From LP to CEO How Chad Schieler Scaled to 2000 Apartments - EP27

🎧 Episode 27 of The Wealth Clock with Steven Weinstock

In this episode I sit down with Chad Schieler, CEO of Focused Capital, to break down how he went from passive investor to full time operator and built a multifamily portfolio that has touched more than two thousand apartment units across the country. Chad explains how he started as an LP to understand deal structure, tax benefits, and operator quality before launching Focused Capital, where he now acquires and manages large apartment communities in Indiana and surrounding Midwest markets.

We talk about tax strategy, risk analysis, deal selection, agency debt, fixed rate financing, and why many investors get trapped chasing projections instead of learning how to judge the operator. If you want to become a sharper LP or GP, this conversation gives you a real inside look at what separates the top performers in multifamily investing. 🏢📊

🔥 What you will learn in this episode

• How Chad used real estate to reduce a major tax burden from his previous business  
• Why he began as an LP and why he still invests passively today to diversify his cash flow  
• The Focused Capital approach in Indiana and why he stays within a three hour radius for his own acquisitions  
• The truth about timing markets and why time often fixes the problems that scare new investors  
• How to think about risk as a muscle and why you will never have every answer before you buy  
• The biggest mistakes LPs make when they rely on IRR instead of evaluating the operator  
• How to look behind projections and question assumptions like rent growth, vacancy, and exit caps  
• What it is really like to close Fannie Mae loans for the first time and why the process is worth the effort  
• Why investors from California and the East coast move their capital to the Midwest  
• How regulation in markets like New York affects cash flow, operations, and long term strategy  

🏗 About Chad Schieler and Focused Capital

In his role as CEO, Chad leads the team in acquiring, funding, and managing real estate investment projects. His conservative approach and analytical skills help him evaluate risk, protect investor capital, and build strong long term partnerships. Chad has invested in more than one thousand two hundred apartment units across the US while owning and operating more than six hundred units and growing.

🌐 Connect with Chad

Email  chad@focusedcapital.com  
Company site  https://focusedcapital.com  
LinkedIn  https://www.linkedin.com/in/chad-schieler  
Instagram  https://www.instagram.com/focusedcapital  
YouTube  http://www.youtube.com/@FocusedCapitalRE  
Facebook  https://www.facebook.com/profile.php?id=61559940456079  

📌 Focused Capital does not run a blind fund. They raise capital

🎙 About Steven Weinstock
Steven Weinstock is a real estate investor and founder of WeCapital and the Goethals Capital Fund. Since 2001, he has built a diverse portfolio of residential and multifamily assets while helping investors access passive income through strategic real estate opportunities. On this podcast, he shares real-world insights on investing, capital raising, and what it really takes to build and scale in today’s market.

📩 Want to invest or get in touch?
Visit: www.WeCapitalX.com

📱 Connect with Steven:
LinkedIn: www.linkedin.com/in/stevenweinstock1

Instagram: https://www.instagram.com/wecapitalx/
YouTube: https://www.youtube.com/@TheWealthClockPodcast

Transcript

Steven Weinstock: 0:01

Hi, and welcome back to the Wealth Clock . I'm Steven Weinstock. And we are sponsored by my company We Capital and the We Capital Mortgage Fund. We're buying first position liens, doing bridge loans anywhere from three months to 18 months. Paying in the 11 to 13% range monthly distributions secured by first lien position. Most of the time 60, 65% LTV. But we're not here to talk about me. We're here to talk about real operators, founders, people making things happen so I can learn from them and my audience can learn from them. Today's guest is Chad schieler. ceo of focuseded capital. Chad has invested in over 2000 apartments. Some of them he is managing. Some of them he is not managing. I guess we'll get into that. He is been around for quite some time. I'm sure you've seen him online. I'm just gonna get to it. Chad, thank you so much for coming. I appreciate it. Great to be

Chad Schieler: 1:08

here, man. This is awesome.

Steven Weinstock: 1:09

Looking forward to it. Okay. Before we start just tell me . what does it mean to own some of them but not necessarily be involved in some of them, or maybe involved is a bad word. Some of them you're running, some of them you're not. Just gimme the different nuances how that plays out.

Chad Schieler: 1:24

Yeah, it starts back to my original journey in the real estate. I started in the real estate really for the tax benefits to offset tax liability from my previous business that I had in the past. And I chose the LP route of being a limited partner on some investments first, see how this worked and that's carried forward even to today to where I'm still an LP on different projects that are a good compliment to what I'm doing here at focuseded Capital. So for example, things that are not multi-family, like industrial or communities, senior housing, that kind of thing. So some of that to leverage my personal cash flow. But the primary business we have in focused Capital is to acquire and develop multi-family apartment complex in here, Indiana area.

Steven Weinstock: 2:07

Got it. And what you said you were involved in a different business, made some money invested as an lp, and then eventually decided to focused on it and open up a focuseded capital. And what what kind of business were you in before, if you don't mind?

Chad Schieler: 2:22

Yeah, electronic payments. So about 18 years I was helping out business owners with their credit card processing systems their accounts, and it did very well with that. But it's all residual business, which is nice, but you have a big tax bill every year coming up. And back in 2017 I was like, we get this fixed here and figure out a way to offset those taxes. And looked at real estate with my CPA and he agreed as well that real estate could provide a lot of tax benefits for me with the appreciation and other things there included.

Steven Weinstock: 2:51

Real estate is a great tax vehicle. A lot of people get into real estate full time by first really just investing in it or trying to get into one deal. I started myself. I was a corporate guy. I was young, and my goal was to buy one single family home. I was still living at home with my parents, and I figured that after 30 years of paying it off and possibly making some money every month, I would have an extra. 401k, so to speak, and I could sell that house and I wouldn't have to sell my primary or downsize or I could afford to buy the condo in Florida, whatever it was. And it's really after a couple of months of actually owning it and the numbers are clicking and seeing the 30 year payoff schedule every month it's a little more it really got me thinking and that's how. I got to number two and number three and number four, and it became my full-time shortly after. So you have a lot of people like that. And I like how you started on the LP side. You learned what it takes to be an lp, what to expect, who to speak to, how they speak to you which is a great idea. So I'm sure when you started focuseded Capital, you you knew what to do or what not to do. Yeah. Which markets are you in?

Chad Schieler: 4:07

Indiana right now it's our home base. Great market here, great state, but we're looking to expand to Ohio and Kentucky eventually as well. And back to what you said about investors, you definitely learn what to do and what not to do with investor communications, investor reporting, and how you treat them from prior deals.

. Steven Weinstock: 4:24

You mentioned Indiana, just on a personal level does that mean you're in southern Indiana or are you away by the Indianapolis area?

Chad Schieler: 4:31

Both. So I'm currently located in Fishers, Indiana, which is nearby Indianapolis. And we've got assets that range from Lafayette to Fishers to Southern Indiana by Louisville, Kentucky. Got it.

Steven Weinstock: 4:43

Got it. So the reason I ask is because even though I'm based here in Brooklyn, New York me, me and my company do own and operate some multifamily properties in the Louisville area in the actual metro area. Which is pretty interesting maybe we'll meet offline in the future if you're ever, in Louisville, not Louisville, which I learned it's Louisville.

Chad Schieler: 5:03

Yeah. They learn pretty quickly if you're a local there, if you say at Louisville okay you're disbarred here, right? But if you call it Louisville, then you're one of them, right?

Steven Weinstock: 5:11

Yeah. I've been down there probably about 75 times. Usually I'm there for, 36 hours on a clip, checking on some assets, whatever it is. And. So many times people will say, oh, you're a New Yorker or a Northeast guy. They say it friendly and nice, but it just reminds me that when I talk, I guess I, I have some sort of accent or maybe I'm talking too fast or too slick. So sometimes I have to be mindful of it when I'm meeting people and trying to impress people.

Chad Schieler: 5:42

I used to drive down there from my previous business quite a bit actually. I learned very quickly to call it Louisville, not Louisville.'cause the Midwest people here, they're a little slower, little not as trusting at first. So you've gotta match that. Your audience there, there

Steven Weinstock: 5:55

go focuseded capital. So you are buying assets in these markets. You're buying multifamily.

Chad Schieler: 6:04

Yeah, multifamily, primarily a hundred units and larger.

Steven Weinstock: 6:08

Okay. And as far as property management collecting rent and dealing with the fuse that blew, or a ticket you got from the city because, somebody dumped garbage over the weekend. Is that are you dealing with that at focused Capital? Are you hiring that?

Chad Schieler: 6:25

Yeah, not in-house quite yet. It will be very soon. Right now we use what we feel like are the very best third party PM companies, and we've got a couple different ones. So we've got each PM company is gonna be stronger in different areas. For example, in Louisville, Kentucky, we've chose a company there that's got a very large presence, that has a lot of. Employee potentials. There a lot of connections network to where they're actually better to be on site there at those southern Indiana properties compared to up north here by Indianapolis. There's a different company up here that we use instead for that's better this area.

Steven Weinstock: 6:57

Have you invested outside of these areas with, I guess either with focused capital or just on your end on the LP side?

Chad Schieler: 7:04

Yeah, quite a bit actually. I've invested quite a bit with my wealth management firm that brings me deals that are alternative investments. A lot of stuff out in St. Louis, Nevada. Not much, not anything at all actually in the Sunbelt. I've done three deals in Arizona. I said they were my first three LP deals out there. Kinda gave me the taste of how this all works.

Steven Weinstock: 7:25

Any any of those markets that happen to treat you very well, meaning everyone has wins, some love duds. Hopefully you'll have losses and, everything's personal. Everything is this specific building just because of the way, the wind blew, but any of those areas that you were that you loved that was better than some of the others?

Chad Schieler: 7:44

Yeah, so all of my personal assets have always been Indiana. I've had some pretty big wins on stuff here locally. No losses at all. As of right now, of course don't plan to in the future. Now Arizona, I had a couple deals there. My first couple LP deals they did very well. The third one, we missed the timing to sell it. So we're, I'm still LP the deal right now to wait for the market turn back around, but it won't be a loss. I don't believe it will be, but the first two were really good. So that's a good synopsis for you there.

Steven Weinstock: 8:11

I'm in a deal where I am the gp and we have to hold it an extra two years. So I, you said before, missed the time to sell it. I'm assuming I'm just gonna guess with, the time that you missed was probably 22 or 23 and next thing you know, you gotta keep it an extra two or three years. That's how it happened with me. Yeah. Any similar with you.

Chad Schieler: 8:33

That third LP deal that I did with a friend of mine that was, they were trying to sell it about 2022 and they had variable rate debt in that deal. It was a development deal and luckily they were able to secure a recap with fixed rate debt and have more time, which that's what we need now, is if you have time on your side, time cures most deals, but it'll be fine.

Steven Weinstock: 8:55

I've said that many times when you said that, time heals. A lot of real estate issues, and it's just a matter of how long you are willing to wait. But I agree. Time heals a lot of mistakes and usually smooths things out yep. Yeah. Creative financing I love to talk about it. It's helped me buy. Lots of real estate and lots of different assets. I started out very early using creative financing in order to buy when I didn't really have money to buy, and I've continued using it even now when I'm buying multifamily. Ever do anything creative, any creative financing that you are a part of that you orchestrated that even as an LP and maybe they did it on your behalf? I'm just curious. I'd love to hear about creative financing stories.

Chad Schieler: 9:42

Yeah, I actually have none of all for you right now. I've either self-funded all my deals or I had raised capital from investors to be LPs. I, as of right now, I've not yet. Had a seller finance deal or sell a carry or a creative finance deal. That isn't a change though. I have learned a lot more about creative financing, so I believe I'll use that. Maybe it's the personal assets going forward, but I'd love to hear about your story too and how you've used that in your assets.

Steven Weinstock: 10:06

Sure. Just to give an example, when I was buying one to fours I spent, about 10 years really focused on that market in New Jersey. New York was just untouchable, so I had to cross the bridge, cross two bridges to to buy some real estate. And right away, I would say in my like third or fourth deal, and I was buying fast. I was, back then the lending and the credit was very easy. This is 2001, so 2001, 2002 was a very good time to buy. E easy time to buy and the banks itself the banks themselves, or the brokers who work for the bank, who work with various banks. When they would offer me loans on a two family house that's costing me 85,000, they would offer me an 80% loan and then a second loan, a second lien position with a different bank and a real bank for 15%. Wow. So I would have to come down with five. When I started doing those deals I would try to ask the seller, would they hold the five and, maybe the 5% I would pay out over a year. And, I started it, it was really just it about it and asking other people and, there was less, there was no online really back then, but, there were these tapes and CDs and all that type of stuff. Carlton Sheets was one of them. Robert Allen. Yep. I ne I never bought. But I used to watch these infomercials that were on tv. I'm not sure how old you are, but in the nineties at least, there were these

infomercials, like after 2: 11:37

00 AM there was no more programming on Channel five. So you'd have these 45 minute commercials either selling blenders or toasters or sometimes real estate books and stuff like that. So I used to watch these and they used to talk about it. I would read about it and, so I, so just to give you a rough I bought tons of one to four is using some sort of seller carryback. I've done quite a few master leases where the person's got a great loan and. Let's say they have 300,000. Let's say they have a hundred thousand equity, I would offer them 25,000 equity down payments. Keep the loan in place do a master lease on the entire property. So everything I'm running, et cetera. Have lawyers fill out some paperwork about. If I'm paying the bill, the loan pay down, that part of the equity comes to me at the eventual sale. Do this for a year or two and then have enough equity or, it's cheaper. It's two years later. So get a new loan and try to knock the seller out. Try and knock out his loan. So I've done quite a few master leases. And even in one of my multifamily deals I got a seller to keep some of the money we needed about 4 million for the deal, and he agreed to stay in for about a million. And that was me asking, it was a big national brokerage firm. It wasn't offered, it wasn't spoken about. And I put it on my LOI and we got it done.

Chad Schieler: 13:04

I think the point there too is you have to ask for it because a lot of these brokers, they're not gonna adjust to the seller. But in this day, as like to get deals done, if they want their price, which is probably higher than what the current buyer's willing to pay, they have to get creative. They have to maybe give up something else, maybe at least some money in the deal, at a certain rate. But I Love You does so far. That's awesome. I think for me it's look at these deals to where if you, the way it works is if you've got a deal that you can force appreciation rather quickly in the first year to two years, it makes sense right now, can you afford to pay the debt servers on that extra note in the meantime with the cash flow on the property? Can you get out in a year to year and a half and pay off the seller? No. Then it makes sense. A hundred percent.

Steven Weinstock: 13:47

Yeah. Yeah. Creative financing is great. Typically these days when I send an LOI there's, multiple offers on it. Some sort of creative financing both even in the multi-family space. I'm still active in the one to fours, so there I'll always put three offers. I'll put a cash offer, 21 day closing proof of funds non-refundable deposit. And in a one in the one to four is that's, non-refundable deposits a big deal. Yep. Then I'll put an offer with. Regular bank financing 20, 25% down and, regular 60 day closing. Or I'll do a higher offer or, a full price offer with some sort of seller finance component to it. So depending on where the seller is. Sometimes they like that higher number. And I tell them that it should be beneficial on your taxes when you do some sort of seller carryback because you're spreading out your gains in multiple years, tax filing years. So yeah, it's definitely a matter of just putting it out there. And you're correct. A lot of brokers don't like to hear it. Yeah, I've had my back and forth with brokers about it, but it's but then you have a lot of them that are all for it.

Chad Schieler: 14:52

They don't understand it usually, it's usually an education piece for these brokers to understand how it actually works, how it can benefit the seller. The question for you would be, okay, so we know you're in your cash offer, what that would be, how it look for you return wise. We now on a bank finance deal, how do you arrive at your calculation on that third offer? I. Basically saying, okay, I'm gonna pay a little bit more in price than property, but I want XYI want a certain amount held back from you at a certain rate. How are you calculating what the increase in price is that you, they, you'll give them what that seller carry amount is and what the rate

Steven Weinstock: 15:24

is? So it's a good question. And on the smaller deals more, I don't wanna say eyeballing it, but I'm more. I'm figuring out that if I get the seller to stay in, I'm usually saving some money in fees. So those fees, annualized or, all that, comes out to X and if I can get the rate for whatever I'm paying him to be, let's say the same as my first position lien, or same as a, what a first position lien would cost at a decent rate, it usually means, it just makes it easier. And worst comes to worst. I have the money still in my pocket I could afford, the emergency I could afford. If something doesn't really come to plan, I could afford to fund it because I, I didn't put that money upfront. Every deal's different and a lot of the reasons I try to do a seller financing is I try to have a relationship with these. People who I'm making a monthly payment to and trying to create a relationship with them where the next time they're selling a property, they're calling me already. Discussing some sort of seller financing component. So I've had that happen quite a few times. You do a deal with a guy and he calls you outta the blue and says, Hey, I got this other property. I'm fine with the monthly payments. They trust me, they know me. I'm speaking to them every month, or they're getting a positive transaction for me every month. So I've benefited from my relationships with these people and I would like to think that all that outweighs. Any potential increase in my monthly expenses by doing it that way. That, that's really how I how I come to that conclusion for the third offer.

Chad Schieler: 17:13

Yeah, I like that. There was a deal I actually had last week that I'm looking at, and I'm looking, gonna give 'em two offers on it. Like one is a, just a straight offer using bank financing plus equity. And the second offer would be, okay, you leave some money, the deal, I'll give you your price that you want, which would be about 500 K extra. In this property it's about 7 million bucks, about 500 extra. But the question is what's the appropriate amount to, to ask him to leave in the deal? What's the percentage rate? I think percentage rate may be closer to that. Five, 6% range, but I could ask them to put in a million bucks or 3 million bucks. What's the right number there? Lowest cost of capital.

Steven Weinstock: 17:50

Indiana, is that where you were born? Indiana? Yep.

Chad Schieler: 17:51

Born and raised? Yep. Born and raised. Lafayette, Indiana, near Purdue University.. You ever think about investing in the Northeast? I never have, man. I never have. I've always been a fan of investing nearby where I live at this point. We've been there a couple hours. That's part of our thesis is like we're within a three hour radius where we live right now, and I feel like as we get large, a larger team, we can branch further out where. It just, it's to me, easier to get to a property same day, get to fly there and fly backs, it takes longer as, as with your Kentucky properties. But there's still the old adage of, live, you wanna live and invest where you wanna invest, which may be at every state.

Steven Weinstock: 18:28

Yeah. You have tons of investors all over even Arizona and salt Lake City with most of the capital stack on the LP side is coming from California. You have that? Yeah.

Chad Schieler: 18:40

Same way too. We have a lot of investors on the West coast and East coast because they don't like the cash flow or lack thereof in California. They love the appreciation sometimes, but the laws and regulations are getting a little tighter over there. So the look of the Midwest as a way to get more cash flow, more of a steady eddy kind of thing with less risk of laws favoring more of the tenants versus the landlords.

Steven Weinstock: 19:03

Yeah. Buying in New York or the Northeast, you'll. Probably do well on appreciation for the most part. You might not cash flow ever but you're definitely at whim of regulatory rules that come down the pipeline. New York City specifically 2019, there was some sort of rule change where you can't increase rents even if you renovate the apartment. So if an apartment needs 50 grand worth of work and you can't. Raise the rent from where it was. People are keeping the apartments empty. It's leading to other problems over there. But for some reason the value of these buildings just keep going up and up. I think you have a lot of people with their own capital or just big funds, money, they wanna park it somewhere. They're fine with 5, 10, 15 year holds if they have to. And typically New York or the Northeast has paid off when it comes to appreciation. Any any books you're reading? Any books you've read? Yeah, besides the Boys,

Chad Schieler: 20:04

I just finished a book by Chris Voss, which has never split the difference. It was probably the best I've ever read about immigration negotiations. It was great. Now I'm reading a book called pitch Anything. Always been a fan of course, Robert Kiyosaki's books, how I got started in Real Estate. Rich Dad, poor Dad I love the Dan Sullivan books. Those are great. But usually I'm reading, I'd say a book a week, usually a book every two weeks. Oh, wow. Audio

Steven Weinstock: 20:26

books. Oh wow. Oh wow. Okay. So you definitely have a good library on your on your apple device.

Chad Schieler: 20:33

Always

Steven Weinstock: 20:33

learning,

Chad Schieler: 20:33

man. Always learning.

Steven Weinstock: 20:36

What is one habit that successful investors have compared to ones who struggle?

Chad Schieler: 20:46

I would say I would look at myself. I'd say one habit that I've done over time is always do what's uncomfortable. And with investors, I think it's getting like risk is a muscle and it's getting used to that muscle and getting used to knowing that you'll never have a hundred percent of the answers or you can't ever mitigate all the risk. There's always risk in investing, but it's figuring out how can I mitigate the worst parts of the risk and have a much greater upside potential than what the downside potential is. So I think in terms of habits you can form as an investor is. Just reviewing more deals. Doing more deals personally, and just getting used to that because I think a lot of investors, they get stuck with the risk piece and they look at a deal and they analyze it a million times and they're, they just don't get comfortable or they can't make a decision to move forward because there's still unknowns. And like in business investing, there's always the unknowns. So my mentality is like, if you have 85% of the answers, just go ahead and do it.

Steven Weinstock: 21:49

What are some of the biggest mistakes that LPs make?

Chad Schieler: 21:53

To a deal. The number one thing the LPs make is they compare an IRR percentage on deal by deal to make their decision. That is the biggest one. I feel like they, they don't do enough deep dive into what makes up that number, and they rely more on making an investment decision on the actual deal itself than the operator. And as you and I both know, operations means everything. You can buy a great deal. If you operate it poorly, it's a bad deal, right? So you have to look more into what influences those. The IRR assumptions, as there's a lot of levers you can pull. You can pull exit cap rate, rent, growth, vacancy, all this stuff. And I think you as a investor, you've got to look more at the operator. Who is a person doing this deal? What's their track record? What's their experience? What's their process in the market? How close it is to them personally? What's their skin of the game? So that's a few things.

Steven Weinstock: 22:47

Ever deal with agency debt, CMBS loans? Do you like them? Do you not like them? Credit unions? What do you like? What don't you like?

Chad Schieler: 22:55

Yeah. I did all, I did only bank deals and only fixed rate bank deals up until March of this year. And now I've done two Fannie main loans. Everyone says the process is terrible. It wasn't bad for me. It was only bad in the last seal because we had a. We had a symbol loan. The deal was built in two phases. We had to do two loans for Fannie Mae. We had a foreign national tick investor. So we had a lot of firsts on that one deal. But overall, I think it's worth it. You get a great rate, great terms, it's non recourse, which is awesome. But it was a lot of paperwork, a lot of due diligence. But once you're in, once you get the first deal done, get through the SCRA questions, the PFS questions in the background. And they grill you. But once you're in for the first one and you're in going forward.

Steven Weinstock: 23:39

Chad Schieler, thank you so much for coming on. Yeah, I had a great, I had a great time talking to you. I'm gonna put in the show notes, but tell everybody here how they could reach you. Are you on social media? Should they call you? Should they email you? What you're working on? Let's hear it.

Chad Schieler: 23:55

Yeah. Thanks Steven. I'm also ee I'm on LinkedIn primarily. You can find me on at Chad Schieler or at focused Capital. Our website is focused capital.com. Go on there, fill out a form, get to know us a little bit better. You can always email me directly at chad@focusededcapital.com. As far as projects, we, we don't do a blanket fund. We do just deal by deal, single asset fundraise, nothing right now. We're very selective. We've put over. 55 offers this year in so far, didn't did two deals. So it's a lot. It's not a very good numbers game there. But should it be next year having the next deal coming up?

Steven Weinstock: 24:30

If you found value in this conversation, subscribe to the Wealth Clock with steven Weinstock podcast, YouTube, apple, Spotify, everywhere. To learn more about my WE Capital Mortgage Fund, where we help investors earn consistent income on short term first lien positions. Please reach out to me directly. Find me on my social medias dm me Chad, thank you very much. Thanks, man. That was great. Good stuff.