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WS694: Developing A Family Office Relationship with Fletcher Clardy

Developing a strong business relationship with family offices and high net worth investors can help you land numerous deals over a long-term period. Today we speak about building these high-reward relationships with Fletcher Clardy, Deal Desk Captain, and Consultant for Clarity Equity Group. We open our discussion by exploring Fletcher’s role at Clarity and his current studies towards his real estate Masters. We ask Fletcher about the first steps that a syndicator should take to secure investor relations and he emphasizes the importance of finding your niche. He then talks about creating a pitch book that highlights your strengths, along with other marketing materials to engage potential investors.

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But before connecting with investors, you have to find them first, and Fletcher shares his tips in this regard. The key, Fletcher explains, is in aligning your interests with investors. Without being able to provide value, you’re likely to burn bridges with high net worth investors and family offices. We chat about Fletcher’s strategies for adding value which include bringing investors off-market deals, not charging fees, and investing their money alongside family offices. We touch on guarding your business relationships, how to use mailers to contact potential investors, and the need to network over virtual spaces. For many syndicators, family offices are an unexplored frontier, ripe with opportunity. Tune in to hear how Fletcher built successful relationships with family offices and high net worth individuals.

Key Points From This Episode:

  • Hear about Fletcher’s role at the helm of Clarity Equity Group.
  • The importance of finding and understanding your real estate niche.
  • Pitch books and developing the right marketing materials to approach investors.
  • How to start identifying your investment criteria and form key relationships.
  • Finding high net worth investors through research and networking events.
  • Reaching out to investors before meeting with them at events.
  • Protecting your credibility by only approaching investors with valuable deals.
  • Aligning your interests with investors and not being afraid of walking away from a deal.
  • Hear Fletcher’s strategy for adding value to investors and family offices.
  • The challenge of making that first contact with investors.
  • What Fletcher provides in his mailers to entice prospective investors.
  • Guarding your relationships through follow-up; “your money is your network.”

[bctt tweet=”You have to be very selective with the opportunities that you present. Make sure that it makes sense for your high net worth investor, or you’ll damage your credibility. — Fletcher L. Clardy III” username=”whitney_sewell”]

Links Mentioned in Today’s Episode:

Fletcher Clardy III on LinkedIn

Fletcher Clardy III on BiggerPockets

Phone Fletcher Clardy — 816-360-9602

Clarity Equity Group

University of Missouri – Kansas City

Information Management Network

Seth Wilson

Real Estate Flight Plan: A Combat Pilot’s Guide to Navigating Real Estate Success

Air National Guard

Insightly

Monday.com

Edward Jones

Northwestern Mutual

About Fletcher L. Clardy III

Fletcher L. Clardy III is a Deal Desk Captain & Consultant at Clarity Equity Group, LLC, a well-funded and highly regarded real estate solutions provider of both stabilized and value-add commercial properties. Clarity operates nationwide in deal flow, consulting, capital formation, and placement, private debt syndication, and arbitrage of commercial assets. Fletcher’s duties are to start new relationships with sponsors, financial institutions, and other professionals on behalf of Clarity Equity Group. Fletcher is often the first contact our consulting clients have with the firm. He then works hand in hand with the client to ensure their ongoing success. Fletcher started his career in financial advising prior to entering into commercial real estate. He applies his financial experience when underwriting and evaluating potential investment opportunities. Fletcher has been working on his Masters of Science in Entrepreneurial Real Estate from the University of Missouri Kansas-City. He will complete the program this upcoming fall and graduate in December 2020.

Full Transcript

[INTRODUCTION]

[00:00:00] ANNOUNCER: Welcome to The Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication.

And now your host, Whitney Sewell.

[INTERVIEW]

[00:00:23] WS: This is your daily Real Estate Syndication Show. I’m your host, Whitney Sewell. Today, our guest is Fletcher Clardy. Thanks for being on the show, Fletcher.

[00:00:32] FC: Thanks for having me today, Whitney. Pleasure to be on the show.

[00:00:36] WS: Fletcher is a Deal Desk Captain and Consultant at Clarity at Clarity Equity Group, LLC, a well-funded and highly regarded real estate solutions provider of both stabilized and value-ad commercial properties. He applies his financial experience when underwriting and evaluating potential investment opportunities. Fletcher has been working on his Masters of Science in Entrepreneurial Real Estate from the University of Missouri, Kansas City. He will complete the program this upcoming fall and graduate in December of 2020.

Fletcher, thank you again for your time being on the show. Congratulations on, I’ll just say early, but on completing this program. That’s incredible, just taking the time to get through that. Give us a little more about who you are, what you’re up to in the real estate business, what Deal Desk Captain means and Consultant and who the Clarity Group is.

[00:01:26] FC: Awesome. Awesome. Thank you so much, Whitney. I appreciate that once again. Like Whitney said, my name is Fletcher. I am currently attending UMKC, University of Missouri, Kansas City and completing my Masters of Real Estate. Basically, it’s a fancier name, but effectively just Masters of Real Estate and that program will complete in December. Thank you for that.

On the Deal Desk Captain-side with Clarity, we’re a boutique commercial real estate investment firm investing in, primarily, multifamily. We own, operate, and manage. Our sweet spot is typically around the 3 to 50-million-dollar range. We could go higher for more compelling opportunities.

We own, operate, and manage 500 doors currently, which is about 65 million assets under management. My primary job there is to focus on the deal flow, underwriting, evaluations, so evaluating potential investment opportunities. Then, also on the consulting side, like Whitney said, I do work with clients who are learning how to syndicate. And learning to access other people’s money. And ultra-high net worth individuals, family offices, connect with those type of individuals to fund their investment opportunities.

[00:02:44] WS: Nice. Well, I know most of the listeners anyway are — they’re also looking to connect with those investors, those ultra-high net worth individuals and family, offices, and those groups. When you’re first getting started in this business, it’s a daunting task, a little bit scary, those conversations. You’re not sure what they’re going to ask. You’re not sure who this person is, or how to even find them to that aspect, or what does it even mean that somebody is a family office, or has a family office. Fletcher, why don’t you break down a little bit how you help people with that and how you find investors and maybe how you learn this craft.

[00:03:23] FC: First and foremost, Whitney, thank you for that question. That’s a great question. When we work with clients who are seeking to build and establish these relationships, first, it starts by identifying your role in the real estate industry and what your business does, what service do you provide to these types of individuals.

First, we’ll pick that apart and make sure you understand it exactly — what your niche is, what you’re laying, what you want to invest in. Are you a development? You want to be on the sponsor side? Do you want to fix and flip, rehab, value add? Just sort through those obstacles and just that understanding, so that we have an understanding of what you provide to these investors.

Then we make sure you have the proper marketing materials and understand what it looks like to approach these individuals and what their expectations are. Those marketing materials usually come in the form of a pitch deck, which I actually have one right here. This is one of our old ones. I’m not sure if any viewers can see or not, but I do have one. Pitch deck, basically, is just a very elegant book of your history in the real estate investment world and the marketing opportunity that you have and just a little brief synopsis of what that investment may look like. Definitely supported with some financials, so that investors will know what returns to expect and different things of that nature.

[00:04:54] WS: Nice. I want you to just dive in there a little bit on identifying what you do and how — and I don’t mean you, but when you’re helping somebody think through this, identifying what you do and how you can help. I think that’s so important when you can niche down and narrow down a little bit and say, “This is our specialty. This is what we do.” Can you give us some examples, or help the listener think through that a little bit?

[00:05:17] FC: Yes, Whitney. Thank you. I appreciate that question as well. What that looks like is really understanding your investment criteria. So breaking that to pieces. What type of class do you want to invest in? Are you looking for multifamily assets? Are you looking to invest in office, retail, industrial? Just what type of asset you’re looking for. That also includes the location, the type of asset. Is it a class A, class B, class C? Are you looking to buy and rehab, add value to an existing property, or a property that needs to be completely gutted and redone?

I think that’s the best way to start the relationship, Whitney, is to sit down and have those conversations about really diving into your own personal investment criteria, so that we can focus on that. That’s how you start sourcing your deal flow. That starts with your own individual touch. You just get on the internet, get on Google, and search opportunities that match that criteria. And then you make those relationships, connect with other investors, or the owner. You can reach out to the owner, the broker, or whomever you have to. I think that’s how it starts.

[00:06:36] WS: How are you finding these investors, or high net worth individuals?

[00:06:41] FC: That is a very great question. I actually can’t prepare for that. It’s a lot of digging and a lot of research behind identifying the proper point of contact within the walls of the family offices, or the ultra-high net worth individuals. A lot of times, these types of individuals are very guarded with their identity. They will not broadcast it over social media, or put their contact information and ownership information, so it’s even hard to find if you access the legal documents through the municipalities in the city documents, loans and deeds. It’s still tough to find them.

It’s a lot of digging. I would say, also, attending networking events. IMN is a great networking middle-market, multifamily forum, which I actually attended in February when things were actually still normal prior to COVID. That was one of my last trips, but that was a great networking event. We met with a few family offices there. Just attending networking events, I know it’s difficult now, but there’s still Zoom conferences, video conferences of networking events — where you can have the potential to meet with these individuals. And have those introductions, tell them what services you provide and hopefully get a deal done with them.

[00:08:10] WS: Going to a conference like that, I know the listener is thinking, “Well, wait a minute. Why is that family office going to meet with me when I get there?” How did you connect with them before that, or to make that arrangement happen? I’m sure they are selective about who they’re meeting with, right? They’re going to be very selective about their time and who they’re spending time with and why. What did that look like beforehand to make that happen?

[00:08:35] FC: A lot of the times with these forums that are provided, like the IMN does, they will give you the opportunity to network before the actual event takes place. Our event was February 3rd through the 5th, or something like that. The whole month before, you have access to the database of all the attendees that will be at the event. You have that time to reach out and try to schedule meetings while you’re there.

That’s great, because a lot of forums don’t provide that. What that allows you to do is just schedule an itinerary for yourself to meet with who you think is most important. And who you want — time management, who you want to spend your time with these three days, these two days. These are all about 5 to 10-minute meetings, so you have to get a lot out in a short amount of time and get your point across and make sure that you’re sharp and enthusiastic and you’re showing that you’re an expert in your field.

[00:09:43] WS: What did that say, first contact look like, or just so you’re able to stand out with them, or how did you handle that say, first contact to even — whether it was through that forum, but then also in person as well?

[00:09:57] FC: Okay, so yeah. Initially, yes, it was with the forum, scheduled a meeting and they have panel discussions. After a panel discussion, we actually met with them and said, “Hey, I reached out through the forum.” They said, “Yes, he was familiar with who we were.” We basically understood right there in that moment trying to identify quickly the investment criteria like, “Hey, yeah. What type of assets are you looking for and what does your family office invest in?” Basically, from there, it was really just a pass off of contact information where you get the card and their direct line, or direct email.

Then, it’s pretty much just you have to send them an opportunity that identifies with them, that fits in that specific investment criteria, that wheelhouse, and that’s how the relationship will get started. You have to be very selective with that, because you don’t want to burn the bridge, you don’t want to waste their time. When you come with an opportunity, you have to make sure that it does fit into that wheelhouse and it makes sense for them, or you’ll damage your credibility with those types of investors.

[00:11:13] WS: How much time do you spend on say, the family office relationship versus just high-net-worth individuals, or investors?

[00:11:24] FC: With the family offices, we’re definitely focused on generational relationships versus transactional relationships. We want to do multiple dozens of investments with these family offices, not focus on one. With that, the focus is just making sure we’re always creating value. That’s one of our ‘10 Commandments of Commercial Real Estate.’ That’s number nine, create value. Always. Number three, you want to make sure there’s an alignment of interest, first and foremost. With everyone we work with, we make sure that we understand what exactly they’re doing and they understand exactly what we’re doing.

If it doesn’t make sense to work together, then you just walk away. Everyone’s not going to fit into your bubble and some people may be doing the same things and they’ll be okay working with you and some may not. Alignment of interest is big. I’ll get back, focused on that. Making sure that overall goals of the company; market, asset type, what I’ve already touched on that, you’re aware of that and you’re always keeping that in mind when sending these types of deals and everything. These investments and opportunities, because you don’t want to waste their time.

[00:12:41] WS: For sure. Tell me though, like you mentioned the importance of adding value to that family office. What does that look like? I mean, they’re obviously very skilled at investing. And have done this most likely over many generations now and have passed these skills down. For you to add value to them, how do you do that?

[00:13:01] FC: The biggest thing for us is providing high-quality, pre-vetted, off-market opportunities. That is where you can get a low basis, first and foremost. Which is number one on the Clarity 10 Commandments of Commercial Real Estate Rules of Investing, low basis. Right now, especially in this market, the off-market opportunities are the only place that you can find quality deals. Just having those relationships established with brokers, other real estate professionals that are in the market and in the know. That can come to you and tell you about opportunities that may be coming online down the pipeline before they hit the market. That’s one of the things we provide and we do that rapidly.

We also, we make sure we put our own capital in these deals that we partner in. Normally when we’re bringing a deal to a family office, it’s a great deal for everyone. That’s part of that alignment of interest. We want to invest alongside your capital as well. You have to have — be in a position to do that. When we work with these family offices and an ultra-high net worth individual, there’s low, or no fees, or loads. We’re not profiting from fees. That’s not how we become financially successful. At Clarity, we manage the investment in a top-notch manner and then we share in the upside. We share in the long-haul over that life of the investment.

[00:14:38] WS: That shows more alignment of interest, right?

[00:14:40] FC: Yeah, yeah. Most definitely. Most definitely. Then we’re good stewards of the investment fund, starting with the service, we put our investors’ interest in front of our own and that’s how we all prosper.

[00:14:52] WS: Nice. Nice. No, I like that a lot. Putting their interest in front of your own. I know you mentioned you’re not going to focus on the fees as much. You all are going to be paid. More so from the long-term, just like investors are. Then I wonder though for you, Fletcher, just through the syndication business, what’s been the hardest part for you getting into this business and getting to where you all are at now?

[00:15:14] FC: The most challenging part, what I would have to say is the initial contact. Because there’s so much digging and research and it takes time and you have to be persistent. It may not be the first call. It may not be the first email, or book, copy of your book that you send them or whatever you try to reach out with, a mailer. You have to be persistent and dedicated to connecting with these individuals. Then when you have that relationship, you definitely have to protect that relationship and guard it and make sure that you’re following up and maintaining it and always adding value.

[00:15:53] WS: Nice. You said you use some mailers. Can you talk about that just a little bit?

[00:15:58] FC: Yeah. Part of the initial contact process for us when we’re reaching out, just the different touch points, there’s always — a call, of course the phone, if you get a number. Sometimes there’s not always a working number. Then you have email. You find an email. You reach out with the e-mail. That doesn’t work. Maybe you have an address. You send a mail, or maybe you’ve written a book on real estate investment, or financial services, or literacy, or something. You want to send them a copy of your book. Back here in the corner here, my manager, Seth Wilson, he wrote a book, Real Estate Flight Plan and that’s what he has sent out to family officers to connect with. It’s a great book. Speaks to his experience in real estate investing. And he also ties it into his background and history as an Air Force pilot, working with the Air National Guard. It’s pretty awesome.

That’s something that we’ve sent out to these individuals. Then one-pagers, one-pagers that briefly just give an overview of your firm, your services, your background. Just a quick one-pager that you can get together. We actually have a copywriter and a designer that does all of ours. Make sure they’re real nice and professional and sophisticated, but those are also good to get out and make initial contacts.

[00:17:29] WS: Nice. What’s a way that you recently improved y’all’s business that we could apply to ours?

[00:17:34] FC: I would say, the follow-ups and managing your CRM database. And your relationships. Because that’s the goal, that’s the money is the network. You want to focus on that and focus on the relationships that you have.

What we’ve done is making sure we have a newsletter that comes out, at least every three months. We try to do a month, but at least every three months. A newsletter about what Clarity has going on and what we’re doing. We make sure to send mailers out. We just send thank you cards out to all the banks, the bank relationships that we have, just because we know that right now, there’s some troubled assets. We work with these banks and remove non-performing notes, judgment pools, things of that nature. That’s just an alternative investment for us. We could use that as arbitrage, so we made sure to send thank you cards out to them. Other things, I would say, yeah, that’s pretty much the gist of it.

[00:18:40] WS: Yeah. No, that’s awesome. Follow-up is essential, right?

[00:18:44] FC: Yeah, the relationships.

[00:18:45] WS: Right. Right. What CRM do you all use?

[00:18:49] FC: We’ve been using Excel and looking at other platforms, like Insightly, or what, monday.com. A few that we weigh. With our 2,500 contacts, real estate professionals that we have in our database, it’s managed in Excel right now.

[00:19:09] WS: Okay. What’s your best source for meeting new investors right now?

[00:19:13] FC: I would say, social media, LinkedIn, BiggerPockets, real estate investment groups on Facebook, because everyone’s working digitally now. You have to get in that network and in that space to really connect with other investors. BiggerPockets and LinkedIn are great for that, especially BiggerPockets.

[00:19:34] WS: What’s the number one thing that’s contributed to your success?

[00:19:38] FC: I would say, communication, relationships, building and maintaining those relationships. And identifying the opportunity within that relationship, so that everyone wins, everyone succeeds.

[00:19:51] WS: Nice answer. I don’t know that I’ve ever heard anybody say communication before. I think it’s such an important skill set. If you can be a good communicator, you can go places. Tell us how you like to give back.

[00:20:03] FC: This is my favorite question thus far, Whitney. If I did mention, my background was in the financial advising space. Before real estate, I was working with Edward Jones and Northwestern Mutual’s selling life insurance. And all in mutual funds and stocks, so I have a financial background that helps with the — of course, with the real estate.

One way that I give back and utilize my experience is, I started a program that advocates financial literacy to age — primarily males in the age groups 10 to 15. And just basically teaching them the basics, just understanding credit, working with banks, how money works, 401ks, investments, savings, things of that nature. Budgeting. Really the basics of financial literacy, because that was something that I feel that I received behind the curve and I want to bring back to the community and make sure that our youth understand how money works and how to apply it for passive income and utilize it to put it to work.

[00:21:18] WS: Nice. Well, appreciate you giving back in that way, Fletcher, and just giving back to us today. I’m grateful for your time and to have met you personally, but then also, thinking about working with family offices is something that it’s not talked about a ton, I don’t feel like. I’m just grateful for you bringing your experience and expertise about that. Tell the listeners how they can get in touch with you and learn more about you.

[00:21:42] FC: First and foremost, I want to say thank you, Whitney, once again for having me on the show. Clarityequitygroup.com is our website and that’s really the best starting point. You could also reach me on LinkedIn, just Fletcher Clardy. F-L-E-T-C-H-E-R-C-L-A-R-D-Y. My work number is 816-360-9602. Definitely give me a call. I would love to connect. Love to hear what you have going on and how I could be of assistance. Definitely, I would go visit the website and all that information is on there. Clarityequitygroup.com.

[END OF INTERVIEW]

[00:22:19] WS: Don’t go yet. Thank you for listening to today’s episode. I would love it if you would go to iTunes right now and leave a rating and written review. I want to hear your feedback. It makes a big difference in getting the podcast out there. You can also go to the Real Estate Syndication Show on Facebook, so you can connect with me and we can also receive feedback and your questions there that you want me to answer on the show. Subscribe too, so you can get the latest episodes.

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[OUTRO]

[00:23:00] ANNOUNCER: Thank you for listening to The Real Estate Syndication Show, brought to you by Lifebridge Capital. Lifebridge Capital works with investors nationwide to invest in real estate, while also donating 50% of its profits to assist parents who are committing to adoption. Lifebridge Capital, making a difference one investor and one child at a time. Connect online at www.LifeBridgeCapital.com for free material and videos to further your success

[END]

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