Charlie Hardage is the co-founder of H&K Investment Group LLC, which improves apartment communities by making them safer, adding value, and running them efficiently. In this episode, he tells us what motivated him to leave his W-2 job, why he got started in real estate as a limited partner, and how he discovered his talent for analyzing deals and raising capital.
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Charlie Hardage. Charlie is joining us from Nashville, Tennessee. He is the co-founder of H&K Investment Group, which improves apartment communities by making them safer, adding value and running them efficiently. Charlie's portfolio consists of being a GP on 282 units, and an LP on over 500 units. Charlie, thank you for joining us, and how are you today?
Charlie Hardage: Ash, thanks for having me. I'm fantastic.
Ash Patel: Good. It's our pleasure. Charlie, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?
Charlie Hardage: Yeah, absolutely. I am originally from Dallas, Texas. I lived in the Nashville area for the last 15 years or so; I got to see the city go from a small big city to what it is now, just a fun town. As you mentioned, I am a multifamily syndicator, primarily looking at 80 doors and up in the Nashville and Middle Tennessee area, and a few other markets within a two, three-hour drive from me.
Ash Patel: Charlie, what's interesting is in your bio - I've never seen this before, but you said you improve apartment communities by making them safer. Explain that to me.
Charlie Hardage: Yeah, it depends. So we've had some apartments where they had a gate, and the gate hadn't worked in years, so we fix the gate. In one of the apartment complexes, we actually put a security camera system as well, which - we've only had it for about three months, and it's already paid dividends, because someone wanted to sue us, but we had footage that they did not in fact fall like they said they did, when they did. So that really helps the tenants, I think, from people breaking in; we have a recording, we have footage that we can go back and see who's doing this, who's causing this... And then besides just making it safer, it helps clean up the property as well, because we have people, like most apartment complex owners illegally dumping, and so we're able to get a license plate and send that over to local authorities to stop that. So lots of benefits there.
Ash Patel: And do they follow up when you send them a plate?
Charlie Hardage: Yes, they do actually. Well, some areas do, and some are like "Yeah, we don't really care. We've got bigger fish to fry."
Ash Patel: Charlie, where are you investing?
Charlie Hardage: Right now, primarily I'm in two GP deals, like you mentioned; one of those is in Middle Tennessee, and then one is in Augusta, Georgia. And the two passive deals I'm in - one's in Birmingham, Alabama, and the other one's in Houston.
Ash Patel: These are with the same operator, the two passive deals?
Charlie Hardage: Yes, it is. Actually, one of the general partner deals that I'm in is with the same operating group.
Ash Patel: Okay. Take us back to the beginning of your real estate journey. How'd you get started?
Charlie Hardage: Oh, man... I've been interested and passionate about real estate probably for 25 years. Never really found my niche on what I wanted to do. We have a couple single-family properties; we're actually in the process of selling one of those. I was introduced to multifamily syndication probably about eight to ten years ago. Never took the jump on it until about two and a half years ago. I'm very passionate about real estate in general. I think it's a phenomenal vehicle to grow wealth, achieve financial freedom, achieve freedom of time to do what you want, when you want.
Ash Patel: What were you doing 10 years ago?
Charlie Hardage: Ten years ago I was in the military. I was stationed at Fort Bragg in North Carolina; didn't have much money at the time, so I wanted to join one of these multifamily syndication groups. Couldn't afford it, so I was just underwriting deals, how I thought should be underwritten... And then fast-forward several years, I realized it was good to kind of analyze the numbers and analyze the data, but I was way off on everything I was doing. So it was a great learning experience, but I'm very analytical, and so it kind of gave me some time to analyze numbers, but then also get more involved in real estate and learn more about it.
Ash Patel: And did you start out with the single family homes?
Charlie Hardage: Yes. And to be honest, that was really kind of our primary residence. We moved out of it, we rented that. Did that twice, and then we actually bought a full-time Investment Property about two years ago, near an army base in Fort Campbell, Kentucky.
Ash Patel: Charlie, did you start investing as an LP before you did your syndications?
Charlie Hardage: Yes, absolutely. And I would not feel comfortable taking someone else's money if I didn't have some type of background on what goes into the LP side of things.
Ash Patel: You're very analytical, so was it hard to give your money to that GP on that deal?
Charlie Hardage: No, it actually wasn't, because I've known their track record for eight years. He was actually the guy that got me interested in this 10 years ago or so. So I knew his track record was flawless, phenomenal. They're providing about a 50% annualized return every year, and he's done over 100 deals. So I knew his track record is impeccable. I was happy to give him my money. And I think my only regret is, which, Ash, I'm sure you've heard this a few times, but I didn't get in sooner. I wish I gave him money 10 years ago, and we'd be in a different spot now.
Ash Patel: So you're doing great, you're making massive returns... Why complicate things by becoming a GP?
Charlie Hardage: Honestly, for me it's the freedom of time. I left my job in April of this year. I was kind of sick of working for other people, working all hours of the day, and making someone else money... I have a beautiful wife and an amazing daughter, and I like to spend more time with them as well... Except for me, it's really more about -- not only about financial freedom, but really just the freedom of time to do what we want, when we want to do it.
Ash Patel: That's important. So you've got your why, and that's what's motivating you.
Charlie Hardage: Absolutely.
Ash Patel: How did you get into these GP deals?
Charlie Hardage: The first deal was in Georgia, 377 units. I had invested with that team on the two LP deals, known one of the guys for a very, very long time. He knew my passion and my interest as well, so I was able to get into that deal and help raise capital. My brother in law and sister actually used to live in that area, so I also knew about the area and was able to help them out with that. The more recent deal, which is near me - I was part of a team in Nashville that underwrote the deal, toured the property, raised capital, so I was there from start to finish for that most recent transaction.
Ash Patel: How do you raise capital if you don't have your own track record?
Charlie Hardage: Yeah, great question. And quite honestly, I'm still working on that. And I think -- I had initially analyzed deals, underwritten deals, and when we did these two raises, they were very close to one another, and it was kind of a slap in the face to say, "Okay, I definitely need to raise some capital." So I've written 30-35 articles, now I just kind of offer these opportunities to I think anyone that would be interested, that I have a relationship with; I'm much more active on social media, Facebook, LinkedIn... I'm starting to do some email marketing automation through Active Campaign... So it's really about kind of evangelizing what I do, the benefits of it... Kind of my why, why I got into real estate... And that's going very well. So I think raising capital is super-important, and it should be something that in my opinion every GP should be able to raise capital. There are people that specialize in that. And then to take that one step further, I think as a GP you should always be raising capital.
Ash Patel: So it sounds like you've found a niche that you're going to pursue. Do you want to get into finding the deals and managing the deals as well? Or are you content just raising capital?
Charlie Hardage: I want to analyze, underwrite... I don't necessarily want to do the asset management piece. I'm not very organized, and I don't think I would be great at that... But I am on those weekly calls that we have, because I want to know what's going on. I go to the properties occasionally as well, just to make sure everything looks good, help out where I can... But ideally, long-term, Ash, I want to analyze, underwrite deals, be part of the acquisitions, and make sure that the business plan is executed properly.
Ash Patel: Charlie, it seems like a lot of people, including me for many years, are very hesitant raising capital. With me, maybe it was a fear, an insecurity... I was lying to myself and said, "I don't need other people's capital." But I was staying in that under a million dollar range for properties. And really, I was just making excuses, until I realized that by raising capital from a lot of my friends, I'm doing them a favor. What was your hesitancy before you started raising capital, and what helped you overcome that?
Charlie Hardage: I think being comfortable with being uncomfortable is something that I'm working on. I would say four or five months ago I went to a conference, and one of the speakers addressed that very thing, and it was, "You're not going to someone, you're not selling them something, you're providing these opportunities to someone." If you are not wealthy yourself and you know someone who's rich or wealthy, you want to know how they got it. At least that's my case. And I like to provide those opportunities to people like myself, who maybe grew up in middle class, or don't know where to go, maybe they're sick of their job, not really focused on retirement...
So I think for me, Ash, it's really more about evangelizing "This is what I do. We have this great opportunity. You don't have to invest if you don't want to. I'm still going to keep you on my email list, because I want you to grow with me. We would love for you to invest, but if you don't want to, that's totally fine." I think people have found that kind of enlightening, because I'm not trying to sell... For years, I was in IT sales. So I think for me at first, when I was talking to people, I was coming at it from a sales background, like "Hey, buy this." And when that light bulb moment of, "Hey, we're not selling them something, we're offering them an opportunity to grow financially", that was my light bulb moment.
Ash Patel: Did you start out with family and friends?
Charlie Hardage: I did. I did that. I'm also in several multifamily groups, so I would actually say more of my database was from them than family and friends. And when I realized that was also a lightbulb moment, because I'm not telling my friends and family what I do. And part of that was I was not very active on social media, so how would they know -- if I never said what I was doing, how would they know? So I've been a lot more active. And LinkedIn is a great tool if you use it well. And I think that's really been my biggest change in the last few months.
Ash Patel: Yeah, I learned a lot of lessons the hard way, and for years after I left my IT career, people still thought I was in IT, and I never corrected them. So shame on me for doing that. It sounds like you had a similar experience, where you realize the importance of marketing yourself and letting people know what it is that you're doing. What are some of the best tips for raising capital?
Charlie Hardage: If you're on social media, definitely consistency. I think being top of mind is up there as well. Because if you're like me, you have a lot of real estate people that you're connected to, so if they're not sending me emails or messages and really building that relationship, I may forget about them. And I know a lot of times as syndicators, as GPs, once you have that relationship with someone, they're in your database, and you might not talk to them again. So I think being consistent, text, phone calls, emails, just different things like that, interacting with them on social media - I think it's a great place to keep that top of mind.
Ash Patel: Charlie, if I'm on your list, and I've never invested, how frequently would you communicate with me? And what do those communications look like?
Charlie Hardage: So I signed up with Active Campaign last week, and I've spent a lot of time to build out that list... So right now, what we're doing, Ash, is we have all of our articles that we're going to send out. I mentioned we have about 35 right now... And those are really geared towards brand new investors, or brand new people that are interested in investing, that don't know what I do, don't know how I do it... And it's really just a drip campaign, anywhere from one day apart to five days apart. So that's what it is for brand new people that want to learn about multifamily syndication and what we do. And then we're going to do a monthly newsletter as well. And then as far as the top of mind -- I haven't quite figured that out yet. That's probably going to be a once a week, or once every four or five business days cadence that we send out. And then additionally, it depends on who it is. Sometimes we text or talk on the phone weekly, daily, and then sometimes it would be in-person events. But I really just want to stay top of mind with people and evangelize.
Ash Patel: Okay, so if you have my contact info, I get the emails, are you going to text me as well, or call me?
Charlie Hardage: Not necessarily. Sometimes some of these relationships are from Zoom... LinkedIn, Facebook, and then I send them my Calendly link, they set up time to talk, and so sometimes it is just -- we primarily actually use the email, put that in our database. If I had to guess, we probably only have about 20% of phone numbers, because we don't typically call or texts with people that maybe we met at a conference, or online... But it also depends on your preferred form of communication. I personally like to talk on the phone. I know some people like to text, some people like Facebook Messenger, LinkedIn messenger, email... So it really depends on their preferred form of communication.
Ash Patel: And how often is too often for emails?
Charlie Hardage: I try not to do more than one a week. In our email cadence there are two instances where we're doing back to back days, because - like, we talk about high-level overview of the tax benefits, then the next day we send something about depreciation, the next day it's about 1031... So those three are going to be back to back to back, but for the most part, it's once a week or so.
Break: [00:15:24.25] to [00:16:31.10]
Ash Patel: Have you ever gotten emails from people every day or every other day when you finally had to block them?
Charlie Hardage: Yes. And that's kind of frustrating, because at that point I do kind of feel like I'm spam. And my thought is I want to educate, I don't want to tick someone off, right? I don't want to frustrate them, I don't want to blast spam in their inbox, because I'm not trying to sell something, I'm offering them this phenomenal opportunity. I'm trying to educate them, and I don't want them to be upset. I don't want this to be a chore to them. Our emails should take about two minutes to read, the article should take another couple of minutes to read. If they're interested, they can set up a time to talk to us, or email us, or whatever. So yeah, I don't like that, when people send something out and it is back to back to back to back. And then you may not hear from them for a few months.
Ash Patel: Yeah. I've got a person that I really like, I met him at a conference, and it seemed like I get an email from them every other day, and I finally had to block them. It's a shame to do that, but man, it was a bit much. She's talking about her personal life, which is great, mixing it in with business... But it just got overwhelming, and truly just a waste of time. So yeah... How do you track leads to closing investors?
Charlie Hardage: Yeah, great question. I am now on my third CRM. My first CRM was just Google Sheets, just putting in everyone's name, email, and if I had their phone number. The next one was HubSpot. Their CRM is free, and that was great. I could do a lot more with that. And HubSpot integrates with all types of things. Last week, I moved over to Active Campaign. And really, the reasoning to move from HubSpot to Active Campaign is kind of the value that I get with Active Campaign. I am actually paying for it, but there's a lot more automations. With HubSpot you can do the automations, but the price point would be much, much higher at that point. Because I'm in two deals as a GP, and quite frankly, I don't have this database of thousands of investors, I know who has invested just by looking at the CRM. So I'm not really even gotten that far, Ash, to put additional tags, or additional filters in there to know who's invested. Right now I can do it all from memory.
Ash Patel: What are some of the high level benefits of Active Campaign? Because I know a lot of large syndicators that use HubSpot, and I know a lot of people that use Active Campaign as well, but I don't know enough about it.
Charlie Hardage: I think they're very similar in terms of the automation. HubSpot has way more features; they have CRM, they have marketing, they have tickets, like work orders.... HubSpot is great, in my opinion, for larger businesses. Being a real estate syndicator, I don't necessarily need any work orders or tickets put in, because our property management has their own system, so we don't mess with that.
Active Campaign, at least from what I'm using it for, it's a lot more of that CRM, but then also the marketing piece of it. The automations that we're doing - and I am no active campaign expert whatsoever - but if people click on links, then you can have them send a different email. If they don't click on a link, then you can have it automatically follow up and three, four days. So it's just this path of - you can take them down your customer journey or your investing journey. There's a lot of different features of Active Campaign. I think HubSpot has most of them, for what I use it for, but I think the price would be 10x, or so.
Ash Patel: Interesting. I didn't know that that was a feature. What are you doing to court new investors?
Charlie Hardage: I kind of have a two-pronged approach. One of those is just being more active on LinkedIn, and Facebook, and then also the Active Campaign really, just build my brand... And then the second part of that, new investors, I'm also looking to network with GPs as well, help raise capital for them, and expand my market. I mentioned that I'm primarily focused on Middle Tennessee, but that's not the only area I'm looking. I partner with good operators and GPs and other markets, like most of the Texas, a lot of places in Florida, Atlanta, a few other markets that I'm interested in. So with those, again, LinkedIn, Facebook, where we can connect on there. I'm in a few multifamily groups that I'm active in, and just meet new people all the time.
Ash Patel: Charlie, help me understand how you connect with people on LinkedIn, because I get a ton of messages on there about investing in multifamily syndications; everything from "Have you considered investing in multifamily?" to "Here's our latest offering." What's an effective approach that's worked for you?
Charlie Hardage: Maybe I sound like a broken record here, but I think educating our investors, or really educating my sphere of influence on LinkedIn and Facebook, talking about the benefits, providing these opportunities to other people... Some people are sick of their W-2, and so I'll do a post on "Are you sick of your W-2? Me too, so I left." And maybe a little controversial, but really just pique people's interest. And I would say in the last two months, where I've been semi-active on LinkedIn, and Facebook, I've probably had 20 to 25 calls. Some of these are people that I have not spoken to in 10 years. Some of these people are people that were a customer at a couple jobs ago, that I've not spoken to in five years... And it's really people that are interested in what I'm having to say, and maybe they don't know too much about real estate, multifamily syndication, they don't really know where to start, but they're interested, and so that leads to a conversation, and then they'll follow my post, and we'll just kind of build a relationship from there.
Ash Patel: I love that. So you're not hitting them directly; you're just posting, and they're reaching out to you.
Charlie Hardage: Yep.
Ash Patel: Do you post your Calendly link, or do you only post that during an interaction, a one on one?
Charlie Hardage: A one on one. I have not posted it just on LinkedIn. I don't know if I'm bold enough to try that yet.
Ash Patel: Yeah, I don't know that I've seen that either.
Charlie Hardage: But it's very interesting, because I've had a call a couple of weeks ago with a guy who I never met. I don't know how he found my post. He liked it, he reached out to me, we had a call, he said, "This is phenomenal. I'm super-interested in this. What can you tell me?" So we had a 30-minute call, and then I have a couple investor decks. One is a one-pager that has a very high-level overview of what we do. I have another investor deck that goes into a little bit more detail. I sent those over to him, and he was super-excited. He said, "Hey, I have some friends that would probably be interested in this, too." And that took me probably five minutes to write the post on LinkedIn, 30 minutes to talk to him, and potentially a few investors there. Can't beat that ROI.
Ash Patel: Yeah, I love that. Put the work in. Do you do a personal newsletter as well?
Charlie Hardage: Right now we don't do any newsletter.
Ash Patel: Not "we", you. Do you do one?
Charlie Hardage: I don't do any type of newsletter right now.
Ash Patel: Why not?
Charlie Hardage: That's on my to-do list, along with a million other things right now. But that is actually next. I'm working on this education piece o Active Campaign; the next step is to actually build out a newsletter and send that out monthly.
Ash Patel: Yeah. Charlie, I'll share this with you and with the Best Ever listeners - a couple of years ago I started doing a newsletter, and it's a one page email. It's not pretty, it's just paragraph format, and it talks about what I'm working on, personal milestones, any investment opportunities, and then any lessons that I've learned, or failures that I've had, and really just kind of a nutshell of what is going on in my life. And I sent this out to just about every contact I've ever had. And it's amazing. For the entire next week, I was on the phone probably eight hours a day; similar to you, catching up with people that I hadn't spoken to in probably 20 years. And some people that I'd only known for a couple of years, 20 years ago. And it was an amazing way to reconnect with a lot of people.
So it's one of those kinds of mixed business and personal, and it just kind of puts your life out there in a one-pager. So I challenge you to do that, man. I think you'll get great results. Talk about quitting your job, talk about the struggle, the mindset shift that had to occur for you to do that... Because a lot of people have got to be in a similar boat, and then a lot of people probably want to invest in real estate, but having seen you go through that would probably inspire them as well.
Charlie Hardage: Yeah. About two years ago I had a five-year plan to leave my W-2. I invested into two LP deals as soon as I could; my timeline sped up, and instead of five years, I said, "Let's make it three." About a year and a half later is when I quit, and really - I would challenge people, because a lot of people say I can't do it financially. To me, it was "We don't have all this money just sitting around that we can live off of for years." For me, it was "Okay, we do have several investments that we're making money on, but it is lighting a fire under me to go out and be extremely proactive, not just sit there and wait for these deals to sell... But it's forcing me to go out there and find deals, be creative with getting income." I'm actually working with multifamily wholesaler as well. One of the benefits of that is I'm able to get off market deals. Find some deals, and make a little bit of money there.
But a lot of people say "I'm not ready yet financially. I don't have the money." And I think if they actually analyzed, that's not entirely true. I think it's really more about a fear of not having a steady paycheck. And for me, the fear of not having a steady paycheck only pushes me to get additional income, find more investment opportunities. And so to me, it was a huge mindset change, and that's really something that I've been going through over the last two and a half to three years, is really getting out of this imposter syndrome that I have. I am risk-adverse, paralysis analysis - all of those terms - I've heard them, I've lived them, and it's taken me way too long to break out of them... But it came a point where I just said, "Hey, if I'm going to do it, I've got to do it now or never." Because I'm sick of looking back three years ago, thinking the same thing I am now, "Oh, I just want to get into real estate. I just want to invest" and it's like, "Well, there's no better time than the present."
Ash Patel: Yeah, that's a great point. And I bet for a lot of people, that number is a moving target. So if they say "I need 100k liquid cash, and then I can quit my job." They can save up 100k, and then it's "Another 50k would be nice. No, 200k would be nice." So I could see how a lot of people talk themselves out of that with a moving target. Thank you for that. Charlie, what is your best real estate investing advice ever?
Charlie Hardage: Oh, best advice ever... I would say get into the game. Invest. Find people that you know, like and trust, invest with them, have them mentor you. I did not heed my own advice, by the way. Otherwise, I would have invested into an apartment complex seven, eight years ago; but that would be my advice.
Ash Patel: Charlie, are you ready for the Best Ever lightning round?
Charlie Hardage: I am.
Ash Patel: Alright. Charlie, what's the Best Ever book you've recently read?
Charlie Hardage: I've got two. "Can't hurt me" by David Goggins", and "What it takes" by Steve Schwarzman.
Ash Patel: And Charlie, what's the Best Ever way you like to give back?
Charlie Hardage: I love talking about real estate, I love providing opportunities for others to reach financial freedom. If you're a new syndicator, if you are a new investor or wanting to be an investor, let's talk.
Ash Patel: And Charlie, how can the Best Ever listeners reach out to you to have that talk?
Charlie Hardage: Yeah, I have the website hkigllc.com. My phone number is on there, and there is a Calendly link on there. And then also, I'm very active on LinkedIn and Facebook, so please reach out.
Ash Patel: Charlie, thank you for the conversation today. Thank you and your family for your service in the military and your sacrifices... And thanks for sharing that story. You made the leap, leaving your W-2, started out as an LP investor, found out that you're great at analyzing deals and raising capital... So again, great story, and thanks for sharing that with us.
Charlie Hardage: Appreciate that, Ash. Thanks for having me.
Ash Patel: Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five star review, share the podcast with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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