The Phenomenal Power of Leverage That Built a 400-Unit Empire in Four Years with Andrew Freed

Transcript

[Mattias]
Welcome to The REI Agent, a holistic approach to life through real estate. I’m Mattias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent. It is your friendly host, Mattias here. Erica is currently doing, I think, swim lessons.

So we are not able to have Erica on the show today. But we had a great guest, Andrew Freed. And you definitely pay attention to this one.

It’s great for people that are looking to grow businesses, to scale, or people that are just wanting to kind of understand more about how they can invest in passive ways or if they wanna learn how to get into bigger things like commercial deals and multifamily. I think, in thinking about what we discussed, there’s the word leverage really comes to mind. And I think that’s kind of an underlying theme throughout this episode.

I just wanna talk about that a little bit before we have Andrew come on. But leverage is just something that is, people often think about leverage as debt, mortgages, which is definitely a form of leverage. But there’s leveraging your time, leveraging people, are all ways of really growing to something much larger than just yourself.

I think the vast majority of people are being leveraged. When they are employees, when they’re working for other people, their time is being leveraged for somebody else’s gain. Like if you’re in a company, you’re building somebody else’s empire.

I mean, that’s kind of a blanket statement. That’s not 100% always true. There’s different ways that, obviously, employment is structured, et cetera.

And if you’re in a field like teaching or something like that, that you might feel that your service that you’re doing, that the work you’re doing is very important and bigger than just what kind of money you’re earning, et cetera. And I’m not dissing that stuff at all. But if you are a person that wants to kind of be freed, Andrew Freed, he made that joke earlier.

If you are wanting to kind of pursue your own things and be your own boss and kind of live your own life and build your own empire, your own whatever, leverage is just such an important piece. And he gets into this a good amount. He grew very fast, his kind of company and what he did.

And it’s an impressive, and he attributes it all to leverage. So, I mean, we talked about leveraging with debt and how that can really make a huge difference in your net worth, your portfolio. And he explains it really well in this podcast.

But if you own a ton of different properties, you wouldn’t be able to do that if you just paid cash. If they increase in value, that substantially increases your net worth. Or paying down the debt, if your tenants are paying down the debt, that increases your net worth.

You could do rent increases, all that stuff just really builds. And then leveraging other people, like if there are things, he talked about this and I talk about it a lot too, but if you really focus in on your strengths as opposed to just trying to grit through the things, like if you just feel like you’re not disciplined because you don’t enjoy doing something and that you should be better, you might compare yourself to other people that are great at answering emails. This is a personal thing here.

I hate emails. I hate emails so much and I hate all the correspondence that happens. And so focus on getting that off your plate, getting that to somebody who does really well with that.

And if you do, that’s gonna get you to a place where you are able to focus on the things that move the needle further, faster. So yeah, leverage is the theme today and I think it’s a huge, huge opportunity. And if you focus on how you can leverage people, leverage money, it’s going to take you a lot further than if you were just being leveraged.

So without further ado, let’s get right into the show. It’s a great one. Andrew Freed.

Welcome back to the REI Agent. I’m here with Andrew Freed. Andrew, thanks so much for joining us today.

[Andrew Freed]
I am excited to be here. Thank you for having me.

[Mattias]
Andrew, we were talking a little bit before the show, but you are a perfect fit for this show. You have experience in all the right places. You are primarily into the commercial or like the multifamily investing space, but you also have a team of agents.

But let’s just start back from square one. How did you get into real estate investing or just real estate in general?

[Andrew Freed]
So you really bring me back to my childhood where I was under the impression that getting the American dream was the path towards financial freedom, like getting a good education, getting a nice six-figure job, getting a master’s, getting a master’s, working at a prestigious organization, get a nice swanky condo in a city. Like I did all that through my twenties. I eventually, I was a grant manager.

I worked at the Broad Institute of MIT in Harvard as a project manager. I did the recipe to reach financial independence. But come around at the end of the day, yeah, I was making good money, but I still only had maybe six, 12 months of reserves and I had to go crawling back to that job.

And that really scared the living hell out of me, to be frank. And at that point, I really decided that, is this the life I wanna live? I ended up reading, Rich Dad, Poor Dad.

It really kind of, I ate the purple pill. It opened my eyes to the fact that I was doing everything wrong my entire life from a financial perspective. Everybody’s telling you to go left and the right direction’s right.

And I realized that when I read this book. And the answer to that question, did I want the status quo to continue? The absolute answer was no.

Every time I came home from work, I escaped to vices. I escaped to anything I could to take my mind off the fact that I wasn’t really going after the dream life that I wanted to live. So at that point, I really decided to go all into real estate.

I key locked my one bedroom condo in Boston for $200,000, which was 80% of my net worth at that time. And then I started house hacking multi-family in Worcester, Massachusetts, which is the second largest city in Massachusetts. And for your viewers, house hacking’s when you get into a multi-family property, preferably a three or four unit, with a low owner-occupied low.

We’re talking FHA 3.5% down. We’re talking a 5% down conventional. So that’s what I did.

I house hacked the property. I ended up buying the property across my neighbor, all with that key lock money. I went into a syndication as a limited partner with that key lock money.

And a syndication’s when you buy a larger property. You know, you fund money from investors, the GPs, the people putting the deal together, get upside. But more or less, I recycled all that money into about 30 units.

And then I ran out of my own cash, but I had all of these amazing deals come my way. So at that point, I figured out how to raise money from investors, how to syndicate larger properties. And in a matter of four years, I started this during COVID.

I went from zero to 400 dollars. Wow.

[Mattias]
Wow. There’s a lot to unpack right there. Man, my goodness, that’s amazing.

And I like how infinite it feels to do play with funds, like the equity lines and stuff like that. Like I’ve done a bunch of different things like that where you feel like you can re-tap into it. You can, if you do like a cash out refinance, that kind of stuff, you kind of get all your cash back.

And it’s a great leverage tool for sure. And I think it’s, you gotta be smart about it. But I’m surprised you got into a syndication that early.

Like as far as an investor, that’s kind of, what brought you into that space and what introduced it to you and what made you feel comfortable with it? Because that’s not usually, people usually are as further on down the line.

[Andrew Freed]
That’s a fantastic question. So at that point, I was reading everything I could about real estate investing. I probably read a hundred books at that point.

I probably listened to six to 700 hours of BiggerPockets podcast. So I was really just diving into all the asset classes and trying to figure out like, what do I want to do? Do I want to do a rent by the room model?

Do I want to do multifamily? Do I want to do syndication where I give my money to somebody else and they invest on my behalf? Like I didn’t know.

And in the process of exploring all of my real estate endeavors, I ran across somebody in my local market who owned hundreds of units and was where I wanted to be five years from now. And I really wanted an excuse to leverage that person as a mentor. So they actually were syndicating this deal.

I took money from my HELOC. I think they offered a 15% annualized return on my HELOC at that time. It was during COVID.

I was paying a 3%. And if anybody knows the concept of arbitrage and this is how hedge funds operate, this is how rich people operate is you borrow money at one rate and you leverage it into an asset that provides you a higher return. That’s exactly what I did.

I took money that I was paying 3% on. I put into something that was supposed to be paying 15% on from somebody I wanted to mentor under and provide them value and thankfully that project sold a year later for an 89% return and on top of that, I got a mentor I could lean on for advice.

[Mattias]
Did you also consider or was one of the motive, this is like a me, this is what I did when I first got into syndication, but I also saw it as an opportunity to get experience on the other side. If I was going to lean or if I was going to lead one of these one day, I wanted to have that experience as a limited partner so that I could see what it’s like and kind of go through the whole process. Was that another piece of the puzzle for you?

[Andrew Freed]
That was absolutely a piece for sure. I mean, at that point, I had no dream of syndications. I think my original goal was to house at 10 multifamilies in 10 years, all three units, have 30 units right off into the sunset, you know, and retire, right?

That was my dream, right? And you also got to think about it. During this time, I did have a W-2 while I was building this real estate portfolio.

So I was really looking for assets that provided good return, but didn’t require a lot of time for me. Because as you and I both know, investing is great money, but it’s not passive income. It’s extremely active income, right?

So those are some of the ideas going through my mind. And the other benefit to syndications, which really wasn’t a benefit to me at that time because I had a W-2, was a cost segregation study. So the amazing thing about cost segregation studies, you pay a third party vendor to do this, is what they do is they go to your property, they make a list of all the things that have, you know, a three year life, a five year life, a 10 year life.

And they figure out what’s the cost of that if you depreciate it now. More or less, the name of the game is, you’re allowed to write off 20 to 30% of your property in year one and use that as a write off, right? And the reason why that’s so powerful is a W-2, I think by write off was limited to 12,000 unless I make above 150,000.

Don’t quote me on that, but more or less, the amount of depreciation you utilize is limited if you have a W-2. However, if you’re a real estate agent or you’re a real estate professional, you get this golden designation called the real estate professional designation. And the reason why that’s so magical is it allows you to use depreciation to offset your active income.

For instance, say for example, you’re an agent, you make $100,000 in commissions, but you have $100,000 of depreciation from one of these cost seg studies, you know how much taxes you would pay in 100,000 in commissions? Absolutely zero.

[Mattias]
Yeah, yeah, you’re absolutely right. And it is such a benefit that being a real estate agent, I think a lot of people don’t understand. And it’s something I definitely preach.

And with these commercial deals, these bigger deals, like you said, there’s a lot of work that goes into just managing a portfolio or managing one rental. It’s work, it’s not completely passive, just like you said. And when you get into like, let’s say, a large multifamily, like when somebody buys that, they’re buying a business.

This is a business. This is not just an asset, it’s a business and you are needing to run that effectively. It is a job and it has to be done properly to execute some of these deals, the syndication deals, which mostly revolve around like making it more profitable.

So it makes it more valuable. And the benefit on top of that is that the scale of it all allows to get these fancy cost segregations done, done right, and then that really maximizes that write-off ability for the investors as well. Even if you are a limited partner, you are very passive.

You’re not actively managing the property at all, but you get to take advantage of that tax write-off. And so yes, as a real estate professional, it’s a huge advantage. And I know a lot of, I’ve heard a lot of agents get into the business because their spouse is like a high income person, like a doctor or whatever.

And then that kind of unlocks that door for them. And then not to get too much further in the weeds, I haven’t heard the latest news, but I believe the 100% depreciation is in the docket of trying to get past, maybe it has already, to bringing that back because we were down to what, like 60 or 40% that we could take of that bonus depreciation, something like that.

[Andrew Freed]
Yeah, I mean, you’re exactly right. I think bonus depreciation was enacted maybe four or five years ago when Trump was in office, and now it’s actually downgrading every year by 20%. And I think you’re alluding to the fact that they’re trying to put a law in place to get it back to 100% depreciation, more or less allowing you to get the maximum for the accelerated depreciation.

[Mattias]
Right, so just again, if you are a real estate agent that makes a lot of money, don’t really want to get into buying a rental or whatever because of the headache. This is an awesome bonus of otherwise a really good investment, obviously depending on the deal.

[Andrew Freed]
Yeah, yeah, I mean, just from an investor’s standpoint, you have to understand, returns and time are inversely correlated, right? So if you want the highest return, it’s gonna require you to put the most amount of time in that asset, and vice versa, a low return is gonna require a low amount of time, right? So say, for example, short-term rentals.

Short-term rentals historically might have 20% return, but that’s gonna require a crap ton of your time and or really good systems versus syndications. They typically provide a 15 to 17% annualized return, but it literally requires you just to bet the deal, put your money in there and collect mailbox money, right? So I think people have to take that into account with their investing decisions of how much time they have available because that’s gonna be directly correlated to kind of the return structure that might be the best fit for you.

[Mattias]
Yeah, but I mean, if you look at buying a single-family rental just on the market, if you’re, I mean, especially if you’re in like the East Coast, West Coast, around the coasts, like the more appreciation-heavy markets, I mean, like you’re not getting that kind of return. I mean, it’s tough, it’s tough to get a good return.

[Andrew Freed]
Yeah, it definitely is tough to get a good return right now. That’s why I love playing in value-add multifamily because with value-add multifamily, it’s me and my mom, right? In value-add multifamily, it’s valued based on how much income it spits out, right?

So I have control over what’s it worth if I have the ability to increase the income of the property. So there’s a lot more control in the valuation in my hands versus these small one to four unit properties, which are based on the sales comp approach, as you alluded to.

[Mattias]
Right, exactly. And it’s beautiful because it has cashflow from day one, or it has income coming in from day one at least, and you’re able to then turn it and make it more profitable, like you said. And I mean, another way people can think about this or understand this a little bit better is typically this is basically a large-scale flip, except instead of just like looking at the properties, you know, like the cosmetic things that will make a buyer pay more for it, we’re looking at the numbers, we’re making it more profitable.

And so in that regard, it could be that you have to fix up the units to get more rent, it could be that you have to reduce the expenses so that it just gets more profit, and that’s what makes the value higher with cashflow.

[Andrew Freed]
Yeah, I mean, I think you mentioned this earlier. It’s like buying real estate is like buying a business, right, and when you buy a business, you value it based off how much cashflow it spits out. That’s how Warren Buffett buy a business, that’s how most people buy businesses.

They buy it based off EBITDA on a multiple of the cashflow, right? Real estate, commercial real estate acts the exact same way based on the income it produces versus the cap rate, right? Extremely similar methodology.

I mean, you could really use this to easily unlock value and really know where it will land at the end state.

[Mattias]
Yeah, yeah, 100%. It is a crazy game changer too once you realize what the power of it all, when you’re playing at this level, when you’re playing with cap rates, and playing is probably not the right word, but you are, instead of flipping a property and getting $20,000, $40,000, or whatever you might be getting, I mean, we’re talking millions of dollars because just adjusting, making it whatever expense, expenses a little bit cheaper per unit every month can have a huge impact on the overall value of the property, so it’s pretty cool.

[Andrew Freed]
Yeah, I mean, it’s literally a multiple, right? If you increase your income on the property by $1 and it’s a 10 cap, you literally increase the value of that property tenfold, right, so you can see if you are really good at getting the LOI up, it can have exponential effects on the value of the property.

[Mattias]
Yeah, 100%, and that’s the beauty of it, and it’s something that it could be a fun avenue for somebody to take on, but I think for many, just understanding the way it works, having a basic knowledge of it, understanding kind of the metrics or what makes it all happen is a good step in the right direction to make sure that a deal makes sense when you are thinking about investing in it, and then also getting a good pulse on the operators. I mean, that’s a huge piece of it, to make sure that the operators are good so that you wanna place your money with them, because there is risk.

I mean, we saw going through, speaking of the pandemic when there was 3% interest rates, we saw a lot of people having bridge loans, which is basically short-term debt that they penciled out with some risk tolerance that the interest rates went from 3% to 5%, then we’re still good, but they didn’t do that, they went to seven, 8%, so a lot of people, when that short-term loans came due, they had to then get other financing at much higher rates, and that hurt the numbers big time, so there is risk in this space. I think right now, since we kind of are on the other side of that, buying deals that are coming up now, it seems much safer, at least from that angle.

[Andrew Freed]
Yeah, I mean, I’m just talking to your agents out there, but ultimately, your goal as an agent is to get on the investor side, because when you own real estate, you don’t realize how much money you make. You make money from the tenants paying your mortgage down. You make money from the actual leverage, right?

If you bring 20% down, your property increases by 20%, your down payment literally freaking doubled, right? You make money from the cash flow, and most importantly, you make money from the tax benefits, right? So the key is to get on the other side and become an investor, and one easy way for some of your agents to do that is to find one of these larger commercial assets for a good deal and bring it to an experienced syndicator, right?

And rather than getting your commission, like ask for equity in the deal, right? And then at that point, you can kind of follow them along in the process, and they’re gonna wanna help you because you brought value to them, right? That’s an easy introductory way to take on one of these deals in a very easy capacity and kind of an easier way into kind of closing on some of these larger properties.

[Mattias]
Yeah, that’s a really good point. That would be a really great way, and there’s so many people say like if, a lot of people think they don’t have the money to buy a whatever, 400 plex apartment, complex, but finding a good deal and understanding what is a good deal and finding something that could have a plan like a value add is so many doors will open from just having a good deal. And like you said, partnering with somebody that has the experience is gonna be important if you need investors.

I mean, they’re gonna wanna see that experience. And then also with the banks, right? I mean, like non-recourse loan, a debt would be another huge benefit to these kinds of deals and to get that is difficult, especially if you’re brand new.

[Andrew Freed]
I mean, even recourse debt, all that you have to be guarantors and a lot of time your net worth has to be more than the actual loan, right? Right, right.

[Mattias]
Yeah, exactly. But no, absolutely. I mean, I think, if we’re gonna quote Robert Kiyosaki or talk about him at all, I mean, there’s the whole cash flow quadrant, which you’re probably familiar with.

And it starts with the employee. And I think most agents feel like they’ve won, they’ve gotten out of the rat race or whatever by getting from the employed to the self-employed, which I think we both would agree is a great place to be compared to being employed. But then there’s the other side of the quadrant, which is owning businesses and being an investor.

And I think that’s really where we wanna kind of keep focusing on growing. Even if you’re not gonna own a business, putting money into syndications like this will help build up that passive income where you’re making money while you sleep. And just the, I mean, almost my entire net worth is based on equity growth.

Just from having rentals, they’ve just gone up in value. And if I had sat, put that into a stock market, it would have done near as well because I also bird most of these places. So like I have basically infinite returns on them equity-wise because I got all my cash out.

[Andrew Freed]
Yeah, I don’t think people realize how the rich get rich. And the rich get rich by using debt intelligently, right? And I can just prove that to you by asking you a simple question.

What would you rather have? Would you rather have a zero net worth and zero assets, or would you rather have zero net worth and 5 million in assets?

[Mattias]
Yeah, I mean, I’d rather have the 5 million in assets, yeah.

[Andrew Freed]
Yeah, exactly. And there’s a good reason for that because what if your assets went up by 10%? What would that mean?

Your net worth instantly went from zero to $500,000, right? Versus the alternative, went up 10% or equal zero, right? So I don’t think people realize the power in having a lot of assets because they compound expeditiously over time.

[Mattias]
Yeah, no, it’s very true. It’s very true. And that’s true in multiple levels, like rent increases, for example.

We saw over COVID again, we saw prices go up, which was great if you owned assets. It made your net worth higher, but then also rent. And if you have one rental, you raise the rent by 50 bucks, that’s okay.

You have 10, that’s 500 bucks. It just becomes a lot more. It becomes a lot greater when you have more assets.

[Andrew Freed]
Yeah, even the mortgage pay down. Like literally every month, my net worth goes up 100 again because tenants are paying down my mortgage. It’s crazy.

[Mattias]
That’s awesome. Well, okay, let’s shift gears a little bit. Tell me a little bit about your real estate team.

[Andrew Freed]
So my real, so I’m a property management company. We self-manage 300 by 400 doors. So I actually have about 20 employees under that umbrella.

We have a range from virtual assistants, I have operations manager, I have a financial director, I have a maintenance team, I have about five different property managers under me. And they really help grow my property management company, but not only that, really helped grow my syndication company. So that’s the bread and butter of how I make money.

I make money off my cash flow. I make money off acquisitions fees. A lot of times my property management company’s break even because if anybody knows anything about property management company, it’s a loss leader.

A lot of times it doesn’t make money. But it saves me time from having to manage all my doors. So that’s what my syndication, my private equity sort of arm looks like.

From an agent perspective, I lead the Worcester team, which is the second largest city in Massachusetts, the Candle Worcester team, we’re investor-focused agents, and I have about eight agents under me. And to date, I think we’ve done around 35 million in volume.

[Mattias]
That’s awesome. Yeah. Wow.

So, okay, so those eight agents are sales agents that are focused more on investing, and then you have a separate property management division team, is that correct?

[Andrew Freed]
Yep, that’s correct that I have. And my property management team also helps with my investing, right? So helps stabilize my buy and hold properties will help me with my flip, because I flip value at multi, typically two to four unit properties to house hackers a lot, right?

So it helps me with that component of my investing. So it’s just a resource center for a lot of my business components.

[Mattias]
Yeah. Well, and I like the idea too. I think you could be a one-stop shop for investing clients.

And I’ve heard people describe themselves as more of like a hybrid of like a, they can’t call themselves financial advisors or wealth advisors by any means, but taking that approach of like, hey, we’re going to help you in the long term. We’re not just gonna sell you a property and we’re thinking about your net worth and all that kind of stuff. And then if you wanna buy your own property and we can help manage it, we can help maybe help flip it, potentially all that stuff.

Or if you’re not wanting that headache, you could invest with us.

[Andrew Freed]
Yeah, I mean, more or less, it’s a private equity firm for normal folks, right? Like it allows normal folks to actually get into sophisticated investments, either with themselves as they’re managing it or as part of a joint venture or syndication or potentially part of a play.

[Mattias]
Yeah. Yeah, that’s awesome. And yeah, it’s just a really cool, I mean, have like, you did this all since 2020?

[Andrew Freed]
I owned, I closed my first multi December, 2020.

[Mattias]
Wow, you’ve rebuilt a lot.

[Andrew Freed]
Do you sleep?

[Mattias]
Do you sleep ever?

[Andrew Freed]
I do sleep very well. And honestly, it’s because I’ve built a fantastic team.

[Mattias]
Yeah.

[Andrew Freed]
And also I’ve led into delegation. Like, what I will say is like, it sounds great right now, but when I was at 150 units, it was just me and my partner, we were a two man army and I was completely burnt out.

[Mattias]
Yeah.

[Andrew Freed]
And like leaning into seeing how other people built these 500,000 unit portfolios and just following their advice. For instance, like I ended up hiring a consultant, he helped me build the org shard, he helped me create good hiring practices with personality tests. And I was really intentional about building this business and now it feels great, but at the time I can assure you the growing process was very painful.

[Mattias]
Yeah. Yeah, I can imagine. Oh, that’s like the whole, what was it, 10X is better than 2X or 5X is better than whatever that book is.

[Andrew Freed]
Yeah, 10X is better than 2X, love that book.

[Mattias]
Yeah, yeah, that whole concept where you’re really, I mean, cause like, you might’ve been making hires, for example, that you’re like, oh, can we really afford this? Or like, I’m gonna cut this, my income’s gonna be cut by this much, I’ve been doing this much enough anyway. But like, if you have that mindset where you’re like, okay, we’re not just doubling next year, we’re going 10X.

You can start making sense, like this is the obvious choice, we need this to be able to scale more.

[Andrew Freed]
Or like, how can I buy back my time? That’s really important. Cause if I’m making three to $500 an hour, like and I’m doing a $50 per hour dollar, it doesn’t make any sense, right?

Like, that was really big with helping me scale.

[Mattias]
Yeah. Yeah, so the consultant, is that a path you’d go down again?

[Andrew Freed]
Absolutely, so at the time, we ended up paying $20,000 for this consultant. We didn’t have $20,000 at the time, we actually put it on a company credit card. But the power of this consultant is he really allowed us to figure out the exact role that we need, and how to identify all stars in that particular role.

Because if you identify an all star hire, one plus one doesn’t equal two, one plus one equals 10, right? Like these all star hires could exponentially grow your business, right? And I got this operations manager that filled my entire back office office, right?

I got this finance director that does all my loan request packages, my appraisal packages, everything in my portfolio appraises, because we’re proactive about creating those financial models that he does for me, right? Like prior to doing that, I was doing literally everything. And leaning into hiring all stars, leaning into investing in ourselves, because when we’re hiring these people, we’re in the negative, right?

But at the same time, you have to be comfortable with throwing 100, 200 grand in the wind, not just throwing it away, but what you’re actually doing is you’re investing in yourself. That’s what you’re doing. And there are many times when my partner were like, if we make these key hires, we’re gonna be $2,000, $3,000 in the negative each month, we’re cool with each throwing 50 grand in the operating account, giving us a try for three or four months and seeing what happens, right?

[Mattias]
Right. Yeah, that’s powerful. And that’s a really hard thing for a lot of people to grasp.

You mentioned virtual assistants earlier. What does that look like for you all?

[Andrew Freed]
So if you are not using virtual assistants in your business, you are literally missing out on the largest leverage point in business today, right? You can hire college master educated people for as little as $4 to $8 an hour, right? It’s incredibly powerful.

And these people are incredibly smart. And I hire a broad range of virtual assistants in the Philippines. So a lot of them will be like my leasing coordinator or my bookkeeper or my social media editor or my executive assistant.

Those are some key roles that are hired in the Philippines. But not only that, you can actually hire C-suite executives internationally. For instance, my head of operations, she’s in Ireland.

My other head of finance, he’s in Columbia, right? And they are fantastic workers and we’re paying them 50 cents in the dollar. They’re making like two to three X what they would make in their country.

We’re saving money, so it’s a win-win, right? So we’ve been able to leverage a team to 20 plus people while keeping our overhead a lot lower than if we hired a US-based.

[Mattias]
Yeah, yeah, that’s so true. And it is a great, I’ve heard of different systems, or I mean, so I use virtual assistants as well, but I have seen different companies that offer things like the extra management as well, so that if you’re feeling like you can’t maybe take on a virtual assistant and really oversee everything they do, there are companies that would then also offer, yeah, management as well. Of course, it’s gonna come with a higher price tag.

Did you explore any of those type of services or did you go straight to just like a job marketplace and post a job?

[Andrew Freed]
So when I first started, I utilized onlinejob.ph which specializes in people in the Philippines. I use that a lot, right? But what I did was for some of the higher level positions, you can actually hire virtual assistant headhunters like in Argentina or in the South America, and they actually hired some of my high level people.

And I think I started paying them, I think they coordinated like a higher hourly wage and ended up just buying that person out of the contract.

[Mattias]
Got it, sure. Yeah, because those are all skills that are skills. I mean, to actually find somebody, to hire somebody, to manage somebody, that’s all stuff that needs to be learned as well.

And yeah, it can feel, I’m sure that all that stuff could feel very daunting when you’re already doing everything, you and your partner to start taking this stuff on. But if you keep that end in mind, it’s the clear path to growth.

[Andrew Freed]
I think one of the biggest things slept on in business is utilizing personality tests effectively, right? You don’t only wanna do that with employees, you also wanna do that with partners, with vendors, because the better you understand them and the better you understand their work style, the more you can actually utilize them in their genius, in their strengths and mitigate their weaknesses. Because ultimately that’s how you exponentially grow.

It’s like growing up, I’ve always learned the United States, you wanna mitigate your weaknesses and you wanna be as good as you can in every single category. And that’s the complete wrong way to be successful. What you wanna do is you wanna lean into the things that you’re amazing at, that you’re a genius in and anything you’re weak at, you wanna either eliminate, delegate or mitigate, right?

That’s how you really exponentially scale in today’s market today.

[Mattias]
Yeah, and that’s forcing yourself to do the things you hate that drag you down, that you’re not good at, that’s what burns you out too. I mean, that doesn’t give you any kind of fulfillment, it’s just the thing that you put off, the thing that you, yeah, 100%. I’m curious if you use disk assessment.

I’ve gone through the process and I’ve had a coach on this show for the CliftonStrengths profile, which that was actually kind of fun. My wife and I, we did it live where we both did it separately and we saw our own results. And then she worked on us as like a live on the air as to how we worked together.

It was almost like a live counseling session. But I’m imagining disk is kind of more approachable and easier to understand from like the onset. Clifton is more in depth, but it would be harder.

I couldn’t nail down your 34 strengths just by talking to you.

[Andrew Freed]
Yeah, I actually utilize this software called the Cultural Index. And the reason why I like this software versus other personality tests is it asks, what are you a genius in, right? And then based off that, what’s your expectations in the workplace, right?

So then it ends up giving you two graphs, right? It shows you what your genius is based off how you believe yourself to be. And then it shows you how you’re utilizing your genius in the workplace.

And if you’re sitting in your genius, if you’re in the best state, both graphs would match, right? But when both graphs don’t match, then you could easily see areas for improvement. For instance, like I personally don’t like following rules.

I don’t like conformity. My last name’s Freed, what a surprise, right? But when I first did this, I came to the realization that like in my job behavior, like I felt the need to follow more rules, right?

So how did I negate that? And how did I sit in my genius? I ended up finding an executive assistant that could really focus on the follow-up and the rules so I could sit in my genius, right?

So like understanding the dynamics between your genius and how you interact with your genius is really important in my opinion on selecting a good personality test.

[Mattias]
That makes a lot of sense. So that was cultural, what was it?

[Andrew Freed]
That’s called the cultural index and it is a hefty bill for that one. There’s also a similar one, I think it’s called the predictive index, right? But what’s really cool about those particular ones is you can, I think there’s 19 archetypes and you can, because every archetype has its strengths and has its weaknesses.

So you can identify the perfect archetype for that role and filter 90% of the employees out, the potential employees out, the applicants and only focus on that 10% that have the personality and have the skills to be successful in this role.

[Mattias]
I love that, I love that. Yeah, that’s exactly, we’re building a team. I’m building a sales team and that is what we’re basing, we’re doing the CliftonStrengths, but focusing on the strengths and focusing on that we’re all doing things that bring us joy that we’re good at and then filling in the gaps.

So I love it, I’m definitely gonna check that out.

[Andrew Freed]
Yeah, hey, if you want a production to my consultant, I can 100% tell you it is absolutely worth it.

[Mattias]
I know, yeah, that sounds great. Yeah, I mean, I guess I would love to hear what kind of golden nuggets you have for our listeners.

[Andrew Freed]
So I think the main thing holding people back from scaling is trust and delegation, right? So one really good tip I have for people really looking to get to the next level and really looking to leverage others and delegate is every morning when you’re doing your to-do list and you’re journaling, you’re figuring out what you have to do today to get you closer to your one goal. So if you’re doing a one-year, five-year and 10-year goal, rather than asking yourself how I can do this, you should ask yourself who can do this, right?

And go down each item and figure out who you can delegate to via a person, via a system where you’re actually doing the work, but you’re figuring out how other people can do the work for you. And that’s really how you scale and get to the CEO level position where you deserve to be, I think.

[Mattias]
I love it. Yeah, that’s great, that’s a great tip. And then favorite book or fundamental book you think everybody should read.

[Andrew Freed]
So I think one of my favorite books, and this is an absolute must-read for everybody alive, is this book called Limitless by Jim Quick. And the book Limitless teaches you best practices on how to learn, right? And honestly, if you’re a good learner, that’s literally the best superpower I could imagine because it allows you to tap into every other expertise that you possibly can.

So I highly recommend, you know, read the book Limitless and treat it like a Bible because it will literally teach you best practices on how to learn and really sit and flow, which ultimately that’s really when you’re sitting in your changes.

[Mattias]
I love it. That’s awesome, thank you. And I don’t think that one’s been on yet, so perfect.

Yeah, and then I guess if people are interested in learning more about you, the deals that you’re doing, is there a good place to follow you or reach out?

[Andrew Freed]
Yeah, absolutely, so you can follow me on Instagram @InvestorFreed and YouTube @InvestorFreed. You can follow me at Andrew Freed on LinkedIn and Facebook. Definitely feel free to reach out, jump on my newsletter.

I always have a ton of value in there.

[Mattias]
Awesome. Well, Andrew, thanks so much for being on the show. It’s been a pleasure.

Thanks for having me.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit REIAgent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in this show is not investment advice or mental health therapy. It is intended for entertainment purposes only.