Alt Investing Made Easy

Sarah Florer (00:06.003)
Welcome everyone to Alt Investing Made Easy. Today we're very pleased to have with us Joe Fairless. He's from Ashcroft Capital and he's also known for the Best Ever Conference. We're going to have a chance to get to know him a little bit today and we thank you so much for joining us, Joe.

Joe Fairless (00:53.432)
I'm looking forward to our conversation, Sarah and Roland, and excited to be here and do what I can to add value to your audience.

Sarah Florer (01:02.397)
Thank you for that.

Roland Wiederaenders (01:03.966)
Joe, we're really excited to have you here. You know, you're a big name in this space and you've been at it for a long time. And Sarah mentioned the Best Ever Conference and that's a way to bring people in to get to know Ashcroft Capital better. We want to hear about who you are, but also, you know, maybe tell us initially about Ashcroft Capital and what

things that you're maybe focused on right now.

Joe Fairless (01:35.6)
Well, Ashworth Capital is a multi-family firm that I co-founded with my business partner Frank in 2015. We buy value-add deals in the southeast. So we have properties in Dallas, Fort Worth, Tampa, Orlando, Jacksonville, right outside of Miami, one of them. Another in Chapel Hill.

and Atlanta, decent amount in Atlanta. So that's a little bit about Ashcroft. We're vertically integrated so we have our own property management company that is in-house and currently only manages only Ashcroft properties and we have our own construction management team. So we are operators and that's what we hang our hat on is operating the properties.

So that's Ashcroft. Who I am, I'm someone who is focused on doing what I say I'm going to do and then a little bit more. That's important to me. And I believe that discipline actually sets us free more than being undisciplined. A couple things about me.

Roland Wiederaenders (03:02.99)
That's a great starting point, I think.

Sarah Florer (03:05.797)
So Joe, I like to understand more since Roland knows you and I'm just meeting you for the first time. What led you into your, I guess, commercial real estate journey? We have heard different stories from different people and most of them are really interesting. So I don't know if there's anything you'd like to share about that or...

Joe Fairless (03:27.932)
Sure, sure. I'm from Texas originally. I grew up in Fort Worth, Texas, Cowtown. And I went to school, well I went to school at a couple places. Blinn Junior College, tried to walk on to play football there. Didn't make the team. Then I went to Mary Harden Baylor for a year and made the team, but it was the junior varsity team of a Division III school. So everybody made the team.

And then I realized that I wasn't going to be the next NFL receiver. So I went to Texas Tech and was a student there. And I was there for, I think, three years. And I graduated with an advertising degree and then went to New York City because I wanted to compete with the best of the best in advertising. And that's where I received the best of the best to be in advertising.

worked on madison avenue make thirty thousand dollars as my first job i'll live in the east lot bush brooklyn and that was at the time very dangerous area and to that statistically speaking it was the business please precinct all the five boroughs east lot bush at that time and i was make a thirty thousand living at the top area and

And then I, but I kept plugging away, kept saving my money even though there wasn't much to save. And as I was getting promoted, I kept scrolling away the money and kept my living expenses and living situation relatively low. And so I had a roommate for most of the years. I was in New York City actually, I think all the years except for very first one when I was in East Flatbush.

But the other nine years or so, had a roommate from Craigslist usually. it was tough. I had a dorm style fridge. There was no AC in the apartment. In New York City, it's hot in the summers. And I ended up getting promoted and switching jobs and hopping agencies. I ended up becoming the youngest VP of an advertising agency there on Wall Street.

Sarah Florer (05:34.851)
yeah, yeah.

Joe Fairless (05:53.28)
And at the end of it, I was making $150,000 base salary. And the whole time I was, again, keeping my living expenses fixed. All my friends would say, well, why don't you get a studio apartment or a one bedroom, an upgrade? And I just didn't care about that. I wanted to, what I was doing is I was investing in single family homes in Texas where I was from and where I knew the market.

Sarah Florer (06:18.577)
Hmm.

Joe Fairless (06:22.876)
and where the numbers made sense. And I ended up buying my first house in October, I believe, of 2009. It was for $76,000 in Duncanville, And then I bought another and ended up buying four total over the course of about four years. on a spreadsheet,

Sarah Florer (06:38.205)
Hmm.

Joe Fairless (06:51.064)
it made lot of sense and it made a lot of money but in reality it wasn't because when people would move out there would be make ready expenses and that 250 bucks a month from each house on paper wasn't there because they just go right back out the door to get the place move and ready. So I realized a couple things, name of the game is to keep your tenants in there longer even if it's not as much of a rent increase just keep them in there longer.

Sarah Florer (07:16.627)
Hmm.

Joe Fairless (07:20.174)
and cash flow. Another is that it just wasn't going to provide a big cash flow that I thought it was, what it would be. But nonetheless, people were interested in it. And because of that, I started teaching a class on the side. And I was working a lot of hours at the advertising job. I started teaching class on the side in the evenings or in the weekends.

on how to invest where the numbers make sense for those people who living in New York City. one of my former bosses attended the class and he said, this is interesting. If you ever do something larger, let me know. And when I heard that, I thought I might have customers before I have a product. I have someone who wants to invest, but I don't have something larger for them to invest in. So that's when I started studying apartments.

Then I ended up finding my first deal in, of all places, Cincinnati, Ohio. I was looking in Tulsa, Oklahoma. I was sold on Tulsa, but couldn't find anything, went and visited there, and then ended up finding a deal in Cincinnati, Ohio, and that ended up being my first deal.

Sarah Florer (08:35.696)
Wow.

Roland Wiederaenders (08:37.046)
And so what year would that have been?

Joe Fairless (08:42.552)
2013-ish, I think. Summer of 2013, I believe.

Roland Wiederaenders (08:46.818)
So really kind of in the middle of the run up, mean, multifamily was just such a huge thing and the fix and flip model was a thing for a long time when money was so inexpensive. so we've seen the change in the marketplace, but the people that did it carefully and I think you fall into that category have survived the changes and that was one thing.

that we wanted to talk about today is the change in the commercial real estate market throughout the United States, but particularly in the areas that you focus in, Joe, and particularly by referencing the increasing interest rate environment that we've been in the past couple years.

Sarah Florer (09:17.523)
Hmm.

Joe Fairless (09:30.492)
Yeah, I mean, I would suspect most if not all your listeners know that, and I can only speak for multifamily, that multifamily values have decreased from 2021, which was probably the peak, depending on the market and sub market, but I'd say around 2021 is the peak. And it's because of interest rates.

It's because of elevated expenses and it's because of supply demand or really supply. Historic amount of supply has hit the marketplace for the last couple years to coincide with the increase in interest rates. So the values by and large are down relative to 2021.

maybe 2022.

Sarah Florer (10:33.811)
Well, that makes sense to me just because if it was looking pretty good there for a while, projects would be started and then everybody would be looking at multifamily. And then when too many people get interested in any asset class, you have the unfortunate problem of success then can lead to oversupply. I think that's also cyclical. So it'll come out on the other side eventually. But I spent a long time living in Dubai and in Dubai they

This is a huge problem there that there's all these projects, everybody gets very excited and then all the supply hits at one time and then rents come down drastically for a while and then it all starts over. So seems that think that's part of the cycle of housing and it doesn't always track with how fast a population is actually growing or the interest and the asset class particularly. But I guess in the United States it slightly varies by trend across the different cities and regions. So there's a bit of balance maybe that happens.

Joe Fairless (11:05.542)
Hmm.

Joe Fairless (11:15.324)
Mm-hmm.

Joe Fairless (11:33.922)
Yep. Yeah, the Midwest, I agree. By and large, it impacted everyone. However, the Midwest was most insulated from it because the supply didn't hit, the influx of supply didn't hit the Midwest like it did the Southeast. So it's...

Sarah Florer (11:34.141)
So.

Sarah Florer (11:58.77)
Right.

Joe Fairless (12:02.492)
It's an issue for everyone, but it's more of an issue for people and properties in the Southeast. the number one, the lead domino is interest rates. Because the lower interest rates, construction projects pencil, more supply comes into the marketplace, higher interest rates, not as much supply because projects don't pencil. So because the interest rates were so low,

Sarah Florer (12:09.235)
Hmm.

Joe Fairless (12:32.166)
projects pencil and then they were completed during a time when interest rates had spiked and so now you've got a couple things that you're competing against are you you're you're battling as a multifamily owner it's higher interest rates and and a bunch of supply so what's that mean for an owner well it means that people are going to pay as much for your property cap rates are

are going to increase and the values are going to decrease because there's more competition. So your rents aren't as high, your occupancy isn't as high, and even if there wasn't that competition, you got the interest rates, so the buying power is lower. you can, and then, by the way, there's that third factor that I...

Sarah Florer (13:06.235)
Mm.

Joe Fairless (13:28.9)
I mentioned before, is the expenses. Insurance, depending on the market, has gone up. When inflation was doing its thing, it was impacting payroll and everything on the P &L. That's been what's happening.

Sarah Florer (13:34.162)
Mm.

Sarah Florer (13:45.288)
Right.

Joe Fairless (13:58.242)
What I believe will happen is interest rates have been higher, relatively speaking, so there hasn't been as much new supply being started. There's still some being completed, but there hasn't been as much being started. Therefore, in a year or two, that's going to show itself in the marketplace. And as you said, Sarah, it's cyclical.

Sarah Florer (14:11.187)
Hmm.

Sarah Florer (14:25.403)
Hmm.

Joe Fairless (14:25.656)
and you're gonna see higher rents, you're gonna see, I believe you're gonna see higher rents, higher occupancy. The value should increase because the NOI would increase as a result of that. If you have interest rates cooperate by lowering, then you've got some really good momentum as multifamily operators. And I think you've got a couple year runway to

to capitalize on that as operators to either exit a refinancer or buy more deals now when the values are down. It depends on how you want to approach it.

Roland Wiederaenders (15:08.426)
Is that Ashcroft's approach like are you looking for those good opportunities because of the value?

Joe Fairless (15:17.434)
Yeah, we just bought a deal that was the bank foreclosed on another group and we have a relationship with that lender and because we, as I mentioned at the beginning of the show, we're vertically integrated so we have our own property management company, we said we can leave the solution for you if you have a issue with one of your

Sarah Florer (15:25.97)
Hmm.

Joe Fairless (15:47.188)
with someone who you're lending money to, one of operators, and you're foreclosing on a group, we could operate it if needed. And we say that to try to get access to deal flow direct to the lenders. And in this case, a very large lender that we have relationship with, they foreclosed on a deal or were going to, and we ended up buying it direct from the lender.

Sarah Florer (16:01.437)
Hmm.

Joe Fairless (16:16.564)
and there's a couple benefits. we bought for less than the debt that the previous group had on it now. Is that good or bad? It depends. It depends on what the value is, right? In this case, that was a good thing because we were, based on the numbers we saw, we were buying at a discount relative to the current valuation, not previous valuation.

Sarah Florer (16:28.317)
Hmm. Right.

Joe Fairless (16:46.652)
We also got special financing terms from the lender. we got a fixed interest rate of 4.5%. And then we negotiated years one and two to be around 2 % interest rate. But then it accrues on the back end. The difference there accrues.

Roland Wiederaenders (16:46.968)
So and.

Sarah Florer (16:50.407)
Yeah.

Sarah Florer (17:07.997)
Well, yeah.

Joe Fairless (17:12.06)
So it's still like 4.5 % but we're getting better cash flow year one, year two as a result. And we had some other things we negotiated with the lender because they just wanted it off their balance sheet. They're big enough where they weren't going to give it away, but they were also big enough where they could work with someone who they had a good relationship with like us and make the deal very appealing so that they could just...

Sarah Florer (17:28.477)
Hmm.

Joe Fairless (17:40.968)
be done with it and move on. And so we got a really good deal. It's in Fort Worth, North Lake, Fort Worth. So it's a really, really good deal that we're proud to have just closed on.

Sarah Florer (17:47.773)
Hmm.

Sarah Florer (17:58.195)
You know, it's interesting just hearing you say that, and I think this would be of interest to our viewers, and that is that deal flow can come from a lot of different directions. so cultivating yourself and like you started off with, doing what you say you're going to do and a little bit more and developing your reputation, we focus on that always. And in any of these, when we talk about investing in alternative assets, and here we're talking about commercial real estate, which is one of the...

the biggest asset classes that we talk about. And guess also the most accessible to people who don't have a professional background necessarily in some of the types of commercial real estate, the way you need technical backgrounds for things like hedge funds and whatnot. But it is so important, isn't it? Just what you're saying, you got access to a great project without actually having to...

spend a whole bunch of money on a deal sourcing team just through the process of your daily business having a good relationship with your lender. I think is perhaps indirectly it's also commentary about how to function in a higher interest rate environment, is maybe when interest rates are really low you can be a little bit...

non-committed to different lenders. You can jump around banks, everybody's trying to get money out the door and deploy that even in the banks. But as things get a little tighter, the relationships matter more, don't they? And then you have this also side benefit of a deal flow, which actually sounds like it could be a tremendous benefit if you're already an established operator and you don't necessarily have... You're not desperate for a new deal, but you wouldn't mind having one in a sense.

Joe Fairless (19:23.675)
Yes.

Joe Fairless (19:40.24)
Yep. That's right.

Sarah Florer (19:41.565)
So I think that's really cool. That's something that we haven't ever talked about before, as an aspect specifically to whether it's a multifamily or any kind of commercial real estate really, there's always this lender process involved and sometimes it's very onerous or difficult, but at the same time goes to show that your relationships there matter just as much as your relationships with any other aspect of being a deal promoter or operator.

Joe Fairless (20:06.844)
It's identifying the solution for those companies that have an issue. if lenders have issues with operators, then be the solution for the lender. most groups don't have their own property management company. So I get that. this won't be applicable to everyone, this nuanced approach. However, we can make it applicable to any operator by saying simply,

Sarah Florer (20:13.235)
Hmm.

Joe Fairless (20:35.644)
talk to the property management company that you currently work with and say to him or her, hey, I want to go find another deal. I have relationships with these lenders. I'm going to name check you and say, you have a great management platform because I know you do. And we're going to go in as a team and say, I'm going to try and get you new business. And at the same time, I'm going to try and buy the deal also.

Sarah Florer (21:03.677)
Hmm.

Joe Fairless (21:06.076)
It's still an approach that anybody can use. And the people who I would start with are your current lenders. So before you talk to your current lender, talk to your property manager company and say, let's go help you get some more business by working with these lenders and then reach out to lender as a unified front and see if you can buy some distressed deals.

Sarah Florer (21:31.347)
We actually had a whole early episode with one of our now former colleagues who's a bankruptcy attorney about distressed assets because it's such an interesting asset class and in their distressed assets and in every alternative asset class. I think it's just really, it seems obvious when you talk about it, right? To talk to your lender. But I assume that it's not actually something everyone's doing or it would be a whole separate market in and of itself.

Yeah, that's really interesting. Roll it.

Roland Wiederaenders (22:03.854)
Well, hey, Joe, maybe we can move on to the the best ever conference. And one thing I wanted to mention one of our friends and clients, Shriar Khan spoke, think recently he gave a presentation on modern portfolio theory, maybe. Does that ring a bell?

Joe Fairless (22:20.348)
I'm sure you're correct. I unfortunately don't get a chance to watch too many of or listen to too many of the panels because I've got a lot going on whenever I'm at the conference.

Roland Wiederaenders (22:29.432)
Sure.

Well, no, it came up and so, you I have some experience of it was 2018, I think is when, when, when I attended the best ever conference in Denver and, it was just really wonderful. It's a room full of 500 people at the time, all interested in getting into this business. And of course it was a different environment then, but you, you created a great value for people, great educational value, really.

giving people the resources that they need to get into this business and giving them such a great model. But maybe tell us a little bit about the Best Ever Conference and how that's maybe changed over time.

Joe Fairless (23:15.032)
Yeah, this will be our 10th year. This year coming up will be Best Over Conference 10 BECX. it is February 18th through 20th. It's in Salt Lake City, yeah, February 18th through 20th. And there are three things that you'll find with attendees by and large. One, they're humble. Two, they're experienced. Three, they're helpful.

Sarah Florer (23:17.395)
That's amazing.

Sarah Florer (23:25.873)
Hahaha

Joe Fairless (23:44.604)
helpful, humble, and experienced people. That's what I love most. I remember the very first conference, I didn't know who was going to show up. I had never met people from my podcast, there's mostly people who listen to the podcast. I had never actually met them. I was just talking through a microphone and it was awesome to see the quality of people there. And it was just a little bit larger than a meetup.

Even though we hosted in Denver and I flew out there, but it was the first conference, but then as it's grown It's just the quality of people has remained intact and it's great to see and when you attend That's what you that that's what people say Experienced people who are humble generally humble not everyone humble and Generally want to be helpful so it's just it's

Sarah Florer (24:35.869)
Hehehe.

Joe Fairless (24:41.756)
it's something I'm proud to host. The people it's for are syndicators and passive investors who are looking for alternative options and also vendors who service syndicators, commercial real estate. It's not just multifamily. It's every type of property type within commercial real estate. We have a

a pitch slam which is fun where a group's pitch there this is one part of the conference but where a group's pitch in front of a shark tank panel and then the award the winning teams or the winning groups get awarded money it's just it's just a lot of fun

Sarah Florer (25:29.299)
That's really cool.

Roland Wiederaenders (25:30.392)
Hey, Sarah, we were talking earlier today about attending some of these conferences. Maybe we should put that on our, you know, show up there with the podcast.

Sarah Florer (25:36.131)
Yeah, I think so. was just thinking. Yeah, that would be fun.

Joe Fairless (25:38.972)
It would be the, I mean, talk to, I mean, you've been Roland, but, you know, talk to anyone else who's attended. They'll say, this is the best one to go to and I'm proud to be a part of it. I mean, we had it last year, or I guess this year, 2025, was, like a year ago, it like three months ago. And we were one of the only conferences.

to host a conference in commercial real estate this year. Most of them just didn't do it because of the environment that we're in. And what we found is that the people who attended our community were long-term people. We're in it for the long haul. We're long haulers. And my approach is long-term relationships with long-term people. And so you'll find that this is a cut above

Sarah Florer (26:11.709)
Wow.

Wow.

Joe Fairless (26:37.912)
other this is a cut above what you'll typically find that a conference as termed as quality of people

Sarah Florer (26:45.555)
Hmm.

Roland Wiederaenders (26:46.478)
Well, you just gave a perfect example that relationship with the lender didn't develop overnight and you didn't demonstrate your acumen with respect to the operational efficiencies. It takes time to do that and I think this is an industry for sure where in one deal it really can change the sponsor's economics for them significantly if they're successful.

I think the people that have had the greatest in long-term endurance are the ones that really take that perspective and know that, you know, while it could be one deal makes you, you know, you really, to get to that point, you've got to really learn and be committed. And like you said, I like where you started discipline. Discipline really can provide freedom. It's a contra, you know, it doesn't,

Joe Fairless (27:35.92)
Yes.

Roland Wiederaenders (27:45.666)
doesn't necessarily seem like that's the case. My teenage children, they want their freedom, but to achieve that, there are some, you gotta constrain yourself. You gotta get up early every morning, go to work, do your job, and then have your fun afterwards, but the discipline is so important.

Joe Fairless (27:48.88)
Mm-hmm.

Sarah Florer (28:04.129)
You

Joe Fairless (28:06.448)
I love the thought process of choose your challenge. It is challenging to be fit. It is challenging to be healthy. It's also challenging to be unfit. It's also challenging to be unhealthy. It's gonna be challenge. So choose your challenge, right? Yeah, choose your challenge. mean, one of my favorite books, The Road Less Traveled by Scott Peck, the first sentence is life is difficult.

Roland Wiederaenders (28:25.518)
How are you gonna suffer?

Sarah Florer (28:25.597)
Hmm.

Joe Fairless (28:37.052)
It's true. It's not supposed to be easy. If it was easy, we'd all be lazy and, you know, the sloss. But it's supposed to be difficult. So once we truly embrace that life is supposed to be this way, and it makes us stronger, then it's not as challenging because we're not blindsided by...

Sarah Florer (28:37.938)
Yeah.

Joe Fairless (29:03.568)
the challenges we expect them because that's how things are supposed to be.

Roland Wiederaenders (29:07.576)
That's right. Yeah.

Sarah Florer (29:08.773)
It's funny because you kind of just jumped the gun on the question I usually like to ask when we're kind of towards after we've had a chance to talk about the business end of things. And that is what is it that kind of keeps you personally motivated? You know, you're an entrepreneur and it sounds like you have a lot on your plate. managing operating multifamily is a busy enterprise, but also a conference. then presumably you have other things that you you're involved in.

So it sounds like you gave us part of an answer, but if you have more to say about the personal approach that you take, I'd be interested to hear about it. think we've gotten some really interesting answers from people who've found success in this industry or part of an industry.

Joe Fairless (29:57.98)
Yeah, I'd say give to live and live to give. I have that on my vision board right in front of me. And the more I focus on others and doing the reason why I'm doing things is for others, not for me. The better I feel, the more productive I am and the more effective I am. So that's been.

You know, that's been a big, big important mantra for me.

Sarah Florer (30:31.707)
Yeah, I think that's really beautiful. In the end, are all a community in one way or another, however you want to slice that. Roland, is there anything else we want to cover?

Joe Fairless (30:39.994)
Yes. That's right.

Roland Wiederaenders (30:46.274)
Well, just to feedback on, give some reflection on that. We think about ourselves as servants to our clients, and in a secretarial role, we can't be attorneys without a client. so really, I like that because when I do the best job for clients, I really try to put myself in their shoes and try to accomplish what it is that they want to accomplish, but also try to keep

you know, be as efficient as possible too. so anyway, it's been great reconnecting Joe and yeah, just we will make sure that we include all your contact information in the show notes and information about the Best Ever Conference and Sarah, let's put that on our radar for sure.

Sarah Florer (31:37.875)
Yeah, that'll be great. It would be lovely to get to do that and also to meet you in person, Joe. Just really grateful that you are available to have a chat with us. you know, it's such an interesting area and something I really like about commercial real estate in the United States is that it does give people a chance. People have had different careers, people have had...

Joe Fairless (31:43.536)
Yes.

Sarah Florer (32:00.315)
You know, been on that 30,000 for a decade or two and trying to find a way forward for building stability for their futures and for their kids. And I think the more education from people like you who know what to do, how to go about things and how to set a good example available to people, the better and it's healthy for our economy and it's healthy for ultimately our society. So it's, I really appreciate that, you know.

people who take like you take your experience and give it back, make it available to the wider community.

Joe Fairless (32:34.524)
Well, that's what makes it, it's just more joyful. Just more joyful to, you know, do things together than be isolated.

Sarah Florer (32:39.175)
Yeah.

Sarah Florer (32:44.819)
Yeah, I totally agree. All right, so Roland, I wrap it up? Okay. Thanks everyone for joining us today on Alt Investing Made Easy. If you like this episode, please like, subscribe and follow us.

Roland Wiederaenders (32:49.634)
Yeah, I think so, sir.

Roland Wiederaenders (32:59.394)
And remember everyone, take aim with your alternative investing strategies.

Sarah Florer (33:04.605)
See you next time.