Subscribe via:
Show Summary
In this episode of the Real Estate Pros podcast, host Micah Johnson speaks with Jim Froehlich, a real estate developer and syndicator based in New Hampshire. Jim shares his journey from an entrepreneurial childhood to his current focus on residential development and syndication. He discusses the importance of pivoting in real estate, particularly moving from property management to development, and emphasizes the value of focusing on local markets. Jim also highlights the significance of building relationships and the long-term nature of success in real estate.
Resources and Links from this show:
-
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Jim Froehlich (00:00)
so the big pivot point now here is going to doing things in New Hampshire and Maine, stepping back with my son and talking about it saying, hey, let’s just focus in our own in our own backyard, because that’s where we’ll build a trust.of people locally wanting to invest with us that know us, family and friends, of like staying local, things more in your control. And that was sort of the big pivot point, know, go from accepting million dollar checks to $10,000 checks and then building back up. that’s sort of, then that’s the pivot point we’re in right now.
Micah Johnson (00:26)
Right.Hey, everyone. Welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m speaking with Jim, who’s been making some serious moves, especially in the new development space for since 2019. Jim, welcome in, man. Glad to have you.
Jim Froehlich (02:14)
Hey Micah,Micah. Good to be here. Good to talk to you. Appreciate you inviting me.
Micah Johnson (02:18)
I’m,absolutely man, I’m excited for our talk today. Our pre-recording call, you’re going through something that I think investors need to hear across the board. Cause one, I’ve never met someone that didn’t go through it. And two, when you’re walking it out, it can feel a little scary. So let’s dig in. We’re kind of leaving them with a cliffhanger there. So for people who don’t know you yet, let’s talk about what’s your main focus right now, a little more about yourself and the markets that you operate in.
Jim Froehlich (02:36)
Got it.Sure, yeah, we’re a small family business called Froggy Companies. We got froggy development, froggy funding. We syndicate some money for developments, mainly residential. We’re in New Hampshire. I live in Whatboro, central New Hampshire, Lakes region. And we’re focused in New Hampshire and Maine. That’s really what we’re boiled down to now. ⁓ We were part of a land brokerage. So we try to be on both sides of the equation, like finding land, entitling land.
getting it developed, mainly build to sell, mostly residential, ⁓ some mixed use. We have one industrial, but I’m not going to do that again. You know, trying to really focus in the residential market. And so that’s what we’re doing. That’s what we’re focused on. And for the last two years, that’s been our exclusive focus on deals.
Micah Johnson (03:29)
Well, let’s take a quick step back.How’d you get into real estate? What led you to where you are today?
Jim Froehlich (03:33)
Yeah, so I’ll take it back really real estate. Go back to, ⁓ man, I probably go back to my childhood, you know, I was one of those kind of kids is like looking for get rich quick scheme or something when I was, you know, I sold life and health insurance when I was 18. I built lawn furniture out of PVC stuff one summer when I was a kid, you know, to try to make money back in elementary school.I did cinnamon toothpicks and sold them for two. Like I was always entrepreneurial. I’ll just say this. ⁓ So that got me in trouble. but you know, fast forward, ⁓ I went to engineering school. went to Georgia tech. I was an air force officer. I was an intelligence officer. had an engineering background and a kid, you know, raised two sons, I have two grown sons, had a family, all the traditional things that, that made me happy and successful to a level, right?
Micah Johnson (04:02)
Gotcha. One of those guys.Jim Froehlich (04:26)
But in the background, I always want something passive, passive income. So at some point down the road, I’m gonna need passive income. And so in my 20s, so I read Rich Dad Poor Dad, 1998 or whatever, like soon after it first came out, right? And I was almost 30 years old and started analyzing it. I ordered Carlton Sheets, No Money Down, Payment Cassettes back then. Again, we’re talking late 90s. I got into the coaching program.Micah Johnson (04:38)
We’ll you then.Jim Froehlich (05:39)
so by the time I was 30, I was all primed to start doing multifamilies. And that’s really where it started. And my wife was involved and my brother-in-law, we were analyzing, we were going to buy our first six unit to start building a portfolio for the future. And ⁓ that’s really where it started. Interesting quick side note is that from the Carleton Sheets coaching program, where I hooked up with these people out of Utah. ⁓they introduced me to a mortgage company. I learned a lot from the Carlton Sheets, even though he was like an infomercial type of guy, I really learned a lot through that process. We had a six unit under contract in Manchester, New Hampshire, and the owner had agreed to take back 70 % in form of a note, something along those lines. And we got the mortgage approved, yada yada. Fast forward to we’re a few weeks out before closing. And the mortgage company out of Utah contacts and says, we didn’t know the property was in New Hampshire. We’re not licensed in New Hampshire.
because I was at an Air Force base in Massachusetts. I don’t know how that happens, but it was kind of tied to the code. There was a lesson in there, but we had to back out of this deal because we didn’t have a mortgage company. And so the seller who was a property manager was kind of mad about it. And I want to say that’s like 1999, early 2000s. Fast forward. We moved up to New Hampshire in 2000. I either read on the heard on the radio or read the paper. The guy who was selling it got arrested. He was indicted.
And what happened was a young girl died, in that sixth unit from lead poisoning. And he had not disclosed that. was, yeah, you can look this up around 2000, 2001. So he’s like, he got sent to prison for a couple of years. That was a property we were going to buy. So was a silver lining to the story of how we didn’t get involved in that. now fast forward, my career just moves on typically to around, around, I want to say like 2015, I start seriously listening to books again, writing a business plan.
Micah Johnson (06:59)
Holy shit.Holy cow.
Thank you.
Jim Froehlich (07:23)
with the vision that I would buy things in the D to C class, make them C or B, and I would own a portfolio and we’d manage it to 10 to 15,000 units. And it’s sort of a glorified high ideal thing. then it didn’t take me long. We were involved in a two-family that my wife managed. Immediately got the lesson that I hate property management, don’t want anything to do with it. I’d like to say if you’ve…Micah Johnson (07:33)
image.Jim Froehlich (07:49)
If you’ve ever helped a crackhead move out in the middle of an ice storm in the middle of the night because they got evicted two weeks earlier, you’ll get a feel for what property management’s about. So I didn’t want anything to do with that. So our vision kind of changed. And then fast forward up to 2018, 2019, in 2017, 2018, I started doing some syndications at a small level. Mostly I’ve been gravitated to the syndication side of bringing investors together for larger deals. AndThen in full time, I went full time in 2019 with a company called Primaris where a guy who I heard on a podcast and connected with that had been doing real estate his whole life, you know, he said, why don’t you vet deals for me? You know, you got this background, like just vet deals for us and you can really immerse yourself in sort of what we’re doing. And so I started, I was the director of development for Primaris in 2019 till COVID and long story for that. But I shifted and I got involved in
development and syndication and sort of been there since. So I cut the story off there. It was probably more than you need to know, but that’s how it got.
Micah Johnson (08:44)
Okay.It’s good, man, because one, it’s going to line up on the focus that we’re going to shift to and how important that is in your business. But also just the reality that real estate’s a big umbrella and you’re allowed to change. You’re allowed to not like stuff. ⁓ The thing I’m glad about is you didn’t just get out after you didn’t like being a landlord and a property manager. That throws a lot of folks out of the industry because they just think, well, that’s all there is. That’s all I can do. And that’s not true. It’s huge. I’m not particularly a fan of being a landlord either.
And I just like, okay, so what can I do in the industry that lets me still be here? If I don’t like that part, okay, not a big deal. What else is there, which is kind of leads us into, you know, that focus factor of sometimes you got to take a step back. Sometimes you got to look and see, okay, what’s in front of me? Why am I actually doing this? Has it changed since I got in? And what adjustments do I need to make based on that?
So what have you experienced in that world coming from? Okay, I don’t want to do, I know I don’t want to do that. I want to focus more on this new development. And now that’s where you’re focused in New Hampshire and Maine, because you were national, right?
Jim Froehlich (09:56)
Yeah, yeah. So let me tell you. So there’s really two pivotshere, right? There was the pivot from sort of the vision that we’ll build up this business and we’ll start building a portfolio. We could get back to that. We could own rental someday, you know, build up a portfolio. That vision and it switched to, you know, syndication and the money that’s involved in the transactions of syndication and bringing equity to a deal and having a sliver for yourself and working through the development process, which really at the
the high level, the development and syndication world boils down to people gravitate to one side or the other. The development side where like I got to go deal with towns and entitlement and site planning, state and local approvals. And then the other side is like, I got to bring investors to the, either have all my own money or I got to bring investors for equity. And then I got to deal with lenders and debt, debt brokers. So, and usually people gravitate to one or the other.
Micah Johnson (10:41)
Gotcha.Jim Froehlich (11:23)
The people that I went to work for at Permanus, they,They had been on both sides of that, but they had gravitated to having a bunch of high net worth investors, an accreditation pool where my job was just vetting deals that were shovel ready, that people had done the hard work with sponsors coming to me saying, do you guys got $10 to $15 million? You want to bring the equity to this and go forward as a joint venture? So I had a big learning experience with that and I liked it. I’m comfortable underwriting deals of any magnitude. I’m using my analytical skills.
Micah Johnson (11:37)
youJim Froehlich (11:53)
built on my engineering background, I’m good with systems, et cetera, right? Bringing all that anal retentive stuff to the equation. And then raising money, then dealing with investors. Pretty good at talking people about a deal and what’s in it for them and dealing with lawyers and stuff. So this phase that I went into, 2019 to 2023, I got involved in partnerships, syndicating a lot of money, doing big deals and having my small slice. So I became a creditor myself.started making more money than I ever had made with in my engineering jobs in the previous time or with the Air Force or Homeland Security. And ⁓ that led me to getting like subdivision entitled in Colorado or something done in Michigan. It was really opportunistic based, right? Anywhere in the country in terms of our outlook and view. ⁓ part of the negative side though, it gave me a false illusion because I had raised physically been involved in the raising of
$40 million, mostly other people’s warm leads. That was the key. Not people coming to me because they knew Jim Freilich from somewhere else. It’s like other guys. So, you know, I’m good at finding the deals and vetting the deals, but I didn’t have all these relationships. So I thought I would just stay at that level of like 506C syndications of credit investors and do stuff anywhere in the country. But I learned some hard lessons that I won’t get into. Didn’t like lose a of a ton of money.
Micah Johnson (12:50)
Right.Jim Froehlich (13:11)
you know, relationship break with some partners who I was letting handle the on the ground ⁓ building part of. And I sort of put a lot of trust in them. I had to take a step back. so the big pivot point now here is going to doing things in New Hampshire and Maine, stepping back with my son and talking about it saying, hey, let’s just focus in our own in our own backyard, because that’s where we’ll build a trust.of people locally wanting to invest with us that know us, family and friends, of like staying local, things more in your control. And that was sort of the big pivot point, know, go from accepting million dollar checks to $10,000 checks and then building back up. that’s sort of, then that’s the pivot point we’re in right now.
Micah Johnson (13:50)
Right.Jim Froehlich (13:54)
I think we syndicated, you know, last six months of last year, like 700,000, you know, we got a small subdivision approved and another one approved and doing some infill projects.And then we’re building back up instead of just swinging for these home runs that really require other big guys to come to the equation. And I might’ve told you pre, one other thing I add to that is that I created a fund to funds when I was in the state about 2022, 2023 for it. And the idea was to raise $18 million. And I was going to diversify that in like with four different really experienced sponsors. And it fell flat. put a ton of money into advertising.
Micah Johnson (14:12)
Right.Jim Froehlich (14:31)
And we didn’t raise anywhere near what we thought we were going to start raising in terms of commitment. And the valuable lesson was on that, it was part of the pivot is like, I need to just go focus on my own deals and syndicate per deal. And if I want to do a fund of funds in the future, it’s going to be for my portfolio of deals, not because I have a bunch of other sponsors lined up. Cause at the end of the day, people writing a check to me, they want to write it to me based on what I’m doing, not what somebody else is doing. Cause they can always go to those other people. Right.Micah Johnson (14:54)
Right.Right. Well, it’s important too. And you learn the skills that you needed. And like you said, it kind of gave you a false idea that I can, you people just give me their money, but it gave you the realization too of, now once that didn’t happen, it kind of gave you the reset where now you’re really doing your own thing
Jim Froehlich (14:58)
That’s it, that’s a pivot.Micah Johnson (15:55)
We got to start here because it’s I think you said it’s some you said this a pre recording call. If you can’t raise a ten thousand dollar check, you’re not going to get a million dollar check. Right. Like it’s where do you got to you may be striking out here. Where do you got to move in the stream to say, OK, where do we actually need to get started so that we can get up to there? Because all the other partners that you work with that had those long careers, they started there, Right. That’s the thing about real estate. It’s hard to skip steps. People can show you potholes to miss. But the steps.Jim Froehlich (16:03)
Exactly.Micah Johnson (16:23)
of the steps, the process is the process, especially for each of us. We all got to build our own reputations, our relationships. We all have our own spheres that we’re dealing with and all those things as you go through them, it creates that the flywheel or the snowball. Like it has to get going. There’s that hard phase. Everything has that upfront lump effort involved, but once it gets going, now you’re setting yourself up for the real future you were hoping for.Jim Froehlich (16:40)
Absolutely.Micah Johnson (16:48)
where the foundation’s there, the floor is there, because that’s something I encourage everybody, raise your floors, leave your ceilings alone. Like we all want to make the most, right? How much money do you want to make? As much as I can, right? That’s always the answer. How much do you need to make? Like what’s the minimum? And does your floor get you to there? Are you set up to get your minimum? Because if you’re not, it doesn’t make a difference how much you actually want to make, right? Now you’re just, now you’re relying on hope and hope ain’t a strategy.That is, ⁓ that’s what we all got to remember. ⁓ And there’s value man to those singles and doubles like you’re going through right now. And it’s the folks I know that are super successful, that’s their focus, singles and doubles. Cause that’s when the home runs come once a quarter or once a year, how they flow through is making sure I got that steady process. I know what to go.
Jim Froehlich (17:14)
Exactly.Micah Johnson (17:38)
How helpful has it been going local, going now just in New Hampshire and Maine, one, just as a business owner and the stress involved, and two, the ability to start getting traction in projects?Jim Froehlich (17:49)
It’s been huge because my tendency in the beginning and through a lot of books that I had read early on was like focus on find the demographic area where people are moving to. It’s still a lot of people think this way and are very successful this way. Where are people moving to? Why are they moving to? How diverse is the economy? Et cetera, et cetera. Because it does come down to that to a degree, absorption rates, et cetera. ⁓But at the end of the day, in my opinion, I strongly feel this way. People might disagree because my wife always starting with my wife, she’s like, well, who wants to move there? I’m like, well, people live there. Five thousand people live there. People want to. I think any market has potential to be good because it really comes down to price point. What are you going to be able to get that land at? What are people paying who are there now? And how can you make it work? Now, there’s cities all across America that you would look at and say, this town like dried up. There’s nothing there’s nothing going on.
I think there’s a lot of opportunity in redevelopment in some of these areas with the internet, with creating other job markets. so you really got to look at, can you create your own ecosystem in this place that some of you, you know, not necessarily related to the same concepts of people, what people do with gentrification, but in different areas, I think it can create your reality. I think, ⁓
Micah Johnson (19:03)
Right.Jim Froehlich (19:09)
Once we settled, and really me, my son helped convince me like that, let’s just focus here where we could start getting people from New England, from Northern New England. This is our area. It took a lot of nonsense out of the equation. Other people come, I’d still try to resist the shiny object like, ⁓ hey, if you raise $4 million over here for the Charlotte deal, I’ll give you $200,000. And I’m like, hey, maybe I’ll look at it. And then I got to go, no, here in New Hampshire, we’re looking at this.Micah Johnson (19:23)
.Jim Froehlich (19:36)
So one, it just narrows your view and now it makes it ton easier to focus on deals you’re vetting into. Two, you start building more relationships locally, things you hadn’t really thought about. You start viewing everything a little bit different because now you’re looking at really sub markets. ⁓ you know, if I could relate it to sports analogy for the, it’s like the guy who gets further along and just create the game slows down for him, right? He’s in practice and all of a sudden everything slows down and becomes more clear.Micah Johnson (19:38)
Right.and so.
Right.
Jim Froehlich (20:04)
So it’s been huge and we’re starting to get traction. More deals are coming up. We’ve created this land brokerage element where we’re on the front end and now we’re not shooting in the dark to the whole world. We’re like county by county or city. These properties, let’s send out carts to these people. Like, let’s look at this.Micah Johnson (20:15)
Hmm.Love that, man. Like you said, it starts to clear up. Everything slows down for you. You start to see it differently. There’s a good book, and you can read it in a couple hours. It’s by a guy named Nick Peterson called Bumpers. And the whole point of this book is to, makes you think about what do you actually want? You need to define it. Get clarity on what it is you want to do and then don’t do anything that’s outside the bumpers. And when you have that, it gets so easy to say no.
Like the Charlotte deal, does it line up with what we’re trying to build? No, okay, it’s a great opportunity, man, but not for me, thanks, appreciate that. Because I’m here, I’m doing this, and that’s how you create that consistency. Because real estate’s doing the little things well for a long time. It’s a get rich, slow scheme. If you want to be successful at it, take that mindset, you’re not in a race. Most folks get into it for freedom and that generational wealth change. You got until you’re dead for that.
Right? Like that’s the fun thing about real estate. You can do it for a long time, depending on what kind you’re doing. And for me in my own life, when I like settled down and started thinking that way of way more long term, way more, less deals, more better deals. What is the, I don’t, I don’t want all the deals. I just want the deals that I want. I want those to be better. How do I start doing that? And then you start getting that capitalization where you can be local. I know folks that are only local.
And one thing I love about the local thing is you actually make the difference in your neighborhood. That’s what I love about it. The stories that come from my local friends. I have a friend out in Missouri in a small little town in Missouri. I call him the King of St. Joe. The dude’s just changing his whole town straight up. He’s been doing it for five years now, just literally changing the face of his town to the point now where even when a house gets condemned, the court, the judges just call him. They’re friends now. Hey man, this thing’s terrible.
We trust you to get it fixed. You want to be able to have a shot at getting this house? Yep, sure do. I’ll be there. Let me take a shot at it. And it’s like, I love that man. Cause it’s more, is he making a ton of money? Yes he is. Is he making a ton of impact? Yes he is. Right. And that is what I love about it is that when you’re doing it that way, and it’s not that you can’t do it when you’re national, but like, you know, when you go national, your mindset shifts. is not.
Jim Froehlich (22:14)
Yeah, that’s awesome.Micah Johnson (22:34)
It becomes way less about the person and way more about the deal itself because you don’t it’s transactional. And in my opinion, way more than it is relational and real estate is a team sport. It’s all about relationships and the longer you can have the same ones like anything, you know, the most expensive customers are brand new one. The one that’s the most lucrative is one you have for a long time. Any relationship is the same way. The longer you can have it, that it’s good.Jim Froehlich (22:40)
Sure.Micah Johnson (23:00)
the more benefits that come from it, especially when it’s the folks we work with. Because making sure you know your contractors, your builders, your everybody on down the line, right? Like we can’t even buy a house by yourself. This is a team sport. You need to know people. And when you can focus, the less people you need to know, the less people you got to worry about, the less things, like all these different levers in the deal that have to make it work start to go away. And one thing I noticed in my world,The less things that could make it go wrong, the way better chance I had of going right. The more things I needed to just barely line up for it to go right. Now I’m introducing exponential probability is fixing to go wrong. And it’s about like what you’re talking about, simplifying. Hey, hold on, deep breath. What’s actually happening here and what adjustments can we make that one line up with me personally and line up with what we’re trying to do. And I love that the traction you’re already getting just proves that point.
It’s the narrowed focus. ⁓ We all get into business thinking everybody’s our customer. Everybody ain’t your customer. You have your customers. Just wake up each day and go find them. They’re gonna be there. No one can take them from you. That’s what I love about real estate. The guy who taught it to me, he said, Micah, there’s no competition in this industry. As long as you wake up each day and do your job, you will never experience not having a deal.
You’re going to experience all different kind of markets. You’re going to experience all different kind of times. But if you’re dedicated, dude, leave the stress behind. There’s going to be plenty of stress in the deal. You don’t have to worry about it. And I love that mentality because it’s what gets you up and keeps you going and lets you focus. I come from a tiny town in Florida. A friend of mine there. You wouldn’t believe how well he’s doing as a real estate investor for the last 20 years in this tiny little place. And it’s what showed me to.
Yes, you can chase the markets. You can do all that. That’s fine. You don’t have to. There’s another option out there where really you put a little pocket together and you have the long game in mind. You’re going to do great. You’re going to do great because it’s the longer you’re there, the more people are going to know you and the more people are going to call you. And then referrals kick in. And now it’s just, it’s coming from everywhere. Your brand doesn’t get diluted.
It’s hard to build a brand nationwide. It’s way easier to build it in a smaller place first. And something I always like to remind folks about Amazon. They only sold us books for nine years. One thing, they went an inch wide and a mile deep on one thing, and then they branched out. And we’re all obsessed with scaling. You don’t, it has its right time. It has its right place where it can scale correctly versus just like being in a rush to do it. What’s that thing you can get really good at?
Jim Froehlich (25:15)
Absolutely.Yeah, good point.
Micah Johnson (25:36)
Well, Jim, man, I really appreciate your time today. For those that are listening in that, you know, want to find out more about you, see what else you have going on and can appreciate your story and just the realism of it. What’s the best way for them to find you?Jim Froehlich (25:48)
Thanks, Micah. It’s been really good talking to you, too. And the easiest is somebody just email me at Jim at Froggy funding dot com. Jim at Froggy funding dot com. I’m on LinkedIn mainly. I don’t do a ton of social media right now. And I are our website, Froggy companies dot com. Give you insight to our development side and our syndication side. So.Micah Johnson (26:08)
thatman. Excellent. Well, if you’re watching along listening in, check the show notes. We’ll make sure that all Jim’s links are there. Follow along with someone that’s building a real business. What we always talk about the folks we try to bring on the show are the real ones that are going through it. And that day to day learning how to make this work. I want, I think everybody can get into it. Real estate is a big industry, you know, take advantage of the largest generational wealth builder the world has ever known when you get a chance, right? Just be open, be in there for the long haul.
Again, Jim, thanks for being with us. I appreciate your time, your story, your perspective, man. I think we need more folks out there doing it like you’re doing it. Just solving the problem, getting it done, putting out quality products. For all those listening and watching, if you got value out of today’s episode, please like this episode, share it with somebody else you think can get value out of it. As always, don’t forget to subscribe. We appreciate every single one of you that follows along with us. We got more conversations coming up with operators just like Jim.
again, out there building a real business in the industry. Thanks for joining us. We’ll see you all in the next episode.
