Good morning everybody and welcome to Investing Across Borders. I’m your host Lauren Cohen, originally from the beautiful country of Canada, which is a little cold right now. And now, in the beautiful state of Florida, South Florida to be exact, where I have my pool right outside my door. This is what Investing Across Borders is all about and I’m here with my guest today, Fredrik Sandvak, who I met through a podcast that he interviewed me on a few months ago with his lovely sons, who I just asked to join our podcast, but they’re busy, probably on something to do with electronics. I can’t imagine why or what, you know I have a 10-year-old myself and I forget how old are your sons again?
Fredrick: 14 and 16.
Lauren: Okay, and they are involved in Frederick’s real estate investment business which is super cool. And when they showed up at the podcast, I’m like, Oh my gosh, what am I going do, I have a 14 and a 16-year-old interviewing me as well. It was pretty cool though, incredibly unique, quite different model. I’d like to talk my son into joining me, but he’s too interested in his own electronics. But I will share something funny. I don’t know if you know, but the government here is going
has issued an additional stimulus check for all citizens and so on, the parent gets it the first time around, I think $1200 and the kid got $600. This time around, everybody gets $600. Okay, so my son, the other day, calls me up he was with his dad, calls me up and says Mommy, I heard that x and we’re not going say his name, is giving everybody $600 I said, Oh? he says, Yeah, daddy told me, and I want my money. I am telling my mom she almost fell out of her chair, she says, that kid is a pistol, right? and I could see your kids doing that too. I want the money, I want to invest, I got things to do. No time for baloney. Fredrik, why don’t you say hello to our international audience and tell us a little bit about yourself and what brought you to where you are today.
Frederik: Absolutely. So, my name is Frederick Sandvak born in Sweden, and I usually live in United Kingdom, London, and that is where I have got most of my investments. I have been working in more than 40 countries, traveling in more than 80 so I’m very international, and I would absolutely say that my accent is muddled up.
Lauren: It is, your accent is an unusual one it’s not Swedish it’s not purely British but
Fredrik: Yeah, and I have been diverting away from a military career with time in the special forces, all the way through consulting and lately Investments, Angel Investments, and most importantly real estate investments, and I love to help others so here we go.
Lauren: Tell us about your Angel Investments, investing, when did you get into Angel Investing because we haven’t had any Angel Investors on the podcast yet? And since I was writing, I’ve been writing business plans for 30 years, I worked in the Angel Investing space in the venture capital space for a lot of years. So, tell us about that.
Fredrik: Yeah, I would say for most people listening to this one. Your biggest likelihood to actually find money, actually from other people might be to work with investors and Angel Investors. I started out as someone who had money coming to this community, which is great because if you come there with your hat in hand, the Angel Investor community, and you have a real good idea, or it will be a bit frowned upon. But if we come with money, all of a sudden now you’re in the higher layer.
Lauren: Extremely popular.
Fredrik: Yeah, you’re very popular and also at the same time you now can really connect with other high net worth individual in outside Angel Space events as well. So, that is usually something that people in real estate love to do although they have no idea what to do but the Angel Investment Space is a good one. And I’ve been doing that for more than five years, and my latest investment, is in an investment platform started out in crowdfunding with property, and real estate. Now we are purely, because of regulations, it was better for us and for our customers to become an investment platform. So basically, almost like a crowdfunding thing where you put your money in, or you come and ask for money for a project. And, and that has since I started work with them, because I took on a non-executive board role, and really helped them all to escalate. It has gone up 10 times the money in soon three years, and I can say that that can happen one more time, at least for the company valuation stock.
Lauren: Which has gone up 10 times since March, I don’t know if you’re crazy.
Fredrik: But also, Angel investment, the biggest warning flag is at least nine out of 10 crash. Right. As statistically, and then also the people who work with this profession like private equity, they know that, and therefore they hedge their bets right.
Lauren: So, the level of risk, that’s definitely very unusual and definitely much higher than in the real estate world.
Fredrik: Yes, exactly.
Lauren: So, you’re not getting a tangible asset that might fluctuate but is always going to hold value.
Fredrik: The biggest similarity with real estate is usually they’re very liquid, so you go out and sell it so right now, I have a position in the same company as mentioned, worth roughly a half million pounds which I like to invite other high net worth individuals to buy off me. Basically, guys today diversify a bit because my stocks have gone up so much. And so yeah.
Lauren: So, where’s the investment platform house?
Fredrik: It’s called Crowd With Us.
Lauren: Crowd With Us?
Fredrik: Yeah, Crowdwithus.London. So, it’s open, we’ve raised more than 10 million pounds in the last few years.
Lauren: So, it’s UK based. Yes well, the word London gave that away.
Fredrik: Exactly good clue there. It is for investments in the UK, but you can invest as an overseas investor as well.
Lauren: Cool, cool and when you say you came with money to the Angel Investing space, where did that money come from, was it from assets?
Fredrik: From assets, savings, consulting and real estate mainly. And you don’t need to have a lot of money either you can come with like a couple of $1,000 and that will be a game changer. Some companies like I see seed stage, up to maybe, yeah, a lot, a lot more, but for the Invasion Angel Investor Space is usually something from 5 to 10,000$ up to a couple of million. That’s when we go into like second wrap fighters around where it gets more
Lauren: or more received to structure. So, I guess this investment platform intrigues me especially because you are investing in real estate as well, and we are in the process of setting something similar up in North America. Only in the UK, do you plan to expand that beyond the UK?
Fredrik: It is set up so you can absolutely work, also outside the UK as well. The reason why UK is just like any kind of business growth, you focus on what you know best. And what works, easiest. But again, like I said, you can invest from anywhere in the world. Of course, with the anti-money laundering checks.
Lauren: Of course, again, for anybody that didn’t understand what the anti-money laundering checks means which is super, super, important when you’re investing across borders, or when you’re bringing money into your country from another country, because if that money isn’t clean, you’re done. Yeah, so even if you, and there are some countries that are red flags and, you know, it’s just a known fact like Venezuela, or Russia or just countries that don’t have the same reporting requirements as Britain, Canada and the US, like the structured reporting requirements, and these countries have a lot of issues and they also have a lot of kickbacks paid, and money laundering. So, you have to be super careful, both when you’re taking money into the country and you’re when you’re bringing money out of that country, to make sure that it’s going to pass. That’s one of the things that I deal with every day, and often get pushback Fredrik, is about the money, if you’re investing to immigrate, that money, all the money, if your investment has to be traced back, and a lot of people said no, they can’t do that. And so, you can’t make the investment happen because you can’t prove that the money is clean, and the banks won’t even take it here so bringing that up.
Fredrik: Yeah, yeah. So, assuming that you’ve got money and it is white, clear nice money, then it’s very straightforward you can invest in this platform or other platforms, or of course like an investment. You need to do just due diligence on the platform. And also, these things go into real estate projects. So, I’ve made some, we’ve got like a range of from like 8 to 10% percent up to sometimes 30% per annum in the down payment.
Lauren: Definitely.
Fredrik: So that’s very unusual. So again, we work with the best people we can find in the industry. So that’s why we often can have like, I would say an average would be like 18% which is very much how you as an individual can have very much the same rates of return to yourself, as you would if you would be like a bridge bank with more legal rigor to safeguard yourself. But again, this is regulated activities. At the same time, nothing is sure in the stock market or anywhere with investments.
Lauren: I am just reading through your notes here. Tell us about a faux pass you made, and you mentioned, considering the final exit link to inheritance taxes, but you’re not planning to die soon anything. I’m sorry I had to get the laugh. I love the fact that you’re most exciting thing that most excites you is similar to the thing that excites me most, which is why resonated so much the first time we spoke about your opportunities of taking a platform, and taking a concept and expanding it across borders, like this crowdfunding. I guess it’s not a crowdfunding but an investment platform. Now once you have the proof of concept in the UK, once you have that prototype perfected, then you can duplicate it and replicate it in other countries. So, to date, you’re obviously from Sweden, you live in the UK usually, tell me the countries that you’ve touched on so far, and had investments in?
Fredrik: Right. I’ll broaden that scope to make it more interesting for the audience, not only include investment. Also, I’ve been managing properties for one or other reason. I’ve been managing properties in countries as diverse on the United Nations behalf. In India, Pakistan, Israel, Lebanon, and Congo. So those are places where I’ve been managing properties
Lauren: In Israel and Lebanon at the same time; and just kidding. Never.
Fredrik: Yeah. All right, but I was working with United Nation, I was backed by both sides of the border, so it was completely legit and allowed, you could be like a diplomat. Yeah, I have a diplomatic correspondent, can also be helpful.
Lauren: Yeah, he can be helpful, especially these days that we could get a COVID shot. Just got off the phone with a friend of mine whose husband is a doctor he had the shot, and she didn’t. Unlike, like kind of like you. I don’t know I feel like they should extend that but that’s besides.
Lauren: I was looking through the list in United Kingdom. I was eligible or not for a shot though I’m not on the top 10 categories, I’m not there and the simple reason is, I’m too young and too healthy.
Lauren: Sure, I was somewhere yesterday outside and there were bunch of older women talking, and they said, and they were all over 65 and I said this is one of the few times I wish I were older just for about six months. And then, and then put me back where I am to go forward in the time zone. In a time machine and then come back but yeah, but we’re not planning to die soon, you’re right, so we’ll just stick with this and hope to stay healthy throughout.
Fredrik: So those countries I was mentioning, they’re all different rules, legislation, complexity.
Lauren: But a lot different. No?
Fredrik: Yes. But the similar thing is, as soon as you have a property, there will be things you need, you can be pre-empting things or things will happen to you with, whether that’s with the actual house, or whether the people living there or animals, or anything. It just …
Lauren: Give us a story I would love to hear amazing stories, to have some crazy story.
Fredrik: I got, somebody gave me one really crazy story was when I entered my office in the Congo. And when I closed the door, a scorpion fell down onto my shoulder, in the same office. Another time, the whole ceiling fell in our hand and showed me that there were hundreds of bats.
Lauren: Oh My god, Yes, Bats are definitely on the bad list these days because everybody thinks that I guess the word is that is this whole pandemic; so that would not be good.
Fredrik: But like a four-meter snake. Nice!
Lauren: Wow. I would be scared, like half to death.
Fredrik: But on the other side. There are many good examples as well, property, but really if you jump, if you’re really new to this and consider investing, especially like cross border, have a nice remote, so, you have to have a team, a power team in place. And if you don’t have that you’re very much, exposing yourself to potential headache and failure and loss of money, potentially,
Lauren: Yeah. The team is super important. We have a coaching program, and we were speaking with one of our, our coaches or mentees yesterday, and we’re talking about this remote investing because these days of course everybody’s doing their own investing and it’s generally not able to do much else, so the challenge of remote investing is making sure that you do have that people on the ground team that can manage the problem. So oftentimes they think joint ventures are definitely an advantageous way to go because you create those relationships and then you have somebody with the boots on the ground, that has a vested interest in the outcome. So that’s a big deal.
Fredrik: So today, where most of the things is in the United Kingdom, and we, we may, my brother used to have a lot of things going on, right now we don’t have a specific project. He’s in Argentina, since three days, and I’m in Sweden, and one more time the properties that we mainly manage they are in London. So clearly, we have a team in place, and they are allowed to work despite the COVID lockdown situation going on there. So luckily, you’re allowed to maintain and deal with your tenants even despite this harsh condition with extremely I mean, as of now, London, United Kingdom, recorded the highest number of infections since they started yes now. So very pleased to be in, in a snowy countryside in Sweden today.
Lauren: Yeah, Sweden’s definitely handled this whole situation much better.
Fredrik: As I’ve hoped for.
Lauren: Is Sweden on lockdown?
Fredrik: No, no, we have, we have restrictions, but we have pretty much never been on the lockdown per se. We are amongst the top 20 worst affected countries in the world, together with America, obviously, we are amongst the people who got the most but at the same time, people have had a life, people can move around, do most of these things as normal. Not like huge, big events, but for a long time I’d like you can’t meet more than 500 people at the time, like, okay, 500, that should work out to reduced sales, but that was very much at the peak.
Lauren: Wow. Wow. So very interesting how differently different countries have responded. First of all, you know being from Canada, living in America, I mean Canada has a completely diametric, has responded in a diametrically different way than America. And, yeah, the numbers are lower, but, but again, they are on lockdown for the fourth time or something. And so, people are not able to go anywhere and you’re right, like it’s a trade off because the economy has been hugely impacted, hugely, businesses are going out every single day and so you have to wonder, you know, no matter what your political leaning is it, there are implications on both sides, and certainly as a cross border investor or an international investor, it’s had a resounding effect on all parts of our investment portfolios, not always negative. It’s just made us have to pivot Right.
Fredrik: Exactly, exactly. I like to share a story about someone who lives, I can literally see that house through my window here by the lake. They have been living in Switzerland for a very long time for mainly tax reasons. Yes, the other week they just came back to the summer house and they sold off many assets in Switzerland. They still got various places where they could live, but for many reasons inside Sweden is the best to be right now. And they even went so far as to sell off main residence in Switzerland, and also therefore, migrating has got huge implications for tax so we spoke about for example, this thing you mentioned the headline tax earlier on. So, United Kingdom, very much like the US around 40% with of course some, some money that you don’t need to worry about in the first part of that. But Sweden since a number of years has got 0% to us, which is better than 40%. So, yeah, plan ahead when you’re growing, expanding investing and tax is way more important than anyone could give credit to. Because Lord knows.
Lauren: I agree with you. Yeah, I agree 100% and it’s interesting because a lot of our team members in EXP, that are making six and seven figures per month, have become residents of Puerto Rico because the tax rate, is almost zero or zero. And so, it makes a big difference, and you know it, you have to choose your country and then maybe your state, or your province or whatever the case may be, depending on where you are, but your tax, if you’re going to make a lot of money and pay most of it to the government it’s not worth it. So, you may as well find your best place to be, your tax domicile, your tax home, and work from there, and it doesn’t mean that you have to stay there, you know, 365 days a year, but you need to satisfy the requirement to make that your tax home. So, one of the things that we talked about just before we hopped on was the fact that you’re not yet invested in the US, but you’re interested in investing in the US, and that’s going to be something that we’re going to be working on hopefully together in the next several months, let’s say developing that strategy. What makes you interested in investing in the US, and why now?
Fredrik: The US has got a very stable legal system, compared to like the rest of the world, is remarkably similar to the one where I’m working like a very much Anglo-Saxon law system. And then you also have, which is ironic to talk about today, early, 2021, it’s about the stability of the political situation in the country, it is also really tied to the polls.
Lauren: I think today, in Georgia. And probably by the time this podcast airs. Yes, inauguration will happen, so I’m expecting there’s going to be a change in precedent I can’t guarantee it.
Fredrik: So yeah, so again so the tax system. The law system, the political stability, are overarching things, and one thing I used to work with and use a lot when I was working with intelligence service, is something called the CIA World Factbook. and it feels good when you find the line at CIA World Factbook. It talks about everything from stability, the GDP, common diseases, what people are up to on a higher level. It’s like a guidebook of the highest level. Potential thing but when you invest, have a look in the CIA World Factbook.
Lauren: Interesting I’m going to grab that for sure.
Fredrik: Yeah, so that’s pretty much for any country in the world. Usually worthwhile to have a look. So again, back to why the US? I always like America, if I would not have married with my wife I probably would have ended up in the US for whatever reason, rather than the United Kingdom, because it’s the land of high promises and high potential and my persona. And you’re allowed to grow, it’s in Sweden many other countries have been working. There’s in Swedish even, we even have a word for Janta law which basically means like you shouldn’t try to be better than anyone else, you shouldn’t try to be something, or be someone, and absolutely not talk about yourself in in that manner either.
Lauren: That’s the social, the socialist in, you know, like a hybrid in Canada, because it’s going to depend on where you are in Canada, because Canada has that European influence but yet, we also have the American influence. In America everybody talks about how great you are. And, you know, live on credit, so yes, exactly, the difference because you’re right. And there are also restrictions like in Canada, one of the restrictions has been on how much money a doctor can make and billing, the billing restrictions in America, it’s pure capitalism. in Sweden it’s, not pure capitalism.
Frederik: So again, I like the entrepreneurial aspect of things. I also like that many of the early investment books linked to real estate I read, they were very much from America about political culture. There are many ways how you can secure assets in the US, which you can’t do in other places in the world. Correct, yeah. For example, to take on the mortgage
Lauren: of subject twos that’s our strategy.
Fredrik: So, I love that as well. Yeah, I don’t love it, but what I like about this you can buy stuff to get a discount. You might think that you’re really exploiting others and their hardship, and I say that you’re basically saving them from financial burden, many, many years of financial headache. Because you can see it in different ways, obviously.
Lauren: I agree that that’s the silver lining in the process.
Fredrik: And my first proper property mentor I had, he very much pushed us like find the motivated seller, just one example of someone who’s really motivated in the 11th hour that you could actually help.
Lauren: Agreed.
Fredrik: That’s what we try to do, so many of the creative finance strategies are possible to do. And for different reasons I always like, Florida. Since I was there cave diving the very first time, I like that, I like the weather a lot, I don’t like the storms, and I do like the palm trees and the sand. So yeah, any place to go has pros and cons and that’s an interesting area and also where the taxes are not ridiculous either.
Lauren: But Florida is definitely a great place tax wise for sure. So, so obviously I think I know your answer to this, when it comes to when you’re investing or when you’re finding an opportunity, what’s the most important thing for you, is it price or value when you’re working with professionals when you’re building your team, what’s the critical aspect?
Fredrik: I’d like to, my wife she loves to get good quality things, and that you really want a value for what you buy. Often, it’s worth to pay slightly higher value, but I try to get the optimum really where we got really good value for the money. And some, I love negotiating, and so on and so forth. So, I see that as optimal, we can get good value for a very much discounted price for whatever reason, which, as long as it’s legal is perfectly fine and moral, obviously. So, I love that, and many, many times with the portfolio I mentioned we before we started. Pretty much every single house we bought, we had a big 20 to 30% discount when we bought it for whatever reason, you make the money when you buy very often, instead of when you sell because if you buy right, you can afford to keep it, you can afford to sell it at whatever price you need to when it’s time.
Lauren: Yeah. So, you have a book. Trust Is The New Currency. Tell us a little bit about that book, and what that message, what’s the key message in the book?
Fredrik: So, the key message really is, trust is more important now than in any time. We are doing business differently. Now there are just a few pages about online trust, but trust is key when you do any transaction. Trust is key when you build your team. Trust is ideal when you do, like, partnering with others. So, the key themes of the book are basically how you can build and maintain trust. How you can use trust in your team and how they are now. How can you use it in the third part, for really, to base this project, etc. and how it all fits together?
Lauren: And have you learned that the hard way? Did you have some issues with people that weren’t trustworthy over time?
Fredrik: Absolutely, absolutely. Right now, I’ve got again full disclosure, I got an exposure of many 100,000 pounds to people that abused the trust of the contract which obviously I have to take the headache for that and sort things out. So yeah, absolutely, done, done a few learnings along the road, and my dad had a very, sad way how to explain how you shouldn’t trust anyone ever until they prove that you can, I do the opposite, right we trust people until they prove that you can’t, which can be very costly. It can be very much a headache, but at least it gives me a positive outlook. Other people, which I prefer to have a very lonely space to be where do you think you can’t trust anyone, not even yourself.
Lauren: Yeah, that’s a little too.
Fredrik: Yeah, you get very isolated I think if that’s your outlook. Yeah, for sure.
Lauren: I agree with you. I agree, but you know what everybody and your Dad ….
Fredrik: Yeah, why not find the middle ground of being realistic in terms of who you trust.
Lauren: I mean I think that all of us have had our share certainly. I have, of working with people that we don’t trust, and I think that one of the things that I’ve learned, and I learned recently, especially the hard way. Go with your gut, not always right. And if we know, if you know from the way a person talks to you, the way a person listens, as you mentioned listening, nobody listens. The way a person interacts with you. The way a person uses their eye contact, I used to have a business partner. He had the worst civil lawyer who was disbarred by the way, he had the worst eye contact skills of anybody, he would always avert his eyes, and it always made me nervous because it’s not the way I communicate. And he ended up absconding with a lot of my own money and so, you know, trust your gut, go with it. If people show up a certain way that’s who they are.
Fredrick: That is how they trained me in this space with intelligence service, also pay attention to the eyebrows, they often say even more than the eyes.
Lauren: That’s true. That’s a good point I find my eyebrows often raising without intending to. So, so Fredrik, what would you like to leave our listeners with today that we haven’t touched on, and how would they reach you?
Fredrik: I would say. Often when people ask like what’s your best advice, like, find someone who’s doing what you want to do and do it with them the first time, and they can give it a second, you can repeat then repeat, repeat or you can decide to do your own version of it but people who have been helping in the real estate space have really benefited from not having to reinvent the wheel again. So, like I said, yourself, your whole business setup to have partnering, helping other people, you know, the local stuff, which means basically you become the go to person. I’m the go to person for him to be in touch with us in London, as you are in, in your geographical area.
Lauren: You don’t want to take what you’re doing in London and just copy and paste that into wherever, in America or Canada or wherever, because it’s not the same. And that’s important too because each country has its own specific requirements as you said there’s a lot of opportunities for creative financing in North America that aren’t available in Europe, and if you work with the right professionals, they’re going to open all those doors. And if you don’t, not only are you going to not have those doors open, but you’re going to have potentially huge legal and tax ramifications that will hurt you and be very detrimental and could destroy your business.
Fredrik: Exactly. So yeah, that was the top advice I would give, and then like how people get find me if you’re sick of the spelling of my name, Fredrick Sandvik in the show notes, you will find that I’m usually regularly active on LinkedIn. I got a podcast called Invest In do. Another one which is called Investing Skills More Ad Hoc Hands Cn Tactical Things If You Love Investing. You’ve got the book Trust Is The New Currency, which is on Amazon, the normal places. And don’t be afraid to actually contact me, because I do like to help others, and obviously I’m time porous, a very busy person. But we found each other now twice in the time space.
Lauren: Exactly. And you know what, eventually when you’re ready to make that plunge into the US, and to be honest with you I may be reaching out to you sooner than that because of that investor platform you’ve developed. I think I’m going to introduce it to my business partner, and we’ll see how we can monitor or, I mean, modify, and use that model in Canada and in the US. It’s a great model so stay tuned, you’ll be getting an email from me soon.
Fredrik: And very often, as long as you work with good people there’s enough profit to go around so often there are possibilities, get introducers fees, completely legal not bribes, or kickbacks or incentives for introductions. There are so many ways how you can benefit from helping a developer. And you can very much like having the same benefits as you will have from a real estate trust, in other ways as well. Being more hands on or more hands off, there are many, many ways how to do this as you will find out if you keep listening to Lauren.
Lauren: Thank you Thank you, Frederick. I look forward to a long and mutually rewarding relationship together, to helping you start your investment world in the US, and certainly to creating a win win. Maybe you’ll be involved in the US, rolling this out in North America that might be your way of coming in, you never know. Yeah, it’s all about creating strategies for investing and making sure that you have those strategies to implement. Thank you again Happy New Year. I’m Lauren Cohen signing off today from Investing Across Borders, where we figure out strategies for you to invest, live, work, and play globally. Have a great day and happy 2021. Bye for now.
