Operating Excellence with Chris Powers

Foreign.

This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis & Young's Tri State investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host. This podcast is for educational purposes only and should not be relied upon for investment decisions. The opinions expressed are those of the guests and not their companies. Listeners should not act upon the information without first seeking appropriate advice from an accountant, lawyer or other professional.

Welcome to show number 185 of the insider's Edge to Real Estate Investing. This is your host, James Nelson Foundation. Thank you as always for joining and we have a real treat for you today. We have with us Chris Powers. Many of you probably know him from his incredible podcast the Fort. I'm a big fan and listener and I have learned so much from his show and all the incredible content that he puts out. So I sure that you're going to learn a tremendous amount from this as well. And for those of you who have not checked out yet, yes we are now streaming these episodes as well through all the social media channels, LinkedIn, Instagram, Twitter as well as my YouTube channel. You can find all them at James Nelsonm NYC. So there you can see us with the recording as well. As for those of you listening and your loyal podcast followers, make sure if you need to resubscribe and follow through Apple I know they switched things up. So today again you're going to learn a tremendous amount about focusing on an asset class and being a great operator. Chris was the Founder and Executive Chairman of Fort Capital, a vertical real estate firm which has invested over 2.1 billion billion in Class B industrial, commercial, multifamily, student housing and land development projects throughout the state of Texas and the sun belt. Since 2016, the company has focused on Class B Industrial full time and that is where the firm dedicates the majority of its resources. And I got to say I really appreciate the approach. I'm not saying that some of our previous guests who've gone into all different asset classes all over the country or all around the world are wrong. But I really appreciate Chris's laser focus and that's going to come through in the episode today when you hear about how well he knows his market and how he targets in. But you're also going to learn about how they're leveraging technology and AI and how that can also be used to support real estate firms along with tips on building culture and raising capital. As always you can go to james nelson.com that's where you can find the show notes as well as a lot of helpful tips. Our video series White Paper I built this site for you to help you gain the insider's edge to real estate investing so you can gain the advantage and outperform the market. So we're going to have a brief word from our sponsor and we'll get right into that interview with Chris Powers.

A different approach to putting our clients first Avis and Young's Tri State Investment Sales Group sells multifamily office, retail, development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more.

Thank you as always for joining and we have a real treat for you today. Chris Powers, who is founder and Executive Chairman of Fort Capital and also host of the Fort podcast. Chris, welcome.

Thank you for having me, James. I'm excited to be here today.

Well Chris, as I was saying as we were speaking before, you are a true inspiration. Thank you for all the incredible content and what you do for the real estate community. You have definitely inspired me. This is the first time we are connecting but I'm sitting here in my new podcast studio thanks to you because Analise, who does my marketing, my PR says James, you got to check out what Chris Powers is doing. We got to step up our game. So you know, thank you.

My pleasure. I'm glad you got a studio.

Absolutely. So well Chris, I'd love to kind of start where we are today and then I want to work our way back and talk about your story. But just for the audience and for those who do not know what For Capital is, would you mind just giving a background for the audience on your holdings?

Of course, as we sit today. So we're based in Fort Worth, Texas and I think the best way to summarize where we're at today is since 2016 we've been hyper focused on one asset class which is small bay light industrial kind of class B product throughout Texas and the Sun Belt. And I think that's important to who we are because we've been laser focused on one thing, predominantly Texas. But through the Sunbelt we now have 55 employees here. Domestically we have seven overseas. We have offices in Fort Worth, Dallas, Houston and San Antonio. And we own deals in Florida, Tennessee and Texas. And soon to be more we've done all that with a fully vertically integrated model. So we, we own our own property management business, manage everything that we own and we've done that through one off syndications, syndicating deal by dealing with and to date we have syndicated north of half a billion dollars of equity. So it's been quite the lift and we're in the process right now of raising our first fund that we've done ever of committed capital which will change the trajectory of the company yet again. And as we sit today, we manage about, we own and manage about 7 million square feet for our own portfolio and an additional 2 1/2 million square feet on behalf of third party institutions.

Incredible. And I think I read somewhere 2.1 billion assets under management. Does that sound about right?

Yeah, we've, we've, we've transacted on about 2.1 billion. So we have north of a billion now of assets owned, but over the lifetime we've done about 2 billion. Yep.

Amazing. Congrats on being the number one fastest growing private equity company in Texas, a number 10 best workplace in real estate awarded by Forbes. And clearly it's because not just of the real estate portfolio that you and your company have developed, but also what you've done to grow your company. And I'm going to recommend everyone listening to this right now, go back and first of all listen to the Ford Capital, the Ford Podcast, subscribe, listen to it weekly. But listen to the 2023 Year in Review. Chris, I got to say I was super impressed the way, and I think this was the sixth or seventh year that you've done this and you actually said, hey, go back and listen to these episodes and let's see how we're tracking every single year. But you know, look, I am, I love the focus on the business and continuing to improve, take stock in what's working and what's not working. So I love the, you know, how does that come to fruition? I mean, I'm sure that you and Jason, your CEO just didn't, you know, sit down and kind of freeform that episode. I'm sure a lot of work Went into a assessing what's working with your business and what you're looking to do for the new year. So maybe talk a little bit about that process.

Thank you for that. We, we've done six of them, so at the end of every year, we sit down at the mic and when we first did it, I think we were just looking for a reason to have an episode. And then we realized, oh, wow, people enjoyed this and it was actually really good and almost therapeutic for Jason and I to do it. And now we've done it six years in a row. And what we really do is try and look at the year behind us and say what worked, what didn't work, what are the major things that accomplished, and then what do we think will happen in the years to come? It's gotten easier to prepare for those episodes because our team does an incredible job at the end of every year preparing a deck that is really our year end deck that we go through as a leadership team, as an executive team. And then we are able to take that deck and take pieces from it and decide what we really want to share with the audience, which there's a lot more we could share, but we try and share things that aren't so obvious to the real estate industry. There's a lot of, you know, very real estate y things that we could talk about, but there's things that we do that we feel like are, I wouldn't say against the grain, but are unique to us. And I think that goes back to the culture and the mission that we're on it for, which is to be the best real estate operator in the world. And I think Jason and I actually take more inspiration from businesses not in real estate than we do from businesses in real estate. Like Amazon is a huge inspiration to us. And why? Because we think they're one of the best operators that ever existed. I mean, what Amazon's able to pull off is a miracle. And when you look around at a lot of real estate companies, there aren't many that I look to to go, man, it's a miracle what they're doing. And so we just thought, okay, why don't we just treat our business like maybe a software company? Or I could go through a list of companies that we really like. Amazon is probably the most well known that your audience would immediately gravitate towards, but they have this unbelievable focus on operations. And what we found in our industry was a lot of people get into this business on the deal side of the business, and maybe they leave a big firm or they don't, but they're really interested in just doing lots of deals. And we were actually that company for a long time. But what we really started realizing over time was it's one thing to buy a deal, which is what we celebrate in this industry, but then you have to operate it for many, many years. And there was not as much, you know, rah rah on the operations side. But we realized that the best companies in our industry that did it really well were these incredible operators. And so that just became our focus, was we need to build a culture that's built on continuous improvement and operating. And I think that shines through in our year end reviews because we talk about things often that people listening either go, oh my gosh, we finally heard somebody talk about this, or just people going, I can't believe you all are even thinking about this stuff. And it's this constant evolution of how do we get a little more efficient every year and operate better.

Well, it certainly comes through in that episode. I hope everyone, our listeners heard what you said to become the best real estate operator in the world. And I know you're not saying that from a place of ego. I think that that's really a goal. And what I heard with the way you run your business is you are doing things that I have not heard before. Right. So you are thinking about, let's not just do the same thing that everyone else is doing and try to work a little bit harder. You are really looking to change the paradigm. So some incredible things that I'm looking forward to getting into on the show today. But when we talk about your strategy and your focus for investment, I love the fact that you know your market cold. And I would challenge the listeners to this show to say for the type of asset class geography that you're pursuing, do you even know how big that market is? So when you all were talking about your addressable market, you had the exact number of properties that were out there. And I can tell that you track your pipeline to a T. So can you tell the audience how you went about? I mean, first of all, what is your addressable market? How are you systematically going after those opportunities?

I might be off 100 million or so, but in the nine markets we're in, it's like $27.2 billion worth of assets that we know that we would buy. Now that doesn't mean we're going to buy all of them. It doesn't mean we want to buy all of them necessarily. It just means we know they check the Boxes. So within that then you start going, because a lot of people say we're in class B industrial or we're in industrial and you go okay, cool. How many buildings could you possibly buy? They have no idea. And what tends to happen at companies like that are they're just fielding deals in all day long. They don't even know from day one or from second one, is this even something we should spend five minutes on or not? Because we're in a business of no's. There's thousands of deals. But you should, as a company, if you're in the deal business, know within minutes of receiving something. Is this something I should spend even a minute on? Because what generally happens is companies that are falling behind will spend days, weeks, months pursuing things they probably shouldn't have pursued to begin with and they probably don't even know that they shouldn't be pursuing them. It's not till later down the road or looking in the rearview mirror that they realize that might have been silly. And so we just said it's important, just like any other industry that you to know your customer well. We have multiple customers in the real estate industry per se. We have investors that we need to treat well. We have tenants in our buildings and, and then we have sellers. Sellers are almost like customers to us. We need to know who they are, what their motivations are, what, what they own. We need to be an expert in that so that we're using every minute as efficiently as possible. So we use software that we've built proprietary to say when we go into a market we want to identify every single building that meets our criteria and we want to build software where we can change the filters so that, so some buildings show up and some don't. And then within that we built, we built new criteria once we know what buildings we want to buy to say which ones are really likely to sell so that we spend time on what we would consider the best 10 to 20% that are, that are going to sell. And sure there's going to be things that we don't pick up on that are going to sell, but you want to spend your time on things that are one, in your target market and two, have a likelihood of selling within what we call usually a 36 month window. And then our goal is to start building relationships with the sellers and the brokers attached to those assets so that when a decision comes to sell or transact, FORT is top of mind.

I love the systematic approach, the data driven approach and that also you've really identified your Lane, you know, what is your space? And I remember you're saying that you're going to play just kind of right below the big institutions. So if we can find our space where we don't have tremendous competition from the biggest players out there, but we're still, I would assume above kind of the, you know, the small to mid sized players, you can kind of find that upper middle market, if you will, and aggregate it. It seems like to me that that's a really efficient place to transact.

For sure we are in an asset class. And again, I don't even necessarily think we. It would be silly or it would be dis, it wouldn't be the truth if I said when we first started this is what we thought would happen. But looking back and now where we are today, there's huge arbitrage to do what you just said, which is stay below the institutional threshold when acquiring maybe one off assets or smaller portfolios, but putting together something homogeneous that the big boys or the big institutions would love to own. And there's usually a premium that you'll gather just by nature of doing the work of putting it all together. And we've certainly seen that through four or five portfolio sales that we've had.

Now I'd like to talk a little bit more about how you're processing this data and how you're analyzing it. And you and Jason spent quite a bit of time talking about how you're leveraging AI. And I know for a lot of our listeners AI is, you know, using chat, GPT and yes, creating content and yes, it's helpful. But when I heard the types of things that you are using AI for, you're clearly leveraging it on, on a very substantial basis and really to affect some change management. So maybe talk about how you're utilizing it throughout your organization, not just on the portfolio, your investments, but your workflows as well.

Yeah, and I'll give a disclaimer. Jason is really the, the, the genius and the visionary behind a lot of this. We obviously chat a lot. So I'll give a high level. If Jason was here today, he'd probably drill in deep. But the way we're thinking about it, I think just like anything, I think we're at this stage where AI is the hot word of the day. It is big and it's coming. But if you even look at where the Internet was, we're still in the earliest stages of it. And so we said like, I think a lot of the big companies have already done, we're not New to this, but maybe in real estate we're more new than most. Is what are some practical applications we could use today that would go back to our mission of help us operate much, much better. And we often say AI isn't going to, isn't going to replace people, it's going to replace people unwilling to use AI. And so what are practical applications we're using today? Well, one, we're building our. We own our own proprietary software. So all of our data lives, we control and own all of our data. It does not live in other people's, on other people's platforms. And we've been doing that for five years now. So we said, what are some practical applications? One, well, we would build an agent for our company that's almost like a chat GPT but for your company, it knows everything about your company. It knows who the people are, who the properties are, that you own, the markets, that you operate, all the processes and systems you have to run your company, all the files you have in your company, all the numbers behind all, all of this stuff, all the underwriting you've ever done, all the deals you've ever looked at. I mean, every piece of data has gone into this thing and this agent is getting to know our company. And so at the most basic level, we're creating something where if you just said across 55 team members, how much time do we spend as a company every year digging through online files looking for documents? Well, you could create an agent that just said, hey, send me the survey on 123 W. Fork St. And a couple seconds later there would be the survey. That would be a really easy way to eliminate hundreds of hours of people's time. The second would be things like we personality profile. We use a company called Culture Index, but everybody in our company has a different set of traits about them. And one of those is like how they like to be communicated to. Most people would know that some people like to be communicated with lots of detail and depth. So you write them an email, it's gotta be long with tons of detail. That is like hell on earth to me. I like simple bullet points. I like about three or four of them as short as possible. I need to get to the point and move on. But the AI would know by knowing who you are, knowing the type of traits you have, knowing being able to see patterns in how you communicate. Oh, this I could communicate the same message to two different team members in ways that they would gravitate towards. So that's another thing. Then you really get into all the data of our numbers. So the other day I asked Foster, how many deals are we underwriting in in San Antonio right now? Oh, we're underwriting 17 deals right now. And. Or whatever it was, then I could start asking it more questions. Okay, how many of them are in the northwest quadrant of San Antonio? Or what were the recent sale comps? And so it's learning more and more about our company. And so we think that's really the first phase of AI for us, is let's use practical tools that our team can understand and use our data to get smarter. And then the last thing, and I think Jason went into this a little bit, is all of our meetings are now recorded. Not so that we can watch people and what they're up to, but saying a lot. What we've noticed over time is a ton of things happen in meetings where people are talking and great things are happening, and it doesn't always translate back into the rest of the team. And so we said, well, AI already allows you to record conversations and turns them into transcripts, and you can see who was speaking and who wasn't. We just said, let's never lose a piece of communication that we had about a certain topic again. And so again, that will continue to feed the machine or feed the AI agent of this is what we talked about on this date. This is how the decision was made. This is who made it. And in the future, we'll be able to ask critical questions of how we came to certain decisions. And that doesn't mean it will have all come from that meeting we had, but that will be yet another piece of data to look at in the overall data pipeline of how decisions were being made or how we should think about things going forward. So it's, I mean, it's deep and I think we're just scratching the surface as a company and as a world where this could go. But I've seen things happen over the last year that I just never, like, never thought could happen. And we think it's really important.

Yeah, Chris, it's, it's incredibly exciting. And it is clear that you all are doing the work. You're not being an observer. You're not kind of dipping your, your toe in the water. You're going all in on this. And so, and like you said, for, for someone like yourself to say you're only scratching that the surface after the AM work and utility you've received, you know, it'll be really wonderful to hear your, your, your in review in 2024 to see all the advancements you've made. So, you know, Chris, that all being said, and I'm sure you've subscribed to this, I mean, you can have the best technology out there, but without culture and without the people that. That is really what makes our business. So you don't end up being a top 10 place to work ranked by Forbes without doing something right. So talk about team culture, especially as you grew. So I don't know if how long it took you to evolve to a company of 55 team members. You know, fast forward three, five years from now, is that going to be a hundred, two hundred people? A thousand? How do you maintain culture as you go along?

That's a great question. I think it's the most important part of a company. I would start by saying, and you mentioned the top 10. I mean, that's one of the best accolades I think we could get. And that's because that's not one of those awards you can pay for. That is everybody on the team being surveyed? Confidentially, that's about as genuine of a award as you could win. I think that comes from who we are as a company. I think we're very genuine with how we treat our people. We. I think we realized really early on that this is a place that our team is coming to work and spend most of their days in adult lives. You know, it's crazy, but it's the truth. We spend more time with our coworkers than we do with our family and friends. I mean, I don't know. Remember the last time I got to spend eight hours a day, 200 days a year with somebody other than my co workers? It just doesn't work. And so Jason and I always, from the day one, we really just would. Maybe it sounds simple, but we were like, we want to work at a place that we would want to work at. And so it was very easy to us, easy for us to start imagining, well, what that would be. And it wasn't all these crazy things. It was, we work really hard because we believe that hard work, and we believe that's why God put us on this earth, was to work at something and to have purpose and to. And to work. I think we've lost that in some ways as a country over the years where working can actually be a controversial topic to people. We've realized that when people are in a good setting and they're given clear direction and clear goals and big things to work on, they love to do it, and they love to do it with people they like to do it with accountability was something huge for us. So we built a culture where people could be accountable for their work and they had to take accountability for their work. And it turns out people love doing that. We built a company that was flexible. That again, when you're trying to become the best operator in the world, that allows a certain amount of agility into the company. To where we're not a company that goes, well, we've always done it this way. This is how we're going to do it. That's how you lose people really quickly. But we've instead incentivized people to find a better way to do it. And if you can find a better way to do it, we will do it that way. We will praise you, we will, we will bonus you for that. We will help you move around, move up in your career. But you have opportunities every day to improve. And we take a really a lot of time thinking thoughtfully of how to make the team better, how to get them to work better together. We do just lots of things. I mean, I could go on and on, but I think it's just like the human aspect. These are not people are not cogs in the wheel. They're people that have needs and wants and we try and do our best to treat them that way and give them a pathway to succeed in ways that they never thought they could.

Wonderful to hear, refreshing to hear especially about the look. It starts by showing up and doing the work right, but then creating that right culture that really motivates and inspires people. And Chris, just a follow up question to that about and especially for our listeners, and maybe they have a team with a half a dozen people and they're looking to grow it again. So that incentive piece and you, you kind of referred to it letting people move up the ranks but you know, how do you motivate people financially? Are they actually taking part in some of these transactions? What should our audience be thinking about that?

Well, culture is what you're willing to tolerate. And so it's not what you're, it's not the top of your company, it's what you're letting. It's what you're willing to let. What you're willing to tolerate at the company just we are as humans is like you gravitate towards the mean. And so it's important to make sure you understand that as far as how we incentivize people moving forward, we're in the investment business. So there's a few things. One, you can do that through carried Interest or promote if you're doing deals. Two, we chose to re. We don't have the same company structure that a lot of people do, where usually there's one or two people that get the majority of a bonus. When you close on something or buy something, usually in the form of an acquisition fee, our whole team benefits when we acquire something. So that acquisition fee, rather than going to one person and then you have all these other team members that have to operate it for the next five years, everybody gets a piece of that. The third is, you know what you find in a lot of cultures is, oh, it's year end bonus time, everybody gets their big bonus. And then January 2nd, here's my two week notice, I'm moving on. We said we're not going to do that anymore. So what we do is a, is a bonus pool. Your bonus goes into bonus pools and every quarter you can take 50% out of what's in your bonus pool. So it's, we call it a rolling bonus. So there's always a pool waiting for you. We then let our team and our managers come up with the bonus pool or, or just your typical bonuses for employees to say, we don't bonus people just for doing the job, but we will bonus you handsomely if you go above and beyond. And so it's kind of a top down, bottoms up approach which is going, what would it look like for you to go above and beyond in your job this year and how could we bonus you for that? And we're very conscious of that. And the truth is when people outperform and outshine one, the company does better, we make more money and therefore our employees benefit more. But it's a very long term approach. There's nobody coming to Fort for a quick buck and they're out rich and they're gone. And we think that cultures that are set up that way are just doomed to fail over time and they attract a certain type of person that wants a quick hit and get out. And that's just not what you're going to get at Fort Chris.

I really appreciate your giving the details and I'm sure our audience does as well. And you know, the compensation thing, it's really important, right? Your compensation, I believe, has to mirror your culture and yet a lot of people don't want to talk about it because, okay, we're going to talk about compensation one on one behind closed doors. So I really appreciate you bringing that to the forefront. It's interesting, my sales team, we have one unified sales team with one commission Pool right now, there's different buckets of compensation, but we close a deal, everybody wins. And I think that's unique to the brokerage business, you know, so. And it, and it works, right? You have complete alignment. You have everybody rowing in the same direction. So really appreciate your sharing that. So now I would like to go back a little bit because got to find out about your story. What drives you? So I believe you graduated from tcu. Is that correct?

That's correct. Go Frogs.

So were you studying real estate at the time? Was this something that you thought you were going to go into? Just talk a little bit about your. Your path.

I never thought I was going to be. I. I didn't think. Now, I did have a mentor growing up that was in the real estate industry. And he was from where I'm from El Paso, Texas. He was an incredible man to me, and he was a huge real estate owner in town. And so it was always like an option. But I honestly thought I'd get into investment banking. And for no other reason than it seemed like everybody was just killing it. They got into investment banking, going to Wall Street. I don't even. Not even sure I knew what investment banking was. I just kind of heard that's the career if you want to do big things. And. But I got the tcu. And really, I mean, it's not probably your typical story is I just needed to make money, and I needed to make more than an $8 an hour job because I was at a private university in Texas, and a lot of my friends at the time had a lot more disposable income than I did. And I realized that to kind of keep up, I was going to have to find a way to make more than an hourly wage. And I picked up a newspaper called the Skiff and the TCU Business School. When I first got there, I had been an entrepreneur in high school, selling golf clubs on ebay. I had a lawn mowing business, a car washing business. So I knew what it was like to make money. And the front page was my buddy Adam Blake, who's still a great friend today. Adam Blake wins entrepreneur of the Year. And he had been buying real estate as a scholarship football player. His freshman year, he was buying rental houses around the university. And it blew my mind. And so I did something that I've always done, which comes natural is I just said, well, I should get on his calendar and go figure out how he's doing it. I'll just go ask him how he's doing it. Because if he can do it. I can probably do it. And sure enough, I took him, I met him, I took him to lunch, and he gave me some wisdom. And some of that was a byproduct of where we were in the world at that time, which was Countrywide Loans. That was kind of the epitome of the great financial crisis. Anybody could get a loan from him. So he told me what to do and what to say. And I got down there and I got my first loan when I was 17 years old for 3% down, 6% cash. Back at closing, I went and bought a house. I rented it and I refinanced out like 35 grand six months later into my checking account and I was off to the races and I started buying more rental houses. I started a management company and a student leasing company. And by the time I graduated in 08, the market had fallen apart. There were no Wall street jobs. And I just kind of kept plowing along without really any big vision. Again, even to that, it wasn't. This is my thing. But I think that's another lesson looking back, is if you just kind of hang around the hoop and keep chopping wood, over time, small things turn into bigger things. And that's really been the story of my career is one, great mentors and people that helped me along the way, two, a little bit of luck. And three, I've been in the game just a long time, hanging around the hoop and really to my nature, which isn't everybody. I've always thought really big. I've always been an entrepreneur at heart, and nobody really has. You don't, you don't have to get me motivated in the morning. I am. I wake up like, broke every morning and go to bed rich every night. And it's been the way I've lived my whole life, and that's led to a lot of positive things. And it's also not. There's some negatives to that. It's not all gravy when you always feel like you're a day late and a dollar short.

I. I hope our audience is taking notes here. I mean, you just said so many good things. So I got to go back and break this down a little bit. First of all, I love hearing about the selling the golf clubs on ebay and the car washing business. I mean, is that just how you're wired? Is that your DNA? Because there might be someone listening right now saying, wow, that, that's not really. That wasn't my thing in, in high school or college, were you just kind of Born that way.

What.

What drives you to take that kind of initiative?

Well, one thing that it was just, is the way I had to grow up was my parents didn't have the money to always buy me what I wanted. So it was like, if you want this, go. So some of it was just the circumstances I was in. There was no other choice. But the second was my grandfather on my mother's side was an entrepreneur. I've always. I don't know how to. I don't fully know where it came from, but I always just wanted to do bigger things. And when I. When again, when you look around and you go, well, who are the people doing bigger things or whatever that means to you? In my world, it was these entrepreneurs that were building great companies and not just big things for the sake of money, but just having a platform and the resources and the freedom to do cool stuff and meet with cool people and create cool projects. And they all had one thing in common, at least in my world, in the world that I was pursuing, which was business, was they were all great entrepreneurs. And so it just kind of came natural to me that that's what I should do.

That's still, you know, like you said today, I've never heard that before. Wake up broke, go to bed rich. But the fact that every day it's like, okay, how am I going to do this? Better take us back to that first deal when you were 17, because there's someone listening to this right now who has the knowledge, let's say they've made the connections, right? But to take that first leap, and even we know there's no Countrywide giving you cash back after closing. But, you know, look, I'm sure there's opportunities that you can get yourself into, but it is a leap. I believe that fear is the number one thing that holds people back from getting into real estate investing. So was there any hesitation? Was there any fear at the time that you didn't know what you were doing, or did you just. Again, you didn't know any better, so you just took the leap?

Well, I was 17, so I'll remember it as well as I could, but I. But even the way I felt then, it's the way I feel about some things now. One, when you haven't really done anything, naivety is actually your friend to some degree. As you move through life, you start to realize where risks are and where things go wrong. And, you know, there's more reason to not do things. Not necessarily out of fear, but more out of what you know and so I think there's a beauty to kind of being a little bit naive. But at the time, my thought process was probably something like this. And again, this is. To me, I realize not everybody's like this, just in their DNA, but I look around and I go, this. This might be a thought process that'll resonate with some people. There's thousands, if not millions of people. Well, there. It's actually millions of people that have bought real estate. They've taken a loan, and they bought it. So it's not like Elon Musk where there's. Or Jeff Bezos where there's three people on the planet shooting rockets into space. This is something that a lot of people have done. And. And I don't mean this in a derogatory way, but a lot of dumb people have done it and done it successfully. Then I would go, how hard is it? And I would try and learn it. So I did read a couple books and talk to a few people, but it wasn't crazy hard to understand. What I did understand about it was where people usually go wrong is when they're highly leveraged. They're speculating in an area they don't really know a whole lot about, or they're using debt to make a deal that would otherwise be bad, be good. And so I was like, okay, I just won't take a lot of leverage, even though I did. But I knew the area so well. So this is, I think, something that should resonate with people. Everybody knows the real estate market. If you've lived in a city for long enough, you actually know more about the real estate market than you think. You know where people like to be. You know which areas of town are growing, which aren't. You know where the new developments in town are coming, which are going to create a new, vibrant atmosphere. You know, which highways to go on, to get places, which street, what side of the street to be on, which one to not, so you can actually get to know a market a lot better. And so all those things combined, I was like, okay, I knew tcu. I had read some books. Real estate wasn't that hard. There was a lot of other people that had done it successfully, and it just seemed like it wasn't as big of a risk by the time I chose to do it, because I did the work up front. And I'd end it by saying this. You talk.

I'll.

I'll talk about Bitcoin in the sense of you talk to people that have been doing bitcoin forever. It's not risky to them. In fact, they'll spend hours telling you why. This is the greatest thing since sliced bread. But you talk to someone that's never paid attention to Bitcoin and they think it's this crazy, risky thing that you buy on the Internet. What's the difference between the two situations? One group knows a lot about it and one doesn't. And so risk diminishes the more you teach yourself something. And the good news for anybody on the fence right now is it's actually not that hard to get very educated on real estate. And the good news is you get even more educated after you do your first deal. And it just gets better and better over time. So I don't even know if I answered your question, but that's.

You went above and beyond that was. And look, we like to aspire those who are on the fence to get in the game. But I think also for the veteran investors who, you know, maybe they feel like the world's been passing them by and maybe fear is still holding them back from taking the leap. So something I want to talk about, especially for those who are looking to take their investments to the next level. You said, and you've got this new fund that you're out raising money for. I believe you said you enjoy raising capital. I, I've now done, I haven't done as many podcast as you have, but I'm probably up to close to 200 episodes. I'm not sure if I've heard anyone say that they enjoy raising capital, so we'd love to know why.

Well, one, I enjoy it because it's a critical part of the business. And so if you're going to grow a real estate portfolio, unfortunately, it's not like software where you can put a couple dollars in and it, you don't need. It's, it's, it's capital light. Real estate is capital intensive. So from day one, I was like, somebody's gonna have to do this and it's super critical, so I might as well enjoy it and figure out why I like it. But why do I like it today? One, you get to meet tons of incredible people when you're raising money that come from all walks of life, have different agendas for their money, different reasons why they wanna invest it, different reasons how they made it. Money's attached to people. So some of our best investors are way more than just a check. They're, they, they provide great connections and open doors. But for me, it's like it's an opportunity to Sell our company over and over and over again. Here's what we do, here's how we do it, here's why we think we're good at it, and that's fun to be able to do. And it, it, it, as the team has grown, I realize how impactful it is for our team when we're able to raise more money, everybody benefits. And so when I take all that into consideration is it's just something I really enjoy doing now. Do I love sitting in, like every single meeting? No, but like net net, it's one of the most fascinating parts of the business. And I've just realized as we've raised more money, the different worlds you get thrown into, and it's just fascinating. Like, I'm going to New York next week to, to raise money. And I mean, I'm like a kid in a candy shop walking around that place. There's so much, there's so much money, so many firms, so many, you know, it's just the energy is next level. And so, I don't know, it's just something I've always loved doing.

Well, Chris, I hope you'll stop by next week. We'll be here at 530 Fifth Ave. Maybe we can help you find some. But I know you're well on your way and this could go on for an hour. I have so many more questions. Maybe you'll be kind enough to do a part two. And for those of you who don't know, we had a little bit of technical difficulties on my side getting things rolling. We were trying to really recreate Chris's studio. So maybe we will do do a part two. But Chris, in closing, for those of you, and I want them to know not just about your podcast, but your content and the type of information you put out there. But what else beyond that advice would you give for someone to up their game? What else should they be doing? Whether it's, you know, networking, whether it's publications, research, data, you know, what can our audience do to make themselves think and really give themselves the insider's edge to real estate investing?

Yeah, I would say you touched on a lot of them. Is one just a curious mindset. And so that could lead you to lots of places. But I would stay curious. And for me, I think the thing that's defined my career in so many ways is, and this is because I've taken the initiative, there are so many people on this planet that have done exactly what you're trying to do right now. You, if you're in the real estate game. There's very few, maybe no ideas that are novel or new. And so seek out people that have walked the walk and ask them how they did it. And people that have been successful, most of them, maybe not everybody, are very open with information and care about other people succeeding because the chances are that's how they learned as well. And so I think the number one thing I tell young people is do your best to learn from people that have walked the walk. The good thing now, like with podcasts that we're on right now, you can learn a lot of that just popping in your headphones. But if you can meet people, find mentors, and be not scared to ask them the silliest of questions, the dumbest of questions are often the best ones. You'll learn much quicker. And that's been a defining part of my career is incredible. People that have shared a ton of wisdom and I think that if I was patting myself on the back was one, I took the initiative and two, I actually did something with the wisdom they gave me. I didn't just listen to it, make me feel good and then not do any of it. You have to actually put it into action.

Well, Chris, that is an incredible way to end. And to quote one of my mentors, Rod Santomosimo, in fact, he wrote a book on the topic, knowing isn't doing. So look, yeah, if you all didn't get actionable information out of this podcast today, I don't know what to do for you because there was so much information in here. But please don't just listen to this and then go on about your way. Let's really talk about putting these steps into practice. I'm also a big James Clear Atomic Habits fan. So what are you going to take from this episode that you can really apply to your daily life and your environment to make you as successful as possible? So, Chris, this was amazing. Thank you so much again for being so generous with your time.

My pleasure, James. Thank you for having me on and for all the great questions. This was a lot of fun.

Wonderful. So until next week, this is your host, James Nelson.

Thank you for listening to the Insider's Edge to Real estate Investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James at James Nelson Nelson NYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show notes and other episodes along with an exclusive video series and other helpful resources so you can gain the Insider's Edge to real estate investing until next week.