Starting A Real Estate Empire: Lessons From The $1B Man

I have a business idea that I've been kicking around for a couple of years that I just can't keep in anymore. But it's in an industry that I've been hesitant to get into because I really don't know anything about it, and it's completely different from what I've been doing. And basically, I want to invest in my hometown of Cleveland, Ohio. Cleveland, Ohio, is where I was born and bred, and I haven't lived there for 10 years, but I feel called to be part of it in some way. And I'm not going to go live there right now, but I want to invest in it because I really do believe that it is the next hotbed of America. It has so much going for it. It is, I think, the next city on the rise. So I sat down with my mentor, jp, and I asked him, how would I even get into this game? Because he manages, like, a billion dollars in real estate. He runs this very successful fund that invests in real estate all over the country. I'm actually sitting in the headquarters of it right now in this beautiful office. And so I asked jp, what advice would you give to me as someone who's entering a new industry and somebody who thinking about going in this direction? And really, I'm just running on passion and excitement right now. So after decades of experience, how would you advise somebody like me? And so we sat down and he gave me the answer I was looking for. I hope you find value in this episode with JP and I from the Investing on Purpose podcast. Hey, jp.

Hey, Ryan.

We're back.

We're back for stronger than ever. Another episode of Investing on Purpose.

And I have a personal topic for today because we started this podcast. The idea of this podcast came from a trip that we were on in Utah.

Yes.

And during that.

A year ago, by the way. A little less than a year ago.

That's right. And while we were on that trip, I went and saw some of the deals that you were working on. And there was one deal in particular that stood out to me, and it was this. This complex that was workforce housing. And this woman who was a single mom gave us a tour of her apartment, and she was like the assistant manager of the place. And I think you had an agreement of discounted rent for her being assistant manager or something like this. And I just watched her show off the property with this pride and kind of allude to the fact that she was really happy to live there and be able to afford to live there. And this really resonated with me. Because it was the first time that I saw your heart for workforce housing, and it was the first time that I really saw how much purpose you could bring into a real estate transaction. My background in learning about real estate has always been about the numbers and the financial freedom that you can have. But I saw. Saw why you get so excited about it for the first time.

Yeah.

Right. And. And I've heard you talk about it, but I saw the example and it was really cool to see.

It was great to have you out there.

And I live in Austin, Texas. And in Austin, Texas, it has boomed since I have lived here for the last 10 years. It's a different town than it was when I moved here. And I believe that my hometown of Cleveland, Ohio.

Oh, yes.

Is going to have a similar boom.

Right.

And I love the idea of being part of that boom. And I really like the idea of bringing. I've always been interested in real estate. I've always been interested in capitalism, and I've always loved my city of Cleveland. And I really have this desire that I have not been able to. To squelch.

Yeah.

Of going and doing real estate transactions in Cleveland and being part of this renaissance.

Yeah.

So I did not tell you that I wanted to talk about this today. I wanted to hear from you what advice you would give to someone who is thinking about entering into the real estate market with a very like, one area that they're excited about with the same type of heart that you bring in. What. What questions should that person be asking?

Yeah.

And how would you. How would you tell someone to get their foot in the door?

Yeah. That's a great question, by the way. I don't think I've even told you this story, People, now that I've been in Austin for 17 years, people are like, oh my God, you moved at a perfect time. You launched. What was about Austin? Like, what made you think. Because when I moved to Austin, Ryan, I did not know a single person. I did not have a reason to move to Austin. And what I actually did at the time. This will answer part of your question. Is I knew I was done with Los Angeles and I was actually looking for, like, the questions coming to me is, where do I see a 10 to 25 year career? Where. At a market. That. And these were the questions I started asking myself. Some were personal and some were business. On the business side, I was like, okay, most markets are driven by jobs, so you're looking for job growth, but you're also looking for job stability. Okay. So the reason why I chose Austin 1. It's a capital city. Capital cities are great because they have lots of jobs, stable jobs, because government tends to not really ebb and flow during economic downturns. So the second thing I really like is a university, some real university. Because when you get a university, you get an educated job force and you also get a fun city. It's why people like Seattle and Austin and some of these like Raleigh, Durham, North Carolina, you've got, you know, a university center in Austin. As we know, we print out some great entrepreneurs, great engineers, because we have a massive school year. So when you kind of combine, okay, capital city University and then what are the other drivers of growth? So at the time in Austin, you know, 17 years ago in Austin, Dell had just made it its headquarters. Dell was already at 12,000 people. So really having Dell was a big, big break. And then there was this thing called Whole Foods which was just, you know, just booming, which was just incredible. And so you're always looking for demand drivers. And then ultimately I can, I'm going to give you some more detail with.

These demand drivers is okay if I interject here because Cleveland is not a capital city.

Right.

But it is the largest city in Ohio.

Right.

It has, it doesn't have the big university, but it has a ton of smaller universities.

Right.

Baldwin Wallace, Cleveland State University, John Carroll. There's, there's a bunch of them, Kent State. So it's, it is a university town, but it is not. Doesn't have one of the big ones.

It's really simple. Ryan, think about this. Like any product that you're doing on the Internet or any product, it could be a supplement or it could be a housing thing. It's simply supply and demand and consumer demand. Right. So the factors in real estate for consumer demand is typically jobs. People go where there's jobs and growth. So you got to look for markets that are doing that. And I love, I'm a storyteller and I love stories. So even to this day, like when I took you to Salt Lake City, I'm a big believer in Salt Lake City as a long term growth market. But there's usually a story. And what I try to do is I try to like literally gather the data. Some, some of it's just numbers and data about job growth and this and that. And then I try to put together the story that, the thesis, why I want to invest. But there's another piece to it that's really personal. You have to really like the city, which you do with Cleveland.

I do.

Because part of it is just a thesis. It's an investment thesis at the end of the day. And you and I are going to go through this a little deeper. I have some ideas for you. But the idea, like, I loved Austin. Someone said to me, this is a funny thing, Ryan. Someone said to me, I came out here for the first time to chase a real estate deal. I had never been to Austin before, and this was a mistake. I didn't know because I was young in my career. I was chasing a small apartment building. And the guy said to me, I said, I think I want to buy this thing. I want to. I want to get to know Austin, Texas. And I said, can we sign an agreement to put this thing under contract, like a letter of understanding? The guy says to me, he was a real country boy. He said, ah, jp, you don't need to worry about that. It'll be here when you get here in three hours from now. Well, I got off the plane three hours later, and it was sold to somebody else. He sold it right from underneath me. And so then I had two days earmarked to do my diligence. And I had no property to look at because it was gone. And so it kind of like I was in Austin with nothing to do. And that's when I started looking around. And someone said to me, during those two days, at the time, I was living in Los Angeles, and they said to me, you're going to like Austin. It's like Southern California's baby cousin. And it's funny because I don't now, in hindsight, it's kind of true, kind of not true, but it was interesting. That became part of my visual story. Oh, I'm in this place. They say it's because I think of Texas as being very different than Southern California's baby cousin. That's not. I would describe my viewpoint of Texas at that time. And so I started building this visual beginning of a story that got me excited, kind of how you feel about Cleveland. And it got me excited enough to keep checking around and to start kind of putting this thesis together. But having done real estate in cities that I was less attracted to, I can tell you it's super important that you're passionate about the city. Because I would come home from certain cities where I was making money, and literally it would take me like 10 days to shake off depression because the cities were so downtrodden or so ugly or just no energy that I knew I was just going there to slay the dragon and there was no joy or I Wasn't getting anything out of the city. And so I made a rule after that because actually it was my first money I made. It was in Louisiana, certain cities in Louisiana. And they just weren't. This wasn't an energy match for who I was at the time. No offense to Louisianans, but just. It just wasn't an energy match for me. And it was an early lesson about I'm only going to do deals in cities that I enjoy flying to.

Well, what's interesting is you're giving me the same advice I'd give an entrepreneur about what business to go into, what industry to go into, is you can make money in all of these. So where is the interest in the natural energy and the momentum when you're talking about that story? I'm thinking about it like a pitch deck. What's the story that you believe in? That is a clear thesis. It's still just a thesis. And part of my thesis is that we have. If the environmental situation continues to worsen and we continue to have a water crisis, the most high demand area in the world is going to be the Midwest. Because you have four seasons, it gets cold, so you're shielded from global warming. And one third of the world's fresh water is in the Great Lakes. A third of the world is in the Great Lakes. No water problem in the Midwest. And those cities have the infrastructure to be able to handle an influx of people as they move away from the coasts, as they move away from. From hotter places and start to move north. A city like Cleveland has the infrastructure of Chicago.

Right?

But they had a huge population decline. So you have lower cost of living, which makes it attractive to live there. They have appropriate transportation, great highways, the food, restaurants and activities, three major sports teams, the same sort of amenities that a big city like Chicago has. But it's a small town that can handle that type of growth, right? And so to me, Cleveland is very attractive from a long term, 20, 30, 40 year play.

Here's the thing, you're correct. First of all, you could be correct. But one thing in real estate that I've learned is you have to be careful of 20, 30 and 40 year plays. I started my career early in Texas buying land around a highway that was being built called SH130, which is now a major highway here. And I started specking land. I was following the holes of the engineers where they were specking and I was trying to buy key corners. But the thing I miscalculated because the government at the time was supposed to make that the Trans was going to be the transcontinental highway that was supposed to go from help truck drivers get from the border of Mexico all the way up through Kansas City, Texas, Kansas City, St. Louis. It was a major artery. And what happened was they built the highway but they never built the whole thing. And everyone down in Mexico and everyone passed Dallas.

Oh.

So my time frame went from a 5 to 10 year time frame of like buying things that I thought would be worth millions and the traffic never got there because the road never accomplished. The politician which was actually Governor Rick Perry, never got his way because financing change, another administration came in. And so something changed in that long term thesis that radically changed the impact. And I wound up selling that thing. You know, it was actually at a loss. I lost money on it. The thesis was right. You know, everything that was laid out was correct. But then something came and that's the danger. And I'm not saying it's bad, it's okay to keep a long term goal. But I would also advise you, like look at the demand drivers. Now if you and I are to go to Cleveland together. Hint. And if we do go to Cleveland together and do it and do a real estate thing, the first place I probably would take you is I might start at the Chamber of commerce and just look at have them. Because the chamber of commerce's job is to sell you on Cleveland. And I'd want to hear the sell from the chamber of commerce. It's free. Go to any chamber of commerce in any city and have them start selling. You tell me about the growth. Tell me about the population. Is it growing or is it shrinking? What are you most excited about? Cleveland. And let them give their best pitch. And I've taken many of these pitches, Ryan. I've taken these pitches in Corpus Christi, big, big cities. And it's really interesting because then you get like this is the best pitch. Even if it's just a bureaucrat, you're going to get the best pitch and you'll get the maps and you'll get the numbers. And from there you get to do more research. And I typically from there go to. Which we'll do if we are going to Cleveland, which I think we probably are. You go to the real estate agents and you start talking to the real estate agents and they're all, again, these are all salespeople. Let this start with what you're already excited about. You're already excited. Like it's okay to let the excitement and the creativity build. We can knock it down later. But let's Start with the thesis and build the biggest thesis we can. Between the Chamber of Commerce meeting with building owners, meeting with brokers. What do they say? And I also look neighborhood by neighborhood. You know, this neighborhood used to be where cars were built and it's been rusty for 20 years. And now this new tech company just bought like Shinola, like in Detroit. You know, Shinola came in and QuickBooks came in and transformed Detroit. I forget. Dan.

Dan Gilbert.

Dan Gilbert. Literally one man. So imagine that story for Detroit, a city that was dead. And then Dan Gilbert brings, you know, QuickBooks there. Shinola and there's this. I mean, what they're. The revitalization of Detroit is just amazing.

You know, he revitalized Cleveland too.

I did not know that.

Because he owns the Cleveland Cavs and Quicken Loans Arena.

Okay.

In Cleveland.

I did not know that.

And. And then this dude named LeBron James came to be and we built our economy around him.

Yeah. Incredible. Absolutely incredible. So those are the kind of stories I want to hear. And then once I started to get the story. Cause again, but I'm always going back to the same thing. Consumers. It's no different, Ryan, than like a product. So where are my consumers? Where are they living? Where are they coming from? And why are they coming? Is there more money? Is there a new industry emerging here? Did the death of one industry create the birth of a new industry? What's the niche? Give me the story. Because those are my. That's the demand drivers. I need to know where my consumer is because that's what's going to drive. Value simply is a demand for your product.

Yeah. There's three things and I'm always looking at through my own personal bias. Right. But there's, there's a few things that are driving it. Driving. Just one is I believe global warming will send people north.

Right. Number two, that's long term. Let's just check. That is sure a thesis, but a.

Long term thesis is the water situation. You never have a water problem in Cleveland, Ohio. Number three is remote work. As people have more and more access to remote work, I believe that they'll choose to live in more affordable cities.

Right there with quality of life. So it's got good schools. You still have to have all the infrastructure.

The quality of life in Cleveland is very, very high. And you like a, you know, $800,000 house here gets you a bungalow. $800,000 house in Cleveland gets you a mansion.

There's wonderful annual surveys, right. That we can always look at together that actually rank the Quality of life of every city. And it tells you what the strengths and weaknesses. You can even go on Google. Like I did one last night. It was comparing Seattle to Austin. It was just some person, like, literally like, you know, person comparing. I always love hearing people's perceptions of strengths and weaknesses of cities. And, and then also like, what, hey, maybe there's a new stadium being built and there's a lot of excitement around that stadium or a new train thing. Like, I love, I love stories. So for me, I geek out on the stuff I used to as a kid. There was a game called SimCity, which I don't know if it's.

Oh my goodness.

Right.

I played many, many, many hundreds of hours.

Right. I love SimCity. And really a lot of what we're talking about, Ryan, is SimCity. You know, what's the story that's going to create that? Remember, like, how great it was. Like, you build houses and build hotels and like, I still love that to this day. It's very much part of what I do when I look at new markets.

You're just so. For.

For.

You're asking to me, you're asking me questions that I haven't considered before. But I think I interrupted you about halfway through. What else are you looking at when you're evaluating a market?

Actually, I want to ask you a different question.

Yeah, go ahead.

Because, because I, I have a bias towards Cleveland. And right now what I want to do is sell you on the direction I want to go. So let's.

Excited is wonderful.

Let's go in a different direction. How would you explore building up the network and the deal flow? If assuming that a city checked all the boxes, what would you then start doing?

So let's just say everybody. Although I'm a big believer in sub markets, not so. And when I say Cleveland, what I really say to you next? Ryan, once we went to Cleveland together and you showed me those great, you know, pizzas and hot dogs, I think you said the hot dogs were pretty insane.

The gourmet grilled cheese sandwiches, they're incredible, right?

If I help you, do I get it? Do I get a. You're gonna buy me a. A gourmet grilled cheese? Hell yeah. Let's do it.

Let's go. I'm going to sell you on Cleveland. It's the most underrated city in the country.

So I'm going to start asking you about, or starting to understand sub markets. And what are submarkets? Simply, they're going to be near the jobs, they're going to Be affordable. It's going to be where people, you know, walkability is a big part. You want to find areas that are walkable, good infrastructure, good transportation and where people want to live.

Okay.

And they're near.

This is. This is Lakewood, Ohio.

Okay.

As you're describing it.

Okay. So let's, so let's just say we decide that Lakewood is the spot. Like that's the spot we want to be in.

It's.

And we have a five year thesis because we know this company is coming. We're already seeing natural growth after the COVID People are already doing this. Like there should be some short term indications now that Lakewood is the spot, especially after Covid, if people now can live. There's this whole trend now people are moving to the, to the suburbs or to more rural areas because they're independent and don't have to drive. I would expect that Lakewood would have this to it as well.

Yes.

And then what I would do is I would get to know if we're talking about residential, the top. I would identify the top three to five brokers who serve the Lakewood market. And I get to them right away and I'd have lunch with them and I hear their stories. Then I want to hear more. What's selling, what's not selling, what price points are selling, what streets are selling, what streets to stay away from. There's a lot of cities. It's very odd, Ryan, but I find it with my apartments too, that as long as you're. They'll say as long as you're south of this street, you're fine. Or there's a $200,000 difference. The minute you get to this street, things change. Or it hasn't quite gentrified yet. Like it's still kind of a mediocre neighbor, but. But it's up and coming. It's a great spot to be because it's still a little sleazy, but it's up and coming. Like you're two blocks from where you need to be. But, but, but it's coming. I just bought an apartment deal in Dallas that's literally on the street of the border. And I'm betting on some, some, some because there are. People are being priced out. So now they're moving to my neighborhood.

Got it.

So I want to know every story, every angle that I can about that city. I want to interview the three to five brokers because what you're going to find out when you have those lunches is they're going to start to all you're going to hear the overlooks of what people are saying. It's this neighborhood, it's these streets don't go over $1 million. There's price resistance. Like you're going to get a thing about. This is just like a product, how to price it, what to look for. Hey, people in my neighborhoods, they really need four bedrooms in a backyard. We see a lot of families relocating here. So the great thing is buy a three bedroom house, you can add a fourth, potentially add a fourth bedroom to what's. So what's tracking this market? There's, is there a lot of good inventory and they can say there's a lot of modern houses out here or God, people will pay you a 20% premium. House is like done like this. They really like this style in Lakewood. This is the kind of thing that sells like hotcakes. And I'm going to ask them how many days is the average house sit on market? You know what, you know, who is your consumer? What's turning them off? What's making people leave?

What's making, are you asking these questions even though your potential acquisition is commercial real estate? Apartment buildings, yes. So you're still asking about the houses.

The same thing. It's, it's homes, it's, it's a, it's a rental home versus a permanent home. Absolutely. These are people's, people want the same thing out of their house. Right.

Makes sense.

Yeah. Little, I mean it could be a little bit different because there's more obviously with apartments the average person leaves in a year. So you know, it might be a little bit of a different consumer in terms of demographics, age, wealth, but people want to live. You know, generally human beings like to live in certain, within certain parameters and sometimes with apartments or houses, it's just where's the cheapest place to live?

J.P. i know that when you're doing a deal there's a couple different structures that you do. In some cases someone else brings the deal and you're bringing the investors to it. Sometimes you're finding the deal and someone else is bringing investors. I know there's a couple different structures but I've never really understood how they all worked. And sometimes you throw in terms like underwriter and I'm not quite sure how that works, ecosystem works. Could you give me a high level view?

Yeah. So simply really let's, let's say like it's easy to say I'm in real estate, but let's break that down more. Within real estate, you generally have components of Real estate. So usually you have an operator or a developer. An operator is operating a property, a commercial property.

Like managing it?

No, maybe managing. But also like there's a business plan. Like, we want to. We want to buy this thing. And there's usually some business. We can raise the rents. If the area is getting better, we can modernize it. So it's. Yes, it's. It's coming up with a business plan that. So what would you call that? A. That's gonna basically operate and potentially manage.

Okay, got it.

That a developer is going to build the vision. So an operator is going to like redevelop or repurpose where a developer, which. So they're similarly related. Is this going to build it from scratch? Same thing. Either going to sell it or you're going to execute a business plan. I'm more on the equity side. So in order to do this, you need money, right? So where do you get your money from? You get your money from a bank, but the bank's not going to lend you 100% of what you need. So if it's a $20 million project, the bank is probably going to lend you right now about 60% of that. So. So the bank's going to need you 12 million, and then you need 8 million more to execute. You're the developer. Let's just say you want to build this $20 million office in Lakewood, Ohio. You need 8 million bucks, and then you come into a company like mine, and that is called private equity. So I really am a private equity, commercial real estate guy. So I am more. I do operate not to get. Because to your point, there's different.

I want. You're. Now you're speaking my language like this is the direction I want to go.

So I'm primarily, let's just say money. I'm equity. That's what you'd call that. But I also do debt. But that's. I'm a money guy. But when I say that I also do own and operate internally, we have an internal platform where we do own and operate some of our own buildings where we provide the money and we're the operator.

Okay.

Never the developer. That is a serious.

Are those different teams? Do you have. You have an operation team and you have an equity team?

Yes.

If you were just an equity team, how big would that team be?

How much equity? It's like saying, how big?

Well, what is it? What is it here?

The equity team. Here is a. Well, again, you get your CFOs and you controls and we've outside it probably takes 12 people.

12 people, wow, that's more than I thought.

Well, you got to think about this. It's all, I don't know if you have far down the rabbit hole you want to get, but not that different than you're find. I mean there's, it's, it's one thing to raise the money, then you have to have lawyers as you know to do your agreements. Then there's securities laws, then there's like registration, then there's reporting. Once you, once you raise the money, you got to report. How do you report? Report quarterly updates to an investor, how are you doing? Then there's other kind of reporting at the government, which is like K1s, like it takes a village.

Is it, is that 12 full time people or are you including attorney source.

Like attorneys and CPAs? It's probably internally, it's four to six.

Okay, got it. So is is your job on the equity side? If it is, it's so much fun. So is your job investor relations? Advocating for the deals and partnering with operators who are finding the deals and coming up with proper terms of who's going to get what for bringing each piece to the table.

Yes.

That's cool.

It is cool.

That's so fun.

It's actually highly creative, which you wouldn't think of. You think of, oh, you're a money guy, but it's actually really creative because.

It'S storytelling. At the end of the day, you got to go out and believe that just like whether it's sheer strength or this, it's like you got to believe in your $20 million office building. You got to tell the story of Cleveland. It's the same thing. And just like business, you got to get it mostly right. Otherwise.

Right.

Otherwise people aren't going to take your stories as credible, but it really is a story. So as I'm telling you this advice, like I'm not just some money guy writes a check. I go out to their properties. Literally what I'm telling you is what I do, Ryan, on every level. Like if it's a new city. I did a really successful deal in Portland recently. It was two miles from the Nike factory in Beaverton. And there's a reason why you go to Beaverton and not Portland. Because like the zoning laws, the taxation and so then when Covid hit when they were doing, you couldn't evict anyone. All this crazy stuff. Like the research I did earlier that understanding the local city councils between Beaverton, Oregon and Portland, it was still pretty hard. But Because I did my research upfront. I did those, all those meetings, literally the meetings I'm telling you, other meetings that I do. I knew that Beaverton was a safer place to buy real estate than Portland. Even though they're kind of the same. You wouldn't, you wouldn't know when you change streets, but, but it makes a big difference in council and ultimately there's probably a $14 million difference on my outcome to the positive, my investors, that I chose the right street in the right city to navigate.

Okay, that's really good.

Is that wild?

That's wild. When you're putting together one of these.

Portland was a new city. I had to break in and literally go through the thesis of everything I told you.

When you're structuring one of these deals, what is it typical for an operator to get versus an equity to get?

So typical is, let's go back to the $20 million Lakewood property. So you want your operator or developer to have skin in the game. You don't want to raise all the money. It's bad. You want to have like, you want them to sweat with you if something goes wrong and what have you. So very typically it is, this is back to the, you need 8 million, you got 12 million from the bank. It's a $20 million project and you need 8 million. You typically want the developer, operator to put at least 10% of their own money in it. So 800,000, 10% of, of 8 million. And then the equity group, like my group, would put in the rest. And then for that, typically what it is, is you're depending on them as the operator to execute the business plan. I like at this point you're supposed to report to the money, to the asset management, report to the equity, how you're doing, we're here for you, but we're not really executing the day to day business plan. That's what, that's why they're doing that. And very typically it's negotiable. But very typically what you will see is essentially a 50, 50 split. So the money for me putting up 90% of the money, I'm going to get 50% for them putting up the, you know, executing the business plan and managing or what have you, they're going to get 50%. But I have to say one thing, that's that pot that we're splitting from is after the investors return and that's called promote. So we're on the promoted side. So basically limited partners, passive investors, say, hey, I want to earn a return in real estate, but I don't want to run real estate. They're getting in the waterfall. Really. They're called limited partners. LPs are limited partners. So really, the way the waterfall works is the limited partners are typically getting the lion's share of the deal since they're putting up most of that $8 million that's necessary, if not all of it. So that split, I'm telling you, between the operator and the equity is after the investors get paid. And that doesn't promote.

Got it. This is fun.

It's really fun.

That sounds like a business model made for me.

Yeah.

In the market that I want to.

Be in, you know, it's been really fun, Ryan. It kind of goes back to investing on purpose. I didn't realize. But because I love storytelling, I realized that the stories of apartment buildings or new projects that I'm really psyched about, I'm doing this really killer deal right now by the new Tesla factory. I'm so excited. That's going to kill it. And, but. But I love using the camera now and like, like to tell a story, because you write down the story, it's not as exciting. So a lot of what we do as entrepreneurs, whether, again, whether it's, you know, supplements or it really is a story, an incredible story. So. And the more facts we have, obviously, and I had to learn this through my career, and I'm sure it's the same for you. You know, some people just believe you. They have a good feeling about you, and some people rifle you with questions and details. And, you know, I had to learn early in my career to be as buttoned up as possible. And then sometimes, occasionally, it doesn't happen that often at this point because I think I know what to ask. But occasionally I do get a curveball from some of my toughest, most astute investors. And instead of trying to ever make up an answer when I'm not entirely sure, I'll just say, let me get back to you as a really good question. You stumped me on that one. Let me get back to you. And I will quickly figure out what the question is. And I think people respect that a lot more than kind of giving a. Yeah, kind of 80% know the answer. So I really try. Really. Unless I'm 100% certain, like, like a laser beam on it, I don't want to fake it. So if it's numbers, demographics, when I'm telling my story, I do back it up with a lot of factor. Like, my thesis is backed up, but I really Want to be like precise as a laser guided missile on it.

Well, I think we should go to Cleveland.

I would love to go to Cleveland.

I will give you the tour of the city. You'll want to move there, though.

I'm pretty excited you will want to.

Move there once you try the melt gourmet grilled cheese sandwich.

Well, I'm going to tell you my strategy about cities that I really like. I like to invest in them. So if you want to start, if you want to start a housing company or an apartment company like Utah, as you know, Utah. I've now bought five properties in the last year in Utah. Guess where I'm going on Tuesday to go? Mountain.

You're going to Utah.

Will I look at my properties? Absolutely. Is the trip have some tax benefits? It will because I will work. But how great is it to work in the cities that you love to be in?

Yeah.

And I think that's, I really can't emphasize enough how important that is. And I would love to go to Cleveland with you. I'm a geek. I'm a sim city geek that likes to hear stories of cities.

Awesome. Let's do it. We're gonna have a blast. Well, thank you. Thank you for this.

Can Alex come?

Absolutely, Alex can come.

You come and document.

I actually already promised that Alex would come on my next Cleveland trip because as soon as he goes, he's going to want to move to Cleveland too. Cleveland is so Alex.

So I love this.

It's. But I'm honest about the con is I'm telling you guys as. And here's one of the things, you know, we were talking about in sheer strength, now that I'm taking this company over, there's one, there's a bunch of products we could launch, but there's one in particular that I have conviction about. And if I look in the camera and I say, this product will change your life, I will mean it and people will buy it. I believe that conviction creates markets.

Absolutely. And I same in my business.

I feel like I, when I look at you guys and I say, you're going to want to move to Cleveland when you come to Cleveland with me.

I'm coming.

I'm like, I'm not kidding. I have that kind of conviction about this city. And so that really excites me. And what, what, what gets me jazzed about that is I feel 0% conflicted about raising capital to invest in Cleveland. But if I was trying to raise money to invest in San Diego, right. I'd be like, it's San Diego, it's beaches. Everybody loves San Diego. But Cleveland. I'll look you in the face and be like, this is the next boom in America.

When I tell you my story of how I got to Austin, people say, how, How'd you figure out Austin? Yes, I did all that thing I told you about, but I was as passionate about Austin, the growth story of Austin as you are about Cleveland. I actually have a little massive crush right now in Salt Lake City. I have a massive crush because I see the quality of life out there. I see the job growth. Everything you and I were talking about on this episode is there for me, which is why I keep buying and buying and buying and there's risk. They actually have a water problem. That lake is drying up and it's. It's the west with the.

They can buy it from Cleveland.

They can buy from Cleveland. Cleveland's going to be a water capital. No. So that passion is 50%. You got to, you got to get some data driven things. But that conviction is what creates success. Absolutely.

That gets me fired up because I have that in spades. Like, I just believe in that city and want to see it.

If we find something, can I be an investor? Because half the time for me is if I'm going to learn a story, I want to be able to make money. Let's do it then. I've had my Ferris Bueller day because I got grilled cheese, I got to explore a new city and I got to make money. That is a trifecta.

You're going to like Cleveland. October, maybe?

Yeah, definitely.

My birthday is in October. That'll be an awesome birthday present.

Fun.

All right, cool. Make it happen.

Great to see you, man. Great to see you.

This is fun.

Thank you.

Appreciate your help. If you've read my book, listen to the podcast, or watch any of my YouTube videos and you're asking yourself, where the heck do I start? Where do I begin my journey to my million dollar business? We got you today. My team and I just completed a new Kickstart class called five days seven figures. This is the best on ramp class for any of you who are ready to begin your seven figure journey. In this five day class, you're going to choose your ideal market, what products to launch, come up with a plan to get each one of them to 25 sales a day and you'll know at the end of the clip class exactly what your business is going to be, how you're going to get it to a million, and exactly what your next steps are to get it off the ground. It's a five day class. It costs 100 bucks. And when you're done, a member of my team will get on the phone with you and review your homework directly with you. When you're ready to start, go take the challenge@capitalism.com five. That's the number. Five. Five days, seven figures. Capitalism. Com.