Today’s guest is Daniel Holmlund.
Daniel started the Alternative Investing Club which helps educate people in creating an ownership culture. He is also an active real estate investor who partners and mentors with others.
Show summary:
In this episode, Daniel shares his real estate journey, from flipping single-family homes to founding Good Samaritan Capital, a syndication and private equity real estate company. He also discusses the growth of the Alternative Investing Club and offers advice for aspiring club organizers. Daniel and Sam then delve into the current market conditions, including inflation and interest rates, and discuss the strategies implemented by Good Samaritan Capital.
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Intro [00:00:00]
Building the Real Estate Club at Intel [00:03:19]
Moving the Club Externally [00:08:28]
Scaling the Club and Membership Growth [00:06:29]
The Real Estate Club and Networking [00:11:12]
Impact of Interest Rates on the Market [00:12:52]
Good Samaritan Capital Growth Fund [00:18:19]
Daniel's contact information [00:22:31]
Expressing gratitude [00:22:54]
Closing[00:22:55]
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Connect with Daniel:
Facebook: https://www.facebook.com/danielwholmlund
Linkedin: https://www.linkedin.com/in/daniel-holmlund/
Email: daniel@goodsamaritancapital.com
Web: https://www.goodsamaritancapital.com/
Connect with Sam:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Facebook: https://www.facebook.com/HowtoscaleCRE/
LinkedIn: https://www.linkedin.com/in/samwilsonhowtoscalecre/
Email me → sam@brickeninvestmentgroup.com
SUBSCRIBE and LEAVE A RATING. Listen to How To Scale Commercial Real Estate Investing with Sam Wilson
Apple Podcasts: https://podcasts.apple.com/us/podcast/how-to-scale-commercial-real-estate/id1539979234
Spotify: https://open.spotify.com/show/4m0NWYzSvznEIjRBFtCgEL?si=e10d8e039b99475f
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Want to read the full show notes of the episode? Check it out below:
Daniel Holmlund (00:00:00) - We went and raised a large chunk of money for them and negotiated with them for better terms, and then an individual would get coming in. And it really dawned on me this year that being able to find better terms is the name of the game. And the only way you can really do that is through scaling. Welcome to the How to Scale commercial real estate show.
Sam Wilson (00:00:23) - Whether you are an active or passive investor, we'll teach you how to scale your real estate investing business into something big. Daniel Hamlin started the Alternative Investing Club, which helps educate people in creating an ownership culture. And he's also an active commercial real estate investor in Daniel. I know that that bio just doesn't even remotely capture everything that you've done in commercial real estate, but either way, it's great to have you on the show.
Daniel Holmlund (00:00:53) - Hey Sam, it's great to be here. I love seeing that you put out a daily podcast and I know a little bit about the rigor that that entails. So congratulations to you too.
Sam Wilson (00:01:02) - Well, we have to I can't say it's daily anymore.
Sam Wilson (00:01:06) - Regrettably, we did seven. I don't know who is. We? We got a mouse in my pocket. I did. I do have a lot of help. So maybe it is we it is definitely a we. Podcasting is a wee wee sport, but we did 720 episodes. So two years straight daily and then we've moved to three days a week. So it yeah, we're only at three days a week now. I can't claim a daily real estate show anymore, but either way, Daniel, this show was about you, not me. There are three questions I ask every guest who comes on the show in 90s or less. Can you tell me where did you start? Where are you now and how did you get there?
Daniel Holmlund (00:01:38) - Sure. So when I was little, my grandparents bought a apartment complex. After my grandfather retired from International Harvester, it was only after he retired from his full time job and bought real estate that he actually amassed a new wealth. And that kind of struck me as a ten year old.
Daniel Holmlund (00:01:54) - So I started right out of college, buying properties in single family homes, usually adding a little value there, flipping them. That was in 2002. I invested as hard money lender from overseas, actually all during 2006 to 2008. I ended up through the 2008 with a couple of houses that hard money lenders didn't want to pay me back for. Kept those for a little while and then founded Good Samaritan Capital, which is a syndication and private equity real estate company in 2018. And I have been working on private equity commercial deals ever since.
Sam Wilson (00:02:34) - Okay, that is really cool. I mean, but you've also held a W-2 here until recently, if I'm not mistaken.
Daniel Holmlund (00:02:42) - Yeah. Yeah. So I until just this year, I was full time at Intel where I worked on video and and artificial intelligence was a trainer for these. So didn't actually write the software. But I trained people in how to use it. And I also started the real estate club at Intel, which has been going now strong for four years.
Daniel Holmlund (00:03:04) - It's just exited Intel and we rebranded ourselves the Alternative Investing Club. And it is we bring a speaker in every single Friday and just learn from great people who are out there doing it.
Sam Wilson (00:03:19) - Let's stay there for just a second because I think this is something really cool that you set up there at Intel. You guys, like you said, you had a weekly meeting. You brought in a speaker every Friday. I think you had, you know, parameters around it which make all the sense in the world. It's a no pitch educational only. And I actually got to present there for you.
Daniel Holmlund (00:03:36) - Yeah you did you it on syndicating parking lots.
Sam Wilson (00:03:38) - Yeah. This was three years ago.
Daniel Holmlund (00:03:40) - Three years ago. Yeah. Yeah.
Sam Wilson (00:03:41) - 3 or 3 and a half even. But it was fun. Yeah, it was great. It was great. It was great to be there. One. How did you build that club and then what advice would you give to somebody else thinking about that? Because, I mean, you guys are at Intel.
Sam Wilson (00:03:54) - You're not there to talk about real estate. You're talking, you know, microprocessors and all the other probably 800 billion things that Intel involved in.
Daniel Holmlund (00:04:00) - Yeah, Yeah. And you know, actually, I not only helped to build the club at Intel, but in 2021, I started just a small pro-bono mastermind helping other people start clubs. And we, we helped start the club with me over at Walmart, over at Netflix, at Cisco, at We revitalized the club over at Apple. We started one at Facebook. And so we we built a little bit of a network there and they're actually totally independent from me and off doing their own deals, starting their own clubs. But in Intel, I basically went into and said, I see you've got a stock company or a stock club. I see you've got a startup club and I want to run the real estate club. And my advice to people wanting to do that is figure out who to talk to at and make sure that you you frame it in terms of I am making this company a better place to be, right? You know, Intel needs to be a great place to work.
Daniel Holmlund (00:04:58) - And because of that, we're starting this club, which is purely educational and and also networking.
Sam Wilson (00:05:04) - Right, Right. That's cool. That's cool. Yeah. Love that. I mean, again, I've never spent a day in corporate America, so wouldn't even know where to start on that front. Like, oh.
Daniel Holmlund (00:05:14) - Hell, some corporations are. Ah love the idea that you have the enthusiasm, some are really conscientious and they'll put like the the compliance officers in the audience to, to monitor you, which, you know, you should be compliant. You should be running a purely educational club. Right. So, you know, just work with them and make sure that you keep the people happy and provide great speakers to your club members.
Sam Wilson (00:05:40) - Right. Right. No, I think that's great. How long did it take for you to get traction on that front?
Daniel Holmlund (00:05:45) - Oh, gosh. You know, my first four months running that club, I was embarrassed to go out to speakers. I was like, We're the Intel club.
Daniel Holmlund (00:05:53) - We've got like 12 people that are showing up. Yeah, but around what I did that actually grew the club is I went to other clubs and there's a, there's a 20 and 30 professional club called called Next Gen professionals at Intel. And I said to them, Hey, can I get on your calendar? And this is what we we do. So I went and networked with other clubs and that's actually what caused my my growth to explode. And you can see a very nice progression up over the last three and a half years. We're now at almost 1100 members.
Sam Wilson (00:06:29) - Wow. That's really, really impressive. And that's something I mean, I'm assuming you've done essentially with no marketing, no advertising.
Daniel Holmlund (00:06:39) - In fact, I was forbidden from doing that. It didn't sell. It was all word of mouth. Right.
Sam Wilson (00:06:43) - Right. Oh, that's really, really cool. I love that. And I think that's the other thing is I think even back to launching a podcast or it was like, you know, I don't know where we are 800 and 3050 episodes, somewhere in that range.
Sam Wilson (00:06:58) - It's like the first few episodes. It's like, Man, why am I doing this? Like I think I had? I think God bless the guy that came on with seven downloads, I think was on my first episode published like, Oh, after a week I had seven listens whoop de stinkin do. Why are we doing this? And obviously that's changed. But I think anybody starting out scaling what they're doing just has to note there's that incubation period, there's the embrace, the suck period of like, well, hey. Oh yeah, Pat in your hand, will you come talk to my 12 friends at Intel?
Daniel Holmlund (00:07:30) - Because our group is at the very beginning of the club, we actually used to reserve a room and physically go there. And I realized one particular time nobody showed up in the room, but there was like 15 people online. And I looked at them. They were all in the same building as I was in. They were just at their desks. And so you go through periods like that, right? Right.
Sam Wilson (00:07:51) - And did you go and did that change the model or the way that you did it from then on? Did you do it all remote after that?
Daniel Holmlund (00:07:56) - It's completely remote. Most of our most of our attendees, the number one spot is actually from Folsom, California. Number two is Portland, Oregon. Number three is is Phoenix, Arizona. So we're a lot of West Coasters. There's some Texas and Virginia and other places thrown in. But but, yeah.
Sam Wilson (00:08:13) - Got it. Oh, that's really, really cool. I love that. And so how did you how did you take that club out of Intel? I mean, did you just take all your email list and say, All right, guys, we're going to move this club? I'm not hosting it here at Intel anymore because I've stopped working for.
Daniel Holmlund (00:08:28) - Pretty much, yeah, over over about a eight week period. I said, first of all, we posted all of our videos internally at while the club was happening in Intel, only Intel employees were allowed to go there.
Daniel Holmlund (00:08:41) - So we posted our videos internally. We couldn't even send them to our speakers. Right? And well, actually, that's not true. We could send them to our speakers, but we asked they not share them. Right. And so and the reason why is because Intel wanted to protect the the privacy of their employees. And that was the policy that we had to abide by. Right. And so going out of Intel, it's been a big process. We basically told everybody, hey, if you want to continue coming to the group, sign up on this external emailing list in order to get on the group and we're going to go through all the videos and make sure that names are blurred out that you know, and anything that reveals any sort of employee name or data is taken out. And which was hard because we did question and answers where would say Bob is asking da da da da da da, right? And I realized actually early on that just using first names and not whole names was a good way to go because it meant a whole lot less editing.
Daniel Holmlund (00:09:40) - Right? But basically we just told the told the group that we were moving externally and we moved over to Alternative Investing Club. Com and that's where we're hosting now.
Sam Wilson (00:09:51) - That's really cool. Yeah. I love I love the idea of protecting the kind of the privacy of the people who are in the meeting. I made it here's a here's a rookie mistake I made the other day. Daniel I was doing a webinar and I didn't and I was using Zoom and I'm too cheap to pay for the, the like the webinar version of Zoom because it's like another, you know, I do like two webinars a year. So I was like and I pay for obviously.
Daniel Holmlund (00:10:15) - Like 400 bucks isn't it? It's something like that.
Sam Wilson (00:10:18) - But a.
Daniel Holmlund (00:10:19) - Month.
Sam Wilson (00:10:19) - It's high. When you tack on the webinar feature, I'm like, Man, I don't really care about that. And you can do speaker only view because none of that, none of the attendees in the webinar needed to be there. But I failed to do that.
Sam Wilson (00:10:30) - And so it had everybody. His name's who was attending obviously a webinar for our clean Laundry fund. And I'm like, Oh, crud, there's all the type of video editor get in there and blur everything out and like. But it just wasn't quite the same, same but same idea. Or it's like, Oh crud, everybody doesn't want to get advertised. Hey, I was in this meeting and none of my investors want to get advertised to the world that, hey, they were attending a webinar for a clean laundry fund. So it's just like you got to protect those things. So very, very cool. We've talked a lot about the club and how you started at Intel, what you've done to move it to taking it out of the corporate America structure. What are some things you're doing differently now inside of that club that maybe you couldn't do before at Intel?
Daniel Holmlund (00:11:12) - Uh, well, for one thing, we're beginning to bring in actual, you know, pitches to the club. So if people want to come in and talk about their clean laundry fund, we're doing more of that where it actually is listed to the attendees.
Daniel Holmlund (00:11:26) - This this is is a pitch for a particular fund. And this is, you know, this is not a non educational one. One thing that I want to back up and say, actually, is that the the real estate club for me was my launching platform for Starting Good Samaritan Capital. So it was a networking group and I did a ton of networking, never using company resources, always called on Zoom outside of company resources, never doing anything like that. But I built up my investor list that way, and Good Samaritan Capital over the last over the last five years now has participated in 12 syndication deals, um, and two of which we have sponsored and then two fund to fund deals, I'm sorry, three of which we've sponsored and two fund to fund deals. And so our goal was to bring a new high quality vetted investment out to the attendees or people, rather not the attendees, but the people on my investor list. There's actually a lot of people attending who were not on my investor list.
Daniel Holmlund (00:12:32) - Um, and bring it out once a quarter. So we've, we hit that goal every single quarter except for Q4 of 2022 where interest rates were starting to peak up really quickly and liquidity was drying in the market. This is still the current conditions that we're in and I'd love to talk about that as well too.
Sam Wilson (00:12:52) - Yeah, shoot, man. No, let's let's talk about I mean, that's a lot of deals to get done. And that's and you, you essentially what you just said, if I can recap it and clarify is that you built your investor list by hosting these events and by starting these clubs.
Daniel Holmlund (00:13:09) - Absolutely. Yeah, absolutely. You and it's straight out of, you know, the best ever real estate syndication book. Right? Create your thought leadership platform, create a thought leadership platform and become the expert to a group of people that you know and earn their trust through repeatedly being there. Our club has actually had for an average of 49 events on Friday for the past four years. So we we usually don't do the Friday after Thanksgiving and maybe 1 or 2 in December.
Daniel Holmlund (00:13:41) - But other than that, we're there like clockwork and that that's a way to create trust.
Sam Wilson (00:13:47) - Yeah, absolutely. Absolutely. Very, very cool. You wanted to talk about interest rates not getting a deal out in the last quarter. What what what has been your focus and where are you going now that we've kind of, you know.
Daniel Holmlund (00:14:02) - Things, things. Yeah. Yeah. So so it's interesting. I think that a lot of people that are in the real estate market right now are realizing and and actually in the club we've been warning for two years I was joking in back in 2021 about which is more transitory inflation or the Fed or the Fed's reputation. Uh, and and I think now it might be the Fed's reputation, right? And that's, that's actually what we thought back then too. Um, but the writing was on the wall for quite some time. And in fact, one of the reasons I started a real estate company is because I knew I needed to convert all my stock market funds into real estate and hard assets because we were going into an inflationary period.
Daniel Holmlund (00:14:45) - And my my thesis was always that inflation is starting to pick up. The way that governments are spending is going to necessitate that inflation picks up. But all it's going to take is a shock to the system to make it really jump up. Right. And we've seen lots of shocks to the system. Of course, nobody thought Covid would come around, but it only takes the shock to the system and shocks to the system happen a lot. The economy tends to position itself right on the knife's edge, right where, you know, we've borrowed just enough to make inflation. Not a problem if everything goes right. Well, what if everything doesn't go right? You want to be in assets that are tangible and that actually go up in value in inflationary environment. Since that was the core theme to my business, you know, five years ago and the writing was on the wall since, you know, 2013 where we anyway won't go down that route. So, so we, we now are in a period where inflation is kicking up, expenses are going up, the interest rates are going up.
Daniel Holmlund (00:15:50) - This is drying up a lot of liquidity in the market. A lot of lenders have drastically pulled back. I see deals right now that, you know, used to be underwriting for underwritten for 75% LTV loan to value and now they're doing 65 or 60%. And so syndicators are raising a lot more capital in order to. If they're deals done, they're paying, you know, 7%, pref, 6% pref, whatever they happen to be paying, which is, you know, not as competitive as it used to be when interest rates were down at 2%. Right. You know, if you can borrow money at 2%, why pay 7% pref? Well, now they're getting a lot more closer to each other which is causing pref to move up potentially in some types of deals. And so a lot of lenders are pulling back and it's it's creating demand for private equity for increased amounts of equity and for mezzanine debt, particularly with operators who are running into cash flow issues or maybe didn't buy a rate locks. And so a lot of distress is starting to come into the market.
Daniel Holmlund (00:16:58) - And that's that's kind of been our theme this year. Last year, our theme was in the two years before actually was flight to quality assets, where we invested in A-minus and B plus multifamily assets. We also bought our industrial asset in Kansas City, which is doing well. And this year it's going to be opportunistic to a certain extent deals with pref equity. And so Good Samaritan Capital has shifted its strategy a bit. Last year in our flight to quality deals, we started what's called a fund fund of funds, and we went and invested with large operators like Rise 48 and Lone Star and, you know, big operators who had a good track record of paying out dividends, not dividends distributions. Um, and so we, we went and raised a large chunk of money for them and negotiated with them for better terms. And then an individual would get coming in. And it really dawned on me this year that being able to find better terms is the name of the game. And the only way you can really do that is through scaling.
Daniel Holmlund (00:18:11) - So I'll stop there because I've been talking for a little while. I could keep going, but I'll let you get an edge. A word in?
Sam Wilson (00:18:19) - No, this is good. I'm loving here in the thought process how you guys have shifted, what you are looking for, what you previously invested in. You know, we're running out of time, but I do I do want to hear about because we've kind of got the back picture on where you've seen things and where how you guys are shifting your strategy, but you've launched a growth fund. I do want to highlight this before before we get off the call here, which is talk about your growth fund, because I think inside of that, when you talk about the four different things you guys are doing will really help kind of backfill the rest of what you were previously talking about.
Daniel Holmlund (00:18:55) - Yeah, it's realizing that scale was needed in order to be able to come to the table and get better terms. We've launched the Good Samaritan Capital Growth Fund. It's a 506 C fund for accredited investors, and we are targeting four main strategies which we think are are particularly good in this environment.
Daniel Holmlund (00:19:16) - In fact, I think there's a short window for it in this environment. And the first one is, is new construction. In the short term, we're going to see a lot of cash flow crunches. And so I want our focus to be on the areas where we can deliver for our investors, and that's in long term, long term growth. So we're looking at new construction, particularly new construction of land that is already permitted and already has the the architectural diagrams signed off by the counties. So we come in, we'll buy the land, the permits and the diagrams and then partner with new construction companies in order to build midsize multifamily 30 to 40 to 50 units. That's strategy number one. Strategy number two is, is a continuation of our previous flight to quality strategy, where we invest in multifamily that is long term and is either A-minus or B+. And usually I like to see some sort of tax abatement. Taxes are the largest expense in a multifamily deal. If you can reduce that expense, which a lot of a lot of municipalities right now are offering tax abatements because there is an increase in affordability.
Daniel Holmlund (00:20:34) - So the county is coming in and helping you subsidize your your renters in many cases. And there's different types of deals. The second and third, I'll do really quickly, there is an opening right now for pref equity deals are beginning to become cash flow constricted and maybe they just need to finish off the last couple of units that they're doing. So there's a pref equity play which is in high demand right now. The the drying up of of markets and the unwillingness of banks to lend or the or only lend to large players has created a vacuum there. And there's an opportunity to step in with pref equity. And then just slightly further up on the. Capital stack is the mezzanine debt. There's a great opportunity for mezzanine debt financing as well. So the long term plays are the new construction and the value add and the shorter term kickers that generate a kick in the fund are the pref equity and the mezzanine debt. And so those are the areas we see as being good places to target this year.
Sam Wilson (00:21:36) - Daniel And then.
Daniel Holmlund (00:21:37) - Probably next year.
Sam Wilson (00:21:39) - Absolutely. No, that's incredibly insightful. I mean, we could spend the next two hours really just breaking down each of those different components, how you vet, how you choose to work along, who you choose to work alongside and, you know, not winding up like you did in 2008, owning assets that you don't necessarily want. You know, how do you guys structure? And we could get into all of that. So maybe you need to come back on the show and we'll re re kind of go or not recap but go through all of those and get it get a little bit deeper. Dive into that. For those of you who don't know, Daniel was one of the early people here on the podcast that came on. Daniel, last time you were on the show, it was December 16th, 2020. And you goodness, I know you were episode number 17, So thanks again for coming. Oh, you came on early, man. Thanks for giving thanks for gambling on me.
Sam Wilson (00:22:31) - Certainly appreciate you having you come back on the show here today. Daniel, If our listeners want to get in touch with you and learn more about you, what is the best way to do that?
Daniel Holmlund (00:22:38) - You can reach me at Daniel at Good Samaritan capital.com and our website Good Samaritan capital.
Sam Wilson (00:22:45) - Good Samaritan capital.com or Daniel at good Samaritan capital.com make sure we include all of that there in the show notes Daniel thank you again for coming on today I do appreciate it.
Daniel Holmlund (00:22:54) - Thank you very much.
Sam Wilson (00:22:55) - Hey thanks for listening to the How to Scale Commercial Real Estate podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen. If you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories. So appreciate you listening. Thanks so much and hope to catch you on the next episode.
