Starting Over In Your 30s & Celebrating The Wins #InvestingOnPurpose

Welcome back to capitalism dot com. This is Ryan Daniel Moran. I've had my mentor, JP Newman on the podcast several times throughout this entire journey. And I wanted to share this episode that we recorded for the Investing on Purpose podcast because this is a topic that I asked, selfishly is the topic of starting over in your mid-30s. I asked JP to talk about how he went from a career that didn't work out to starting over at 35, making very little money for the first few years and still ending up with an eight figure net worth with a company that is growing and changing lives across the country, and being one of the most respected people in his field about a decade in, a little more than a decade in. And I ask this because I too feel like I am going through a reinvention or starting over at 35, not with nothing, but just in a new direction with my sight set on much bigger goals. And I wanted to hear from my own mentor, somebody that's very close to me, how he navigated starting over in the middle of his life and what he did in order to accomplish so much in the second chapter of his career. This was a maybe a life changing hour for me and I hope it has a fraction of the impact on you that it had on me. Enjoy.

J.P. i was hoping that we could go to the time of your life where you became an investor. I think it's trite to go back in time and do the what's your story Question.

Sure.

But you started over at 35, essentially, and most people think of investors like they think about Warren Buffett. They've been doing it for decades and they're old and they're rich and. And you started in the second chapter of your life.

Yes.

And I was hoping that you could start there.

Sure. Well, in fairness, being raised in a family, you know, kind of like the rich dad, poor dad, I have to confess, I mean, I was raised around investments. And so I knew about it just because my father was doing, you know, investments. So.

I didn't have much. Like I wasn't doing much. I was, as you know, I was doing my Sony Pictures route. But. But I knew about it, but I really kind of learned. And I think this is what Kiyosaki teaches so well is there's another world where basically it doesn't take always your labor to equate to money. And that if you can ever actually break that barrier and get to passive income, it really is liberation of your life. Because if you have your health and you have your time, I think you really have wealth.

And you, were you 35?

Yeah, 35, yeah.

And from what you've told me, basically at zero.

Yes. Zero. Maybe negative. A little bit.

And why was that?

Well, after I had left Sony, I had my savings and I decided to create a company producing films. And the film actually got made, got Disney to release it, but because of a series of partners that tended to take advantage of a situation because they were very wealthy and I was just starting out, ultimately went through all my savings to get this film produced, which took two years to produce. It was like blood, sweat and tears. For two years. I produced everything I was supposed to produce. But when it was time to pay me, he pretty much took advantage of a very great contract. But he basically said to me, I'm rich, you're poor, I know I can crush you. So take this, take 25% of what you deserve and call it a day or good luck. And it turns out he was actually right that you can do things like that in the legal world.

So your whole career was in this business producing films.

Yeah.

And you had some successful ones. I can say what they were. Right.

Yeah.

So JP produced Where the Red Fern Grows.

Yeah.

And most of us have seen that film, but you produced it and walked away with basically nothing. Basically a token to make it disappear.

Right.

And you had nothing or less than nothing. You started a whole new life at 35.

Yes.

And that's the piece of it that is so interesting because most people don't start all over in a brand new industry at 35 and become wildly successful, one of the leaders in their field. So those early stages when you were starting all over, what was that like?

Humbling. Very, very humbling. I think so many of us get our identity, including myself, from our career and even particular with entertainment. When you're, you know, people kind of think, you know, you work for a movie studio, you're flying around the world, you're doing all that stuff. So I think to go from that to literally complete destruction of that and then recreation and something else where you really don't know what it's going to be is really hard.

But did you know what it was going to be? I mean, did. Were you hellbent on this being the career?

No. No. I mean, truthfully, I wish I could tell you it was.

I'm glad you didn't. It makes for a way better story.

Yeah, no, not at all. It was tenuous at best. It was like, pay the rent, go, go to work. And I remind you, Ryan, my work was my old Childhood bedroom because my dad had retired and he was kind of mentoring me for my old childhood bedroom. So I'm back in my driving 30 minutes to my old childhood bedroom and every day I had to recreate makeup. I mean, I pretty much had to make up the agenda. There was no agenda, there was no course, there was no easy way to do this. It was like one thing at a time. So very uncertain.

How old were you then when you're working out of your parents bedroom?

I was 35.

35 for a few years, I think.

Correct? Yeah, yeah, yeah, yeah. Till. Yeah, 30. About two years. 35, 36. So I got married. I was thinking I was just leaving the bedroom when I got.

Oh my goodness. So this is so interesting to many entrepreneurs and investors simply because that's one of our greatest fears, is having to go and start all over. And it wasn't until you were almost 40 that you started to hit pay dirt, Right, because you did a total pivot at 35, 36, 37. And most people don't want to do the do over and go through the period that you referred to as humbling.

Yes.

And so going through that period of being completely humbled, what gave you the foresight to continue going there and going through that time rather than saying, I'm just going to go do something that makes money now?

I had a dream and the dream was financial freedom. The dream was I'd met the girl in my dreams who's now my wife, and I had a certain vision for our life together. And I knew that any plan B would not get me to that destiny of, of what I wanted, which is my time, which it's kind of fun because now coming back to present day, I feel like it's as good as I thought it was going to be to have your time. And if you're lucky enough to have your health, it's. It's the best.

So how long did it take to get to that point?

Well, there's varying degrees of it, you know, so being more specific, like how long did it take?

How long until you felt like you had real freedom?

I would say real, real freedom. Probably five, six years ago.

Really?

To really understand.

Five, six years ago or five, six years in.

No, five or six years ago, really, where you're kind of like. Because it's funny how the mind works. There's always scarcity. So you make X, you make your first million, let's just say. And you're like, wow, I can't believe I made a million dollars. And then you have kids or you've got something, you realize, oh, a million dollars isn't quite as much as I thought, you know, and so that takes a while, I think, both for your pocketbook and I think the mind to catch up that like it. We're safe. We're good.

The reason I asked that question is because that means you started over at 35, 36, 37, and then it was 14 or 15 years from then that you accomplished the dream, the total dream.

I'd say everything else was. I would say from 40 on, it was in the making. Like, I saw. I saw that this was gonna. I mean, I'd say by. I would say, really, Ryan? By 36, I kind of knew this was going to work. Like, I had a lot of confidence. Like, I couldn't prove it to you in my paycheck quite yet, but I had. I had a high degree of confidence that I was starting to enjoy it. And then I started. I wouldn't say I even had the big vision yet, but I kind of saw that, like, I can make this work. I. I had been able to present and create trust with my first few investors and then go full cycle, show them a deal, and create a return, which to me, to this day is still my favorite day, is return. It's not the day I buy or it's not the day I loan. It's the day I return. It still gives me actually that same kind of buzz of, like, wow. Cause then I feel like I actually did something. I really served something bigger than myself. And that's super fun.

JP, I ask all these questions selfishly because I'm 34, going to be 35, and some days I think about making a complete pivot and starting over. And I know that there are many, many like me.

Yeah.

What would you say to the young JP or to the young Ryan?

Yeah.

That is thinking about making a pivot and going through the humbling period again.

Yeah. You know, I would say that your mind will be terrified. It should be. Because it really is like, everything you identify with. And it's funny, I had someone say to me, they were a channeler, and they said to me, at 35, they said, your sister who's passed is telling you to go for it, that your ship is going to come in. And of course, at the moment, I don't know that I completely believed it, but it was an interesting thing, and it really stuck with me. My ship's gonna come in. And I think that if somebody would have just told me, stick with it, because you Know what's at stake is your dreams. And anything less will not be your dream. It'll be something, but it won't be that. So I would say, you know, sometimes it takes audacious, Audacious, say that easy conviction to do it. And.

It'S scary. It's scary, but it's. It was scary for you the first time, wasn't it, Ryan? The first time you. Your first deal and you have all riding on it like it does. That muscle doesn't change. You get a little more confident, but it takes that courage.

What gave you the audaciousness to go through that period when you're 35, 36, 37, and you've met the girl of your dreams, but you have no money, most people wouldn't see that as a time to sprint towards something. They would build up a safety net first.

Yeah.

Why were you different?

I think on some level it sounds really. I just believed in myself. But it's funny that I say that now, looking back at it, because I don't know, you're right. I mean, like, I could have just taken a corporate job and been safe, but I think I wanted this so bad. I think I believed in myself that somehow, some way, I'd figure it out. And evidence was not really there at that point because, yeah, I had a good corporate job, but I had tried like five or six other startups that completely failed. So, like, I had a lot of failure to. To show me. And again, things that almost got there, including the red fern. In some ways that you could say, I think the movie, I'm really proud of the movie. But it wasn't a huge financial success because of the story I told you so. It's almost like it's that conviction in yourself. It's like even when the evidence doesn't always support it, you kind of like, I believe in myself and somehow, some way, if it's the sixth time or seventh time, I'm going to figure this out. Until you do.

So in some ways, the real estate investment empire that you've built today could have been another do over three years later had you not just kept going and you would have just found the next thing kept going.

It terrified me, so I didn't want to think about it. But yes, I would have, I would have kept going. I really think at that point. I used to joke at certain points. I think by my time I was 41, I'm like, this better work because I'm sure I'm unemployable.

I like doing things My way. You know, I don't like corporate. I've done the corporate thing. It's great. I just, I don't ever see going back to that. Like, I'm just gonna have to figure it out.

You said by 40 that you felt like this was gonna work.

Yeah.

What was the moment or the turning point in which you had that win where you knew that you had something?

Yeah, I think.

I think it takes a while to really realize, I don't know that it was one moment of an aha. But I do think when I sold my first property and we made our first returns to those investors, there was something of like, I can do this because. And that takes about typically depends where you are in the real estate cycle. I think in this case it was about two years. So I had to go raise the money. We gotta execute a business plan. Cause you know, real estate's no different than any product or service that a lot of the people that you're mentoring, you know, it's the same thing as a business.

Well, you can't see me if you're listening, but I'm smiling ear to ear because I run a fund for E commerce brands. And we haven't had our first exit yet. We have several brands that we're really confident will, but we haven't had that moment that you're talking about where there's a liquidation event to pay back our investors. And when you said that, that first big return to your investors, like I think we got something, I haven't had that yet. And so I still have those moments where I'm a little scared that this is gonna be a do over. But I know that one of those brands has a big win. That will be the moment.

That is the moment.

So that just gave me a lot of permission to keep going really aggressively towards that moment because I know it's happening and when it happens, that's gonna be where the switch flips.

If I'm anything like you, I think that's right. And the trick is, because you're going to see after you have two or three, the first one's always big. It's very meaningful because you've put the. Your business plan together. Sweat and tears, all nighters, whatever you've got to do. And it feels really good. But then the mind is tricky. Then you get to your second or third or fourth one and it just starts to become a little more regular. Oh, you have taken four companies public or five companies have hit and then your mind almost wants to make it like, just like A human being. We want to make things normal. Don't let it become normal. Even to this day, when I have wins, I try to go out of my way to come up with something creative, to acknowledge the talent of my team. The talent, the blessing that we get to do this. The talent of my team, the fact that we live at this time in this place and that we get to do this. I never want to forget that first endorphin hit of that first success. And I'd really encourage you and everyone out there, like, to. Oh, to. To do that. I mean, to really. To. To go out of your way. I'll get. We had a big win two weeks ago, and I asked the group, including my. My joint venture partners, what do you want to do? And they said, let's have a fantasy weekend in Salt Lake. Let's do snowmobiles and the best restaurants and the best hotels. And that's going to be our victory. We don't have to do that. But that actually, that weekend I will relish and really reappreciate everything going back to the origin story the first time.

JP, I had my first big exit in 2017 and I never celebrated. I went right back to work.

A lot of people do that, and.

I paid for it because I never told my brain how good it is to win. And so I believe that I told my brain that it was actually failure because when you have a big financial win like that and then you go right back to work and you don't give your brain the reward, what incentive does it have to go do it again? And I have been paying for that for the last several years.

And you can stay in fear about the uncertainty. Like, yeah, it's really good brain work. It's not just. I think it's a really good point, Ryan. It's like it's not just the reward. The reward does reinforce the things you want to reinforce with your brain.

Jp, do you remember what the financial win was for you personally after two years of hard work to get to that?

Tell me. I'm a mountain biker, so I really wanted a really cool truck to take my mountain bike around. And I really couldn't afford it at that point. And it was like, at that point when I had my first sale, I bought this truck and it really meant a lot to me because I think for years I wanted it and I realized it for the first time that I could afford it. And from there, a year later, it went to a BMW convertible. And then still love cars to this day, but that Truck meant a lot to me, and it was. Every time I drove it, I went right back to that deal. I could tell you the deal, how much I made, and that truck was really symbolic.

How much did you make?

I think I made $68,000 on my first deal, and I bought that truck, and I was just like, couldn't believe that I could buy that truck.

Was that two years of work for 68 grand?

Yeah. Yeah. On that one deal, I had other deals going, but on that one deal, it was 68,000 bucks.

How were you getting by before you had the 68 grand?

Scrappy. So what I was.

This is what I want to milk. Because you talk about it like it's a done deal, like it's. No. Like it's not a big thing. But you're 35. You work for two years for nothing, and then your first win is $68,000, which is like, average salary. Your first big win was 68 grand, and you're 37, 38 years old. There are plenty of people who are entrepreneurs who would give. If that's the win, they would have given up at that point. And I want to know, in your mind, there had to be something that kept you going there. And what I'm hearing from you is you just. You had the internal knowing to keep going.

Yes, and what I was doing to keep it going, first of all, I was driving. Driving the worst car I've ever driven in my life, which was, for me, was very humbling, because after having some success, I have to go back to a car that I might have had when I was 21 and not when you're 35 and you know, how you look and how that looks to your friends and all that. It's humbling. You know, modest apartment, nothing. I wasn't living in a house or not even close, But I got my broker's license, and I was just doing deals. I would do a deal where I help somebody buy a.

Dollar store, and I'd get a $15,000 commission or. I mean, it was like, whatever it took to do. I mean, whatever it took to do with that license. 10,000 here, 15,000 here, 20,000. And I probably was making 60,000 a year, 70,000 a year, probably the 60, which was, you know, in l. A. You just don't. It's. It's a pretty humble thing. So that 60 was, like, a big deal to me, or 67 was a big deal to me because I was making $10,000 at a time just to keep. So I just. So I Knew I could play. Because what I realized is, and it's not that different than what you're doing in the sense that I got to, you know, there was, there was these other real estate deals. So while I got the first one in, I had two or three more that were not baked yet. Like, just like you when you finance a company, two or three more were baked. And I was just betting that those would, one of those would work and then another one might work and see where this thing would go. But I had no proof, There was zero proof that that would work.

JP when you're starting this new venture and you don't have any wins in your back pocket and it's your, it's your second career and you're not paying yourself much, you could have had a lot of reasons for you to be scared to ask for the investor to trust you.

Yeah.

How did you persuade or to enroll these investors to trust you with their capital without a track record and without a book of deals in your back pocket?

I think I knew that these, because I had worked so hard on these first deals. I think I was smart enough to know at least that these were better than market deals. These deals were extraordinary. And there weren't deals that I could replicate. So instead of trying to do five deals, I picked one deal. After looking at hundreds of deals, I realized that this one deal or two deals, the first deals were better. I was getting better than market deals. And I think that confidence of knowing that I truly had something gave me the confidence that when I would speak to these investors, I would just tell the story. But I was telling the story from a place of conviction and authenticity. Like I was just telling the story that was real, not a, it wasn't a over the top story. It wasn't like hype just to get you to say yes. I think, and I think that energy of really probably the conviction first and the authenticity second of just probably to this day, Ryan, as I raise money, I just tell the story as it is. I don't have to like overdo it. I don't have to oversell it. A lot of times I'll start, you've heard me in my high energy mode because I really, really believe to this day in what we do. And sometimes I get frustrated because I know I could be even twice as big if I wanted to. I could have pension money, I could have 100, several hundred million dollar funds of police money or this money, because I have that track record at this point. But that's not where I get My enjoyment from. I get my enjoyment from that conviction of doing something that I. You're the same way, Ryan. I mean, when you talk about your companies that you're backing, it's like you kissed a lot of frogs. You've went through a lot of things and you just know that this is something. You've been doing this long enough to know when you have something special. And you. And I can't guarantee the results of that, but it feels really good after doing this and you get better and better. That to be able to share that with someone is pretty cool.

So what I'm hearing you say is that you went through the humbling period of kissing a lot of frogs and looking a lot of deals and still having the humility to say, no, I won't pursue that one or that one or that one. But this one, I can stand in front of an investor and say, we got this one, and you don't have to run on your own track record then because the deal was so attractive that you could look an investor in the eye and say, this is worth your capital. What about that deal gave you that confidence? Why that deal over everything else?

The partners who I chose to actually execute the business plan I believed in, they did have a track record. While I didn't have a track record on the money raising side, they did have a track record in operating real estate. And they knew the market well. They had other properties in that market in the past. Think they had a reasonable business plan. They knew it was a good deal. Like they'd been doing this for a while and they knew it was a good deal. And I would challenge them left and right, every angle and I couldn't find. I was looking at what's your SWOT analysis? What am I missing here? And grilling them. It took me a long time to say yes. And by the way, it took me a long time to find that first deal. It didn't just come. In fact, the first deal that I thought was a good deal, it turns out it got swiped for me from someone else that I knew from high school swiped it for me, which is a whole other thing. But it took me like eight months to find that. Flying across the country, walking things, coming to Austin for my first time, and I actually thought I found my first dill in Austin and then somebody bought it. When I was on the airplane, somebody overbid and bought it from me. And I didn't have the experience to know that don't go unless you have it locked up. That was a. That was an early experience don't fly unless you have it locked up.

So for you, with, you're in this new career, but you're flying all over looking for the first deal, just making it happen.

Yeah.

And how did you find this one and have the ability to know that these partners were the right fit for your first deal?

I'm pretty sure I found this on.

I think I found it. Either we were running newspaper ads at the time, and it might have been through either a newspaper ad that they found me and called me, or there was something. It still exists. It's called LoopNet, which is kind of a commercial gateway. And it might have been the early days of LoopNet. And I found them because it had been a while. And at the end of the day, you get to the point when you chase all those deals for eight months. Pretty good at the spreadsheet, pretty good at feel. I've walked a lot of things once. You've seen 30 of the same kind of deals, but the numbers just look better. And the story, you try to. You try to pierce holes in the story, and you can't even find the holes. You keep trying. You keep asking. I think it got to the point where I'm like.

They'Ve got this. It's pretty hard to screw this up. Like, I looked, you know, until this day, I still look at, like, what's my downside? Like, what if I'm wrong about this premise? Like, then what? And I think on this particular deal, it was bought at such a good price, it had so much upside because I could tell it was being mismanaged. You have to re. Like, I mean, nothing's impossible to screw up. But there was so much margin that I felt highly confident that I was going to deliver something between good and great. And actually, what I delivered in the end was great. It wasn't even good.

So what I'm hearing you say is that what gave you confidence in this deal was that you could tell there was a mismanagement problem and the network you had, the person that you had was a great manager, and you could just tell that with a good manager, the numbers made sense. And so this deal just needed different people in place, and you knew that you could bring them all together.

It's still part of my strategy today, Ryan.

Well, what's interesting about it is that's the producer mindset. When you're a producer, you're not doing the acting, you're not doing the funding. You are bringing together the pieces, and you brought that exact same mindset into Your real estate. In entrepreneurship, I call this the owner's model. The owner doesn't try to run the entire business. The owner brings the pieces together, it brings the capital together, it brings the operations team together, it brings the CEO in place and produces it and says, I'm the owner of this.

Right.

And that's the exact model that you took into real estate.

Yes. And really to this day, if you think about what Thrive does, you know, how do we create value for investors? Well, we go out and seek these. On Friday, I got a phone call from a 32 year old. It reminds me a lot of, you know, he's hustling and he's got talent. And so I'm gonna go meet with him next week. But it's the same thing, right. I'm always looking for that next hungry, talented person that's gonna go the extra mile to find the deal and then support them and become a platform for them through time. But it's the same owner. Then I gotta find the money. And so it's really, you know, my value is to be able to identify talent. You know, actually the money part for me has now gotten a lot easier at this point. The money's not the hard part. It's actually the deal and the talent to execute the plan. Which probably isn't that different than what you're describing in the owner's manual. What you call the owner's manual.

The owner's model.

Owner's model. Sorry. Yeah. Yeah.

JP, today we've got 20 years of investing history now.

Yeah.

You have somewhere around a billion dollars under management. You have partners all over the country. How would you describe today what Thrive does?

It's the same thing on a bigger level. It really is. If you think about it.

The numbers just get bigger. But it's the same fundamentals. And that's not true for a lot of companies, by the way. I think a lot of companies.

You either get so corporate that you almost start to rest on your laurels and you have another team do it for you. But as you know, there's something special about the founder, I think that or someone else in your team. Because no matter what the spreadsheet say, it's gut. And how do you develop gut? What is gut? Gut sometimes is just you have good senses. But it's a lot of experience too. I've been down this road before. I know the 11 things that can fail me. I know when someone tells me a story, the next 31 year old is going to tell me a story. I can kind of feel. I can feel not only here, but I can feel where their strengths might be, where their weaknesses might be, to really come up with a great evaluation. And I think that's one of the greatest things for entrepreneurs with time, is when you get that mileage underneath you, it just gets easier and easier and easier to kind of be the wizard.

Twenty years in, with a billion or so under management, at this point, do you have a clear thesis for thrive at this point? Have you found that bullseye that you now stick to?

Yeah.

How would you describe that?

I think the bullseye is every time I try to spread out into other categories, it's always the one thing I didn't know. And if you want. If you don't mind learning that, it's great. But I think, like, for instance, for me, I got really passionate. I thought. Let me take that back. I didn't get passionate. I thought that I saw an opportunity in senior living. And the truth was I didn't have the passion or conviction for it. It was all in my brain as to why. And I could. It was a very rational argument at the time as to why it would make sense to expand into that area from like my. My core business and kind of just add another wing to it. But I never had the conviction for senior housing. I wasn't particularly interested in the space of seniors. It didn't really match my mission of, like, building. I mean, while it's building communities, it actually wasn't a community that I was particularly interested in building versus, like, the workforce, housing and really helping the underserved in America, that.

That.

That lights me up. Where I think seniors is great, but to be honest, I just, for whatever reason, don't have the same energy for it. And. And I was really blinded until. Until I kind of got to get kicked in the teeth a couple of times to realize, you know, you always say when you do something that doesn't work out like you expected, what can you learn from it? I think that was the biggest lesson I could have learned from it. There was no conviction there. It was. It was a mental construct versus a conviction.

So you developed a skill set for years before finding that real bullseye, which is workforce. Workforce housing.

Yeah.

How would you describe workforce housing to someone who doesn't know what that means?

It's basically, we do, you know, apartments across the south and the Southwest, and all workforce means is we're really targeting people making, call it 25 to $70,000 a year. It's your workforce, your policemen, your firemen. It's Your teachers, It's kind of rents between 800 and call it $1,600. And that's kind of what we specialize in. You know, it's not, it's not homelessness, it's not people, you know, with government handouts. It's Your hard working 41 million people in America that we're here to serve.

And the idea of investing on purpose, how does that infiltrate how you look at a deal in workforce housing where your average tenant is making 40k a year?

Yeah.

You know, I think that I really feel as someone who's been lucky enough to have financial success in this lifetime and I also think part of just being an American in this time when there's so much turmoil, that this idea of we need to pay it back, this idea that when there's such income inequality in America, you know, with the rich getting richer and the poor not getting the benefits.

It really struck me in a way, it struck me as a person that this doesn't seem very fair. And then when I saw how a lot of people were being treated in this industry and kind of how, how these residents are spoken to, it became really commoditized. They almost felt like they were products and not people. Pieces of traffic. I think we've talked, you know, like pieces of traffic or you know, what's your business plan? We're just going to raise rents. I didn't hear a lot of people talking about what value they were creating. And they were creating some value. But the ultimate thing was it was very obvious to me they were trying to create the most value for their investors. And the residents really were not in the middle or even part of a real spoke in that conversation.

It is interesting how when we're talking about residential real estate, we very rarely think about the customer.

Right.

In every other business you are customer obsessed.

Right.

But when it comes to residential real estate, the customer seems to be the investor for most funds and most companies.

Right.

You flipped that completely.

Yeah.

And you say if we're good for the customer, then the numbers will take care of themselves, right?

That's exactly right.

How do you communicate that to investors and how do they respond?

What I had to learn because at first I was, I was trying to communicate that with more of the social impact side, which is it's the right thing to do.

You know, it just seems like it's the right thing to do, like we can still make a good return. But really, really what I've learned over call it the last 10 years of actually doing these and Start out with small little things. Let's plant a little garden and see what happens. Like, this wasn't like a big grand idea. It's like, what can we do in our budget? Hey, we save 5,000 on paint. Now we'll build a garden. And then we realized that don't grow tomatoes because they'll wind up on your wall because kids like to throw tomatoes. It really became this trial by error. I had no budget for this. So again, whenever I had a little money to save, I would throw it at a new idea. And that's really how it came about. I think what happened later though was we started seeing that our resident retention numbers, meaning that residents would stay longer or residents would refer their friends and they'd say, this is a great place to live. It seems like something's going on here. And that, you know, when, when the management, because most management companies are just third party companies, they're not, you know, they're not, they're not. Most of the time they're not. Unless it's a big institution, they're not part of your company. And they're just trying to pretty much execute the business plan for most people. Think about it. Commercial real estate, when I say the multifamily is no different than a business, what are you trying to do? It's your, it's your ebitda. And an EBITDA is expressed a little differently. But basically you have your income. You want to create as much income as possible, which in this case you need to either raise rents or lower expenses. There's no other way to do it. It's that simple. So if you're a company, how are you going to increase your income? Raise rent? How are you going to try to trim down your bottom line? And that's your, that's your ebitda. In this case, it's called noi. It's really like no other business. But the problem once again is if those are your two things you can do, and that manager's job is for $70,000 a year, is to please the owner. What do you think that manager is thinking about? If that's the only signal they're getting from the owner, they're going to raise rent and try to lower expenses. And that's not a great formula without, without the owner saying, hey, the objective here is to create a community. Yes, we need to do these things, but it's all going to need to be wrapped around a community where people are referring, you people are staying longer. People feel like they're being treated well, they feel like this is their home. They're getting their respect, they're getting the decency, they're getting new carpeting because they've been there for three years. Reward them like, like. And those are simple things that are becoming more and more in our industry. So I love to think about how do you start with those basics and then kind of signal, keep signaling more and more that you matter as the resident. The resident. You matter to us. But if I don't communicate that, if I don't feel it or think it or communicate it to the entire team, it's not what's ordinarily thought about in this business at this point.

And I think you hit the nail on the head that you first communicate it to your team. It's one thing to say it, but if it doesn't become part of the company culture, then it will get swept under the rug.

It will.

And it always starts with you. It always starts from the top and percolates through the team. And then the team oversees how that is enforced throughout the entire portfolio. JP I don't know of a whole lot of investment funds that keep that as the priority. In fact, I know very few real estate investors who are even thinking about that. They're just looking at numbers on a spreadsheet.

Yeah.

Do you know of any other teams that take that same consciousness going into a deal? Or is this part of what makes Thrive different?

I think it makes Thrive. I think what makes us maybe unique is we started, we started figuring this out a while back. So we've been doing this for a while now that social impact and ESG investments are becoming more popular. There are people coming out that are doing it. And I think. And there are people really doing, including one of my partners who just raised 300 million in a fund. And I do think there are some people who really do care. But I still find that a lot of us, and we don't mean to. I don't. I think it's. I think it's a human trait. We, we want to do the right thing. And sometimes we, we build narratives in our head. And I would even say, to even gut challenge myself of saying, are you really being authentic? Do you really care as much as you're saying? Or do you want to sound good? Or is this part of your program? Hey, we're. Yeah, we're doing this because we still raise rents. Like, we're not angels. We're not a nonprofit. This is a for profit company. I think challenging ourselves, like our own authenticity, like, how much Am I really all in on this? Like, am I really all in or am I kind of all in or my. Or does it look good on a brochure? And I think a lot of people do mean well, but I see how quickly their convictions fall apart when it takes a sacrifice, like more money or telling your investors they might make a little less because we are going to invest in this. That's what I noticed. When the rubber meets the road is when it takes money people don't like. Like that's the funny part more than anything. Yeah, you were gonna have to spend some money on this or in our case all last year, you know, I actually had to go raise money. I gotta get donations to go fund these programs and I had never really raised money before and it was humbling and a little embarrassing for me and uncomfortable to ask my colleagues and friends for money towards a program where they weren't gonna, they weren't gonna see direct benefit. It was not an investment. It wasn't, Ryan, you're going to earn 12%. It's like, Ryan, this is the right thing to do. And would you consider leaning in? Because I think it's time that we, you know, really make a statement out there to the entire industry that this can be a lot more of a community based process and still be profitable, which is half to this day, which is mostly what it takes to. Otherwise everybody would do it. Most people don't have never really put either two and two together that doing, doing the right thing will actually create bigger profits because you're going to have this sticky resident retention or they don't believe it or are too busy to think about it. They've got other things to worry about which is, you know, which a lot of people do.

JP in your opinion, do you need to get to a certain financial level to be able to think with that amount of intention or can you think with that intention first and the money will show up?

I think it's all between your ears. So the answer is I think it's the intention you bring to and I think a lot of people think they gotta wait to get rich to become better philanthropist or think about that. I would say it's just the opposite because I know so many wealthy people who have scarcity mentalities like they don't make $50,000 a year most. I mean I feel like still a lot of business still kind of revolves around that scarcity thinking and that doesn't, it doesn't cure itself necessarily just because you've got more credits in your account.

But you said they're still successful financially. What's the difference?

I think the difference is.

I believe maybe this is the optimistic side of where I come from. I believe that we are hardwired for community and to help each other. And I think that's what brings the most amount of joy. And so I think that if you're not kind of, if you're, it's very two dimensional to me, if you're just there to make money in your company has great returns, that's great. But it's very one dimensional to me. I think if you can do that and you know, you've got customers that somehow are being served on a higher level to that you're actually like really proud of what you're serving them, the service or the product. You really believe in it. Your team believes in the mission that they get that you're doing something that's extraordinary and that you actually care. Not that you're using the words that you care, but you're showing it consistently. And it's by, it's not just with the residents. When it comes to bonuses for your employees, when it comes to you sell and you make a big profit to bonus that janitor to the manager in ways that they're not used to being bonus like you have to walk your talk. And I'm going to tell you Ron, I'm a work in progress. I'm not, I'm not prophesizing something that tells you that I've mastered. I can only tell you at this part of my journey that what I can observe and how I think I keep, you know, hopefully keep getting challenged because hey, it takes more money. This year was the most money I've ever spent on bonuses. You know, it hurts a little bit and maybe that's where the expression give till it hurts comes from. But I would tell you that the satisfaction of running a for profit business where you know that the whole, all your stakeholders really are looking at this and saying this, this entity that you created is a blessing. It's a good thing and with respect because it is a profitable, you know, amazing organism that's much bigger than me. I mean it's, it's my team. It's just something to be proud of. And I think that that being proud translates quite frankly to greater happiness. So I'd argue the, the three dimensional or the versus the two dimensional or the one dimensional is you actually really enjoy what you're doing. It's not a slog. You get to make decisions like I don't have to grow, but I can grow. I just think it gives you a lot of freedom and a lot of other dimensions that kind of where all of a sudden your. What you do and how you live kind of flow with each other. They're connected to each other, as opposed to two very, very separate things, which I'm sure you've seen companies where it's like, on Sunday, you're happy and you're almost like rolling your eyes and, you know, Monday's Monday kind of thing.

Well, I think it's interesting that you started talking about how you went on this journey and were willing to go through the humbling phase in your mid to late 30s because you wanted freedom.

Yeah.

And you know, today that freedom is way more than just money. Freedom is also how you express your money.

Yeah.

How you deploy your money. The purpose that you feel with, where your money goes with, the difference that you feel like you are making. And that's living on purpose.

Right.

And that's investing on purpose.

That's exactly right.

Jp I'm very excited to go on this journey with you, my friend.

Me too. This is fun. And thank you.