Capital Raising Secrets: Boost Your Business Growth with Expert Insights

John Harcar (00:01.697)
All right. Hey guys, welcome back to our show. I’m your host, John Harcar. And I’m here today with Tanh Truong. And what we’re going to talk about besides his journey in business and in real estate, we’re going to talk about his capital raising and some of the lessons he’s learned or is learning over this current deal that he’s doing. It should be really interesting. Remember guys, at Investor Fuel, we help real estate investors, service providers, really all real estate entrepreneurs, 2 to 5X their business.

You know, we provide the tools, community and training to grow the business you want to have, which helps live the life that you want to live. So Tanh, man, welcome to our show.

Tanh Truong (00:39.522)
Thanks, John. Pleasure to be here.

John Harcar (00:41.311)
Yeah, I’m anxious to hear your lessons learned. I love hearing real life experiences and examples that a lot of our audience can relate to. But before we get into all that, why don’t you spend a few minutes, tell our audience a little bit about you, your background in real estate and business, and how you got here.

Tanh Truong (01:01.912)
Sure, sure. Well, like John said, my name is Ton. I actually started my career as a pharmacist. I practiced for roughly three years. And I essentially did that to pretty much appease my parents, to give them that nice shiny piece of paper so that they can brag to their friends, right? Brag to the community. 100%, 100%. So I got the piece of paper. I wasn’t really a great student during pharmacy school.

John Harcar (01:20.385)
frame it, put it on the wall, you know, all that cool stuff.

Tanh Truong (01:28.43)
because my mind was always focused around finances and investments, things like that. And once I graduated, I kind of took that full tilt to learn a little bit more about investing, taking it deeper, right? I would always jump down rabbit holes and just absorb all the knowledge that I could. And throughout that, you know, it only took me roughly a year to absorb all this shit, you know, as it relates to investing in general, know, stock market equities, et cetera.

rabbit holes after rabbit hole, I found real estate and through real estate, I jumped into it full-fledged probably around end of 17 and I graduated or I sorry, I graduated pharmacy school in 2017. So that’s when I bought my first rental and that transpired into 2018, 19 and 20. So during, during those years and obviously as you guys know, 2020 was the COVID era, the COVID season there. So

John Harcar (02:12.352)
Hmm. Okay.

Tanh Truong (02:26.189)
During 2019 and 20, over a period of probably 14 months or so, I and some partners, we acquired probably another 14 doors of residential real estate. So small multifamilies, single families, and we did everything under the sun, know, held, bird, wholesale. The only thing I probably didn’t do was probably note investing in the residential side. And with that, we started

having we’re sorry butting heads we started disagreeing on a couple things you know who’s putting in more time which should be getting paid blah blah blah and I said something that I never thought that I would have said I was like you know what what if we just sold everything in disbanded because I was kind of a buy-and-hold guy pretty much forever so that period took roughly a year or so and after that so everyone parted ways and I was kind of sitting in a position where I didn’t know what to do do I

do the same thing twice continue wholesaling fighting off market deals or do i transpire into something else and you know i said i did the whole sale by myself for a little bit i didn’t really like it and i a as essentially moved on to commercial real estate after all of my home for gone i stepped away from pharmacy after practicing for three years full-time and i put my back against the wall and just put everything that i’m could into commercial real estate and

John Harcar (03:48.416)
Mmm.

Tanh Truong (03:54.412)
Pretty much from there, John, I grew a portfolio of roughly $20 million in, that was really pretty much the first two and a half years. So, finding deals off market or on market, putting myself in a team, and now today we kind of own everything from retail strip malls to flex spaces, warehouses, office space, things like that.

John Harcar (04:23.27)
Mm-hmm. Very cool. Very cool. Yeah, I’ve been, you know, lately getting a lot of people talking about flex space. But let’s go back. You were doing wholesaling. Did you ever flip a house? Did you ever do the fix and flip? You did? OK. Why did you choose commercial, non-residential stuff as opposed to maybe just going taking a step up into, you know, bigger multifamily apartments, those type of

Tanh Truong (04:24.02)
anything that people aren’t living in.

Tanh Truong (04:30.997)
yeah.

Tanh Truong (04:36.648)
I did. Yes. Yeah.

Tanh Truong (04:52.428)
No, great question because that’s pretty much the normal route that anybody would take, right? But if you go to any real estate get-together, any little conference or any local conferences, right? And you’re networking, you talk to people, everybody is pretty much on the same trajectory. How many fucking five units and 20 units are there out there? You know what I mean? So everybody you talk to, they’re growing in a similar fashion. They’ll flip.

John Harcar (04:56.019)
Right, yeah.

John Harcar (05:15.316)
Right?

Tanh Truong (05:21.772)
Get some capital, they’ll find the next thing. One to four units is kind of the next stepping stone there. It’s cut out for you. The plan’s there. Look at what the next guy’s doing. Now it’s five to 20 units, right? Everybody’s looking for the same shit. So my thing is, how do I make myself better or stand out versus everybody else here who’s probably been doing it longer than I have in order to find the next one to four five to 20 unit or from 20 to 100, right?

John Harcar (05:26.805)
Yeah, yeah.

John Harcar (05:44.917)
Right?

Tanh Truong (05:51.882)
The competition is fierce there. That sandbox is a little crowded. So from my perspective, you know, going back to my Buffett roots, be a contrarian. Look for something where somebody else is not playing in, right? Or less, or it’s less crowded. So from my perspective in the commercial realm, the non-residential realm, there’s a lot less players in there. So I’d rather compete with three or four guys or maybe 10 guys versus 25, a hundred guys, right?

John Harcar (05:55.562)
Very.

John Harcar (06:03.648)
doing.

Tanh Truong (06:21.206)
So that was why I transitioned into commercial. I guess the second piece of that, John, is that it’s always been elusive to me. If you guys Google commercial real estate, you’re not going to learn. Or from my experience, it takes a lot more time to figure out all this information. When I did it, there was very basic rudimentary information. And it was all revolved around apartments. So.

John Harcar (06:21.514)
Bear true.

Tanh Truong (06:47.179)
I guess I was challenging myself to learn something new that nobody else knew.

John Harcar (06:52.224)
So let’s talk about that learning piece. How did you learn it? mean, you know, lot of people when they’re making a transition into a whole different asset class, I you have one of two ways you learn. YouTube U, or actually one of three, YouTube U, school of hard knocks, or pay a mentor.

Tanh Truong (07:08.437)
Yep, yep. So once again, I went to YouTube for a little bit, but I couldn’t find anything. It was all basic shit, right? And the school of hard knocks, I didn’t have the balls to actually do that. I didn’t jump out to find something, because I have no idea what the hell I was doing, right? So luckily I found a mentor, a local mentor who was in my market, right? And I hounded this cat. I was Facebook stalking him for weeks over weeks over weeks.

John Harcar (07:24.445)
Yeah.

Tanh Truong (07:37.557)
kept telling me no no no no no but then all of a sudden he gave me the yes and i said hell yeah packed my shit went to his place hung out and i think the biggest lesson for the the audience here from a short form perspective is that i lead with value and i was there to figure out his bottlenecks and how i could help him versus being there and asking what could he do for me and

that really gained his respect and essentially I acquired a mentor without even without even purposely looking for it for free. Whereas you know with John like you mentioned there are a lot of mentors out there that are paid and luckily mine is not.

John Harcar (08:23.306)
Sure. Well, and I think that’s the biggest nugget, maybe of what we all talked about so far, excuse me, is that, you you gotta put yourself out there and you gotta be able to find someone that’s gonna help you learn it, right? You gotta be able to take advantage of their mistakes, of their times, or the times they messed up and kind of shorten your growth. So for you, as you transition into this,

And also to the leading with value is always I think going to get you a lot farther than coming in asking for something Like you said solve their problem. They’ll help solve yours What were some of the struggles that you found in that in that transition or difference from the wholesaling and what you were doing to the commercial part like what were a couple of biggest differences

Tanh Truong (09:11.896)
God, I think everything in the commercial world is completely different. So if you look at any business plan, you have to look at it from an overview perspective. If you can’t understand it from an overview 30,000 foot view perspective, you really don’t understand it. You wanna keep it simple, right? Wholesaling, what are you? You’re the middleman. You’re marrying the buyer to the end seller and it’s all through your network to make that happen and you get a fee as your reward.

Buy and hold. You buy a property, you get a tenant, you make rent. That’s how you make money. Flip. Buy an undervalued asset, fix it up with X costs, resell it, hopefully for a profit. Those are the simple models there. Now, when you talk about burs, those are a little bit more difficult. And obviously, from what I’m saying, it’s a lot more simple than it is. Once you dig into the granularity of it, now you got, OK, how much does a kitchen really cost? What’s the countertops like?

John Harcar (09:48.074)
selling.

Tanh Truong (10:09.342)
What type of materials do I put in the exterior roof, et cetera? How do I budget for all this? It gets a lot more granular, but let’s look at it from a simple perspective. From a commercial perspective, everything changes. You can flip it, you can wholesale it, you could hold it, you can do all of those things, but now the asset itself is completely different because now the lease changes. When I mentioned that every deal within the commercial realm is different,

This is why. You can have a gross lease, a modified gross lease, a single net, double net, triple net, absolute net. So there’s different leases here, right? And that spells out the relationship that you have with a tenant. And within that lease also, it tells you what you’re responsible for in terms of maintenance or repairs or replacements. HVAC, roof, parking lot, exterior structures, things like that, right?

John Harcar (10:39.668)
Mm.

John Harcar (11:00.19)
Right.

Tanh Truong (11:08.381)
So those are all different. now within these commercial real estate asset classes, you’re looking at retail, office, industrial, mixed use. Those are the four main. But then each one of these four main classes have sub-asset classes. So you have to know the nuances of those asset classes in order to invest in those deals. And this is where the school, if you don’t really know, if you don’t have your bearings in place,

John Harcar (11:09.737)
Mm-hmm.

John Harcar (11:31.68)
Mmm.

Tanh Truong (11:38.067)
this is where it could really kick you in the ass. So I guess the main thing from a commercial to a residential perspective is the leases. then without getting too deep into it, there’s a ton of other nuances that goes into it.

John Harcar (11:53.619)
I’m sure. it more difficult to get capital for commercial than it is for residential?

Tanh Truong (11:59.419)
I would say so because I think people understand residential a lot better. understand residential, they understand multifamily way more than they do understand some of these other asset classes. It’s like the redheaded stepchild.

John Harcar (12:13.184)
Yeah. Well, I mean, while we’re on the topic of capital, let’s talk about, you know, the capital raising. I know when we talked a little bit prior to, you know, our recording that, you know, you learned some lessons from this current deal you’re doing, capital raising. So why don’t you share with our audience, you know, maybe some of those lessons because they could be in that same spot.

Tanh Truong (12:33.089)
I think overall, if you really look at it, the main challenge is the understandability of the asset class. But once you talk to investors, have to really simplify it to keep it, to have them be able to understand it. Understanding it is crucial. If someone doesn’t understand something, they’re confused. And once they’re confused, they’re most likely going to say no, right? 1000%, 1000%.

John Harcar (12:56.128)
Confused mind says no all the time.

Tanh Truong (13:01.511)
What I truly learned about this particular deal that I’m working on, it’s a 16 unit office building. It’s very similar to if we were to purchase 16 single families or 16 smaller multi-unit buildings. And from my perspective, I have to look at it from the eyes of the investor. How do I word this or how do I explain this? So simple.

that they can understand it. But now the problem becomes you have some other investors who are very analytical. So you have to know your audience, right? Who’s your audience? Are they hedge fund guys? Are they doctors? Are they lawyers, high income earners? Or have they done this a while? You have no idea. You’re blasting all this shit out and you’re just hoping somebody comes in, but now you have to cater it to your audience. So I like to keep it simple.

John Harcar (13:37.728)
Mmm.

Tanh Truong (13:58.969)
If I put X, if I put a hundred grand in, what am I going to make every year? When am I going to get the distributions and what am I going to make in how long? That’s all I care about.

John Harcar (14:06.76)
Yep, easy peasy.

Tanh Truong (14:09.692)
But now there are some guys that are super analytical, right? They’ll look at all these metrics, IRR, AAR.

John Harcar (14:16.066)
I want a castle cash. What am I getting back? Yeah, it’s like

Tanh Truong (14:21.052)
that’s that’s all about john i’m a ball i’m all about cash on cash timing tell me when that’s all you got to tell me but some of these guys these guys are asking i r i’m like do i have no idea what the i didn’t calculate the i r but if you want it you know give me a day or so i’ll figure it out

John Harcar (14:22.816)
You

John Harcar (14:26.314)
Yeah, right. When and how much, man? That’s all I got to know.

John Harcar (14:38.656)
All right, all right, all right. So what other lessons have you learned about capital raising? Or maybe better yet, but wait, what are some tips that you could give our audience on effective capital raising or things that worked for you?

Tanh Truong (14:52.294)
Well, the one thing I’ll say is that there’s a lot of capital raisers out there and you have to really vet your capital raisers. And it’s kind of like a marriage, right? You have to trust them. And that’s harder said than done. what I’m trying to caution is that a lot of people are doing it illegally. You have to be a registered broker dealer in order to effectively do it. But then there’s a lot of other guys out there who are not. They’re working in a fund-to-fund structure.

under a broker dealer, which is fine, but some are not. So those are the ones that are not doing it legally. So that’s one thing of caution. And to your question, John, how to effectively raise capital, I don’t have the best answer for you here because some things work differently for different people. I am very unorthodox. Like I mentioned, I cuss a lot and I’m a shitty liar and I’m a shitty salesman. So if anybody are, I try to be, right? If you’re a good

John Harcar (15:43.091)
You

and you’re honest.

Tanh Truong (15:49.735)
If you’re a good salesman, you might do perfectly fine. But for me, I suck at all those things. I tell the story. I tell what it is and what I see. If you would like to invest in it, great. If you don’t, not my problem. Cool. I’ll go find somebody else that sees what I see. And aside from that, I invest or I find capital or I find investors untraditionally. I find them at a bar. If I’m at a conference,

I’m going out talking to people. Yeah, that’s cool. A couple words here and there, but how do they really trust you? Right. And from my perspective, after one to two drinks, a lot of times I can really tell who that person is. And one or two drinks will probably give me 30 minutes with them. You know, unless you’re a slugger, that might take me, you know, if you can drink that in five minutes, I might not have enough time to figure out who you are. But, but for me, after two drinks, three drinks, four drinks, whatever,

John Harcar (16:25.482)
Yeah.

John Harcar (16:37.728)
What?

John Harcar (16:42.25)
Right, exactly.

Tanh Truong (16:47.778)
I’m most likely still the same guy. I might slur my words a little bit more. I might curse a lot more, but I’m still the same guy and I still tell you like it is. from, guess what I’m trying to say is I’m going to cut to the chase. If you want to know who I really am, this is who I really am and you take it or leave it.

John Harcar (17:08.832)
And that’s important, right? And that’s important to be genuine and be authentic. And that resonates with a lot of people and they can read through the bullshit because I have so much bullshit being thrown at them all the time. So what would you say over your time and your growth in business and all you’re doing, like what were some of the keys to your success? Like some things that kept you driving or some habits that you have that kept you kind of pushing forward.

Tanh Truong (17:18.903)
dude.

Tanh Truong (17:33.783)
man. So I’ll give you two here. As far as habits go, I will tell you that the Miracle Morning will lay you out the best habits that you can follow. And the acronym is SAVERS. Silence, Affirmation, Vision. What am I? E, Exercise, Reading, and Scribing. So it doesn’t have to follow that particular structure or sequence, but you can customize it to yourself, but as long as you do them, right?

And maybe one of them doesn’t really resonate with you. I would say trust it first before you take it out. But I’ve done that for years. I would wake up at 4 o’clock in the morning, go through my routine, and that was one of the years where I read 40-something books. And the knowledge that you gain from reading these books and following these habits was astronomical. It really exponentially moved me in a direction where I was dangerous.

intellectual standpoint from a business perspective. So habits wise, I would recommend that upon anybody. Just knowledge in general, right? And creating some of those habits. And if you want to learn more about habits, Atomic Habits is a really good book. My favorite book out there. And the last thing I will say from your question, John, is the billion dollar idea within probably

John Harcar (18:46.076)
I was thinking that same thing, incredible book.

Tanh Truong (19:01.634)
a hundred pages a hundred fifty pages and probably gonna take you up maybe three hours to read is from the book called the go-giver by bob burgers one of the co-authors i interviewed him yep yep yep that’s that’s the one right there it’s i won’t spoil it for you but essentially gives you five laws that you should live by or practice in itself but it’s a fable very very quick read

John Harcar (19:13.853)
And

Tanh Truong (19:30.861)
I tell everybody the billion idea, the billion dollar idea is within that book. If you don’t understand it, chat GPT it, figure out a summary, figure out how to understand it. But I tell everybody that and I think, and that’s what I follow John. I lead with value and that’s how I’ve gotten to where I am today. And that’s how I’ve built the network today. And I think if I continue to continuously do it, it should lead to

John Harcar (19:42.634)
It’s simple.

Tanh Truong (20:00.864)
a huge fruition.

John Harcar (20:03.54)
Give more in value than you receive. Good old Pindar. Yeah, I just finished my third reread of it like a week ago. that’s why I have it on my desk. well, cool, man. So real quick, kind of tell our audience, like, what are you working on? Do you have any deals you’re working on? Maybe someone out there that wants to invest?

Tanh Truong (20:05.676)
I love it, I love it. yeah.

Tanh Truong (20:12.638)
love it.

Tanh Truong (20:22.723)
Yeah, so the most recent deal that I have, it’s currently under contract. I’m going to close on at the end of the month. It’s paying out a 7 % preff, so you’re going to get your money day one. Distributions are quarterly. The idea is once again, we’re going to purchase those buildings and sell them off. They are valued at roughly $400,000 a piece. We’re coming in at $218,000 a piece at roughly 40 bucks a square foot in a really nice suburb of Louisville.

If you want more information, please reach out. You can find me at protonprofits.com. Super active on Instagram. I’m sure John will put all the handles and all that shit. Yeah, yeah, The coolest thing I’m most proud of recently is I did write a book. It’s one of three. The other two is on hiatus right now because I got all this other shit I’m dealing with on selling some properties and acquiring properties.

John Harcar (21:02.558)
Yeah, we’ll put all that in the show notes, yeah, for sure. For sure.

Tanh Truong (21:21.891)
The only one that I have currently out is called Value Over Volume, the foundation of commercial real estate. It’s not going to teach you everything you know, you should know about commercial real estate, but I think it should get you at least 40 to 50 % of the way there. And once again, it’s my personality. I curse a lot. if that’s not your style, you’re not going to like the book. It’s as if I’m sitting in front of you talking to you. It’s kind of…

the the the feel that i was going for yeah outside of that i’m happy to connect with anybody who has anything question related to commercial real estate happy to talk happy to help

John Harcar (21:52.32)
That’s awesome. Very cool.

John Harcar (22:03.068)
Awesome guys reach out if you have any you know any interest in commercial you have you know interest in investing in him. You know Tanh thank you so much dude that was great conversation man I really enjoyed it guys I hope you took some good nuggets out there and enjoyed the show and we will see you guys on the next one. Cheers.

Tanh Truong (22:21.965)
Thanks for having me. See you guys.