From Tech to Real Estate: Tips to Building Tax-Free Wealth
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So today we have eric sue, uh, on IT was the segment that the two of you did IT limit less?

Yeah, that was awesome. Digital marketing genus buying up media companies. He is just on a role.

What I think the interesting part though is, is this was supposed to be an interview where you were interviewing him.

but he did a lot of interviewing, well, it's flooding because he comes from the silicon valley space, right? And he's into this tech startups and he's done extremely well. But the thing about most silicon valley tech guys is that they pay a lot attacks cording to him yeah and he said, we don't want to think about IT.

We just grow these businesses and we exit and we pay our attacks. And so he he learning about real estate. So he start to get very curious as I started to tell him the big question, which is the purpose of our businesses to own .

real state. And I think that he just didn't understand and that you know he's paying so much tax and he doesn't have do and I think a lot of high and uh employees don't realize that, right? Like doctors and surgeons and lawyers like they don't understand that you can offset your tax burden through a real state. And that's why a lot of people .

that make a lot of money or in a real four thousand plus .

people are absolutely. So checks episode out and let us know what you think.

Yeah, so many is are executed. This is can over here. Obviously, he's the mastery mind of all this.

And so I A podcast once called marketing school, the other ones called leveling up. So where did you talk about business? We talk about marketing and a hopefull.

You guys get a nut or too. I am sure kin got a tonne wisdom here and um i'm going to go home and get started. So here we go.

Can I got a question for you? You're eight hundred million dollars in debt right now. What's going on?

Well, well, as I said yesterday, we're in the fifties ltv. So we're not very levered, right, like which means that we have probably forty five percent equity, right? So so so when you have that much dad, um you know even even during the pandemic, like when we shut down and like my got our ten pay you know in April was shut down and everyone home and then we were like, man, April we out to collected and march or may we were sure of that.

We were like, okay, we only needed I think we checked like sixty years or seventy percent oculus y to be able to cover our debt and our expenses, you know mean. So so that's what that means. So so there's only a couple things in in the stack.

One is debt, let's say that fifty five percent, and then you got your expenses and then that's what we call you, your break even occupancy. So you just have to collect that much to cover expenses. They'll be no it'll be no distributions or returns anything.

But so that's that's that's one thing that we did intentionally or not. That also gives us opportunities to to be the scoop that equity later through cash out revise or seconds or maybe even a recap or something like that. So so we never we've never really been in a position where ever actually that that that I could remember that, that was in jeopardy, though the thing that's killing people now is are the interest strates, right?

So even if they're not heavily levered the interest rate you like on our construction projects, we started our construction projects in the in the force like two years ago, three years ago, you know another in the ninth, the same project, right? Like we have done anything different like were you on budget and you know when your debt costs almost double, that's actually you know even low, low the value that has stuff. So that interest strates are a big deal right now for most people.

And I want to come back to that and I can. But what what is that? That banks don't want you to know about the stuff that you're not doing as an example.

Well, the banks. So here, here's a thing like when you do alone, like a lot of people probably realized there's these loan convince they are all inside the long documents. And loan to value is one of debt.

Service coverage is another one. And there's a whole bunch of things about cash and cash reserves and things like that, that you're required to. It's like it's I got the fine print but IT doesn't really come up very much you know IT till times like now.

So what happens is and the debt service coverage is probably a really important one to discuss. So people called the D S. See what that means is let's say you're net Operating income as a million dollars. Well, what they're gonna is like a one point two or one three ratio so that you have essentially two or three hundred extra thousand dollars in your annoyed we will recover your debt. I mean, that's a simplified way of saying IT, but reality is just like an insurance policy.

So when the debt service coverages are one two, one three, even one four, let's say, and a really good time, they might bring down like one one i've seen him lower, but that's actually that's a trigger. So the back now can come after people and go you're not hitting your debt service covers requirement and and that then they can open you will open the hood, take a look inside and you know so there's all these cover and effort the banks are afraid of right now. What's really interesting actually the most interesting if you look at what people paid and you look at where they should be and there's assets actually going back to the banks.

But what what they're doing is they are keeping IT on their baLance sheet. So it's the equivalent like like, like, like the fed, you know, I beat there. There are unrealized losses, so they're just sitting there.

So so let's say, let's say I borrows from you and my property is not worth alone. You take the property back, you just set IT on your baLance sheet. Now IT doesn't got to sale yet.

And so nobody knows that the Prices that you know, i've taken a loss and I lost my equity, all my investors of loss, but you're sitting there waiting in the asset manager category. So there's a bunch of asset that are sitting on in this asset manager category by big companies like mf one and arber. And because have I said in wallets, I want to start an asset manager recovery, you know, to start managing these assets.

So I have first crack at, but I was the the only one to think about that, obviously. But so anyway, now the interesting part is the equities gone, but and they only have to realize those games if they sell them yet, right? So anyway, so they're in this limbo period time.

Well, I mean that you're still hot doing deals right now. You just did a deal recently, I heard so yesterday I dinner I heard was ninety, but maybe you did another one at .

fifty yeah we have another one that we're going to do at fifty um that we actually just put in next grow that we haven't been done a visit land on. But yeah, we're in the deal listed. But yes, we just closed on one in in last vegas three hundred and forty seven minutes and we got fifty two million and dead and then put the rest up in equity with our investors.

We love that one because IT cash fls on day one, we bought a below replacment cost. So we're a build or two. So we would cost us probably three, three, twenty three, twenty five to build that exact property. And we bought IT for two sixty well, and brand knew. So IT has and then also has some IT has some room in the Operations, mostly on on the on the income side, it's really hard to like.

But if if people if people say you can save on expenses, you should you just build the brokers fully shading you like, that is never going to happy, like everything's going out, like insurance is going up, probably taxes are going up, utilities are going up, like cost are going up. So you're not going to get a lot of cost savings. It's really going to be in a rent roll. And so there's some there's eventually some room to grow, the rest to market in the rent, not not future rents. So we'd like to deal a lot.

Got IT. And what I mean with the ninety seven, I mean, now this is a two seventy deal. I just caught that. So how are you structuring these deals? And you know can you give us some more details on the deal to .

like Price per door? Yeah of course. Yeah so so we're right. Two hundred and sixty thousand a unit and and then we got an agency agency alone.

So big strait loan, we locked, you know like you never know like what the treasurer are going to do, like we locked at five point seven, then they went down the next day like like you know but whatever you know, we're still cash flowing. I and it's just cash flows. I'm going off a memory, but I think like maybe maybe four percent year on, so not so great. But you know IT has that we will obviously, within a matter six or eight months will be kicked off more cash. But it's it's it's an underperforming asset that's poorly managed, that's well built.

got IT and what so how do you I mean, you do a lot of these deals, right? And just cares OK. So we're talking about this.

yeah. So how can these deals in general? Because every deals different.

So how do you think about this? What good question. I always think about the investor first. So and I mean, that deal a million dollars, my partner in for a million and we have invest in for a lot more.

So it's just like anything else, like if you're going to give me a million box that was sitting in a treasury making four and a half, that's a hurt, right? You bear safer in the treasury. So so there has to be a compelling story for the investors so that we always start there.

So and IT can't be i'm going to sell IT for more than I bought for. Like that's not a story, you know, that's gambling in my opinion. So so you have to you have to have a story inside of the asset itself.

There has to be up. I'll give you another like the one warn us grow now that we haven't put out yet. IT was built in the eighties.

It's right next to the photo x zoo in the paper goo golf course, which some people don't know that area, but it's right in the heart of town, five months from the airport right next to areas on the state. And it's untouched. And so what will do is we will go in and we'll do ten percent of the units will revere them.

We'll see if all we can push the rents and we should get maybe one hundred fifty more, let's say, on those on those units. That's called proof concept. Now you've proven that you can renovate some units and push the rent up.

That's a story. Now you can do that on the whole project. So now if we could sell IT, actually at that point, you can do ten percent. Units do prove a concept. We could actually sell IT for a lot more than we bought for. Or if the rates are um CoOperative, you know maybe we will refinance and you know and and renovate IT and and just the rest of the project hold for a cash floor. So we're going to have kind of two, two, two roads ago, and that's what I mean by a story.

So every deal so IT casuals on day one as is that's really important with fix rate debt like not floating debt and and expense some growth of maybe three, four percent like you have to really say twice are going to go up and and you know you have to be really diligent on the way you're underrunning and then there has to be a story around that. So so that's that's we do. And so that's gonna a really nice value at the one in last figures.

IT will be a really nice value at. And so that's what people are always looking for, the tax benefits, the cash flow and then the future cash flow. And what we always like to do, eric, is.

I preferred not to sell. And in fact, my whole career has mostly been hold. And we have properties like we have several properties and dallas here that we've refinanced three times, you know and we just keep harvest in and that's that's that's tax free.

So when is like if you put a if you put a loan on your home, a refinances that's a cash out reply, you don't pay tax on that because it's debt. So if if we could like this project that we have, if we can grow the value significantly and put new data on IT and be able to do a cash or refine and distribute that to our investors that tax free because it's debt. Now if we sell IT, we have a cap again. But because if we don't if we just keep harvesting IT and just keep brief doing cash a replies, then it's forever attacks free event. And so so you can kind of go down both roads and we prefer to hold.

And is that the infinite .

money glitch that the the infinite money is when we give a hundred percent of the equity back, we have a lot of properties like that. IT used to work Better in the old days, like, you know, when we are buying you, Prices are really high right now and interest strates are really high right now. Expenses are really high right now and and cap rates are really high right now.

So everything is going in the wrong way. So it's a great time to be looking to buy because there's a disruption. But IT works like in new construction.

So new construction, we have several new construction deals that we're doing. We have won all mostly stopped. We have one we just started and you're building for wholesale costs, you know, so we're building for now, let's save three hundred thousand and unit. And you know if and this is a big if, if that thing is worth significantly more than that, then you go back and you pay off the construction debt, you do a cash or refine with with thank friday are funny. And then that money gets strip ted to the investors.

But the whole idea from the beginning kasei in every deal i'm invested is how do we get that money back tax free um and then when we get to the point, sometimes IT takes to cash out replies probably that's probably more likely in today's today's world. But still these are long term holds. These are five, six, seven, eight, nine, even ten year holds. We have properties here and dance that we've on't fifteen years .

yeah me ask you a political question here. How how does your calculus change with a unrealized capital?

You now i'll get crashed. Man, I don't know, mad. I'd be just think about everything.

Think about like your car, like i've got some old classics, you know, some fancy cars and even on my house, like i've got massive gains, you know, from what I paid by persons stuff. I don't have any debt, roddy. enough.

Like everything I own personally I have, I don't do with that. I only, I only do that with the ones that the tenant could pay off, you know. But there's a lot of have a lot unrealized.

Yeah a lot. yeah. I I would be I would have to move to cuba. I love IT.

I do want to come back. I mean, just you know the way I think we obviously can you hear? Okay, yes. So what's interesting to me, I worked out software companies. I mean, you're you're Price testing, you're experimenting, you're seeing what works, then you roll IT out. So I guess I mean logistic on the em but the acquisition tion side of things for mom, what is in your deal box like what do you look for a windemere .

ing what the very first thing is, barker. So we've had a lot of migration. No, we've had a lot of change in where people are, where they want to be.

Political environment is huge. The the people that can work from home move. The people that can move.

Do you know there are lots and lots and lots thousands of stories of people. One of the really cook things you can follow. One of things we follow, it's spot simple. It's like rider truck, you hall and united airlines one way moves like this is all track.

He's gone online right now and IT shows like if if somebody moves from seattle the hens one way, well, it's probably means that they're moving um you know and they're not moving back. And so there's all this is really crazy. That's just one way there out of state driver's licenses.

And there's all these ways that the us. Kind of tracks where you are cell phones are now obviously the big one. And and so they can kind of see where people are going.

That's extremely important before we do anything. So you always want to be where people are going. And then what he does is IT puts a lot of pressure on the infrastructure for that town.

So IT puts like like I live in scotland. Zona, it's like impossible to get a restaurant reservation and i've been there for twenty, twenty five years. Like, yes, crazy, may I like is like ww, all these people are all the traffic coming from where all the and it's just because there's lot of people moving there.

There is on right now Price value in scotstoun in other places because the political environment is decent, I guess, and safe, it's warm. It's pretty reasonable. Price IT just happens to me.

But the same thing is going on in north CarOlina, florida, tennessee, texas, a lot of areas. And so that's where you start then. But there are areas that you want to stay away from, that's a state.

But then you start to look at towns and you start to look at some markets and you start to get really, really focused like a lost vegas. We're in Green valley, which is the affluent area of vegas, and it's outside of the strip. It's where, you know the homes of eight hundred million dollars, mes, the average Price next to whole foods.

You so you start to look at those some markets really, really that's really important. And there's if you really want a shirt cut, this whole process just go fine where you know there's big companies doing the same thing. Like whole foods is a great example.

Whole foods is gna plant a store in an affluent area. That's where we want to be. That's where we want our partner to be because you're going to have a higher demographic.

And now there are also people that do the opposite, right? They go after the low income housing, which is totally fight. I've done a bunch of that.

So very different strategy. You were we're going after the people, but we want is a big, big delta between rent and mortgage. So a million dollar home is going to have a significant mergers where a rents or two thousand dollars, you know, so there's a big gap.

And and then what he does is they want to be in the area. It's a nice area. And but then being able to move to that neighbor od is is so we start with all of that right? Then know that our buy box becomes really small. And then from there, we have our acquisition guys who are here actually and and they just go at IT.

So what i'm hearing is you're largely looking at traffic flow at the end of the day. Yeah, it's interesting because my software friends, other business friends, um a lot of people were like, yeah, we don't touch that. We don't know how to leverage to that.

But then you look at someone like you, it's like you've got ten very comfortable with that right. So what what do you say to people like that? Yeah all the Y P L people.

Yeah I know horble in Y P O um you know I don't like my my wife tell she's got a number of real state deals SHE. Actually this is a this is a great debate. Our home, you know SHE SHE is like that he uses IT to buy up, then SHE pays IT off and this doesn't want any where i'm like a if it's covered with my tenets, then I have I on the management company.

So that gives me you know that's that's that I came up to the managed business. I do understand how to keep a property. So that kind of my secret sauce, I would think, is i'm not afraid of fifty two percent debt or fifty three, I think for our vegas, al, because I only have to keep that property basically seventy five percent occupied.

You know, it's like ninety seven, ninety eight percent. So things really have to online for me, where people get in trouble is where their debt plus their expenses are so high, they have to keep the property so occupied and they have to have so much cash flow to cover that dead. That's actually .

like sixty percent and like seventy .

eight percent yeah, or even higher yeah yeah. I've seen the worst i've seen as one hundred and four percent. So imagine what that reads is the guy has to be one hundred and four percent occupied, which of course can happen.

What basically means that somebody gave so much money, has expenses pluses debt? There is no possible way can ever casually he basically, if he's one hundred percent collected, he's got a right attack for four percent every month, every year. I I was like, man, do you in big trouble? And that's not how you wanted buy real states. So so that those two those two things are really we call the break even point and and then anything after that is cash flow, right?

yeah. So and you can say I don't want to answer this, but of all the deals that you've done, what percentage haven't .

worked out or really small like we're probably bought three three billion. Um I know exactly the few deals that haven't worked out. You know I did a kono conversion deal in scot stale that we sold two hundred of the three hundred units.

So that didn't work out. That was in the kind of conversions days. We've one a lot of that we take apartments in vert and you know IT IT happens and that was twenty years ago.

But still it's painful. You know, when you have to sit down. I had money, russian. I had half a main each. We had investors and sit on and welcome through and they deal with the bank. And you don't really bear what I learned, eric, know you don't learn almost anything when you're making money, like you learn that when they have to pull of loan documents out and the during venture agreements out and you sit down and you that's when you learn you're like o okay, the stop these pages of a real they come to life know and then you sit down of the lenders and and the investors and you kind of welcome through you and you know that's it's it's a painful process. If you were to consolidate .

the lessons from all of the deals that didn't work out, what were the patterns that you've so.

Future, future 的 future value was could be more like IT even in the condo business。 What happened with us and IT IT with the when when you buys something, when when everybody buys anything, they really wanted to be worth more later, right? And you have to have a strategy that allows for when that doesn't happen, right, right? And that that's that's a cash flow strategy.

So if you can have a cash flow strategy that has his value, the people that are they are doing fine now are the ones that have enough cash flow to support whatever is happening and they don't have a pretty fed exit. So the predefined exit is, let's say, let's say you give me money and you want to back in three years, that's a pretty decent. You're like, listen, three years as IT, you don't get a fourth.

So those are the things that you learn. And so in the conor conversion business, um what what happened was this two thousand eight time frame, the investor loan business went stopped completely. If you member where a bit fall out of the single family housing market, well, our x IT was singing of family housing he to be. So when you don't have people buying single family or condos or whatever IT is and there's no loads for IT, it's just turned IT literally turned off overnight. And so we were left with we had to wait twelve million in profit toward the end, plus in vitoria that didn't see got IT.

Now should I i've debated this of actually so my podcast co. And I so neil, he's got a nine figure business and we've talked about how we've been in real state to our people's fans or like all these you Angel and vesting all these things, right? And what we found at the end of the day is nothing grows faster in our own business.

Yeah and and the were like, okay, know yesterday with with Steve over there like in my mind, i'm just like should if if you're entrepreneur, should you even bother investing in real state? Because my argument is like, no, because you should just focus on your main thing. I keep the main thing, the main thing.

So i'll chAllenge you are a little bit here because I believe that the purpose of a business is to buy real state. wow. So let me just explain what I mean by that.

like. And the reason is a is a tax reason. So if you look at the model of lets me mcDonalds, you know us like a recross, he said multiple times he's not a hamburger businesses in the real state business. Now if you look at the real wealth of a lot of those early franchise, IT was all in that in the real state. And so I think that if if you're going to have a um I think like I work with a lot of doctors, dentist, higher practical wing practices um and when they retire from their practice, if they wanted to shut IT down a big piece of their wealth is because you think about there are transactional O W I call like my friends are doctors like I like do you're working for tips?

You like literally like you're just you're seeing patients so fast like and use generating cash, but you know use work in your asa for and you know that that's um if you if they bought a building and they are paying rent to themselves, which is the right way to do, you buy a building, you pay rent to yourself and then your painted to somebody at the end of your career. I have a good friend out of florida. I think they've got six or eight clinics now and the I doctors, they're crushing IT.

You know every clinic is worth, I don't know, three, four, five million box. And now that's a big part of their net t orth. And so when they decide to walk away from, they can sell the business.

I had another friend that did this, a White yoga at a santino. He started read clinics. So he was an added and he is is a phenomenal story.

It's called warriors heart. I invested in this deal with him, but he started, we have clinics and then a private equity company. He came in and he sold the buzz and kept the real state just in long term leases, know.

So he's retired, then you got a big branch in santa ony and he created a whole new business caller's heart. But the point is the cash flow from that from the businesses got him through that period of tae while he was grown his next company. And he didn't because he also had the cash, right? So I always if I if I exit something, I want to keep the real state because I want that passive income, right?

So peer, argue you a potential a set up peer. So in the agency visits, which I mean, so let's give simple numbers here. So let's say in the agencies doing five billion year and profit, then IT decides to buy a platform or become a platform where starts to buy other agencies.

You can buy two million ebata five million years eba. You stop the eba. But there your multiple goes up fifteen, twenty x right? So you can sell up for a lot if you wanted to sell IT or you can have an next next year every year, twenty fifty million dollars or whatever. But if you do exit IT for a couple hundred million or maybe billion, maybe a potential model is I don't want to learn real state, right? Maybe I just put money .

into your fine. Is that model? Well, yeah, you could. So here's a thing. First of all, if similar, what you doing.

But I I think for I haven't paid tax and I don't know how long a long time because legally, because I get such a big tax break for providing housing and there's all kinds about the reasons you get both exercise cost segregation and of course, straight line convertible. And there's all kinds of tax benefits the the government gives you. So i'm we're making lots of money actually, my accounts here and I I just we spotted building.

We accident another one and i'm black kerk. I need a meeting in october. You know we need some year and tax strategy to see where you know how explosion we are.

And and I think that um you know I have I have friends that have done what you've done, you know because I might wipe you right I have friends that have actually big companies and the problem is that you pay a fairmont tax. And so the option at that point, eric, there's actually real state, sophisticated, very good groups that are actually trying to aggregate people to go into opportunity zones. So opportunities zone money, you can take a capital gain and invested into opportunities on fund and then defer that cap of game.

So so for me, it's all about trying to mitigate tax even if i'm exciting, you know, and I actually was we we also sold our business to blackstone, and we were in an nda and and that was my big issue, was okay, you sell off a big peace man like they wanted the real state. So we have so much appreciation, recapture and see you there. So much so, such a big tax piece and a lot of people as so why would I? Why would I want to give up thirty, forty percent of whatever i've, whatever i've made even more, you know. So for me, I think I think he has to be a part of that girl strategy. yes.

I mean, that's another thing I talk about. A lot of founder friends or Y P O friends is like if you're love you, what you're doing is continue to grow. Like why would you sell IT? right?

yeah. No, it's a fair question. I think at some point there is a lifestyle you know we all get addicted to girls, right? Oh, I have.

And and then there's kind of a baLance of lifestyle and what that looks like, I have friends that saw big companies. One guy in my form, I started to company called lifelong. If you guys know what that is, he solar for over two billion.

And you know he like tried to start like multiple companies like in that first few years. I'm like, dude. Br, yeah, like, like it's in your blood, you know, and you just want to keep trying. And i'm like this, relax.

You know, go hanging out but after a while, I get boring to like, you know there's some momentum and there's some things you want to be connected to whatever is and even if it's like fantasy, right? And so that's actually it's not really the money at the plan, right? It's you know it's the the joy of IT.

I'm curious and maybe this is warm confidential, but did his things .

work out after yeah, yeah for the most part. I mean, these are guys yes, IT was is a fun to watch. You know, we have a rule in our forum that if you sell your company, you can invest or do anything or starting anything for one year.

Oh, wow, like that. I mean, what if you do get out? It's a loose rule, but we're like good, not IT off. Like, you know because because you know what's you get on that cash, you want to just read, deploy IT right away and you wanted just know you're used to that.

You're think the rule is the loose role is you gotta sit on your cash, don't do anything with IT and don't try .

to starting and just emotionally settled out, right? You like you think because you like thrown money all over the place, investing in things I like you, you just just relax.

I'm here. Can so what do you think your superpower is? And who are the key team members that kind of make up for your weaknesses?

yes. So for me, IT was by property measure background. So you know, I started property measured, so I really understand the Operations. And so when I look at the deal, like the deals we just got, it's so I I can see how a property runs just by looking at the financials before even show up. I'm like all my gosh, this this is great, like literally in five minutes.

And you can see that you start to see patterns, you start to see this management, you start to see expense control or or income issues in right sign of the rent road, right side of the financial. And that's actually worth and then that is probably IT. Then I might yes, this is a go let's go look at this.

And sometimes that plays out. Sometimes he does IT. And then for me, like like in vex, I have seen the property yet.

I actually have any little I mean, so like but my team has and have literally had a property measured here. My head Operations, shane SHE flew yesterday. We took over the property tuesday. SHE flew yesterday, say twenty friday. So yeah, a couple days ago and you know so that you know you got ta build a team out, one that could find IT, one that could do diligently involved in the equating the dead at the others ship level, you know, the legal and and the numbers and obviously look at all that step before we do IT in IT work. But I haven't physically been in the bill.

so you would say I am. I'm here a couple things, right? So what top super power might be a good at identifying the right deals? And then when IT comes to structuring IT, the details that's also you yeah got IT yes okay. So who are the key members on your .

team and makeup for? We have three hundred people, so you know we have our our C I O charity, our co bran and a head of ops. Shane, you know my partner of r CFO, a pretty and we have our and then I mean, we have a heads of construction and like are so many and and we we run our OS, yes, so we run on U S.

And which is Operated Operating system and the whole company runs on IT. And we managed all that ninety minutes a week through our l ten, and it's superstructures red. So essentially, I run the whole business on about ninety minutes a week.

And then all the other noise that comes in through emails and stuff like that, if you're not a closing, yeah all goes into two days and o'clock and then we do an investment community meeting in the same way. And so there are Operations meanings that sometimes on, sometimes on on. If we have a problem, we have plenty of them.

I'll jump in new and you know so like we have that stuff for our property manager company. We have that stuff for our asset manager company is so those minutes are going everywhere, right? But i'm not in all got see .

you you're playing free safety where you need to but then there's one standing meeting you have which is the l ten yep.

the l ten and the investment community OK because that's that's a big one. The investment committee is essentially the acquisition guys are out. They mean with the brokers are being we have deal flow coming in, we're underwriting stuff ah and then i'm looking at maybe two or three a week and how .

many import are you getting per week?

I'll look at five, six, seven, one hundred a year, okay, deals out and what percent are you winging on? We make offers on maybe three or four a months.

Okay.

that's IT got so and then we get zero. I would say, I mean, you know, like in the last three years, I only bought two deals and and so real because Prices were really high. Now things are really like the blue is off the rose, you know. So we have seen a big correction on pricing and and we'll see where interest strates go. But if that make sense today with interest strates where they are.

we're buying. So you you're optimistic yeah that is coming cool. So you got two deals out of thirty six, out of seven hundred. Yeah, yeah so not I mean, I think a lot of people, and I made a mistake in the beginning where you swing on like effort looking at a couple of deal yeah, got at a lot.

You do yeah yeah. And you serve your team that way. You know just do you give the the promoters that we always start with cash on and cash start with the investor?

You a great question. That's where IT starts. And then so if they bring me a deal that doesn't cash for I like yeah next you know like I don't even look at those.

And so IT makes IT simplifies the process and they do all the work. So what i'm looking at is maybe twenty to thirty deals a year now and then and by that time that know IT hits all our parameters. And so we're actually now in the l stage was okay. Um and then you know how far we want to stretch on this. So we ever we have an awful Price and then we have a maximum Price and then there's a process to that.

I can't, anna, learn on nerd out on the investment, the time investment you're putting into youtube because you do have a unique method that you're optimizing for there. So can you speak IT like what I was before and after? Because IT IT seems like your youtube actually driving good deal flow now or not deal flow investor float.

Yeah, yeah that that's been a real surprise. I wouldn't never done any of that and I wouldn't been for the pandemic. I don't know. You knew that? No, yeah.

I was like, why would I go on the internet like he like we had a whole business and I am sitting at home and Jerry, who's over here somewhere, we I went on crags list, like we need a video guy come to my house, start doing videos and didn't know what I was doing. theory? Yeah, really yes.

And I was like, man, and all some we I did a video that when viral is I like, wow, this is easy and every is home like, watching. So so. And then the best far was IT would connect to do a bank account because I didn't set IT up and I didn't even know you made money on youtube like the money was going in this make account.

And one day somebody asked, hey, how much you make in a new too. I go, what are you talking about? They're like, oh, you make money on those.

I like what? So so I had no clue. And so from there I was like, well, this is.

IT was a fair man of money in there at that point, which was was surprising. I'm like, oh, so now I can hire a team like and so that's what we did. We've never have never actually take a nick out of IT.

It's always been like, how do we educate more people with this? And and again, back to the model. I got away for me.

I was like, H, I got this like a whole other job. So then I went to monday. So I do all filming monday.

I I have meetings in morning. We have a meeting on this with the team we have to do alive eleven. And then I do a couple things in the afternoon and that's IT. I do nothing youtube, nothing social media at all from basically tuesday on. So just just monday.

So i've dedicated monday to the channel eight monday yeah but probably more like six but yeah and that worked out really well because everybody and then josh comes, you know joash really helps our channel yeah and and and so he's helped. It's it's really it's really sad that I I am trying to see like it's it's a foreign world for me. It's interesting because it's during a pandemic.

right? Everyone's watching. You are getting a couple hundred thousand, if not maybe million, plus use for video. And then were really went down and a lot, maybe like a hundred thousand years of the rivers.

And then now you're back up to a couple million and they're long form views which are more valuable. Well, right. But the key thing I like just explain everyone here, it's like you're actually driving business value for us. So what is the metrics that .

you're optimizing for? So it's interesting. I've always I said this is no selling like IT just has to be like let us talk about what will work in out and then josh figures out like and that's easy because I have we got the construction.

We've got property manager, got asset management know we got deal flow, we got you know, we got all the stuff going hour doing loans, we're doing revies, we're doing recaps. And so there's never a shortage of have going to properties or anything like that. And so for me, it's a great way to higher like my time and and also tell what's up and tell the truth. That is why i'm seeing as what's going on. It's actually been great, you know and IT makes the team sharper and it's butty like when you're talking in front of a camera, you know real I see a here like I had no idea like, you know, IT shows up at like a limitless right people are like, I love your channel as you know so you look at views are just like, you know, oh, that's cool. I need to go out more, I guess.

So okay. But you I mean, I think you are getting like you're looking for investor applications at the end of the day, right? I think now that your youtube canals growing again, I think you're getting five to ten times more.

That's been a really cool thing. Yeah, yeah, I started just teaching, right? Know, I got the books and stop that i've written in.

Well, we have a whole division. We have a full time director of philanthropy in our company. We have a whole division for philanthropy. And so all the books and all the stuff that i've been known in the past has been all kind of going to that, going toward charity.

And so I kind of started off with, this is a great way for me to, you know, teach online is a lot of girls online was like, I don't know, just bad information. So I was like, okay, I want to be the guy that I don't want to be that guy so well, I and so and then it's turned into a trust online, which has been really cool. And then that's been driving deal flow. And we have had a lot of investors and all of that been a bossing.

I still think youtube is the biggest opportunity for the next decade. So the thing is now IT seems like you maybe change to strategy a little bit, and I want to come back to the deal stuff a milk moment, but you are also not going to Joshua, he said, like josh is like criticizing me on my channels. Like do what you just talk about your business, right? And so IT seems like that's what he's done to you. Like what are you talking about mostly now?

Yeah well, IT depends. Like most of the time, like if something big happens, then I try not to be like, I hate to click bait stuff, but but I unfortunately and i'm not in control a bit at all, couldn't are there are people there that like that want that? But typically, I think people just blocking and tackling just real basic stuff like these are some of the things that we're doing.

These these are some of the things that we're seeing. And I just want to stay in my lane. You know I know i've seen guys um try to be like news host, so whatever. And like i'm like that's the site I am like I read all that stuff, you know. But also if I if i'm trying to.

But sometimes I have a really great conversations with people and sometimes i'll talk about those you know like behind the scenes like we had A I had a great conversation with they had a capital markets for bercail a you know which is a big company. It's warm buffet knows this company and he worked for warm buffet. And I was like, you know, however, maybe IT after knowing them and then i'll i'll talk about that, you know, you know, just being able to like say, this is a stress is what big money thinking like that stuff? You know, those are kind of behind those are the border room meetings. And without being, you know, break and confidential video.

he's anonymous.

Yeah, yeah, yes, yeah. He maybe I all ask him, i'll say is okay. I meant your name is like, no, no or yes, you know but I always I think that's to stop people a lot like, you know and it's it's straight from you know, straight from you says and I got in a question .

from Steve over there. I actually have two questions. You can wave a there and Steve so and you talk about the ninety minutes per week. So he says you're famous for running your company on ninety minutes per week. Tell me the downsides of being an absent owner. What are some hours stories when you get IT wrong? And I also walk me through how to build company culture that allows you be an engaged on a in the ninety minutes a week.

yeah. Well, first, but you have to have a facilitator. You so will we are we have somebody that goddess on the platform, and that was a huge pee.

So IT didn't IT didn't start off in ninety IT starts off with two or three day full day meetings with your top team and analyzing your organizational chart, your direct reports, what their priorities are, their corner goals, their so so we had kind of my partner, I had goals like everyone on for the company, but they were sometimes are not adequately pushed down. And so that time all that up. So what we how to say at our sea sweet all in there.

And so you could take whatever in your head and and handed over to you, the people on the sea sweets, take your goals and give IT to them, make them quarterly milestones or whatever. Maybe IT might be one year or two year old, maybe it's may be it's a ninety eight goal, but whatever is we took all that stuff. And then once what sets like out of your head into those folks, then you just kind of drop in like I have like one I one one ninety eight O I know I used to have five, went three, and they all have three or four or five.

And so I get on there and i'm like, okay, where are you? You know, here they're on track or off track you as you know, like so bomb and so what I was able to do is I was able to take all the stuff that's going on my brain and transferred doubt. We all have degree on IT and and what's what's the most important and and so what's you're able to do that with, my part of two, ross, because we got construction deals, we got acquisition goals, we ve got equity goals, you know, we got refinances stuff.

We're looking at our hope portfolio, we got Operational issues. There are so many things. And once you get all that and take the proper score card and the K P S IT actually becomes quite easy, right? And and the big mistake a lot of entrepreneur s make is they want to do with themselves, you know? And and so that I always want to jump in, right? I always want to solve like and that's that's a huge to say, kids, you don't really you you don't given the ability to learn, right, if you're solving other stuff.

So that was that took years to get to ninety minutes. But now now we're at that point, like literally, it's okay. We know how many deals we want to close this year.

We know we want to buy a billion dollars in eighteen months. I think that's all agreed on. Before I did the video, I made sure, but he was on point with that.

Yes, we can do that for a development, construction and neck acquisitions. So then you just basically work backwards. You what does the million units look like from, you know, eighteen months work backwards.

How many you have to have an esco? How many you including fall all stuff. You just basically put math on IT and then we know how many deals we're going to close this quarter and security we need where where we're already working on. Twenty, twenty five, you know where I made that take about now know so what's you metric ate down that becomes easier yeah you you back into IT .

and we've got a gone away from the whole annual planning thing. Now it's a three year thing and we are to just work in quarters yes, IT seems like that's been easier. Um so here's another question from Steve is a deep one at the at the end of their life or at the end of life, people often say family and health matters most.

I'm Young and I really care about wealth creation. What are some tips you can give me today as someone focus on making money that can help me mature my mindset around family and health? H.

so really good question. Um so I went to mentor once i've had a lot of and his was truly done up and IT was a lipo thing actually. And he had a business plan that he he brought and he was a IT, was a business plan for his family, like a full business plan.

Man's wife would leave for three days a year. They were two nights, three days. They would ghost, usually in like sedona, flax seven and arizona's from arizona. And he's like, you know, he has five kids and he was like, you know, like we do business plans for our businesses, for our real deals and all that we like really think a lot about like all this stuff.

But we never do IT for our family, for our faith, for our health, for our kids or like it's it's just like, yeah, yeah, we get IT to that. So I went to this thing for him and he's like, like he had the wives and the husband there is like, what would you guys get your marriage, you know and and the lives were like a six or seven and the guys are like a nine and he's like, every time the same. And he's like, there's such a big gap because, you know, there's a communication problem.

But he's like, and then what happens is because most, most people go business, kids, wife or spouse, let's save because I probably be careful that one. So business, kids, spouse and he's like an inny spouse, kids business. And so that for me was a big game changer.

And there are all these things that I learned back then. And and so for me, what I the changes I made immediately were if my kids had a spring break, fall break, summer break, whatever, a morral day, whatever was labor day I took off. So so I started right after that, my kids get out school, let's say june first, I would take off literally june, july.

And then when they would go back to school, I literally was with them twenty four, seven those this years ago. And and that changed a lot of stuff, you know, further Better, right? And so that was a one big change that, that we made. There's a bunch of others and and just kind of reprise tize everything yeah and and my my boy said, listen, you know you gotta give your family um half the money and twice the time like yes, you're right and so so for me that that was a game changer and here I got my my son here somewhere he's over there honest fault so he's really present um and you know my other kid is that he's watched in live right now. He's working back in his I share so I think you know I just put my my business um at the end yeah and how long the goes you do that got .

fifteen probably .

over fifteen years ago yeah and .

it's still like that .

today yeah hundred percent, one hundred percent. Like i'll give me I give you a great example that his recent I was with my wife, we went to the olympics and we just got back and you know, we got by vicinity coming right. So yes, i'm excited about that.

And I get attacks from tories. Like he, we've got invited to the Kennedy compound. You know, like sweet when, like in a week, like with my wife. No, sorry, got to miss IT.

So you know, and I want to be obviously that I would really wanted to do, but I told that I go, listen, i'm not cut our vacation short and we're on the thing. And so there are things that always chip away at you, you know, that you've want to do. And it's it's those moments, you know, like, I had a this crazy storm, my son rustled in high school.

I'm a big resting fan, by the way. I rustled in college in and we went to restating the olympics. And I had, I had A A median rome, like of all places, rate. And I was there for something. And I don't know, six, seven, eight years ago he had a resty match, high school resting match, and I never miss them. So I was like scrambling from rome, right, to get home of and I made IT and that's the kind that's the kind of commitment I literally, I mean literally just made like twenty minutes before from rome and I I think you just gotten like and so that's that's on the point like you always have to you so .

I have met one sons at um at the event maybe last year so in pork city and I my immediately reaction was this guy is really humble, is really driven right and in in Y P O. So we have a third people that are you know hired guns, the third people that are entrepreneurs, the third that are family business business. But I finding the family business people, they're either really amazing, they've been raised really well or the complete scripts. And so so I guess my question for you would be, how should someone does well like yourself, what your philosophe round raising kids?

He's hard. I will tell you I have so many stories like the first thing we did was we um again, I said this yesterday. I really believe it's true.

Environment is stronger than will. And I think if you know for me, you know, my parents are great people. My mom was a hair dressing, my doc instruction, their circle.

We were bumping up to whatever their mindset was, period, their belief systems and all that stuff. And once I kind of go out of that, no, I grew. And I was just once I got into bigger circle es, I I had a rest scholarship, I got to college, and all said that was a different circle.

Then then they started to be around. And so what happened for me is that just happened again. So I always tried why he has been great for me, because I keep my maki's listening to me, right? So why would they? And so I just make sure that there are around good people, and, you know, around other other folks.

And also, they worked. I taught him, you know, there's a great internet, someone youtube called the red paper clip. If if you have heard of IT, we we watched that together.

And basically the guy, the kid kid took a red paper clip and end up with the house, all without use, money, barter. And and so there are things you could do. They had businesses at seven, eight, nine, ten years old, there were seven golf balls, and then they were during duck tape wallet.

And then we had a little marketing company. And and so by the time they ve got to college or high school, they had played the casual game. They understood what a ascent liability was.

They knew that that was. And and I also got him into my business and they were clean. It's you paint units and all I get of stuff. And so it's a process. And so by the time they got to that, I never gave a money.

I mean, I like they they always made IT always my son over here, he had a he was fixed in back when you could iphone screens in making fifty box, you know, whatever sometimes survive in high and college. Because every kid didn't college has the broke and iphone screen and my other son, same thing. They would buy stuff, sell from more you know, from china or whatever.

And they were always just great. They were had money no. And then um you so it's all that small stuff. Um users hundred lessons like that.

So no allowance .

is nothing like that. No no that's it's like welfare you know you .

know what I know that I mean this is a great place to and you so often time the kids won't listen to your parents, right? And but instead you're like OK, i'm going to surround with people that have my faces and I have the mental them.

You have my forum so like I took both kids we climb killed and job my kids and seventeen like a right of passage thing, you know, let's go for a month to hava and and I put the team together and all wipe your guys and you know they hang out with so I got their kids and they got my kids and you know they're feeding with good information. That's why mean by environment, you know and the same thing like i've i've had a cup, my kids go off track like we all do and I call him up. I'm like A I need my sunder, you know he's like I got you you know right? And then I had one kid actually go move to uh, work for for one of my friends and he drove and picked them up in the morning and going to Brown to work and he added for over a year and just, you know, breads some sense into him and so that's that's kind of stop on talking about, yeah.

that's amazing. Again, this has been great. We went for the four hour. What's the best way for people .

to find you online? Oh yeah, yeah, yeah. So obviously came back that come is the best way to find me. We're got all kind to stop on there and MC companies as our in the company.

I can thanks so much. You're doing that. You Better met.