How Gas Stations Can Help Your Fund (2026) ft Jason Harris

It actually allows all of the building value in real property to fit under a 20-year life.

They put in $15 million and they literally on their taxes show a negative $45 million tax loss.

So there is an arbitrage play there where you can pay less.

They have a lot of other income. They've saved me, so I'm good.

That's what's going to bring you the most fulfillment.

All right, Jason Harris.

Welcome to the show. Hey, glad to be here.

Good to have you on. So people that don't know you, haven't followed along, give us like a 30-second overview of you, your group, Harris Group. I know you guys do a lot in real estate tax depreciation, all that kind of stuff, but give us a— give us the 30-second thumbnail of what you guys do, who you guys are.

Uh, yeah, um, essentially started my career in real estate in 2010. 2014, took it to outside investors, mostly multifamily value-add space, buying existing building ugly and old, fixing it up, making it better, trying to increase net operating income, and then selling it 2 to 3 years later, hopefully for a nice profit. And then either 1031 exchanging out to not pay taxes or in other structures, just taking the overall benefit and then reinvesting again. So done, I've done that since 2014. In about 2020, 2019, started our fund doing the same thing, but just in a bigger scale.

Yeah.

With more of a diversified approach instead of individual isolated deals. Each time, and so yeah, we have an eleven-man team now and hiring a couple more right now.

And how much do you guys manage right now?

About 150, 160 million.

Okay, that's amazing. We're going to dive into all this stuff. I want to hear about you guys do a lot of tax appreciation for your clients as well. Should be fun to talk about. Talk about real estate. We're talking about the markets right now. It should be a should be a fun time. So let's actually let's dive into first why the transition to a fund. There's a lot of people listening to this that are syndicators that do real estate. They've done onesie-twosie projects that have done well, actually. Why did you guys switch to a full-out fund?

I was very hesitant to go to a fund, actually. I liked doing the individual deal analysis per deal and knowing what I was getting. And, but in 2019, we were scaling and growing, and there was some complications to just the overall admin operations to doing a syndication. There's plenty of that on the fund side as well. However, I met someone that had a background working in private equity and Wall Street for 20-plus years who was more experienced in the fund model and did an analysis of syndication versus fund and how that it would best impact investors from tax shelter strategy, from investment returns. And although they're very similar, there was some benefit by doing a fund over the syndication.

Yeah.

In that most of our investor base is looking for diversification and they don't want to have all So investors are on multiple properties, not just one at a time. Right. Yeah. So 5 to 7 core properties within a fund structure allows them to not have maybe too much allocated just to one. And so if it doesn't turn out as well, just like a mutual fund or anything else that you'd be buying in way of stocks on the market. And so we started that and it allowed us to scale a little faster than I think than we had thought it could. And it attracted more family office money. And I think that helped to go in that direction.

So yeah, was there friction from previous investors that didn't want the fund model?

Quite a few.

And what— how do you guys deal with that?

It was, it was a difficult conversation, and ironically, the economics were better for them. When I was younger in my career or newer to it, though, they were willing to pay out higher amounts to me or company for more direct access, I think, to me. And I realized as we were scaling, I didn't have the time to be as involved in every single deal. And so it made more sense where we had hired a team where we could have the team share in the time that we are on the properties. And so that's what we ultimately were trying to get to, is that I can't be as involved as I've been. And with that, as we're growing, you know, we're going to share in more economics to the investor. And so I actually was getting $0.50 on the dollar of any profit after they got their initial basis back. Oh, really?

So they get their basis, you're getting 50% after. Oh, wow.

I had people investing $1 million plus with me. They fronted all the money. I didn't put up a dollar. Only because there was a relationship there of trust. Right. And I'd proven myself, I think. And I was a financial advisor, wealth and wealth management at the time too. And so there was several sit-downs. And so there was, there was trust. Some of this is family and friends too, right?

Yeah.

So they, they knew me personally as well. But with that, they were fronting the money on most of the deals and then we'd split everything 50/50 on the upside after they got their initial investment back with no preferred return. However, the returns were really good. And so with that, word spread and organically we started to take on more and more friends and family of those who we worked with. And it got to a point where we had to scale in a different direction. So it was hard for them initially. A few of those conversations—

And the biggest thing you said was less access to you.

I think it was the biggest—

That you think objection in their brain, like, oh man, if they move to a fund, I'm just going to be a number on a spreadsheet. I'm not going to be Jason's best friend that we're going to talk every deal through. Is that correct?

Yes. There was more lunches and sit-downs personally that we could go through and having that access. And I still try to make myself accessible, especially with those early relationships that helped us get to where we are now. But I think that was a concern. Am I going to be able to demand Jason's time when needed and wanting to? I almost would prefer to give up more economics in order to have access. And so, yeah, we've tried to make that still possible. Yeah.

Well, and it's funny, so we work with a lot of funds. We hear this a lot, right? There's the transition from syndication to fund. There's always some friction with some legacy old investors. But typically, and I hear kind of two tales, I'm curious what happened. Did most of those investors say, well, okay, fine, I'll come, or do they actually leave and not invest again?

There's two I can think of that didn't, but everyone else did. Some did, and it wasn't a big deal for them. A few did, but there was several conversations that were had first. Yeah. Some of the biggest, the biggest concerns that I remember in the early stages of this was You don't have a track record specifically to a fund model. I trust your ability to take one deal, but how are you going to operate 5, 7, 10 properties within one fund? And there's some different complications to doing that. And so I don't have anything to go and do due diligence on your ability or the team that you've hired. And some of them who've worked for you maybe only a year or two.

Interesting. And what was your response to that?

Well, I guess you just tell 'em, yeah, you're right. That is the case. But here's Matt Denny, my CIO's fund experience and what he's done in his track record and mine. And each deal still has its own individual pro forma that we put together, just like we've done in the past.

Yeah.

There's nothing new there. We're buying the same investments we've bought in the past. However, with Matt's risk management background and making sure that we have liquidity needs to get through the difficult parts of a value-add process, forcing vacancies, you know, you're not going to be bringing in as much rent income. You're going to have some challenges, which we faced during COVID the pandemic. Labor costs have gone up, supply chain timelines have been shot. And so with that, you know, keeping adequate reserves to get through the process so that we can achieve post-renovation stabilization on the properties and get the higher rent rates that we're aiming for, that's a challenge. And we did have challenges. Fortunately, though, we did have adequate reserves and a plan, and now we have more of a track record with our fund models to showcase beyond just the syndications. It was challenging.

Yeah.

And some of those investors—

That's pretty good, only 2 that didn't come along.

Yeah, yeah.

The rest came.

Yeah.

And I think, I mean, what you said is we're already kind of doing this. We already, and actually it's a lot of headache to manage 8 syndications at once, 'cause there's a different cap table, there's different terms and investors. It's a lot easier actually 8 properties in a fund, 'cause it's just everything rolls together. The accounting, the backends, you could argue is actually a lot easier.

Yeah, it is.

That's what we see typically after the fact. Now you mentioned though, after the fact you've raised more money from different investors that like the fund model more. Is that correct? From bigger family offices and stuff like that?

We're seeing bigger checks come now that we have a fund structure versus a syndication. And it's because they're willing to allocate more of their portfolio to a fund knowing it's further diversified within, within the fund itself. And so I believe that, you know, the more affluent family offices or multifamily offices They'll write the checks that are bigger than just a high net worth mom-and-pop type investor would feel comfortable with in just an isolated one-off deal, because obviously that's a big representation of someone's net worth potentially if you're starting to get into that 7-figure number.

Yeah, very interesting. Have you guys changed your approach raising capital from syndicators, smaller investors, to family offices? And what has been that change, if there is one?

We structured everything from the beginning that our end investor that we hope to eventually achieve is going to be an institutional investor. And so there's lots of processes in place that we're continually trying to improve in order to get a $25, $50 million plus type check. And that's Matt's background. That's why he wanted to design it that way.

Yeah.

And so while we work mostly with individual investors, that's the end goal to be to have those processes in place that we can eventually get those bigger checks. So with that, yes, there's been changes, but as far as the overall assets and how we're going about it, not a lot has changed other than the underwriting process with what the market currently is now versus what it was 2 or 3 years ago. I mean, obviously there's a lot of changes in that aspect of things.

So yeah, yeah, really cool. How'd you attract Matt? So Matt's your partner, came from Wall Street. So it's interesting that, you know, you guys decided to make the switch. You brought in an outside partner that had ran the fund model, which I think is a great idea to give confidence to investors moving over there. What was that story? Have you known Matt for a while? How'd you attract Matt to your firm?

So yeah, in 2020, gosh, it feels like it was 2019, but it was 2020. We moved to Hawaii. I lived in Kauai for 6, 7 months.

Oh, no way. And walk us through that.

Why'd you move there? Yeah, well, it was actually just because things were getting weird, I think. And specifically our kids in the school system, they were going to have to sit in boxes wear masks, and it just seemed like there was too much control. I had a buddy who owned a property in Kauai. He couldn't rent to anyone. It was a nightly rental, but he couldn't rent anymore. Hawaii shut it down, and so you could only hire— you could only rent if someone was willing to sign a 6-month lease or longer.

Interesting.

And so he was hurting. We were friends. He came to me, we chatted, and I said, I'll sign a 6-month lease.

Yeah.

I moved out there. We signed the 6-month lease, put our kids in a charter school there. We knew Kauai. Loved it there. And so with that—

Really interesting. That's awesome. That's interesting.

Things were getting challenging. I mean, I was waking up at 4 in the morning, which is 7 or 8 o'clock Mountain Time. And then 1 o'clock comes around, which is 5 o'clock here. And I just kept working. And my wife seeing the 12-hour-plus days being put in every day wasn't the lifestyle that she was expecting going to Hawaii. Things like slow down, right? You chill and you enjoy the island. And I understood that. And so I knew I needed to hire someone that was more my right-hand man. And initially, Bridger, I was looking for someone that could be me, like who had my background.

Yeah.

I spent 7 years in wealth management. I've always been a student to investments since I was a kid and started really early and young, and that helped me get to where I was now. And I also have spent a lot of time understanding taxes, and I love tax strategy and trying to pay as little as possible legally with what's available to me in the tax code. And I've been very good at that myself and have shared that with my investor base. as a financial advisor and as a real estate investor. And so, it's hard to find that person that, you know, could be like you, but that's what I was looking for. Ironically, we put out something to hire for that position as CIO, essentially. I met Matt as well as many others, and Matt did not have my background, but he had something I didn't have with the fund management, which I knew we were looking to do.

Yeah.

And so, after several interviews with him, I put him on a 6-month 1099 trial period where he worked from Rhode Island where he was working in New York at the time, and I was still in Hawaii. And I realized there was a lot of synergy. There's things he didn't know but I could teach him, and same he knew that could teach me. And it was actually a lot better find than what I initially was looking for. And so—

I love— I love, just to cut you off, yeah, the 6-month period you did. That's something that I have, uh, been burned on a few times as a business owner, is you just— you think someone's so great, you just hire them. Here's your salary, you're in. Here's your bonus, whatever. And all of a sudden, 2 months later, like, this is not The guy or the gal we thought, right? And I'm actually a big, I don't know, promoter now of dating your partners or dating people you're hiring is you put them on a trial period.

Yeah.

And I love that concept. Is that the first time you'd done that or you'd done that prior with other partners?

It was actually the first time I did it, but it was a key position. I mean, I knew that this was someone that was a long-term, even I think Matt will finish his career with Harris Investment Group. I mean, 20-plus years that I think he'll work. And so definitely wanted to make sure it was the right fit. He was relocating his family, if it made sense. Like, I really wanted to know him well. I think we both wanted to see how we worked and what happens in high-pressure situations and how we handle it. And so that dating period was important. And I realized, okay, we have a great find here and, and it's been awesome. And I'm glad that we did have that 6 months.

Yeah.

Since then, we've done that though with new hires and more. And so we actually have a plan or process to scale to a much higher salary base plus performance or bonus structure.

Yeah.

After a year's time. based on how things work. And so we try to do 1099 or some type of lower structure that can scale quickly based on performance and other aspects.

So now that's cool.

That's awesome.

So then did you come back from Kauai? When did you come back? What was the plan there? What happened?

We did end up coming back. We did get a little island fever and just want to be back to the mainland, family, friends, and other aspects of things. But we've since bought 2 things there and I'm under contract right now for something else.

And so I really love the island.

Yeah, we're actually going to do a podcast Also, and I'm thinking about filming some of those there and just going back and forth, but just love being there. And now that our team's— we've got some great team members, I have the ability to step away a little bit more and focus on some of those goals that I have personally. And so, yeah, it's been great.

That's cool. But didn't want to live there long term. At least—

My wife would definitely live there long term.

She would love it.

I still love what I do and I'm passionate about what I do. And so I like getting breaks and I like getting away, but I still love being involved, but I think in time, you know, years, years later, I may be not working as much. Yeah.

Yeah. Interesting. That's awesome. Yeah. Walk us through. You're very big on taxes. You were talking before how you help. You have a zero— is it a 0% club or $0 club? Something like that.

Club Zero. But I call it 0% club.

Okay. Club Zero. How does somebody get in Club Zero when you're investors? What does that mean? Walk us through Club Zero.

So, yeah, no, thanks for asking. In 2013, just to give context, I was still a financial advisor with Edward Jones. And a couple families that I helped represent or work with, it was more the kids that I was, had the relationship with, but the parents were going through a transition of the estate planning and tax strategy of how they're going to pass all their wealth to their kids, grandkids, and so on, creating a legacy.

Yeah.

And I got to sit in on a lot of those meetings and I learned a lot of great things that the affluent do to protect their wealth, grow it, and make it tax sheltered. And this particular individual had sold a meaningful position in a real estate project. Made about $20 million in capital gains from a real estate development he had, and he didn't pay a dime in tax.

Cool.

And I'm like, $20 million not paying any taxes?

Yeah, that's awesome.

This is illegal. This is shady. I mean, I really did. I was like, I don't, I don't feel comfortable. There's no way you can do that. And I think it was just reinforcing my knowledge and understanding of the tax code, of what's available for those who are active in real estate and how you can use phantom loss bonus depreciation benefits to offset either passive income or all sources of income. And this particular individual was able to do all sources. So that was considered a capital gains tax. And so he was able to use these built-up depreciation losses from other real estate he owned.

Yeah.

To shelter the sale of this real estate project. And my mind was blown. I already loved real estate. I was doing it in a small scale compared to him, but I actually changed my strategy where like, if I can pay $0 in taxes And anything I earn is tax-free as long as I own enough real estate and can generate enough losses to offset my gains, active income sources, capital gains, and the like. That's a great wealth strategy.

Yep.

Because our biggest tax in America is taxes.

Yep.

And so for me, it was a game changer. In 2014, it's when I realized I need to raise money beyond my own because I make a decent income, but not a lot. And it's taken me a long time to save up for each deal. So I started to reach out family and friends and doing JV partnerships and then later syndications.

Yeah.

And as my income increased and my portfolio increased, I wasn't paying taxes and I was using the same strategy that some of these families were. And so I think I just dug my heels further into understanding tax shelter benefits because one, it benefited me, but it also was of great value to my investor base. And so it was a huge win-win and worth my time. And when the Tax Cuts and Jobs Act came out in 2017, 2018, huge benefits were available, far better than they were even before then that allowed us to then grow even, even bigger. And so—

That's awesome.

We focused what kind of assets we bought within real estate that could help generate those meaningful losses and then help maybe someone who's selling a company and they're coming into a big liquidity event or an exit and they're going to make $50, $100 million plus. They don't want to pay a third or more to the government of that money they worked hard for. And so we found ways to structure our fund and our syndications to generate meaningful losses. And in some cases use those losses against the sale of the company or other amounts. And so that's how it happens.

That's cool. There's funny enough, 6 months ago, so I run a fund right now, a hedge fund. We had an investor pitching on this, our whole strategy and stuff. And it was so funny. He just full stops us middle of the pitch. He goes, guys, I do not care how much money you're going to make me. I make plenty of money. I got too much money. How can I use this strategy to save on taxes?

Yeah, absolutely.

And we were sitting there and it was like, we do a crypto hedge fund. And so I was like, There isn't a ton. You know, we were like, ah, there's not a lot. And he said, he's like, guys, honestly, this year I have way too much money. I know you're going to make me a great return and stuff, and it's going to be fine. I only care about tax loss. And it was funny, you know, from our fund perspective, we didn't have a lot to offer him. But as from a real estate or a gas, oil and gas, or whatever fund structure you're doing, or even maybe parlaying a crypto hedge fund with a piece of a tax shelter, is a massive benefit when pitching You know, people with real money, not kind of onesie-twosie investors, people that have actual real money is a massive play and something that I wish we had already structured in our fund. So give us a— if you can give us an example or two of, you know, an investor that comes with you with a certain dollar amount, give us an example of how you guys help that investor shelter with taxes.

Awesome.

Yeah.

Real quick though, too, on that, if I may. Yeah. Crypto, depending on what stage you were in and when you were in it and how that was going, It's so funny. I've done a lot of presentations on real estate, but I've sometimes followed the crypto or NFT guys and it's like the returns that crypto and NFT can provide versus real estate is nowhere near as sexy, especially when things are good, right? When crypto's good, it's really good. And so it's kind of funny at certain times you probably could say just give the $30 million away and we'll make that in a few weeks or a few months and then it won't matter, right?

That's kind of what we said. And then we also said you can tax loss harvest, right? If you have existing crypto or whatever, you can sell and then buy back in or whatever. That was all we could offer really, but which is fine.

But there is something about keeping that money and not giving so much. It hurts to write that check. And so with, with us and what I saw this gentleman do and what I then helped other investors do and in time was doing myself, I realized there's a way that we can, we can help certain people who have the active professional status to use real estate as a massive tax shelter loss so they don't have to end up paying those taxes as long as they're willing to do the right criteria to meet the active professional status. And so In those circumstances, I can give an example. We helped in one particular time someone that sold, actually a different time, that was a meaningful amount, about $60 million that they had in way of equity and a capital gains event on. And some of that was actually W-2 earned income.

Hmm.

So that's taxed at ordinary income rates versus the capital gains, which is long-term capital gains, not quite as high of a tax rate. But in looking at the analysis, we were able to take a piece of that $60 million and create a diversified portfolio of truck stops with some value-add multifamily and generate a 2.33 or 2.4 to equity ratio of depreciation. So what that means is— Wow.

Yeah.

Take $20 million, let's say, and invest it across those truck stops and some multifamily. In that year, you can do something what's called a cost segregation study to find out how much of the gas station truck stops, how much depreciation—

Depreciation you can take from it.

Yeah. Usually you can't depreciate land. It doesn't go down in value. But anything that's considered real property or building value has a lifespan.

They have a lifespan. You're gonna have to replace them sometime. So you can depreciate those assets.

Correct. And so, as you know, carpet and countertops aren't going to last as long as the building structure itself. And so the IRS typically puts it in 5, 7, 15, and 27.5-year buckets or 39 if it's commercial. Well, the Tax Cuts and Jobs Act allows anything that's a 20-year life item or less to all be sheltered in the first year. And because truck stops and gas stations fit in a unique part of the tax code, if 50% of the revenue comes from the oil and gas from the pump and not from the convenience store, it actually allows all of the building value and real property to fit under a 20-year life.

Wow.

And so what we did is we bought, let's say, $50 million worth of gas stations. Back out land where we were buying the truck stops. It only assessed about 5% of it to the land value. Usually it's more like 20 when we're running our model to be safe. Yeah, but 15 to 10% is pretty common.

Okay.

In this case, it was 5%.

$50 million property. So 10, let's call it 5%.

Call it, call it $3 million was assessed to land. $47 million was then assessed to the building value.

Yeah.

Or real property. Now, when you buy these truck stops, of course, Bridger, we could go and pay cash for them. But more often than not, we're going to go ahead and get financing. Financing.

Yeah, using debt.

Let the banks put up 65 to 70% of their money and we'll put up the rest, 30, 35.

Yep.

And so what happens is you get the same amount of depreciation loss benefit whether you're an all-cash buyer.

Yeah.

Or whether you're using leverage. And so for a person like this who's looking for tax shelter as one of their primary needs, they can put up, say, 30% of a $50 million purchase, $15 million, and generate a $47 million loss. In this case, that would be a 3-to-1 ratio. So it wasn't quite that good. It was more like—

So they put in $15 million and they literally on their taxes show a negative $45 million tax loss.

Just unreal. And imagine if that $47 million loss can shelter earned income, capital gains, or any income. You're talking about 35 to 40% on the dollar. So $0.40 on $47 million. you're looking at $18.8 million of potential tax savings depending on the tax bracket you're in. Yeah, put up $15 million, get $18 million back. We have had situations in helping some groups get more money back in tax savings than they actually invested in equity. It's incredible.

That's so interesting.

And now you're risk-free essentially from the investment before the investment itself's actually even performed.

Well, a couple things to unpack there. Yeah, no, yeah, number one is the investor's like, man, Risk. I'm almost back to my basis now. You've saved me $15,000. If they're really— if they have a lot of other income, they've saved me. So I'm good. Even if we break even on this property, this is a great deal. Number 2, you're probably not going to break even. You're probably going to make some money on this property.

That's what we hope to do. That's the real reason we're in the business is to make—

yeah, to make some or have cash flow from the business, right? You're going to offset. Now, 3rd question, when you sell the property, do you have to recoup those things that you wrote off and stuff? Do you have then a bigger tax bill later?

Great question. So Let's— let me— there's— it's a little more complicated than it may seem as far as the answer goes. But let's say yes, you recoup the depreciation loss. However, it's capped at 25% or less on the recapture. So get a benefit today at 40% if you're in the highest tax rate. When you recapture later, you recapture it at 25% tax rate. So there is an arbitrage play there where you can pay less. Interesting.

Yeah.

Now, in addition to that, where it's also meaningful, and this gets missed more times than not, Unless you're a sophisticated investor, family office, or working with an asset manager, perhaps.

Yeah.

What also is a benefit, Bridger, we were talking about this cost segregation study, right, that put everything in a lifespan, 5, 7, 15 years. If we buy this property, sell it 5 years later, how much are those 5-year items worth 5 years later?

Zero.

We've essentially said it's a zero basis.

Essentially set at zero, yeah.

You recapture all of those 5-year items at a $0 value. So not only—

They're still there.

Yeah, they're still physically there.

Exactly.

Not only is the tax rate lower from 40% to 25% in this example, but you're also recapturing at a lesser value.

Yeah.

And so there is strategy to pay less in taxes even if you sell outside of some kind of mechanism like a 1031 exchange.

Yeah.

But I will say more often than not, someone whose primary goal initially is the tax savings, we're structuring things in a way where we'll use the truck stop gas station first as a massive tax shelter play.

Mm-hmm.

And then maybe in a couple years after you establish long-term intent, Then we sell the asset in a 1031 where we can then reposition the equity into higher-performing assets like our value-add multifamily space. And there, now it's about returns.

Just for people that don't know, so 1031, you can sell property, you can move it into another property in a certain time period without paying taxes on the transaction.

Exactly.

It's really nice. You can just parlay essentially one deal into a bigger deal, bigger and bigger and bigger, and then Take the cash flow from those deals.

Right, exactly. And, and most of the time these investors are looking to indefinitely defer that taxable gains because in America at least, I think there's other countries that do this as well, there's a step-up basis at death. And so all those depreciation losses and capital gains that would've otherwise been taxable in your lifetime, they all get erased and there's a step-up in basis to the value of the portfolio at death. And so the idea is to make it indefinite and then along the way, You take cash flow or pull equity out in the form of cash-out refinance loans. Loan proceeds are not taxable. And so we can still access money from the assets and grow the money over time doing it tax efficiently. And that's, that's usually the goal. So, so I will make mention of this though. The basis does carry forward to the new asset. And so that $47 million benefit, if we sell the $50 million portfolio, hopefully at a profit, right? That's the whole—

Yeah.

We're incentivized to drive IRR. That's what we do. So we're selling hopefully at a higher amount and then we take that equity, reposition it into multifamily to grow it at a higher IRR opportunity. Yeah. But the basis that we took initially on those first properties purchased does move forward into the new properties.

Yeah.

Making it where you don't have as much depreciation loss opportunity as you could on the new, new portfolio that you would have had you brought in fresh cash to buy that new portfolio because there's a basis carryforward.

Yeah, that makes sense.

Yeah.

Now, is— do you do all this in your fund, or do you— if you're going to advise somebody, again, not financial advice for people listening, but would you have them go to maybe one of your syndications or a different fund that's oil and gas first and then come into one of your multifamily funds? Or do you have a full product that does all this in one?

Yeah, thanks for asking. The funds that we've done in the past, we do incorporate some truck stop gas stations, even if it's primarily a multifamily fund. We'll usually have a 30— up to a 30% niche investment where we could do land development, truck stops, and some others that we think are complementary to the multifamily. But certain circumstances, especially the one I'm mentioning, where someone's coming into a meaningful amount and they may approach us with a $20 million plus type of amount, we can— if we're not in a fundraise where we're fiduciaries to those investors, we can do something tailored and customized to them. And, and that's what we've often done, where someone will come and say, I want X amount of dollars and this is how we want to strategize it.

Yeah.

And then we'll overweight to truck stops. Gas stations that have the bigger benefits and then create a strategy to over time reposition the equity into more of a higher IRR opportunity like multifamily is.

Yeah, really cool. I love it. What an interesting, unique—

I love— Yeah, I don't know a lot of people who have done that. It's—

Do truck stops get bid up or do you pay a premium because people know this strategy with specifically 2 truck stops?

You know, it's operators who are in the truck stop business or gas stations who know about it, and they're using the same benefit that we would be using it for. They're active, though, in the operations, and that's where they make their revenue. Yeah. So you and I have our companies that we can drive income and revenue from, but their business is the actual operations. And so more times than not, unlike on multifamily where we're the onsite operators trying to drive value, on the truck stops, gas stations, we're hiring good operators out there and usually the best operators achieve better financing, which is important to us.

Yeah.

So we're going to buy the asset, hiring an operator to run it effectively because we want a good operator to achieve a good EBITDA or EBITDAR to allow them to afford to pay us the lease rate that we've negotiated. And so usually you do a 15 or 20-plus year lease agreement with the operator, and we want to make sure that they're incentivized making good profit above the lease. But we have annual escalators built into that. So there's not as much operational burden on us on the truck stops. But we're usually, you know, 2 to 3 years only in that position before trying to sell it at a profit. So there's a cap rate spread. We're still trying to buy 6, 7. It was different a couple, a few years ago. Yeah, 7.5 cap rates or higher. Yeah. But then selling them for, you know, 1% cap rate less.

Yeah.

Making money on the equity side on the spread plus the annual escalator.

Yeah, makes sense.

Yeah.

Oh, really cool.

I love that strategy. Yeah, very unique.

Very unique. I love it. Now, switching gears, you've been in this game a while. You've been watching markets for a while. What are your thoughts on the current banking crisis that's going on? Are we through the weeds yet? Are we— do you think more banks are collapsing soon? And what's kind of the opportunities that you see come out of this?

None of us know, right, Bridger? I think we all have our hopes and our guesses of what's going to happen. Purely opinion. No, I don't think that we're out of it. Obviously, President Biden came out there. The FEC— what am I saying? The Federal Reserve.

Oh, yeah.

The Fed's come out and taken their stance that they're going to back a lot of these regional banks.

Yeah.

But I think that there's going to be some more pain still until rates come back down further. I think a lot of people who have seen the unattractive yield that savings and money markets had took a portion of their business and were willing to risk it in government bonds. And as we see bonds drop, as yields rise as fast as they did, especially short-term duration, they're sitting in a very vulnerable spot. And, you know, when you have these bank runs of people—

I think SVB, right, they had— it was about a $2.5 billion loss on bonds that they had bought about a year and a half ago.

Unbelievable.

They marked down 40%. And I looked at a chart yesterday, there was— there's $675 billion If all the banks appropriately marked what their value is today, it'd be a $675 billion loss. Silicon Valley Bank was like a billion to $2 billion loss. $675 billion total across all banks. It's pretty interesting.

We can't, in our financial system, allow that to happen. We say that we're a capitalist society, but yet we saw what happened in '08. The Fed came to the rescue, the government came to the rescue and bailed out a lot of these banks that would've gone under. But the catastrophic event that that would have caused is worse than, than letting them go under. And so oftentimes we see that they don't. And so it's my opinion that things will sort itself out and they're not going to let too many of these banks fail, especially the largest. Yeah, I've actually been investing in a lot of regional banks recently because of that. It's been a good trade. Yeah, it's been— First Regional was great for me on Monday and Tuesday. Actually, this morning it was Credit Suisse, I think, that I, I did and got in and out. But not that I do that a lot. I bought 3,000 shares this morning.

Did you really?

Yeah.

Okay. We'll see how it plays out.

Yeah, we'll see.

It's, it was cheap. It was like $2 a share. I was like, it might go to zero, but there's a chance it doesn't.

I don't know. I was in and out, $1.90, sold it at $2.20. And then now I'm back at First Republic Bank doing the same thing because there's no news coming out. Anyhow, I don't believe in investing in them in the long term at the moment. I just think there's a lot of volatility and opportunity because there's a lot of fear and fear drives uncertainty and the markets don't like uncertainty. I don't think that a lot of regional banks are going to go under. I think that there will be some security, and I think the Fed's going to start taking more of a dovish approach to raising rates further because they see the impact it's having.

Yeah.

And we'll kind of know where the inflation numbers are coming in. But as it relates to us multifamily investors primarily, this is actually a, a positive opportunity. Now, there's definitely some negatives, and there's tailwinds because our investors can be impacted. In fact, we've had some recently who have been impacted by a lot of this recently. And it's really unfortunate.

Yeah.

But what does happen is when rates go up, less people can afford to buy a home. And when less people can buy or want to buy, they rent.

Yep.

And when there's a demand for more rentals, that usually drives higher rental rates. We're in the business of affordable housing, already catering to the lower end of the market rent range. And so as we invest in the assets themselves, and then put them back on the market, we're still like middle of the range, of the rent range, but there's so much demand. So in the markets we're in, we're actually achieving far higher rental rates than what we thought we would achieve.

Yeah.

And so even though cap rates have had some expansion going a little higher, we've seen 300 to 350 bps move in interest rates and only 25 to 50 on the cap rates. And because of the rental rates that we're achieving post-renovation, We're still sitting really good. And so I actually feel very fortunate even in a market cycle that we're in right now, we're still seeing positive returns when most asset classes are either in bearish territory or just seeing a lot of losses. And so, yeah, I don't—

Multifamily has the best Sharpe ratio of all asset classes.

It was the best in 2008. And again, it's same, same, similar, different because credit was totally taken away at that point. But there was still 90% employed when you hit 10% unemployment and most of them were renting. And so you change out some of the tenant base who can't afford, maybe who have been hurt with those who still have jobs and can. And that's why affordable housing multifamily is a lot less risky than maybe some other real estate asset types. And that's where we like to have the bulk of our real estate assets is in the multifamily there.

Yeah, it's interesting. Do you think over the next— I know we're talking about current crisis, but the next decade, It seems like trends are people, millennials, Gen Zs, are not buying as many homes. They are choosing to rent, whether it's low end or high end, and it seems like they're pushing rental rates up and there's less supply and inventory of these rates. It almost seems like a just a straight-up trajectory for multifamily as far as rental rates go, which would— which pushes cap rates, which pushes everything else for the next decade. Do you see any blips in that? Assessment that I've seen from a lot of reports. What are your thoughts on the next decade of real estate?

No, I think my sentiment's the same. In fact, I read a report yesterday, over 3 million individuals or households eclipse $150,000 or more of annual income and rent and choose to rent.

Oh, wow.

$150,000 or more of annual income. You would think someone of that type of income can afford to buy. But they're not. 3 million in the US. And so I find that very fascinating that there's an increased percentage of those who are not looking at buying a home as the American dream anymore, of what's going to help them have wealth or protection and safety in their retirement years. And so you have talking heads like Grant Cardone who says, no, never, never buy a home. So it's very, it's very interesting. I don't share that feelings, but I benefit from it as there's a growing trend.

You get more customers.

Yeah, they come and they rent your place. It's very helpful. And I, I have things I've done in my history that's made a home a significant and very meaningful asset for me, and even have made great money in buying homes. And so for me, it's different.

I just looked at a report, the average baby boomer, so most bought homes, and so most of their wealth is generated through, through owning a home. Average baby boomer, average net worth is $1.2 million right now. The average baby boomer. I was blown away. I went and Googled it like 3 times. I was like, this can't be true. The average— because you think about like the average income earner in America is like $65,000 or something, $70,000.

Yeah, yeah.

Which is pretty low in my opinion. And for the average, for the dead center of them, and I was like, but the average baby boomer has a net worth of $1.3— it was $1.2 to $1.3 million net worth. And most of it was driven by homeownership because they just bought it. And right now people are not making that same choice. Currently to buy homes. And it's, it's kind of interesting. We'll see what happens this generation.

Very fascinating. There's been a lot of run-up in home values where maybe there would be someone who sat on their home 20-plus years where they would have a good amount of equity. And that is very staggering though. I actually am surprised. I know that there's more millionaires in America than there ever has been until recently, the last maybe 9 months to a year. Yeah, maybe people dropped out of that, right? Because of maybe home values or the market, 401s, have seen a hit too. But it is interesting that the largest portion of that is the home value, which doesn't actually translate to income in retirement. So there's still this crisis where people aren't— they don't have enough wealth to retire, to live, yeah, the retirement that they hoped for.

Because what are you going to do, sell your house and then rent?

Downsize. Yeah, right.

Yeah, right. Exactly. Or downsize, I guess. You could pull equity out and downsize.

But you can't do that as much anymore. That used to be a big thing. California, move to Utah or Idaho or somewhere where it's much more affordable. Yeah, exactly.

Unless you're going to go to a townhome or something or a condo.

But going back to Matt, he sold his house in Rhode Island. Great area, $1.2 million home. And at that time and in that area was actually a really nice home. Half acre, acre, had a swimming pool, really nice big house.

Rhode Island.

This is Rhode Island. So he's like, okay, great. East Coast value coming out to the West.

I'm going to be able to get this big mansion.

Yeah, he could not believe. And it was during the boom in 2021, 2020, I think when he bought the house. Because he was working abroad before he moved out here with his family and it didn't translate as well as he thought. And so the whole downsizing and trying to move to a more affordable market isn't as easy as it once was because housing's been strong and rental rates as well. And so it makes it harder to find yield in this market.

So. It's interesting too, playing out the next decade. I've thought about this. I obviously, I talk about funds, I preach funds like this, all we do. I wonder if we're going to hit a point. Last year, I think it was 1 in—

2 years ago, it was 1 in 7.

residential homes were bought by Wall Street or big Wall Street funds, essentially. I believe last year was 1 in 5.

Yeah.

Of homes. They're just continuing this scoop up of assets. And the World Economic Forum has put out that by 2030 you'll own nothing and you'll be happy, right? Is their thing. And I actually— we are, we are trending towards that where big funds, institutions, people like you and me are buying up all of the real estate. All of these small businesses are all selling to private equity or all selling to a firm or whatever. And I wonder if we're going to trend to a point where if maybe everyone rents, but to get the income, you would invest into a real estate fund while you're renting the properties that they buy. And that's how you generate cash flow back to yourself.

So interesting.

Because everyone's priced out. There's no way you could go buy a single-family house. Maybe this is 2030 or 2040, but you could invest into a REIT or a fund that would generate the cash flow that you would have— that you're paying in So interesting. I've thought about this game. Any thoughts? Just kind of going to the crazy zone for the next 20 years.

But I don't know if I have a lot of insight into it. I find it fascinating and I see it being plausible, honestly. I mean, that is the direction of where trends are going. And you're seeing more and more of these mini home concepts. You're seeing people who are sharing homes, more and more families that are willing to live together in order to afford sharing in the cost of a home. And so So yeah, it's changing a lot of how we view homeownership in America. And because of the unaffordability that's there, not just because values increased, but now looking at debt and interest expense being where it's at, it's pricing so many out. And then you've got these big institutions who have an obligation to achieve a certain return objective for the investor, having cash and liquidity and needing to put it to work. scooping up these prices because they pay cash, the interest doesn't bother them, and they know rental rates are continuing to grow. And so it very well can lead to that. Yeah, that's interesting.

Now, the other side of the argument is you have a lot of deflationary aspects in real estate right now. You have these new types of construction like the 3D printing construction. You've seen those, right? Where they go— that's very interesting. You also have remote workers, so you don't need to live in downtown LA. You can live in suburban or rural Kansas in a field, you know, with a tiny home. And maybe that's the next generation of— you have a deflationary pull and we're not hitting it well, but maybe in the next 10 years we do see a deflationary pull where this cheap land that's out in the middle of the boonies, all of a sudden you could have a whole little city of tiny homes with maybe drones that bring in your groceries or something. I don't know. Right. You could see this deflationary aspect happening as well. So maybe that'll be the saving grace for some people if they still want to be able to buy affordable homes. they could on maybe cheap land that hasn't been utilized as well. But at least currently, it seems like the trend is trending towards less homeownership and more rents.

I couldn't believe how many people in 2020 and '21 that I met that didn't— that worked in a different state than they were living during COVID and the pandemic when everyone had to work from home. It was unbelievable how people migrated and went somewhere else because they could and were able to get California salaries and live in the Midwest. Yeah, somewhere which is a lot cheaper. And so, I think you're right in the aspect of if there's more and more remote jobs, there's opportunities to get, you know, higher salaries in markets that, you know, you don't have to pay as much and be able to benefit in that way. But that changes everything from the housing logistics and how that would play out. And it's funny that you mentioned something that I remember my son came home and he's 12 and he's got all these big ideas, but he He mentioned something about, Dad, they're talking about by 2030 that I'll be able to just hop on a plane and orbit the Earth. And, you know, 2025, there's this big push to— if you have $250,000, you can be the first one to orbit the Earth. Yeah, yeah. Just casually as a, as a fun thing to do. And it's just unbelievable in the future what that could mean as AI continues to expand and drones bringing everything to us.

I've already, I've already pegged my ticket to go do it.

Is that right?

Well, no, I haven't, but I'm like saving money.

I'm like, I will do that in my life.

lifetime. And my wife is like the exact opposite, dude.

Doesn't want to.

She hates— she won't even watch a space movie. She like hates space. Like, I'm like, there's all these like— like, I like love sci-fi movies and stuff. She's like, won't even watch because she's just scared of dying in space or suffocating or whatever, which is a legitimate fear, I guess. But I'm like, come on. Like, of all the humans that have lived in history have all dreamed about going up to space somehow, and we have the chance. We can pay a little bit of money and go. Like, you're not going to take the chance? Like, what about our— what will our ancestors say about us? You know? She's like, no chance, dog. Like, she's like, I'm good right here. It's just funny. So we'll see in a couple of years if that turns into a big argument. Am I trying to go to space or not?

We took our team recently to the Eastern Caribbean out of Florida and actually went and visited the NASA—

Oh yeah, I've been there too.

Center. It was incredible. And they talked about how there's going to be more and more of these trips starting in 2025. But Carrie and I, my wife, we were talking more about that. She's like, let me just give it 5 or 6 years, make sure everything's safe and they work out all the kinks and then let's talk about going. So maybe you'll have to negotiate by this date. We're going to— and it may be more affordable, right? It may be something that by 2035 it's $5,000 a ticket. You know, it's just unbelievable how technology—

Yeah, we'll see if we get there. It's kind of cool, this convergence technology of what's going on. Do you think, you know, it's kind of interesting that NASA has spent— we went to the moon 5 times and then we don't go back. And people like Elon Musk, Jeff Bezos, Richard Branson have spent billions of dollars getting technology to go to space. And they are— I mean, they've done okay, but struggled for years. And these are the smartest entrepreneurs on planet Earth.

Yeah.

It's— I don't know. It makes me curious if we actually ever went to the moon. Are your— what are your thoughts? Did we land on the moon?

Oh geez, I don't know about that. I've— yeah, there's been speculation on whether that's all true.

And, um, come on, Jason, give us your hot take. Did we land on the moon or not?

What happened? I know so little in that regard, it wouldn't even be worth me commenting. I think that we did. Who knows? I— who knows? Yeah, I will say NASA is excited about the rockets that they're launching and taking to the moon again. And so they make it sound like we've done it before and we're gonna do it again. And, uh, having— obviously technology's significantly better than it was during the '60s when there was the big push. But geez, I don't know. I would say so, probably.

I don't know. I was, I was like a full, like, yeah, we landed on the moon. Then the last couple of years, I'm just more skeptical about it. I just get, I just get more and more skeptical because I see these amazing entrepreneurs, people, Jeff Bezos, like Elon Musk.

And the amounts of money.

And the amounts of money and the years they've been doing this since 2004 to 2023. And we still really haven't got to deep orbit. I mean, they are in low-level orbits right now. And I'm like, man, in 1964, we were way behind the Russians. We had the space, and all of a sudden we land on the moon, and we've been there 5 times. Anyways, I love the speculation. We'll see if they can prove it. I guess there's supposed to be 5 lunar rovers or 4 lunar rovers that are on the moon, but nobody can see them with telescopes. They left them there. They didn't bring them back, but no one can find them.

So I don't know.

I'm turning into more of an—

You're a skeptic now.

As days go on, I become more and more skeptical of the moon landings And it doesn't— I mean, it doesn't affect my life at all. I just think it's fun to think about. But, uh, I don't know, I get more and more skeptical.

So, you know, they said the record for the golf ball hit 800 yards, and you would think that if, uh, guys can hit it 300 to 400, that the moon, it would travel a lot further than that. But I think you're right, there's reason to be skeptical. And I think the more and more as we see—

Maybe they went once. I don't know if they went all 5 times, right? Maybe they went twice. Maybe they faked 1 or 2 of them. I don't know.

Yeah, they're telling the stories and they're driving revenue, so there may be a conflict of interest, but who knows? Yeah, we'll see if we go there again.

But yeah, I mean, if by 2030 it'd be— I'll hop on a ship if— unless like my wife's gonna divorce me or something, but, uh, she's bad for me if I'm leaving. Um, do you think— sorry, totally shifting gears. Um, with the current— you mentioned— we meant to talk about 2008 kind of bailouting banks and now doing it again. Do you think this disincentivizes banks going forward to make risky bets and say, well, if we— if they go bad, if they go good, we'll make tons of money. If they go bad, well, we'll just get sold or FDIC is going to step in. Do you think this— I mean, this is the second major time that they are moving in to save an industry, the banking industry, after making risky bets and mismanaging their book. And do you think this sets a bad precedent for the banking industry going forward?

It does. It's been bad since 2008 when they were bailed out that time, too. Right. It's scary to think that we really don't have a free market capital society that we believe that we have, because they have to let a few banks fail to be the example. And then one can see that if they don't come to the rescue, then what happens? And that picture's just so much scarier than them coming through.

Yeah.

But you're right, it does set a precedent.

And to be fair, I actually am happy they came in and saved SVB, at least the depositors, because you had all these startups there. You had a lot that would hurt the United States for years.

A lot of people here.

Yeah. And maybe President Biden mentioned he's like, we're only going to protect depositors. We're not going to protect the bank and the assets there. They are going to true capitalism way. And maybe they can find a good balance of saving depositors versus the bank itself. But sorry, I cut you off.

But even there, Bridger, you're right, though. I like the approach. Some of it seems like good marketing. If you really understand it, though, it is taxpayers that are still hurt by this all because unlike in 2008 where they're saying that no taxpayers are going to be hurt by this, all they have to do is print more money. And when they print more money, inflation goes up and inflation going up hurts our the value of the dollar. So it's like it's still it's still us that gets hurt by apparently the TARP program in 2008.

Apparently, so I've been told, actually returned a positive return to taxpayers, about a 20% positive return to taxpayers, which I didn't know that. But again, this time they're saying the same thing. It's not going to hurt the taxpayer or whatever, but it still, it still smells and tastes like quantitative easing.

Yeah.

And maybe it is, maybe it isn't. I guess we could dive in the numbers more, but that's what they're trying to preach. And I learned that about the TARP program. Apparently it wasn't, but it's still— I think it was. I don't know. I got to do more research, I guess. I didn't hear any thoughts on that.

It is just overall, I think I think if banks know that they can be rescued and will be rescued, they just have to be down the line. They can't be as risky as other banks. And I think that's where it gets to be scary, where they'll let a few fail to set the example, but then come in and keep you. And yeah, it is. And that's why I think you have to work with— you have to be diversified. You need to work with smart asset managers.

Well, and diversified in your bank accounts. I can't believe how many I'm like, These— I've talked to funds that literally last— this is when SVB went down. They sent out letter notices. We, we actually can't— as a fund, we can't make payroll on Friday because all of our money was at SVB. I was like, really? You guys are asset managers. You diversify a portfolio, you have this whole thing, but you didn't diversify your bank accounts?

Bank accounts.

You didn't diversify who— where your flows of money coming in now? Like, what kind of money manager are you? You would think a smart treasury manager Yeah. Would go through. And our company right here, we're pretty kind of a small, we have about 50 employees. We have 3 different, we have Chase, Wells Fargo, we have multiple accounts at both those banks and a Charles Schwab account just for that same reason. We don't even use 2 of them really, but we have 'em just as backups. We had those, we did those last year because we wanted diversification across our portfolio.

Same with us. And Matt actually sent out an email to all of the banks with follow-up calls of any place that we had $250K or above balances.

Yeah.

That could possibly not have the FDIC insurance. Fortunately, we were in a good spot with that.

Yeah.

But recently I talked to a few of our investors who only had an account with SVB. And sadly, they found out about this before things were tanking, and they tried to send out a wire, but they didn't have another bank account to wire it to. So by the time they set up another bank account, the money froze and it couldn't go out. And so that is an interesting diversification strategy that you maybe don't think about that often. So many people, startups, rely on SVB. They're one of the best in, in getting capital from them. But you never think, I need to open up other accounts to transfer some. And so it's, it's an interesting time right now, and we don't yet know all the repercussions, which is why I think it's still too early to see how all of this plays out. Um, I'm optimistic longer term, but I think in the short term there may be still some pain points that we see before it gets better.

Interesting. There's an interesting book I read called The Finance Curse, and this book talks about, um, in Africa, and it goes through Middle Eastern countries where there was a very diversified workforce. You had students coming through school system, they were going to be doctors and lawyers and teachers and other stuff and actually they said back in the 1960s, a banker and a teacher made about the same amount of salary in the United States.

Wow.

Then he goes then they call this the finance curse is where banking or finance makes a lot of money and so kids that were maybe gonna go to NASA and be an astrophysicist go well, I could do that or I could just go into banking and take my statistical analysis there and I'll make $3 to $4 million a year doing that rather than $200,000 doing this. And what happens is it sucks the best and brightest of a full generation into the world of finance. And it was— it went through all these countries in Africa and the Middle East that have had essentially this huge surplus of kids that are smart, great kids going just all into one industry.

Wow.

And an industry that kind of has innovation, but not really, you know, where they could have spent that working on rockets or new technologies or whatever. but they make way more money in this finance curse. I thought it was a very interesting read and something that's happening right now, especially with when you continue to bail out a banking industry and they still offer really high salaries and huge bonuses that a really smart kid from MIT that's gonna go change the world, hedge fund shows up and said, hey, we'll pay you $4 million a year, come make statistical analysis for us, charts and stuff. Do you want like in or out? And like that kid's gonna go, well, yeah, I'm in, you know?

Fascinating.

Very interesting book.

Unless they're following their passion, which— It's hard to do when you're giving up that much on the side.

And you're in student loans and debt and all this stuff and you're like, well, I might as well, you know what I mean?

Yeah. It's pretty interesting. What's that book called again?

The Finance Curse.

Really cool.

It's an interesting read. It really changed my perspective on the world of finance.

Yeah.

It was very interesting.

One thing, Bridger, I know we need to wrap up here or something, but tax incentive does impact that greatly. You know, R&D credits, right? And so there are opportunities through it. that allow someone to have an artificially higher salary than they would have otherwise.

Oh, interesting.

Because the industry doesn't create enough value yet. But you got to stay on the forefront on technology and developing as a country.

So meaning if you had a $250,000 salary, you don't have to pay as high taxes on that salary?

Well, no.

Do you get an R&D credit or how does that work?

There's typically ways for tax dollars to be able to be invested in a particular industry.

Oh, gotcha.

So that someone could get an artificially higher salary than what the actual field would provide. And that does help keep those types of jobs, I guess, competitive. Although this disparity is not going to be one that would make sense, I guess. But I do think that that's where I find it so interesting. The tax code specifically creates jobs, but it also creates money that flows into certain industries based on the needs that America has. And so it's just interesting to follow where the money goes.

Well, I think it's a good point you bring up. The tax code is all about incentive-based. I believe it's— I can't remember the first— you might know the story of the first time they did a tax incentive. Do you know that story?

No. Tom Wheelwright talks about 2% of the tax code, why you have to pay taxes. 98% is why you don't have to pay taxes of that 2%. And so all your time should be spent on why you shouldn't have to pay tax based on all the incentives that are available to you.

Yes, there's a story. I'll mess up the details, but early 1900s, they tested out a tax incentive. And they thought, well, maybe people would do it, maybe not, we'll just see. And all of a sudden this huge amount of capital flowed into this one area and they're like, huh.

Interesting.

And they said, let's try it again. 'Cause they needed, there was one for like an energy deal, they needed energy investment on something and like huge amount of capital flowed into it. And they thought, huh, let's do it again. Then they moved in, if you have multiple kids or if you have a bigger family, we need more, you know, childbirth. And they had, they gave, and all of a sudden all these kids were born and like they slowly started adding these things to the tax code over time. So people that might sit here and say, oh man, you're a tax evader. Yeah, there are illegal ways for sure to evade taxes, but there's also many legal ways that are built into the code to incentivize you to invest into oil and gas or truck stops, or to incentivize you to invest into real estate or into— to move your capital in a certain direction. And you need smart people like Jason Harris to walk you through that and understand the tax code very well. And that's, uh, it's, it's built in. It's actually what they want from the tax code.

It's, it's, it's absolutely correct. Because if you give an incentive out, there's actually a stronger multiple of return to the government than if they try to pay taxes and then create jobs of their own. A government job is a $60,000 a year job that's raised by taxes. So they have to raise taxes to then pay the $60,000 a year. 18% of jobs in America are government-run jobs. So that's all of our tax money that we're paying in to support 18% of the jobs in the job market.

Yeah.

Or you can give tax incentives to business owners, and business owners will then create jobs. They'll cover all the expenses to pay them, and the incentive itself is a 1 in 9 multiple in some of the studies that I've read. And so—

1 in 9 multiple?

1 in 9.

Really?

And so you either pay them directly from tax dollars, or you create incentives for people like us to hire employees, and then we'll take on the risk, we'll take on it, the, the I guess the wages that would be paid out. And in return, yes, we get some nice incentives, but it's a better return for the government to do it that way.

And we're going to do it in a more efficient way with less government, with way less risk from the government side, because that's capitalism. That's why I love capitalism so much. Yeah, that's amazing.

Yeah.

Um, I mean, you saw, for example, I'd love to talk through Opportunity Zones. That was a huge incentive that, uh, more money was invested into ghetto, rural, inner city areas in 2 years with Opportunity Zones than the past 50 years with government programs and bigger brother and charity. What Trump did was say, hey, if you guys invest into Opportunity Zones, you get a huge tax benefit. If you, if you develop those properties, you have to increase the value over 50% and hold them. You'll probably know that.

10 years.

Is it 10 years is the total time? You'll pay $0 in taxes.

Phenomenal.

And I believe it was $100 billion that went into that, correct?

I don't know the numbers, but it was a huge amount of money. And And everyone wins. It was a phenomenal tax opportunity.

The investor wins. The inner city areas win because they get more improved buildings and better areas. The people that live around there, the value of their real estate increases now.

Safety, crime goes down.

Crime goes down and safety. The kids that live there, families that live there have a better family and there's less, you know, gang violence and stuff. It was an incredible thing that happened in 2 years. More progress happened those 2 years than you would say decades before. And I believe it was $100 million that went in initially. And with that, like like $250 billion pegged to go in over the next 5 years or something like that. But very, very interesting. Yeah, there's opportunities on funds.

I'm hoping that they are renewed at some point. Yeah, yeah, yeah.

We'll see if they keep that going. I know it was a really cool thing. All right, a couple last questions for you. I'll get you out of here. Um, uh, what's a book that has changed or impacted your life immensely?

Um, the one I was just mentioning, Tom Wheelwright, Tax-Free Wealth. He was the CPA for Robert Kiyosaki.

I've read this book.

But he actually has come out with a second edition and actually has things that are very current for 2022, 2023. And he has a new book, and that's where I got this recent study about how the incentives, 18% of government jobs. So I can't remember the name of it. That one was Audible, so I don't really remember the page of it. But that book absolutely opened my eyes to how beneficial the tax incentives are and why it's good for the government. It's better for the government to do it that way than to just charge us, charge more in taxes. And it helped me understand how to use real estate as a massive tax shelter strategy. When done correctly, and it's helped me grow my wealth far faster than I thought I, I could and helped us grow our investor base's wealth in the same. And so love that book. So many great golden nuggets there for people who are paying a large tax bill each year.

Yeah, really cool. I love it.

Yeah.

Okay, 2 last questions. What's a great way for people to maybe follow you or connect you or find your group online if they want to learn more? What's a great way to find you guys?

HarrisInvestmentGroup.com, our website there. Instagram, I guess you could find us, Harris Investment Group. Jesse Yates is usually the head person that we have. Bronson would be just fine too, but I would just go to harrisinvestmentgroup.com.

Okay, harrisinvestmentgroup.com. It's awesome. Thank you so much for coming on today. Final question. Yeah. If you could leave this audience with one thing that was most valuable to you, something that you thought would just change your life or change someone else's life that's listening, you can talk religion, politics, business, finance, Tax savings. What do you think would be the most valuable thing you'd leave with this group before we close up?

Best investment that you can ever make is in yourself. You've got to set aside time every day if possible to invest in your, your knowledge, your relationships, spirituality, physical goals. And I think I love investing. I love the financial successes I've seen. But the best investment I've ever made is just just investing myself and finding out for me what gives me true joy, true satisfaction, and making time for that, you know, every day. And I think that's the thing that I feel like provides me the most joy in life is when you're able to set the distractions aside and really listen to your, you know, inner being, you'll find the answers of what's going to bring you happiness in this life. And we don't— I mean, we love making money for our investors and making money ourselves, but at the end of the day, It's, it's more for the relationships that we can make in this life and the opportunities and activities that we can do with the money. But it's all going to stay here. I hope to give some away to charities and good— for good purposes. So I just say make sure you're investing in yourself and your health and the relationships. That's what's going to bring you the most fulfillment.

I love that. Spot on. Jason Harris, everybody, go follow him online at HarrisInvestmentGroup.com. Go check him out. Thank you so much for coming on today.

Thanks, Bridger. Appreciate it.