 80% return, you know, so it's really understanding that a good ROI. And if you can shorten the time curve, that's when you can really make a lot of money and make make your capital A lot of money. 16:03 Yeah, absolutely. Well, and to your point, too, is not only, you know, you're just getting a 4% return, but then look at your bottom line after all the fees, and, you know, Commission's you're paying, you know, if you're in a brokerage firm or whatever, I mean, the bottom line, I mean, it's pretty, you know, sometimes you're losing money, you know, after you you know, pay all those fees, so, 16:27 ya know, it's, it's definitely, definitely alternative assets to look into. I don't one thing I like about real estate in general, is that there's so many different like, asset classes, like you don't have to do single family and for everybody, I feel and this is where like, I think about single family all time, like 80% of people in real estate are single family. Why is that? It's because there's the most of it, and there's the most information about it. Yeah. So by us doing this and bringing this conversation out there, we're increasing more Inter National entertainment, but more education out into that space about multifamily and on bought syndications and about other asset classes, because there isn't the information out there, you're not going to get it. If you're not in the room, you're not going to get anything out of the podcast, I kind of get it if you're not on YouTube. 17:11 And again, it's just another alternative way. Right? And I think, you know, for somebody that is looking at investing, you know, you really got to determine, you know, are you a cash flow investor? You know, do you just need that money passively, like, you know, somebody without a W two, right? Well, you need monthly cash flow. So you want to invest with that invest with assets that are, you know, paying a higher return on cash on cash? Or are you a growth investor, right? So, honestly, that's kind of where I'm at right now, actually, that's not kind of that is where I'm at is I want to build my net worth, I want to grow my net worth. So yeah, the cash flow is nice, you know, some of these deals you can get anywhere from five to 8%, depending on how it's structured. But I want to I mean, if I could double my money in three to five years, I mean, and just keep compounding that. I mean, that's huge, right? I mean, in three to five years, you know, I mean, I'm already in five right now, you know, I plan to do another another law. I already did one this this year, so far plan to do another one. I mean, you know, I mean, just compounding returns on this can be, you know, pretty, pretty nice, 18:24 significant, significant. What's, what's your all in all goal? Like, in five years? Do you want to be more of a GP doing more of these deals? Are you trying to just eventually be a better LP and be more passive, like, what's your overall goal? 18:37 So no, building his business, I, you know, I want to be more active. I mean, I love this, I love this space. I love real estate. And so I definitely want to be more active. I honestly, I thought I wanted to be a GP, like, you know, the person with the boots on the ground and, you know, managing the properties and, you know, just being involved in and everything there. But, you know, as far as a capital raiser, I'm still a GP on the deal, but I'm just I had the, you know, certain qualifications and requirements that I have to meet, you know, on the on the specific deal, but I like the idea of partnering with the professionals, right, who already had the relationships, who had the network who, you know, already have everything established and in place and just, you know, bring in capital to their deals. I mean, it works out pretty good that way. 19:31 What is a quote that is yours or somebody else's that you resonate with? 19:35 You know, um, I think, to come to mind, hopefully, that's alright if I because again, it kind of goes hand in hand is, you know, so education plus action equals results. And I heard that from Jake and Gino on Have you ever heard of them? They're pretty big in our apartment. partment space, and you know, I have to be comfortable being uncomfortable is, you know, I've, I kind of I get into a lot of situations where I'm like, Alright, here we go, you know, let's figure it out, you know, and I think that's the best learning experience you can really do that, you know, you can really learn from is, I mean, you got to have the education, you got to know what you're talking about. Right. So there's definitely a piece of that. But, you know, I mean, without the action, nothing happens. Right? And so, yeah, and honestly, you know, going back to this first GP deal, I'm about to close on, you know, as I mean, if I wouldn't have said yes, and kind of just jumped in, right. I wouldn't, I wouldn't be talking about that right now. You know, 20:49 100%? Yeah. You can get them all information overload, but if you don't take action, you're not gonna get 20:55 anything. Yep. Exactly. 20:58 So what was the second quote? You said? Simple? 21:01 Well, so the one was education plus action equals results. And then I had to be, you know, be comfortable being uncomfortable. Because, yeah, so kind of two and one, and they were they go together, but yeah, 21:14 that's good. It's good. So what? What is your acquisition? Are you like reaching out to agents? Or that's your name? Worried about that? Because you're working with a GPS? 21:24 Yeah. So I'm just working with GE pretty. So it's pretty much retail and investors is is who I'm looking for? Yeah. 21:33 Let me ask you this. Why? Why the podcast? Why podcasting? In general, a lot of people have ended all in all goal is it's a journey capital as a whole. 21:42 Well, so just to Yeah, to get my get myself out there, build my brand. help educate people on different alternatives, they can invest. Yep. You know, other than the stock market? And yeah, I mean, eventually, if somebody's you know, interested in this space, you know, definitely can can help you out and placing your money in a, you know, good cash flow and deal. 22:04 You know, legal, I'm plugging it in, this is what it is. Every every lecture is looking for capital, including me. Absolutely. Capital guarantee, if you listen to every episode earlier, everything for capital, I presume for capital place. Most things, there's, there's always an underlying need for it. And every asset class, so it takes it takes your business to the next level. And once you have the capital in place. Yeah, absolutely. Is your Are you there, like exit plan for your W two? Or is it as you get there, when you have enough deal flow or cash flow or that worth? 22:41 Yeah, so I tell you, I was on a podcast probably close to six, seven months ago. And I said, I put out two years there. So that was at about a little under a year and a half now is the goal. Which is it's a stretch goal, you know, they say, you know, don't make goals that are easy to get right. And, you know, so you got to make those big, audacious goals. And that's definitely a big, audacious, but it's attainable, right? I mean, you interview people and probably hear it all the time. I mean, people replacing your income within a year or two years after getting involved in real estate, you know. So, you know, 23:25 real estate is definitely cool strategy to definitely build you up your worth, your net worth your your cash flow, all the above depreciation, it all comes in down that path. So it's definitely a cool, definitely cool niche. Just finding the one strategy you're good at and like, and like doing, because I don't really like single family. I don't. Yeah. Single family is not the tell. I'll do all you know. 23:49 And honestly, I thought it was at first, right. I mean, my goal into this when that first single family house, we were gonna buy 60 7080 properties, whatever it was, right, just rent them out. And, and I quickly realized that was not the route I wanted to go and 24:06 what changes exactly? 24:10 Well, so I, for one, I, after just going through that process of the first single family home and that deal, I'm like, Man, I had kind of thought I gotta go through to 6070 more times, you know, like, you know, which is doable, but for me, it just wasn't something that was really sitting well with me and then yeah, a lot of effort and then you know, seeing the repairs that can come up, I mean, one repair can wipe out your cashflow for you know, really two years I mean, if you're cashflow on $200 a month you got a $4,000 repair you know two plus years your your cash flows wiped out I mean, yeah, you're still getting that. But for me, I think it's not really smart to bank on equity. You know, you want to bank on a cash flow on property and hope it you know, you You know, raises or hopefully it goes up in value over time. Right. So, yeah. Which that's not always the case. I mean, you see somebody flipping houses right now. I mean, I just did my net worth sheet yesterday, actually. And it went from 720, about eight months ago to or, you know, probably down $100,000. Right. So, yeah, I gotcha. I gotcha. Yeah. A lot. A 25:27 lot have a lot happens very quickly in the real estate space. Yeah. Like? Well, where can people find you optimal equity capital group is that where are you where your website is? We can work with us online. I think you put your LinkedIn and Instagram as well. 25:44 Yeah. So LinkedIn, Instagram. I'm on Facebook as well. Yeah. All the major social media platforms. And then now do you want me to give that out? Are you gonna put them in? 25:56 As people people might be listening to this and not watching? Yeah, 25:59 so yeah, Jared and Alexander 2489. And for the Instagram, and then LinkedIn, just Google my name, Jared Alexander. And then I'm on Facebook as well. Jared Alexander. Yeah. 26:15 There you go. I appreciate you coming out. I appreciate the information. Like I said, there's there's not enough information out there in the real in the multiple multifamily syndication space. So I probably I thank you for helping me provide some education in that space. As I said, I don't I don't have very much out there and my podcast was kind of cool. Having some more information come out. 26:36 Absolutely. Yeah. Thank you. And yeah, if anybody's interested, please, you know, get in touch with me and happy to provide some more education content around around what we're doing here. 26:46 Thanks, Ben. For everybody here listening to like, subscribe, share with a friend. Please like us and share. Share us. We appreciate you coming on and listening. We'll see you on the next episode. Thanks, guys. Have a great day, guys. Bye

Jarod AlexanderProfile Photo

Jarod Alexander

Owner / Sales Proffesional

Jarod Alexander is from Fayetteville, NC who is happily married with 2 amazing kids. Jarod has found his passion for real estate and loves to listen to podcasts about passive investing, growth mindset, and financial freedom. Together with his wife, they started their real estate journey buying a turnkey single-family home, investing in 5 apartment syndications as a limited partner, and just recently started there business Optimal Equity Group. Jarod enjoys the simpler things in life; like spending time with family, spending time w/ like-minded individuals who challenge him to grow, running, biking, gym, spartan races, and quality time with his children.

Daniel Esteban MartinezProfile Photo

Daniel Esteban Martinez

Host/ Ceo/ Speaker

I have been an entrepreneur since 2018. I come from a regular home just like most people. My dad worked on the roads in the Chicago area for over 30 years. He always taught me to work with my brain, instead of my body. Your body can only take so much abuse. I learned so much from my father. He always pushed me to work smarter and not harder.

I have owned and operated a trucking business for 2 years. I started learning real estate in 2019. Fell into the Data & Skiptracing business in 2020. My partner Anthony & I started Hivemind in 2021.

I have done a ton of different jobs coming up from painting, to door-to-door sales, telemarketing, truck driving, and loading trailers. What I learned most is that I want to stay in the digital business space. The leverage you can have delivering digital products to the marketplace can yield limitless possibilites.

I started The List Guys in 2020. It is a data and skiptracing service. We provide seller and buyers list nationwide. My clients have been getting great results and I am proud to help people killing it.

I started the Hive in 2021 with my partner Anthony Gaona. It is a real estate and business mastermind. It also comes with a all in one CRM, that can host unlimited websites and users.

Starting the Hivemind has been an amazing journey so far. Seeing one of our users make his 6 figure month in June 2021 leveraging our software, I know there will be plenty more to come!