From the Skies to the Market: Eric Bonick's Investment Insights

Are you one of the many busy professionals working in offices day in and day out? Do you wonder how some people grow their wealth fast, retire early and play on work days? Well, you're in luck because Ginny Bolling hosts this show Pivots of Prosperity where she interviews people that can do just that play on work days. Many guests have become financially free. She also interviews people that are on their journey and people that are in support roles like attorneys, contractors, brain brokers and others. Commercial real estate is the common element. She is on a mission to be sure. Busy professionals know they can own substantial commercial properties too, like apartments, self storage facilities and others and not have to do the work managing them. Passive investing is the key. Syndications are the typical method. Tax write offs are some of the biggest rewards. Ginny and partners find the deals, build a strong team and business plan, then offer the investment opportunities to passive investors. New episodes are released Every Tuesday at 12 so watch for new releases. If you want to get involved, let us know. You need to get pre qualified to hear about most deals. See the show notes for contact information.

Hello Hello. Jenny Bolling here with Pivot to Prosperity brought to you by Pivotal Real Estate Investments. And we have here with us today Eric Bonick. And so thank you for coming on Eric.

Thank you so much for having me Jenny. I really appreciate the opportunity.

He is with Paragon Assets. He I'm going to just go ahead and read the bio and then we'll go from there. Of course, Eric believes in providing both premium services and transparency. His core responsibilities with the company are asset acquisition and portfolio management. Before Eric co founded this company, he earned a Bachelor of Science degree in Military and Strategic Studies from the United States Air Force Academy. After graduation, he flew MQ9 reapers for special forces, then transitioned into Acquisitions for the Air Force and Space Force. Eric started investing in real estate in 2016 and quickly realized the importance of real estate assets. While serving, he became a licensed Realtor in New Mexico in 2018 to provide desperately needed expertise to home buyers, sellers and real estate investors. Eric earned a Master's in Real Estate Development through the University of Arizona in May 2024 and with the intention of utilizing that education for the benefit of the company and its investors. Welcome. Yes. So there's so many more things we just talked about too that aren't even mentioned there that I think are great to talk about.

Absolutely.

So tell us what you want us to know. First and foremost, after I read that.

The intention of starting this idea of investing jointly in real estate came from a need That I grew up, my family was not well off, we didn't have a lot of money. There was no investing speak, there was no financial talk at the dinner table. It was considered disrespectful. So after I was in college and I could see how other families operated and were able to be very successful financially, I was trying to figure out how that worked over time. And then it kind of dawned on me that if you have money, it's really easy to make money. If you don't have money, it's very hard to get to that hurdle. My business partner of had this quote which was pretty funny. He was like, the easiest way to make a million dollars is have $10 million. And it's so true because there's so many hurdles out there for average investors to just participate in deals that could be extremely lucrative for them, but they're just barred from it because they just don't have the financial backing and they're not accredited or what have you to be eligible for those deals. So I really wanted to create a product where average investors had the ability to partner on deals that were typically exclusive only for people who already had money. So that was really one of the driving forces behind doing this. And I was very fortunate to have some awesome friends and family that took the leap of faith and invested their money so that we could go off and develop what we have today.

Which is pretty much by definition almost a syndication with 506B, right?

It is, absolutely. It didn't start that way though. We had to start before I, before I knew what these things were called. Everything kind of started off as a joint venture. And I realized very quickly it was extremely cumbersome to manage multiple joint ventures between different properties, different investors, all this stuff. And it was administratively inefficient. So it took me about a year to work with the right attorney team. After I interviewed about 12 of them at a price point we could afford that. I could do a consolidation of roll up, transfer everybody's equity into a higher level fund and then carry those assets forward and bring all the investors with me to create what we did underneath Paragon assets. So it was kind of out of necessity and having to learn a bunch of things that I didn't even know was possible. And then it was a lot of brute force to just figure it out, which was great.

Well, kudos to you, especially at a young age to have figured out in one year to do all that while you're still working. That's excellent. That's really something else. So why don't you expound on that a little bit more? You were telling me a moment ago that it's kind of like marrying a syndication with a reit, right?

A little bit. Right. So a syndication from, I guess at a fundamental level, you know, everybody talks about, like syndication, and it's like very real estate focused. Well, a syndication just means people pulling money together for a joint vision, right? And then you have limited partners and general partners, and sometimes a joint venture is also a syndication. Right? And a joint venture, everybody kind of has roles and responsibilities. It's a lot more equal and stuff like that. There's no passive investors. But, yeah, for a syndication, it was still one off. And that was. Something in my mind was just very inefficient about it. I didn't like having to incur all those upfront costs, the filing, the tax filing associated with that. And I just felt like there had to be a better way of doing that. But then when you look at a REIT that's very expensive to do, and it's very complicated. And very early on in my research in this, I was googling and I just looked up, how do I form a. I was looking for attorneys that could form a reit, and I found a law office in the financial district of Manhattan. And it's like a huge international law firm. They got offices all over the world. I couldn't even tell you what their hourly rate is, right? But I ended up just going on their webpage and I found one of the attorneys who was like a vice president up there. And he was like, his thing was, I do REITs, right? So I called the number on the website and it turned out to be his direct desk line. And he was very caught off guard. He was like, who are you and how'd you get this phone number? And I was like, it was on the website. So we had like a 15 minute conversation. I told him exactly what I was going to do. Super nice guy. I mean, I'm sure his hourly rate's like $1,000, $2,000 an hour. And I told him what I was trying to do, and he was like, okay, if you want to do this, you need $100 million in assets under management out the gate, and we're going to charge you half a million dollars to set this up. And I said, okay, well, I appreciate your time. Have a great day. I'll talk to you in maybe a decade. And then the search continued of trying to find a law firm that could help bring everything together under kind of a Fun structure. And I was very fortunate to find somebody through the securities Commission in New Mexico. They referred me to an attorney's firm in Albuquerque that knew exactly what we were trying to do, how to do it, because they had experience in Silicon Valley with tech startups, VC capital, all that kind of series fundraising and stuff like that. And I explained to them the idea and they're like, oh, yeah, we could do this. And it was cheap. Like I'm talking, I mean, we were like in it for like 22 grand to do all this roll up, consolidation, the filing, everything and then carry into the future. Like, I mean, you're in the space, you talk to attorneys out there and they're going to charge you 15 to 20 grand a pop to do this. But, you know, the way we're structured now, when I do a refiling every year, it's about 1200 bucks. That's it. Right. And like, I mean, I just keep, I just don't like inefficiency. Right. And I like for someone to do boilerplate over and over again, 15 grand a pop, that's unacceptable in my opinion. But just me.

So does this fall under what would be called a customizable fund where they can pick their asset that they want to invest in among all those that you hold in the fund?

No, it's, it's a semi blind fund, actually. So it's semi blind in the sense that when somebody invests with us, they see all the previous assets and the current assets and how we've been performing. Right. So you're not, you're not walking into a new entity here. And the blind portion of that is they are subscribing to a business model and a strategy of like, hey, these are the assets we go after. Here is our buy criteria. Here's how we analyze things. This is what we're going to do to generate income for you. Do you want to be on board? So, you know, we have a tremendous level of trust with our investors because they are friends and family. And that's, you know, that's just where we had to start, with a 506B. We can't be out there advertising and all that kind of stuff because that violates the SEC rules. But we've only been able to successfully do this because of that level of trust. I mean, I don't, I don't know how many deals out there that you've underwritten and looked at where they're just like, hey, this is like our idea and we're just going to do this. But we just need you to write us a check and then we're just going to acquire assets that fit our buy box. Like most people, unless you have that level of trust is probably not going to do that, right?

Yeah, yeah.

So that's, you know, it's been very fortunate for us, but also it does kind of limit our ability to expand because it's just friends and family and you know, those relationships take time and like, you know, we've known these people for years. We've served with these people, we've fought wars with these people. So like, you know, you just have this very high level of trust that it's not easily found on the open market.

Right. Well. And so taking that forward now. So you've done some midterm rentals, some short term rentals, I believe, and you've. And you've expanded on that, right?

We did, yes.

When people look at your business model, they'll see some of that, but you're also going into some bigger, bigger, bigger stuff, right?

Yes. Yeah. So a quick recap of how the fund started. It started with a duplex in Albuquerque and then 25 condos. And the idea with the condos was we're going to furnish them and go midterm to long term rentals for traveling military, nurses, business professionals, what have you. Right. So, and then the duplex was really the first get your feet wet. And that learned a lot of lessons on that, which is great. And we still made money. It was awesome. So it was definitely beneficial there. And then inside of the fund it has expanded to. We have a fourplex up here in Denver. We done flipping the property and then we were lending money out as well. So I mean, because we're semi blind, we have just ultimate flexibility to go after deals and opportunities immediately, which is great because we can constantly keep working the capital and really optimize how much profit we're able to generate for the investors. The other side of this is outside of the fund and what I do, I am also working with a private equity development group in Colorado Springs and we've kind of stumbled into this very unique space that nobody's really going after right now. And the people who are in the space can't produce at volume or quality of what we're about to send out the door. We are currently building a fabrication facility. It's 125,000 square feet on 103 acres in Florence, Colorado, where we are creating modular housing units. They're called, I think they're defined basically as park models because they're 399 square feet. But you know, these things are going to be extremely high end, premium all out throughout the finishes and stuff. Like we're not, we're not coming in and saying, hey, do you want like the different versions of a car? We're just saying if you want a Bentley, we're going to give you a Bentley. If you don't want a Bentley, we're not your, we're not your cup of tea and that's okay. Right. So like, you know, we are developing these things at honestly a very attainable price point. I mean right now the retail space of this is probably about $250,000 for one of these units that's delivered, installed with a warranty, all the bells and whistles. And if you compare what is on the market, nobody's even coming close to what we're, what we're about to produce. So very exciting project that we're working on down there.

Right, Very good. And as we were talking about before recording, you're learning the hard knocks of adaptive reuse and trying to get this factory.

Oh gosh, it has been, it's so interesting. So the factory has been abandoned for 27 years. It was previously a gypsum manufacturing, so drywall manufacturing. And yeah, there was like, you know, some asbestos remediation we had to do, tear stuff out. But I mean there's no power to the facility right now. So we're out there with generators getting this stuff up and running and we're negotiating with the local utility company saying hey, we need you guys to drop a transformer here. And we're at the point where it's like if they're not going to do it, we're just going to bring in commercial grade generators and like hospital grade generators and drop them in there and just power ourselves because we have the capital and there's such a demand for this that we just need to start getting these things out the door as fast as possible. So I mean we're, we're just coming up with all sorts of unique ways to solve these problems as fast as possible. So.

Yeah, I didn't realize you had that kind of situation going on. I've, I've dealt with that some and I've worked for utility companies as you know, usually once you get the building to where it's considered safe and sound, then they will come drop even a temporary line to you and whatnot. So you're probably getting, you'll get there, you won't have to power it yourself. I don't think.

Yeah, it's also, well, the infrastructure that is currently there is too small to house the capability of what we're going to be needing at the factory. So that's the other issue too. So there is a line that they can hook up but I mean you're talking like a house or two and we're like, no, this is a full on factory that we're getting up and running. So I mean it just comes with some unique requirements. I mean fire suppression systems, water retention, we have water rights with the property. I mean it's, it's, it's pretty, it's pretty impressive what we're undertaking and like the vision and where we're going and like we are all hands on deck sprinting to get there. So it's a fun project for sure.

Getting close to that CEO is killer though, isn't.

Is it is. And especially from a manufacturing perspective. Right. You know, you think of like just an assembly line or something. There's different safety ratings that you have to have in place for different aspects. Like if you. We're going to have a wood shop on site. So we're going to make all of our cabinetry in house. We're going to have metal fabrication, we're going to have welding. All these things have to be sectioned off appropriately with the correct safety mitigations in place or else the factory is not approved to be a factory of what we're trying to do. So you know, these are very interesting problems that nobody really experiences unless you're in the industry. And there's not a lot of people in this space. You know, real estate investing from, you know, I'd say the broad strokes of things. It's a lot of residential, some commercial, some self storage, maybe some RV parks. But like no, we're going in and doing a manufacturing company that does printing units for real estate. Like that's a blend of both.

Yeah, yeah, it's interesting. Yeah. There's not many investors that even want to think about this stuff unless they're into adaptive reuse or industrial. Sometimes you get into, you know, a lot of times in the industrial world, but yeah, I can appreciate that for sure. Well, so. And as far as your outlook right now on the market, why don't you talk a little bit about what you're seeing as the next year or two or three and your plans.

I mean I've always been skeptical from the beginning that interest rates were not going to come down quickly as people like it's still holding out. But I don't have a crystal ball. Right. That was just kind of my hunch on it. I think over the next couple of years, rates are just going to be sticky. It's just going to sit there and wait. There's a lot of pieces that go into those formulas and calculations, and I'm not sure how involved some of those equations are, especially with the retirement that's going on for the baby boomers. They're talking 10,000 people a day that are just exiting the workforce that don't factor into the unemployment number. And then you have gig workers that don't necessarily factor in. And then you have people that are. We're looking for six months, and then they're not looking anymore. So, I mean, unemployment is kind of a big. A big player in that. But I don't know how accurate that's really being quantified. And then stuff that's going on all over the world, there is a lot of geopolitical tension, but the various conflicts going on. I know everyone's very concerned about what's going to happen with China and our involvement with that over Taiwan. So it is definitely precarious. But I still think there's going to be opportunities. So, like right now, for example, even though interest rates are high, people are still investing in deals. There's maybe not as many deals that pencil out. It makes sense, but it does create opportunities to even privately lend money for somebody else. Right. You know, there are a lot of people out there hustling and making things happen, and there's plenty of ways to partner with people, lend to them, do equity. I mean, there's. There's still ways and opportunities to make money. You just have to get creative and be willing to just push through and find opportunities. So I think those who are willing to take a harder look at things and just not give up and just keep fighting through it are going to be successful in any situation. And even, let's say if rates went higher, that's just going to create new hurdles that we have to overcome. But then it might open up new investment opportunities that we didn't even think were possible because we just weren't forced into that situation beforehand. So I don't know which way it's going to go. I think the economy will still continue to grow and accelerate and maybe at a slower pace than what we're used to. But I don't necessarily see a gigantic collapse coming anytime soon unless we do have some sort of global cataclysmic event. And then people probably have more worries about than investing in real estate. But hopefully that doesn't happen. Right.

And so taking that a step further even and importantly, one of the things we were talking about before we started recording was how you are mitigating that risk.

Yes.

Tell the audience how you're containing that risk.

So because of how we set up this fund, people are getting a diversified risk across multiple assets. Right. So instead of just investing in a typical syndication, it's like, hey, we're going to raise money for this thousand unit development over here. Your money's locked in and if that deal goes sideways, you're pretty much stuck. You also can't ask for a redemption. And if they do give you redemption, it's probably coming with pretty hefty penalties. So we are diversifying our risk through an entire portfolio approach across all the assets. Right. Also, we're looking at things from like a cash basis. So I mean the portfolio has started out through cash acquisitions and a little bit of seller financing. Just because it has been very difficult to work with conventional lenders or even institutional lenders on putting money towards a fund. A lot of people are just very uncomfortable doing that unless you're in the very higher assets under management to where that makes sense. But being in this much smaller space, it is quite difficult to try to get some lending. So we've always been going everything from a cash perspective. So even if things go sideways and we don't perform as well as we thought we were going to perform, it's okay because I don't owe a bank money, I don't owe somebody money and I don't have a bill hanging over my head. So we can weather the storm, which is great. So while other people are maybe not so successful because they over leveraged or got some bad debt terms, we'll just be ready to scoop up opportunities when things do correct. If the economy does crash and interest rates plummet through, I will then look aggressively to refinance assets in our portfolio and start buying things at a discount and just scooping up opportunities there. So that's how we wanted to offer a very risk, you know, diversification through to our investors in this approach.

I think that's great. Very wise too. So before I ask you the big question, one more thing. We have to talk to you a little more about what's going on with the Space Force. So what are you all looking to do? What are they give us a scoop.

So, yeah, Space Force is still very new in its infancy. Right. I crossed over in. Oh gosh, it was like 20, I think 20, 20. Is when I actually signed the paperwork. But then I didn't actually go into Space Force for like two years later and there wasn't really anything established. So it's very new. They're trying to figure out their identity, where they fit in, but the mission and the importance of it is paramount. So nothing in our modern day society would function the way it does without what we have up in space. And it's because it's not only what we have up there as the government, but there are so many commercial applications and so much telecommunication that is going on through space systems and whatnot that it provides so much influence on the economy and our ways of life. So the Space Force is really focused on a lot of situational awareness, defending our assets up there. We're kind of like a. One segment of the Space Force is kind of like traffic controllers. You know, they're looking up there constantly to try to deconflict assets and space debris and stuff like that, to make sure nobody's colliding into each other, nobody's interfering with each other, you know, that kind of stuff. And then we have our own military technologies and capabilities that we want to defend and preserve up there because it gives us an advantage across the world. But I mean, something is like GPS for a lot of people don't know. GPS is a military technology that everybody's been using for quite some time. And if GPS goes away, your credit cards don't work, your ATMs don't work, your gas pumps don't work. I mean, it would be pretty devastating for our economy to go back 30 years in technology in an instance. So we're very concerned about ensuring that the capabilities that we're providing continue to be provided uninhibited.

So I grew up with a dad that was doing aerodynamics and selling hydraulics to the space program and domestic flight stuff. But so I had Apollo stuff for show and tell usually, right. So when it all went Smart island after the big explosion 25 years ago or whatever, that was devastating to us here in Orlando and Coco and, you know, Titusville and all. And it's been hard for me to, to get comfortable with privatizing space travel. Where do you stand on that?

If there's a market for it and people want to push technology that way to privatize it and have that like leisure experience and that vacation experience up there, I think that's. If people want to do that, that's fine. People are willing to pay for it too. I'm not going to pay for that. That's way outside of my budget and it doesn't get me that excited to do that sort of stuff. So, I mean, in our lifetime, yeah, we'll probably see more commercial adventure flights. I mean, some people even talking about doing like a, you know, a leisure type international space station set up so basically like a space hotel. I mean, there's a lot of investment and a lot of interest to go back to the moon. China has already been putting stuff out there, so that causes us a little bit of concern. But there are a lot of resources out there in our universe that would be awesome to one day go out there and utilize. But that technology is pretty far off. But I think if people want to allocate dollars and invest and privatize space travel, I think the technological advances that will come out of that would be beneficial to everybody.

Yeah, that's kind of where I'm at too. Plus that way if there's a major accident, then it doesn't set us back as long and as badly. There's more of an appetite to overcome than there was, I think.

Yeah. And I mean, the private sector could move a lot faster than the government. And I mean, the things Elon Musk has done with the. The reusable first stage of the rocket boosters, I mean, that was a pretty impressive feat that they overcome. I mean, they had a lot of crashes, but they just kept pushing on and kept learning and growing. And I think by them utilizing those rocket phases again, I think they were saving over 50% of the cost. So they're driving down the cost of space launch, which is great, so that we can put more towards development dollars instead of just putting it towards the getting stuff up there. Cost sort of stuff. So I mean, you know, there's. There's all sorts of different applications and advances that are going on, which I. They just end up trickling down over time and impacting other sectors, which is awesome.

Yeah, it'll be interesting to see where it goes, but. And so let me go ahead and ask you the big question. Is there a pivotal person or event that brought you either to where you are now or. Or propelling you to where you want to go there?

Yeah. There's a pivotal point and then there was a pivotal person that helped at that pivotal point, which was great. So while I was flying reapers down there in New Mexico, I had a medical thing come up and I was like in this limbo state for two and a half years of being unsure if I would ever fly again, which I didn't. Right. That was Taken away, and then would I still be in the military and even have a job. So at the time, I kind of need to figure out what I'm going to do if the worst case thing happens and I'm no longer eligible to serve. So that's when I really started looking at some opportunities in real estate and trying to figure out how to do this. And then fortunately, I had very close family member Elliot Cohen. He's been like, you know, a pseudo parent to me, a mentor. And he's prior military invested a lot. He got caught up in the 08 housing crash of Florida and all that, all that good stuff. So he was always kind of skeptical about real estate. But I brought him an opportunity on a duplex out there, and I was like, hey, I think I can do this. I just need some capital to do that. And at the time, it was only $47,000 for a duplex, so kind of low dollars, which is awesome. And he fronted all the money and just let me have at it. I owed him the money on a private note, which was totally fine. And I just ran the whole thing. I acquired it. I did the property management. I was over there fixing stuff, doing all that kind of stuff. And then we did it again on another duplex in the same area. And that's really what created this momentum to push me forward and be able to talk with my friends and talk with other people about what I'm doing in real estate and then becoming interested in saying, well, I want to join you and do what you are doing and be profitable like you are, so help us do this. That was a very pivotal moment. And then he was the one that just believed in me and said, go do it. Here's some money. You'll figure it out. And without. Without that, I would not be where I am today. 100% seed money.

That's huge. That's huge. You want to nominate him as a pivotal person to come on the show too? It's up to you.

I could reach out to him, see what his interest level is and whatnot. He's. Even though he's retired, he's extremely busy. They're living up life. They do like two big international trips every year. They travel domestically a ton. So, I mean, he's really trying to get after everything. As long as he's healthy and able to do that stuff, you know, it just becomes too difficult. But yeah, always reach out, see what he's interested in.

Okay, yeah, well, great, great. Okay, well, so tell people how they can reach you. And we'll put that in the show notes, too. But remember, not everybody will will see the video. So spell it too, for the Spotify and others.

Yeah, absolutely. So I can be reached out my email. It's my first name. Eric. Eric, period. Bonnet B O N I C K at simple paragon P A R a g o n-assets a s s e t s dot com. And then our website is paragon-assets.com you can look up. It's there. Contact us, reach out. We'd love to chat and see how we can help each other out and just become successful together.

Great. All right. Well, thank you so much for coming on the show.

Thanks.

Share that information. Like I say in the show notes too.

Absolutely.