Episode 138 | Bill Militello | Military Millionaire Podcast

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Bill Militello on The Military Millionaire Podcast

00:00 - 05:00

David:

What's up military millionaires. I'm your host, David Pere. And I'm here with my lovely co host, Alexander Felice and Mr. Bill Militello, who I'm sure a lot of you know from, well, he was he spoke at veterans Rei live last year. And he's obviously been around the military community. But Bill is the founder and CEO of local vest as well as a Marine Corps veteran. And he's done just a ton in the real estate, private money, venture capital world. And yeah, he's, I've gotten to hear him speak once or twice, and just phenomenal wealth of information.

So there's gonna be a really good show as we kind of dig into while raising money and some of the fun fun things that go into that side of the real estate realm that everybody always has questions about, because everybody always wants more money.

Intro:

Welcome to the military millionaire podcast where we teach service members, veterans and their families how to build wealth through personal finance, entrepreneurship and real estate investing. I'm your host, David Pere. And together with my co host, Alex Felice. We're here to be your no BS guides along the most important mission, you'll ever embark on your finances.
Vehicle one, you’re clear to depart our friendly lines. Roger Vick, one, Oscar Mike..

David:

So, Bill, welcome to the show, brother.

Bill:

Hey, thanks so much. I appreciate it. David. Alex, it's a real honor. Appreciate you having me on.

David:

Yeah.

Why don't you share with the guests just a little bit about a little bit more detail about your background than what I just waved off?

Bill:

Oh, well, as he said, I think the most important part was Marine Corps veteran, right. And after that, got out of the Marine Corps in 1997. And as I'd like to share with people, there was really not a lot of transition assistance back then I think, we took a course and the guys at the front of the room. And I was like, we're gonna interview for being Undertaker's or whatever. So.

So it was a tough time transitioning, and my wife affectionately refers to it as the flaming re entry. And, and so, you know, that's, I started, you know, trying to tread water right off the bat kind of the head went underwater a few times with, you know, trying to be an entrepreneur. But basically, that was it after a, you know, short stint on Wall Street. And I'm 11 and went to work as a consultant to the Securities and Exchange Commission, as a port in the storm thought I was going to go back to Wall Street, that didn't happen. And in January of 2003, I hung out a shingle with my first company, so started four businesses sold to all in financial services all in, you know, private investments, doing deals, real estate, venture capital, etc. And, as you said now, I'm the CEO and founder of Local Best, which is really built for the purpose of helping military veteran entrepreneurs and real estate operators connect with capital quickly, easily and inexpensive.

Alex:

I'm so glad you're here.

Bill:

Well, we're a little far apart, and, you know, my checkbook is in the other room, so, but in all seriousness, you know, I, my whole focus has been financial services, I, what I wanted to go in from the time, I could remember, but I also wanted to serve my country. And so I knew that being a military is a young man's game, and I was going to front load that and then move on, and, you know, kind of earn and earn the benefits that that our country provides with our, you know, free market system.

And so along the way, I don't know, I guess my stats, if I was a baseball player, we've bought about $485 million worth of commercial real estate, invested in over 50 companies, primarily technology companies, over 100 transactions, and led series seed rounds, series A rounds, etc, etc. And, you know, trying to take that capital raising syndication experience, regulatory experience and bring it to bear to help military veterans.

Do it right, right, because there's a lot of ways to do it wrong. And I see it done wrong every day. But, you know, really keeping them from, you know, stepping on it, if you know what I mean.

Alex:

That's a double threat Bill, because for syndicators, they need both help with the syndication and the capital.

Bill:

Yeah, it's a process right. You know, Alex, thanks so much for saying that because I think a lot of people miss that, that that syndication is actually a process and there's rules and that you've got to follow, and you've got to have knowledge. It's a profession to be an indicator.

05:00 - 10:00

Bill:

And then of course, you know, the money is what everybody's focused on. But you've got to do all the things right in the right order, and dot the i's and cross the T's Or else, you know, you've just have, you know, you're you're welcoming, bad news into your life, and you don't want to do that.

Alex:

So I just closed my first indication that I lead, actually, in June and December.

Bill:

Awesome. Congratulations.

Alex:

Thank you, um, and the process for me is not like, you know, doing a single family deal, the process is similar, but it's not the same.

So that definitely was the hardest part about, you know, I gotta go out to people, I gotta ask them for money, I gotta get a deal that you, you know how, like, you get to do a deal. And it's like, you know, you think you know what to do. And then you gotta dig and you dig and you dig, and you're basically digging into the last day to make sure that you're doing the right thing.

And then you're like, I have to dig into this deal. But I don't really know the process. And somewhere along there, I have to have enough confidence to know that A it's a good deal and B it's gonna close and then go ask people for money. Well, I really don't.

This process is complicated. And so like you said, so having like, understanding how it works, in theory, and then being able to navigate the legalities? And, and you know, what will happen next? And the people who are, you got to know, people who are going to give you good advice.

So yeah, I mean, those are all really, I don't know, if they're underestimated. But people when they talk about these deals, like you said, they're like, what's, what's the money? And I'm like, that's the easy part, you got to do the work. It's like, you still got a mountain of stuff to get through.

Bill:

Yeah, you know, in some respects, the money is easy. In some respects, it's really hard.

I would say that the operator, you know, finding the deal, whether it's a venture backed company, it's a piece of real estate, or it's whenever you're doing, raising money for fun, you know, finding the deal, if it's a great deal. And believe me, you gotta you got to kiss a lot of frogs to, you know, turn over a lot of stones to find great deals.

But when you find a great deal, you can't, and you have the confidence, as you said, to know, it's a great deal, and you pull the trigger, right, you're crossing the line to departure. Now you're committed, right? Your deposit goes hard, and you have to go and find the money.

You know, I feel like as long as people follow and do the right thing, have good counsel, right? And you always have to have, you know, good advice. Don't try to do it on the cheap. That's I think that's one of the landmines that so many, you know, veterans step on is that they feel that they don't want to pay for good advice, because it's expensive. And I'm like, No, no, no, it's not expensive. Making a mistake is expensive, paying for good advice. It's not expensive. And then it's an education. And then, you know, so that's, and by the way, I don't do that, right. So I don't, I don't I'm not soliciting anybody to you know, for me to give them advice on syndication. I don't, I don't, I'm not a securities attorney. But I kind of feel like I'm an honorary JD just because of how many of these fellows I've and ladies I've had employed over time, but, you know, it's, you got a great deal, you're right, the money will find you, but you just gotta do it in the right way.

I will tell you one more thing, and I'm sorry, to this sound, I guess I should take a breath. But one of the one of the things I found is in in finding a deal and then going out and getting the money and then closing the deal is that really works against people, I would highly encourage folks that are listening that want that are doing syndications to kind of reverse some of the steps change the steps and you know what I've done is and I have not always been at the place to do this. So I understand that this is this is you know, you got to be a little further along but if you can close the deal with your money okay or friends that you can borrow the money from right close the money with your balance sheet or money that you can borrow from friends or from high net worth individuals you will get a better deal at purchase because you'll be able to move quickly right?

Moving quickly in real estate or anything else and certainty of close because you waive the you know the checkbook in the in the account statement in front of them and say Hey, man, I got the money you want to do a deal or you want to do a deal with the guy down the street who might take 60-90 days to close and but I'm going to I want to discount right I got certainty a close I have the funds we're going to do it I'm gonna get a discount you do it and then you syndicated after you own it, right?

And so that's what I've done. And and it's you know, you kind of walk in with a you know, with a built in gain for your investors.

Alex:

Three things. Hang on, David, you just wait, three things.

One. Go. I might have a saying going. You said earlier about going cheap, going cheap as the most expensive way.

Bill:

Yes.

Alex:

To your point. The second one. I forget, David go ahead.

10:00 - 15:00

David:

Oh, no, no, no, no, I'll let you stumble for a minute.

I was just gonna say that I am actually really glad to hear you say that. So when we talked on the phone, I mentioned that one of the reasons one of the things when I was a GP on the first indication, I was, I was not the main guy. And I realized very quickly, like, I don't know, if I really want to get into this world, like the personality side that handles the syndication, like that actual process did not, that was not the enjoyable part of real estate for me at all.

Anyway, so I'm looking at a big deal right now that's off market, we've been negotiating back and forth have probably been seven, eight hours on the phone with the seller and going back and forth, like, you know, 79 doors, three different properties, but all in the same, like, two mile radius, one mile radius. And I was trying to do all this crazy stuff with it to decide if I was gonna raise or this or that, and the other. And I ultimately just said, you know, what, I got two buddies, we've got the money. 33% partners, great, high five.

And so it's cool to hear you say that, because you're right, we're gonna be able to take one of the properties down in 30 days, and the other two I think are gonna be 45 day closes, we're getting pretty solid terms. And then if we want to syndicate it afterwards, there's enough meat on the bones. And there's a lot of ways to do that. So I don't know if we're going on this one, particularly, but just just kind of cool to hear you say that, because that's kind of where I'm at right now. And I hadn't even thought about it from that standpoint, where you could syndicate on the back end. And that actually makes a ton of sense. That's a cool, cool strategy. If we wanted to go that way.

Bill:

Yeah, well, and congrats on thinking in that direction. Because I think when you do go to syndicate it, I've always told people like, well, I already own it. And what greater confidence do I have in this property, then, then I put all my money to all my chips in the middle of the table on it.

So if you don't like it, I'm gonna own a lot more of this than I thought. But, you know, that's, you know, that's commitment. And people really want to, people invest on confidence, and trust, right? And so they're like, wow, you're confident about this deal. Alex, you were talking about that earlier, right. You know, what, when do you have that confidence. And so, you know, certainly being able to communicate that to an investor, that you've got the confidence in a deal, because hey, you know, all your chips are in the middle table, and you got a pretty big bet on.

Alex:

Lots of skin in the game.

Bill:

A lot of skin. Yeah.

I'll tell you what, that's I'm sorry. That's, that means a lot to me, right? As an investor, because I don't just do my own deals, I write checks and in other deals and other veterans deals, and, you know, I look for that, right. I want to see, I want to see them. With skin in the game. It makes sense.

Alex:

Skin in the game as far as how I, one of the primary ways that I measure somebody's decision making.

Bill:

Hmm, yeah.

Alex:

Yeah, I think about time.

That also works for our single family listeners. That is how I figured out. That's what I figured out really early on single family. If I'm trying to buy foreclosures with a loan, it's impossible. Get the cash. And what you do is you separate the buying and the financing transactions, and you can get if you're trying to do both of them at the same time. They're both complicated transactions, they muck everything up.

If you can separate these two, it's like do buy it as soon as you close you can do the syndication and get the money back on the equity side. Easy. Put a loan on it, no problem. But if you can buy cash now, look, I can't go out there and buy I don't have, I needed $3 million to close this deal. Three and a half million. I didn't have that.

So I don't have that luxury. But yeah, but yet, but an ideal world. The same would go if I could find somebody that's like, hey, look, they have an account they want to do syndications with me, they don't want to put all the money and hold all the money, but they could bridge loan and pay buy it for me, you know, we'll buy it together, and then we'll go get the loan, I'll raise the money, no problem, you'll, you know, you'll loan me the $3 million us the $3 million for six months, and then you'll syndicate out of it, no problem.

Bill:

Yeah, listen, uh, you can cut deals like that all day long. Certainly I do. And, you know, you give that person a, you know, market interest rate, and then, you know, you give them a, you know, a, once they're, you fully syndicated the deal, you give them a, you know, free ride in the GP and give them a piece of the carry. And, you know, then, you know, they've made good interest, it's backed up by real estate, right. So there's, there's collateral there and for that loan, and then, you know, their, their money's out. And when you pop it or you refi it and you guys get a carried interest that the general partnership or the manager, you know, their rate of return is infinite.

So it's a good deal if you can, if you can, if you can, you know, put that deal together and show it to the right investor. You know, they'll do the deal with you all day long.

Alex:

Yeah, I love that, that you way you talk because about it, because that's the same way that I approach real estate. Well, I don't know the exact same way but my whole thing is like, Look, if you can find a good deal, then you could find somebody else to pay for it. And you can all make money.

15:00 - 20:00

Bill:

Yes, you're absolutely correct. I'm sorry. I didn't want to step on your words out.

And it goes beyond real estate, right. Like I've done it in venture, for example, you know, I don't know, if people on this call under, you know, understand venture capital very well. But, you know, if you do I'll give you an example that, you know, once a company passes a series a round, like, and they're gonna be real, real, no kidding venture capital firms that are, you know, running hundreds of millions of dollars, if not, billions of dollars, are stroking checks into B, round C rounds, and D rounds.

And so if you've got access to a B round, or a C round, and you can, and you can, you know, come in for 100 grand or 200, grand or whatever, just say $100,000, you could, you could borrow that money from syndicate. By syndicating you can basically borrow the money, right? Invest in the round, pay someone a modest interest rate, now it's gonna have a negative carry. So we're talking modestly, like three 4%. And then give them a piece of the pop, because, you know, three, four years down the road, maybe five at the latest, you know, you're talking about, you know, B rounds, typically, or exiting at 468 x. I mean, you're talking about wealth creation. You know, there's, I've done that a number of times, so you can do the same thing in venture as what we're talking about in real estate.

Alex:

Yeah, I know, real estate. So that's why I look, I started as a single family guy, I had no idea about syndications. It was way I was out of my, it was out of my confidence level to a degree that was like, okay, that's just not good, you know, you get better at life, right? And so, I worked in commercial banking underwriting.

So, to me, the overlap between real estate and business is kind of similar. I happen to know, real estate, but the financial transactions are largely the same. I'm sure the nuance of venture capitalism is much different that I don't know. But financing is financing as far as the bank concerned.

Bill:

Financing is financing, right and it's all private money, right? You know, we're not we, we haven't even talked about going to a bank yet. It's only, you know, you've closed the deal. And you're, and you're looking for a mortgage to take out that private lender, and then you've syndicating equity, right? So.

Alex

But to your point, when you say, well, in the first part, if it's backed by real estate, that somebody is going to be happy. So everybody likes, everybody likes hard assets as collateral.

Bill:

Sure, sure. Who doesn't? Right. You know, it's 100%.

Alex:

So talk about the private equity side.

Bill:

You’re talking in terms of what? I'm sorry.

Alex:

Um, well, you said that you had a background in doing private lending.

Bill:

Yeah, well, you know, whether it's, if we're talking about like those venture capital, or private equity deals, so we're moving away from real estate and talking about those kinds of deals.

Alex:

Yeah.

Bill:

Yes. So, listen, entrepreneurs are entrepreneurs, right? And, and I've, you know, got a soft spot in my heart for entrepreneurs, particularly military veterans. And, you know, and the reason is, is because, you know, nobody teaches syndication, nobody teach, or if they do, I haven't, haven't heard a talk well, and it's, it's, and raising money is one of the hardest things you can do outside of serving in uniform.

And really, the, the success of most entrepreneurs is really, their ability to raise capital and their ability to raise capital is a function of, you know, the size of the wallet of their personal network, right. And so that's a really, really tough thing. But if they, but if they go out there, right, if they get out there, and they expand their personal network, and they gain knowledge, they're looking for deals, and it doesn't matter if it's real estate, or, or venture or private equity, but let's just take venture, for example, take that same example that I used earlier, that, Hey, you got a bunch of buddies, you know, some of them are in, you know, running companies or, you know, startups, and you're able to come in on a round, right? 100 grand, and you go out and you say, okay, you're gonna close in 30 days, 60 days, 90 days, I'd like to, I'd like, you know, $100,000 worth this illiquid speculative stock. He's like, sure. And so, but you've got to have real conviction in the company, right? Real confidence that this company is going to go someplace. And yeah, you, you learn about that company, just like you learn about a real estate deal. And you gain confidence about it, you go out, you syndicate, you know, 10,000, 20,000 you know, bite sized dollar bite sized pieces of it. And you say listen I'll pay you a modest interest rate, because I'm giving you access, remember access to the deal. These people don't want to do the homework, right? So your, your value to the investor is that you're going to go out and do the homework and you're gonna, you're gonna provide access.

20:00 - 25:00

Bill:

And then you're gotta make sure that you're aligned on, right, okay? Well, you know, their collateral happens to be the stock, and then you're going to provide them a modest interest rate. And then on the upside, this thing pops in a couple of years, you know, they're gonna make whatever another 20,30,40 50% of the deal, but what you're gonna make is, you know, the Delta, right, you're gonna make 50,60,70,80% of the upside, and you see a forex on 100, grand, you know, you know, do the, you know, do the math, it ends up being a pretty, pretty cool event for you financially.

Alex:

Yeah, so you say one of the most important things an entrepreneur or a real estate syndicator can do is raise money, what about but then you say, you have to have conviction to deal. So how do you feel about how somebody gets good at both raising capital and due diligence slash underwriting?

Bill:

It's tough, I tell you, I don't know if anybody is really good at both. It's I'm not. You know, I've got. I try to surround myself with people whose unique ability is different from my own, right.

So hands down, I love syndication. And so, you know, I'm, that's what I do in a partnership. But I, you know, I trust people who are excellent at finders, right or, you know, being able to get the deal or then I trust people who are really excellent at diligence. And, and we're really great at operating and, you know, leasing it up, or, you know, just making sure that the thing, you know, runs smoothly.

And so, I think that, you know, trying to be a one man army is a mistake. There's just too many hats to wear. So, I think it's about, you know, finding people that you can trust, are highly competent, in their areas of expertise, their unique ability, and just surround yourself with people who are great at things that you're not great at.

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Bill:

But know what you're great at. Because everybody's great at something. I'm not blowing sunshine up people's skirts, but it's everybody's great at something, you just got to know what that is. And then just do that and outsource everything else.

David:

Is why most indicators are teams, right?

Bill:

Yeah. Yeah. I mean, I can't do it all. There's no way. And, you know, I've been really lucky. Well, I found my way to be lucky, right? Because I can tell you the 10,000 ways not to do it. Because I've certainly had, you know, you know, I've had my failures and, and, you know, my bumps and bruises and, and things like that. And so it's really through, you know, 20 plus years of experience of, of, you know, meeting some of the bad guys, and surviving those things that I know, a good guy, and somebody who's really competent, honest, has that integrity, and it's hard working.

And of course, I don't need to even say it to this audience. That's why I'm just doing business with veterans, you know, because they've got the intelligence, integrity and grit that is necessary. And, you know, you can't necessarily screen for those subjective qualities, you know, otherwise, and the best way to do it, in my opinion, is just to work with, you know, to work primarily with, with veterans.

Alex:

Yeah, that's actually a pretty good filter for what you're looking for. That's really interesting.

David:

I agree.

Alex:

So, my first my first 24 unit, I didn't bring on any partners and I made a lot of mistakes and in some ways that was good for me. And the second one, one of the first things I did when I got in trouble is just call people, call and ask for help to give up part of the deal.

25:00 - 30:00

Alex:

Call and ask because having people around that know what they're doing is so much more valuable. The other thing kind of hit me at the time was like, life is a long game. And so people get greedy about, hey, I want to have all of this one deal. And it's like, yeah, you're gonna, you're not gonna make as much, you could have given up some of your deal and have a better deal. And then also, you don't have to split that with your investors.

So bringing on people, it kinda like you said earlier, like advice is cheap, expensive advice is cheap, going cheap, is really expensive.

Bill:

It is expensive, yes.

Yeah. I love that. And I love the fact that, you know, you know, I meet some, I almost in like, within minutes know, whether I want it, like continue to have a conversation with with a veteran, you know, but let's say most people, and, you know, they've got this one ID, they've got this one project, or they've got this one company, they got this one real estate deal. And it is like, they've got their arms wrapped around it. And it's, you know, mind, mind, mind, mind. And it's, and you're like, I can't help you, man. Because you're gonna have to share it with a number of very competent people to bring them to the table. And yeah, they'll give you 30 minutes of their time for free to help you because they're good people. But it's, it's people who have that real, I will say messed up mindset, that scarcity mindset, that and and I loved it out. David, how you corrected Alex earlier about the three plus million bucks. It's like, yeah, you don't have it, yet. You have it. You just don't have it yet. Yeah. And so you will.

David:

You’re welcome Alex.

Bill:

And so, yeah!

Alex:

It doesn't matter. Because once I have the 3 million I want to spend 15.

Bill:

Ofcourse! It always works that way.

Listen, and if you're not, hey listen, when you get to the top of a mountain, and we all like to climb mountains, you're going to see higher mountains that you're going to want to climb, right? And, and it's I'm working on that it's so funny that you should mention that topic, because I feel like if there's anything I'm working on in meditation, is this. I don't know if it's a disorder disorder, or disease, or it's just that personality, you know, thing, but the concept of more, right? And if somebody told me 10 years ago that I would be where I am today, I would have been like, man, you're done. Right? You're done. Man. You made it. Whatever. Meanwhile, I'm like, man, so much more to do.

Alex:

Have you ever heard the term hedonic treadmill?

Bill:

I don't think so. Tell me about it.

Alex:

Yeah, that's what you're talking about.

Um, it's the the, no matter where you're at, you want more? Like, yeah, so I learned this in the gym. I went to the gym, I started powerlifting. It's like, I used to get 315 pounds, get to 315 and guess what? Tomorrow five or, or you're a sucker. It's a 405. Like, 500, you know, 400 for girls, you know, 500 for men, you get to 500. You're like, guess what? Not a man yet. Right? Oh, and then you find out after? After a while you start to figure out like, it's not a disorder, but it is a human condition. And some people definitely suffer from it more than others. addicts suffer from it more than other people. And then people who have generally intense personalities or get passionate about things. These are all good traits. It's manageable, it's like, you know, get addicted to the healthy thing.

Bill:

I don't know any intense Marines though. I don't know.

Alex:

Yeah, right. Yeah.

Hedonic treadmill, that's a known that's a known difficult human condition. Yes.

David:

Yeah.

I like that. You mentioned bringing in somebody who's a like subject matter expert to the splitting things out.

So I mentioned that we're splitting this deal three ways. It's three assets, two apartments, one hotel, one of the three people I'm bringing in owns a hotel, 40 minutes south, and I was like, bro, this is not my realm. You look at this deal. You tell me if you want. Like I had him look at it with my property manager. And he called me I was like, I want it like Okay, cool. All right, we'll take it that like I'm not touching this thing if you don't if you're not in because I don't know the first thing about running a hotel.

So you know, but the numbers on it are good. So I'm like Alright, well, hey, if this guy's got one and we've got bank financing it good terms mean, I guess. I guess in a weird way. This is probably about the best timing to buy a hotel because I feel like we're kind of coming out of the worst time..

Bill:

David I think you're I think it's brilliant man. I listen, if anybody's out on the call that is like got a hotel deal, limited service hospitality, and they're looking for a business partner, or just money or help syndicating give me a ring. I've been looking for a hotel for like six months now.

30:00 - 35:00

Bill:

And so yes, if I mean, to the extent that you know, you want my approval, you don't need it. I think that I've always been at this is another great topic actually. Yeah, I've always been a concern. And, you know, and what they say about, you know, real estate is true. It's not how you sell it. It's how you buy it, right? And so, and I know I'm gonna, I know what I'm gonna say next is sacrilegious to a lot of listeners. But listen multifamily scares the shit out of me right now. Okay? It just scares the bejesus out of me.

Why? Because it's priced to perfection, and it has been okay. I stopped buying multifamily, I think in 2016 Okay, I own 13 communities with partners, right, you know, 1000s of doors, and we have our last community under contract, and I can't wait to get out, honestly.

And so and so three years ago when I made a shift to, you know, flex industrial, and now, you know, over the last year, I bought Ooh, wait a second, don't you know, people are gonna have come at me with pitchforks is pitchforks and torches in process. Buying office. Oh, office office will never come back. That's exactly what I want to hear. I want people to tell me, I'm crazy. Because every time somebody tells me, I'm crazy. I'm like, I just I'm gonna go buy more.

David:

I like it.

Alex:

The multifamily part? I think it's a function of if you're a guy like me I look at and say multifamily is probably a little risky right now, real estate, real estate been overpriced for three years, like you're like you said, four years, for sure.

By the year, well, interest rates are low, and they're gonna hang low for a reasonable amount of future. And the inflation is coming. I think it's a somewhat safe bet, although an overall risk. So I think it turns out if you're a young fellow who's trying to get started and learn, there's a lot more upside, that's worth the risk. If you're doing it a while and you're like, dude, I need to preserve my capital, I need to make less risky bets. And I don't have the learning curve to buy the, you know, I'm buying, I'm buying risk to learn. Because the learnings in a carry me even if I even get burned, you know, during a correction, that learning is going to carry me for the next 60 years.

So I understand that position where you're like, hey, look, it's just risky. And you don't need to take the risk with others some people..

Bill:

Oh, yeah, I totally get that. And I do. And I would say my corollary to that, because I'm not totally against it. It's financing, right? Okay, get your money out. Long, right? And fixed, and have a buffer, right? Just be able to ride out the next downturn, because there's always a downturn, right, the world moves, the universe moves in cycles, right? You know, the tides, night and day, the moon, you know, waxes and wanes, seasons, so the universe operates in cycles, and business cycles are just part of, you know, the universe, so just expect it, but, you know, have a reserve, you know, fix your interest rate. Just do those smart things.

Alex:

I got, I got a Freddie Mac loan with a single with an assumable mortgage.

Bill:

Yeah, and how long is that?

Alex:

10.

Bill:

Yes! And when did you? When did you get it?

Alex:

December.

Bill:

Yeah! So you're good.

Listen. And, and I and I say all of that, because I agree with the other parts that you say inflation is here. Inflation is here.

Anybody tried to buy a sheet of plywood? Right recently? I mean, like, it's like, is it gold plated? I mean, like, does it nail itself to your house for you? I mean, with it, it's crazy, right? And look at gasoline, what has happened with gasoline, what's happened to, you know, things of that nature.

So inflation is here. I talked previously about M one money supply. If you look, if you just pull that up, that measures the velocity of money in the economy, not to make this an econ class, but it's very simple, that the velocity of money which measures really the the the vibrancy of an economy, the health of the economy, peaked in 2007. It plummeted and until 2016, had a bump during the Trump administration fell, you know, put in a new load during COVID and is now coming back up.

But you're coming back up with trillions, trillions and trillions of more dollars in the system. You're talking about unleashing massive, massive inflation, so get long assets, but don't but finance them smartly structure the financing so you don't lose the damn thing.

35:00 - 40:00

David:

And I also want to say this because it might not go through. But the financing we got, we have a meeting with the president of a bank on Monday, the guy who owns the guy who has financed all these deals. It's a small, small town. And so the president of the bank, who's already lent on them, really wants to pull us in and talk to us and see if he can beat the terms that we found somewhere else.

The first bank or the well, the second bank, we talked to the terms he threw at us was 30 year am it's floating, it's not fixed, but with a 6%. ceiling, no balloon, and like, I'll take, I'll take 30 year no balloon, okay. like six is six is high. Not not, I mean, it's not the end of the world. And if we're starting at three points, like 3.8, 3.85 I'm, I'll take a 30 year, no balloon on anything right now, if you're going to give me...

Bill:

Amen. Amen. Amen.

Listen, that's really smart to see it. Most people are too naive. And they just look at Oh, well, this is a lower rate. Yeah. But it's a lower rate that's going to, you know, going to reset in two years or five years or seven years. It's like, let's, I'd rather, you will never see we've already seen the bottom and interest rates. They're not coming. They're not coming back. We've already seen its bottom. We're going up from here. And so hold on to your hat. Get long, and fix your interest rates to the greatest extent possible.

David:

So I want to if we can shift gears a little bit here, Bill, we haven't actually touched on it yet. Can you give a brief overview on local vest, right? Like I'm the guy who wants to get into real estate. Tell me what, tell me what, so I went and cruised your website, right? Simple. I like it. It told me what I needed to know. But from you, you know, what, if I'm Dave, the new guy, and I'm like, Oh, what's this? What should I expect? If I go check out a local vest? What do you guys offer? What do you guys do? I guess? What's in it for me?

Bill:

Yeah, what's in it for you? Well, I guess, you know, it's a marketplace. Really, I mean, there's no transactions that occur there. But in in the broadest sense, it's a marketplace where there's, you know, there's investors who are buyers, and there's issuers of securities who are, you know, real estate guys and gals, and, you know, venture backed companies and funds that are issuers of securities, and they're the sellers, right, they're looking for investment capital. And so at the 30,000 foot view that that's really what it is, it's really there to level the playing field, because it's so doggone tough to raise money and to know what to do, right to what, to do it properly to have a process to be able to access a network of high net worth investors, I think that the the wallet share the wallet of the of the investor based on local vest, I'm gonna do some quick math in my head, I think is like 16 to $20 billion, right.

So you know, if you've got a good deal, you could raise money. And that's, and so that's me, bringing, you know, my 20 plus years of syndication and capital raising experience together with my passion to help, you know, the military veteran entrepreneur, I said at the beginning of the podcast that, hey, my transition, really sorry. You know, it was fraught with unemployment, and, you know, six figures in credit card debt. And so yeah, it's easy to laugh about it now. But it's, you know, I can remember, you know, eating mac and cheese for a long time. And, you know, it really was not fun. So.

Alex:

I still do that.

Bill:

Yeah.

David:

It's a choice, though.

Bill:

Yeah, yeah, it was not my choice. So I'd like something, mac and cheese, but it's, but in all seriousness, you know, like, losses, like anything, any hardship, you learn from it, and you hope you learn from it, right. And, and I certainly did, and, you know, for over the last 20 years, it's been, it's been great. You never stopped learning. And so you know, that that's what Local Best is, is that I want to make sure that the military veteran entrepreneur who says, Hey, listen, I've done a deal or want to do a deal. I want to, I want to do a third deal. I want them to be able to access the capital. And then I want the investors who are other military veterans primarily or people just who want to support veteran entrepreneurs, you know, can find these deals because there is no clearinghouse currently Local Best does it. No clearinghouse for, you know, military veteran led companies and Real Estate projects. So we're, we're the place you know, we want to continue to grow it. That's, that's what we're up to.

David:

I like it.

Bill:

Thank you.

40:00 - 45:00

David:

Yeah, it's awesome. I went and looked at the website. It was simple. It told me what I needed to know. I'm definitely a fan. So I think it's a great opportunity. And I think I think you're definitely on to something like Alex said earlier where you I mean, you've done a ton of these deals. And if you're, you know, I mean veterans, obviously not every veteran, but as far as the character traits you're looking for with, you know, integrity and grit. I would yeah, I would say, buying away there are much more, you've got a much higher propensity for hitting the right mark, in those traits with a veteran than you do someone who's never been tested. Not necessarily because, you know, a veteran is inherently going to be that way. But just because they've been through the fire a little bit more.

Bill:

Yeah, listen yeah, they've been in the crucible. They've been in the fire, they've been tested, right, they've been slapped into the breach, you know, all these things, right?

David:

At least survived the drill instructor.

Bill:

That's right. Listen, whether the military attracts a certain person or the military, you know, produces a certain person and this probably, you know, it's both things are true. And to some degree, it just makes me feel good, right. I want to, I want to help them, they, they've given so much. And they've given so much, right? I mean, nobody gets rich in theory, right? I mean, I remember, you know, as a second lieutenant my, well, now you excuse me from your military salary, let me put it that way, right. You know, so that's where I was going, is like..

Alex:

David's not making much money in real estate or the military.

Bill:

I think I made $17,000 a year, right? And, and, yes, even in 1992, that was a lot of money. So, between, you know, my wife who had a full time job, and me, as a second lieutenant, we were able to buy a property that right. And, you know, we had a combined income, I think it was like, I don't know, $41,000 a year, but we bought a property. And then we went bought another property, we rented it out a number of years later, we sold it, you know, made money.

So, but you know, you the military veteran really deserves you know, a shot, not everybody wants to go to work for Boeing and General Dynamics and whatever else, right. You know, there's a growing group we haven't talked to, I talked to vets every day. And there's such a growing group of people that are just like, I just want to start a company, I just want I have this idea. I want to get into real estate I want to own I want to be financially free. And they just, they just don't know how, right. And then there's more programs with that are in masterminds, which are great, that are teaching the how, but then, then they're left kind of at the altar with, but now I need buddy, right, I need to, I know, I need to learn how to syndicate, I need to access to a network that people can write checks, or is willing to take the risk on me. And so bringing that whole ecosystem together on a platform, like local best, I think could really, you know, turbocharged, for lack of a better term, you know, this movement, and I really think it's a movement that, you know, people like, you know, maybe I don't want to go work for a fortune 100 company or something like that.

Maybe I want to, you know, be an entrepreneur, you know, and if there's a group that's good at it, you know, even the Small Business Association, did a study and they said that, that, that, that a military veteran, has a greater propensity to be an entrepreneur than someone who has a graduate level education.

David:

I like it.

Alex:

I think, yeah, business and entrepreneur, we talked earlier, it takes a lot of confidence. It just takes the idea that like, Hey, I can, I can. I'm not scared of this thing. And somebody said to me on this last deal, they're like, 50 units, $3 million, raising a million. That's so scary. And I'm like, I've seen way scarier stuff in this. This ain't scary.

Bill:

Amen, brother. Right.

Alex:

And so I think that I think to your point about military veterans, it's like, Okay, um, you know, anything where there's no bullets flying? I'm not worried at all.

David:

I might lose some money, but I'm not gonna..

Alex:

Yeah!

David:

Depending on where you buy, you could get shot.

Alex:

There are some investors who buy stuff that scare the...

Bill:

That’s why you’re partners, right.

David:

Oh, man.

All right. Hey, Bill, we got a couple questions. We always ask everyone on every show.

Bill:

All right. Let's do it. Now I'm afraid.

David:

No, no, they're easy. They're there. Marine Corps level questions are good.

So the first one I always ask is, if E one, E two you know, 18-19 year olds that walk up to you just ask you for like one piece of advice. One thing you wish you'd known when you were 18, what do you think you'd be the one thing you'd have to tell him?

45:00 - 50:00

Bill:

Oh, man. I'm just gonna go with my gut, my gut and my gut is fear nothing. Fear nothing. It is just listen, enjoy the ride. It is the things that you think are big deals or not big deals.

David:

I like that. Like that a lot, because I mean, that's exactly what we're talking about, right? This deal I'm working right now is gonna be the biggest one I've taken down. And I'm, I mean, we literally like the three of us were sitting down talking, and I finally just came to the end, it was like, if you lost this much money, would you be okay? If you lost this much money, would you be okay? Alright, none of us want to lose this money. But like, we'd all be okay. What do we have to lose? We're going for it.

Bill:

Listen, money is infinite, there would be the second thing I would say, money is infinite, you make it every day. There is incredible sums of money out there. And, and so it's okay to to, it, you know, account balances go up and down, right? And it's okay, you know, you'll learn something, you'll still survive, right? If you lost that money on that deal. But probably your education you gain from it will be infinitely more valuable to you. And you'll make, you know, 10,20,100x on that because of the knowledge you gained, and that it's not over. It was just an education, you paid your tuition.

David:

Yeah.

Bill:

You needed to learn some.

Alex:

Real estate, very forgiving to businesses can be very, it can be volatile, but real estate's very forgiving overall. And so a lot of times people are like, hey, should I do this deal. And I had a guy the other day, called me stressed out about this deal and stressed out on this deal. And I'm like, dude, you're gonna make 30 grand on this deal. If you really mess it up, you're gonna make 20 go sign up shit.

And actually, actually, he took so long worrying about worrying about worrying about he missed the deal. But worrying about I’m like if you make a great, you're gonna, you're gonna make this tragic, horrible mistake, you're not gonna make 20 grand? If you do well, you can make 30-35. So like, you know, you're over analyzing the risk and under appreciating the return?

Bill:

Yeah, that's a good point.

David:

All right. Question number two.

What is one resource that you would recommend anybody looking to get started in? Normally I say real estate, but in this case, maybe I'll piggyback it and say real estate or private equity financing, if there's, there's a specific resource in that world either.

Bill:

Yeah, The unfortunate answer is that there aren't any. There's like no resources. It's like a, it's a total OJT, you know, type of learning. But I guess, what I would do, if I really wanted to learn about that is, I get in the hip pocket of somebody who's, who's done it, done it a number of times, and has integrity, right. And you just learn, and you're going to pick up stuff. And, you know, I, you know, I think about education, the thing that's missing in America today, is that whole, you know, mentor protege or journeyman tradesman type of thing where, you know, you follow the, you know, you follow the person around, that's been doing it for a long time. No, they do it in the trades, right? They do it in plumbing and electrician and carpentry and stuff, they need to do with an average, right? And you just kind of shadow somebody. And you know, and I think that's, I think that's possible.

Alex:

It's highly specialized, you know, plumbing, it's like, there's the thing about plumbers is they're like, well, everybody's got everybody has plumbing, whereas syndication, it's highly specialized. So I totally agree with your point, but I understand why it's like, hey, he didn't he made a big resource about this. How, what's your user base for people that would, that would need it? You know.

Bill:

Yeah, you're right. You know, maybe that's the reason why, that, you know, nobody really, you know, codified a program, I started to write a book during COVID. And it's now on the shelf on how to syndicate creating a course, maybe I'll dust it off and start rewriting it but you're right, you know, it's, it's something that you kind of got to learn from doing. And, you know, just expand your network and talk to people who have done deals and, and, in a mastermind, Hey, bring a deal to the table, analyze it, not necessarily, you know, the cap rate and how you capitalize that but more in terms of, you know, from the time you identified it, you know, how did you take it through the process so that it was a legit syndication?
50:00 - 52:56

Alex:

Yeah. Also, I think it's testament to people who are, you know, if there's no easy education, does that mean you're going to give up? It's like, Hey, is there a book for this? No, well, okay, bye.

So it's like, I think in some ways, it's a, it acts as a little bit of a filter. It's like, the internet has all the information that you could possibly want. And like you said, it gives, you know, you can find somebody who will teach you it, and you can get to them from the internet. So, interestingly enough, while it would be good, if there was a course, or something a little more formal, the tools are still at people's fingertips whether or not they want to take the time to diligently go get them because, you know, I learned this from the thanks to the internet. People can figure it out.

Bill:

I think I spend more time on YouTube than my kids, right. So I'm constantly watching videos and podcasts, then I'm listening to them. And so you know, again, I keep thinking about how jealous I am of a few people transitioning nowadays, you know, I'm not going on 52 and years old. And like, man, if I had this at 28, when I was transitioning, I would be filling my mind with all of this information. I'd be listening to all the podcasts and, and I would have come up to speed a heck of a lot faster.

David:

Yeah.

Alright, last one. Is this a real hard one? Where can people get a hold of you?

Bill:

Oh, yeah. I thought it was like, What if I was a tree? What kind of tree would I be? But you know, maybe not.

But you know, how can you get a hold of me? So it's real simple. My first name is Bill, and my company is Local Vest. So [email protected] Shoot me an email and connect with me on LinkedIn. I think I'm under William. The only person who calls me William is my mother. So please call me Bill.

And, but you can get with me if you want to go. That's fine. But yeah, listen, love to hear from everybody. Seriously, please connect with me on LinkedIn. You know, share your story. And, you know, if you need to grab a couple of minutes with me, I'll shoot you my calendly. And you get on my calendar. It will wrap for a little bit. And you know, tell me, you know a little bit about what you're looking for. And if I can be a resource to any military veteran entrepreneur out there, let me know. And I'll try to make a connection for it.

David:

Awesome.

Yeah. And you guys should absolutely take him up on that. Phone calls are great. So I appreciate your time. I've appreciated your time a couple times now that I've gotten to hear you talk and you've come and spoke to our mastermind, and it's always always a pleasure. Bill.

Thank you so much for joining us this evening.

Bill:

Thank you!

Thank you guys. Listen, this is quite an honor man. I appreciate it very much.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it, be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.

Bill Militello quote about paying for good advice!

Episode: 138

Bill Militello

Join your hosts, David Pere and Alex Felice, with their guest Bill Militello as they talk about syndication as a process, raising capital, Bill’s thoughts on multifamily investing today, and his company that links military veteran entrepreneurs and general real estate operators to quick and inexpensive capital raising –Local Vest.

For Bill, finding the deal, getting the money, and closing the deal can sometimes work against people. In this episode, he talks about reversing the steps. If one can close a deal with their own money or the capital they can raise from friends, moving on with the transaction is more quickly achievable. Your personal network lets you walk in with confidence. He believes an entrepreneurs’ success is their ability to raise capital, and that ability lies in the size of their personal network.

Having good counsel and surrounding yourself with people whose unique abilities are different from your own is also an essential component of building partnerships for Bill. If one can surround himself with people who have the experience and integrity, chasing and closing the right deals can become a less risky nature when investing and operating around the world of real estate –an industry that teaches you nothing if not through the actual on-the-job experience.

About Bill Militello:

Founder and CEO of Militello Capital. He graduated from the U.S. Naval Academy in Annapolis in 1992 and later served as a Captain in the U.S. Marine Corps as a Signals Intelligence Officer. In 2001, Bill moved to Wall Street, where he was an equity trader for Knight Capital Markets. Mr. Militello subsequently served as a consultant for the U.S. Securities and Exchange Commission.

In 2003, he founded Piedmont Investment Advisors and set out to create not just another investment firm but rather to redefine the traditional investment model. His view was that the financial services industry was ripe for innovation. Therefore, he founded Militello Capital in 2011 to guide the wave of registered investment advisors “RIAs” to think beyond Wall Street and challenge the conventional allocation model, The hedonic treadmill.

He knows firsthand the challenges of being an entrepreneur and RIA and built private equity products that create jobs, enhance communities, and fund the development of technologies that help mankind.

Advice to an 18-20-year old:

Fear Nothing, and enjoy the ride. Money is infinite!

Recommended resource(s):

Get abreast of somebody doing what you want to accomplish!

Sponsor:

Email [email protected] to apply for the War Room Real Estate Mastermind group we host for service members and veterans!

Outline of the episode:

  •  [02:10] Helping military veteran entrepreneurs and real estate operators connect with capital quickly.
  • [06:20] Paying for mentorships is not expensive; making wrong investment decisions is.
  • [08:03] Reverse the steps.
  • [11:05] “People invest in confidence and trust.”
  • [17:28] Entrepreneurs are entrepreneurs; Raising money – one of the hardest things to do.
  • [25:17] The concept of
  • [30:01] Multifamily is a little risky right now…
  • [32:23] M1 – inflation is present.
  • [35:03] What’s in it for you in Local Vest?
  • [42:44] Becoming an entrepreneur takes a lot of confidence.
  • [46:16] It’s a whole OJT experience – learn by doing.
  • [49:16] “I’m doing this at 52. If I had access to this knowledge at 18…”

 

Resources:

 Website:              https://localvest.com/

LinkedIn:             https://www.linkedin.com/company/localvest/

Email:                    [email protected]

 

Need help in finding an investor-friendly realtor? Check out:

https://www.frommilitarytomillionaire.com/va-realtor/

 

Join The War Room Real Estate Mastermind Group:

https://www.frommilitarytomillionaire.com/start-here/

 

Follow our journey:

 Blog:                      https://www.frommilitarytomillionaire.com/

YouTube:             https://www.youtube.com/c/Frommilitarytomillionaire/

Facebook:           https://www.facebook.com/groups/1735593999901619/

Instagram:          https://www.instagram.com/frommilitarytomillionaire/

Real Estate Investing Course: https://www.frommilitarytomillionaire.com/teachable-rei

Recommended books and tools: https://www.frommilitarytomillionaire.com/kit/

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My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase “I don’t get paid enough” entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom! – Click here to SUBSCRIBE: https://bit.ly/2Q3EvfE to the channel for more awesome videos!

THIS SITE IS INDEPENDENTLY OWNED AND OPERATED. ALL OPINIONS EXPRESSED HEREIN ARE MY OWN. THE VIEWS EXPRESSED ON THIS SITE ARE THOSE OF THE AUTHOR OR THE AUTHOR’S INVITED GUEST POSTERS, AND MAY NOT REFLECT THE VIEWS OF THE US GOVERNMENT, THE DEPARTMENT OF DEFENSE, OR THE UNITED STATES MARINE CORPS.

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David Pere

David Pere

David is an active duty Marine, who devotes his free time to helping service members, veterans, and their families learn how to build wealth through real estate investing, entrepreneurship, and personal finance!

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