Purpose with Matt Blesso

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and 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.

Welcome to episode number 159 of the Insider's Edge to Real Estate Investing. This is your host, James Nelson. Thank you as always for joining. We have a special treat for you today. With us we have my good friend Matt Blesso. For those of you who have read the book, you will know that Matt was the first person who I ever invested with, taught me so much. I know about the business. We went on to partner on almost a dozen projects and he's got such an incredible story. He is the co founder and CEO of Blosso Properties and also the mastermind behind Shift Living, a company dedicated transforming the way people live. You're going to want to listen to this whole episode because he really has a different perspective on how he approaches the business and now how he's looking to give back. So Matt's story After he got graduated from NYU's real estate program, he went into commercial banking but quickly found out that he loved real estate and developing. After he bought an apartment and ended up combining it, then going buying a property in New York, living throughout the development and conversion project and then when visiting a friend in Panama, he saw a boutique hotel where he couldn't find a boutique hotel where he could stay. So he ended up developing one and modeling a public space. And after doing more projects he felt compelled to carry out a sustainable project with a positive social mission. And so he went and he bought a farm in Costa Rica and there his vision includes growing food that residents can eat and create an environment where residents can interact and find support for their well being and health. As Matt says, when I started my goal was to make money and and since I've learned that it really comes down to having purpose and having purpose in my work and he's much happier as a result. So as always you can find show notes for this episode@jamesnelson.com you can link in with Matt and get his information on his projects at the Blesso Properties and the Project Shift Living website. So we're gonna have a brief word from our sponsor and we'll get right into that interview with Matt Blesso.

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Welcome everyone. So happy today. This is really a special treat to have my good friend Matt Blasso with us. Matt is founder of Blesso Properties and Shift Living. I've known Matt since the early days of my career. My first investment ever with Matt. We've gone on to become friends partners and he remains an incredible mentor to me today. Not to mention a lot of what this book stands for came from, you know, a lot of those lessons that you taught me from early in the career. So thank you so much. I know you're up from Costa Rica. You've been, been up in town for a couple weeks now and yep, back.

In New York and this is sort of second home but we really have two homes. So Costa Rica is home base and my main, our main professional focus at this point. Great.

And we originally met through the NYU network. So maybe just kind of take us back to how you got to that point. Maybe your, your career leading up to that, how you got into real estate.

I think we actually met, I believe it was the year 2000 or 2001 and you were handling the Chelsea neighborhood for at that time Massie Nackle and I had my first investment in Chelsea and I called you up to come take a look at it and you show up and you were the first person I met that I suspected was younger than me at the time. I never had anyone that was younger than me, you know, at that point in my life. And I was, I just turned I think 27. And so. Yeah. And that's how. And you like I thought there was.

An NYU connection in there as well.

Didn't.

Or maybe you went.

I went to NYU and we both have taught there. Yes, yes. And so yeah, we've had that connection along the way as well. Got it.

So what, so how did you end up in New York? Maybe tell us how that happened. And then what brought you.

Because you, I think after that you.

You were in investment banking originally or.

I started off in, in really commercial banking, doing a training program. I moved to New York right after college with that job. I took that job mainly because it was good money and I didn't have any. I just had student debt and so. But I always felt like I was a little different than my colleagues and I always was entrepreneurial. I was always hustling as a kid and, and you know, trying to make money and trying to do things. And so it was really more of a means to an end and I didn't know what I wanted to do. And I became sort of an accidental developer in a way because I bought my first apartment in Hoboken in one year out of college using like a first time homebuyers program. And that was when real estate was really, you know, out of favor and the economics were just really positive. And so I fixed it up and I wasn't particularly handy, but my dad was and he helped me with a lot of things. And two years later I bought the apartment next door because I knew the owner and that needed a lot more work and really hired our first contractor and, and really started. And then I had, you know, income and so I'm still working in banking and, and still didn't really fit in there, but was doing fine and, but it, I realized I had actually made more money in a lot less time by investing in real estate than I did in my banking job. And so that was really the time where I said, okay, I'm going to be a developer. And I knew nothing about development. But I, I went and applied for the NYU program. I got a new real estate job doing real estate banking because that was the only way I could get a job in real estate at that time. And, and I actually looked to sell those two apartments and roll the profits into buying my first building in Chelsea, which is how we ended up meeting. So that's kind of how it all started. And was doing that while going to school, while working the banking job, all at the same time. So it was really intense for a couple years. And then after that project kind of, you know, got more grounded and I knew, felt more secure, eventually left banking and, and you know, haven't, haven't worked for anybody else since. Wow.

Were there still fears when you made that leap? How did you know when you were ready? Because I'm sure there's plenty of listeners to the show. Maybe they're, they're working a Day job right now. I mean, if you were in banking, you're probably putting in 60, 70, 80 hours a week and then trying to moonlight doing real estate on the side. So how did you know when you were ready to make that leap? I mean, you said you were a little more financially secured, but I still have to imagine it was a little bit of a leap.

It was. It was scary. But I had. I had tried one other entrepreneurial endeavor before that, and I had this idea that, man, if this fails, I am screwed. Like, I, like, what am I going to do? Like, I've spent all this time and money and. And it turned out not working out. And I really was. I felt very upset for about one day, and then within a day I was like. And that was actually the impetus for me to really say, okay, I'm only going to do development. But I actually had left. I skipped a step, but I left banking twice. And after doing it the first time and having so much fear around it and then actually failing, you know, quote unquote, failing, and it was. And I was like, well, this actually isn't so bad. I mean, I'm young, I still have these apartments and, you know, place and I come, I'm employable, and. And was one of the best lessons I've learned. I think we all have this idea that we think failing is going to be so much worse than it actually is. And so it. It keeps a lot of people in a comfort zone and prevents people from really, you know, taking chances.

So I remember that Chelsea deal and walking in, you know, in the midst of construction, and if I'm not mistaken, I think maybe you were living in the back of the ground floor, which was an old retail place, and you were like, walking over planks and like, you know, maybe with. With water dripping from the ceiling. I mean, you were definitely living in an active construction site. So were there times when you're like, oh, my God, what have I gotten myself into? I, you know, I know you had a little bit of background combining those apartments, but, like, did you just kind of figure this out on your own?

Yes. You know, that was before the Internet, so.

And before my book. Although I don't told you what to do in that situation.

I actually used to go to the NYU real estate library and just pick up, like, I read like two years worth of old New York Times real estate sections and Real Estate Weekly, because that was the only industry knowledge at that time, only industry writing that was available. And I was just trying to learn. I didn't have Anybody to learn from. And so that was a way to learn. But yeah, I lived in, moved into the ground floor in a building that didn't have any windows for the first winter. We just had, I put plastic and there were metal bars for security, but just, that's good plastic on the windows and, and use space heaters and put in a makeshift kitchen and bathroom and actually had roommates there. So, you know, we had some fun too. And that was a time in life where you could do that. Yes, it was, very much so.

And for those of you joining us now on Instagram Live, we are doing a taping right now for our podcast here with my friend Matt Blessow. And Matt's telling us about how he just got into the business. And so that if, if I'm thinking about this was the same Chelsea building, this was ultimately the one where you were able to get the Penthouse edition approved. Right. Which was probably several years later. And one thing that has always impressed me so much about your career is that you really are not only willing to take chances, but really a pioneer in some of the things that you were doing. And I remember when you told me that you were going to add a two story penthouse on top of a five, six story walk up building and you were going to sell those two condos for over a million dollars, which back then was a lot of money. I was, you know, I was rooting for you, but I, I was scared for you. So kind of what led you to believe that you could actually pull this thing off? Because I, I don't think there was a precedent before you're doing that.

So I was scared too. Okay. And I didn't know what I would get for them ultimately. But I bought the building so well and the basis was so low. So even if I was way off on, on projections, there was still, you know, positive income to be made there. And you know, at that time when you're really young and hungry and, you know, and this is all your assets really in one place, you know, I think you have a tendency to work really hard and be really creative and resourceful. I did most of the interior design myself at that time and I'm a self taught designer mainly because I couldn't afford to hire somebody that was more experienced than I was. And the good thing about that is I really put an incredible amount of effort into it and thought into it and came up with a very creative design for those apartments. And when they went on the market, I had the good fortune of the market being really hot at that time. And they sold on the same day in one day, both of them for well above asking price. And it was the highest price per square foot that anyone had ever paid in New York City for a five story or higher walk up apartment building. Walk up.

And I'm not mistaken, you also won a design award because I remember going up to the top floor and the way it was kind of angled out, you could actually lean over the streets. I don't know if that was your idea, if that was structurally difficult to accomplish, but how did you figure that all out?

No, that was an idea from the architect, but it was, you know, we play with a lot of different ideas and that was one that just, you know, seemed really interesting and yeah, it was very challenging. And you know, my dad has worked in preservation his whole career and so when we're taking this old building and putting a very modern addition on it and, and at first he didn't like it and he came around but, but you know, it was really, it was a risk. It was sort of like how does, how do you blend in the new with the old? And sometimes it works really well and sometimes it really fails. Right.

So after that, and so you're, you're riding the success. You have this multi million dollar sellout of this, this building. And how much did you buy that building for initially?

$815,000. Okay.

And I'm sure you had to put a couple bucks into the building to convert it and add it.

But the thing is it actually didn't even carry a mortgage at that price because there are so many problems with it. There's was all rent stabilized, all the rents were so low it had over a hundred violations. So I actually had to take back a mortgage from the seller. So, so there was a long process of, of there are some tenants there illegally, some others I bought out. And yeah, it was, it was a lot to work over that, that was.

An MBA for, for certain. So coming out of that now you've got some reserves, you have the ability. And I think it was, was it 10 street that came next. Okay, so, so, and we'll have to leave some for the book because I write about our experience on, on 10th street and I don't know if that continues to be one of your, your best investments of all time. But if you, if you think about this, I mean, and it had, I was just speaking to a group of college students kind of talking about all the ingredients of a great opportunity off market, buying in, repositioning, seeing something that you know, know no one else saw here was kind of this rundown walk up where tenants weren't paying rents. And you said, I think I can turn this into a condo and sell this. And so truly it has been the gift that has kept giving. So maybe you want to continue the story. You find this. And by the way, doing a condo conversion of a walk up building even, I mean this was what, 20 years ago, that, that wasn't really a thing back then. I mean you converted, you know, big gracious pre war buildings or you built them new, but that was still a little edgy for you to, to kind of continue on that, that path.

Yeah, well, let me preface this whole idea with that was a very different time in New York. And you and I have witnessed the institutionalization of New York City real estate. And at that time, developers that were more sophisticated and well capitalized, they just weren't really looking at these little buildings. And so at that time nobody was doing conversions of small buildings. It just wasn't worth the time for developers who did conversions they wanted to do big ones. And you know, but I just said, well, why not? Like, you know, and, and, and all these buildings were being sold based on their cap rate and I was looking at them based on dollars per square foot. Now if you fast forward five or ten years, everybody's doing that, but there was a window open for a little while, which, you know, I could say, oh, I did such a great job of finding this perfect deal. And but the reality is there were a lot of deals back then and, and New York's changed a lot. So but we found it and, and it was off market and it was a good deal. And I think I showed it to you because I had one eye, one option of potentially flipping the project and, and you immediately got an offer for.

Significant 5, 600,000 more. So you knew going in it was, it was a great, yeah.

And, and so yeah, that was the sort of start of it. And you know, it was actually very straightforward as a very, very prime building, a prime block in the West Village. And after doing the one on 20th street, this, you know, as the second one was a lot easier. Right.

Well, to end to complete the story. After selling the condos, I think for five, six million dollars, you had held onto the restaurant. It took a couple tries to get a solid operator in there, but then sold that for four and a half million dollars, more than double paid for the whole property, parlayed that into 1031 into a mixed use department building which we still own today, sold the Air rights to the neighbor. I mean, it was truly the gift that keeps giving. So I. I wish I could be as lucky that all of my investments have turned out that way. So. So talk about. So then you kind of took the next step. I mean, you did a conversion up in Harlem, like another record. Again, the trend here is doing things that other people have not done before. And I don't know if I'm going to put that into kind of the risk basket where people just weren't doing it because it wasn't proven and too risky. Or were you really sitting there thinking about, okay, what is my thesis? What can I do that no one else is doing? Because I sure, I'm sure we have a lot of listeners right now who are thinking, okay, I want to jump in. I want to think of the thing that no one else has done before. I mean, was it that. Am I reading too much into this or were you just kind of building on one success after another?

I think the first two people hadn't really done them, but they seemed like kind of no brainers. Like, I kept looking, I was like, how do I go wrong here? You know, like, why? You know, what am I. I must be missing something because wouldn't other people be doing this? So I must be missing. But I wasn't. It just wasn't. You know, there was a window that was open as the market progressed that evolved a little bit into like, okay, it's getting harder and harder to find opportunities. And I would say the project in Harlem was more, more in that, along that line. So it was like, okay, we got to be a little more pioneering and do something uptown that hasn't been done before. But again, it was really, as you know, when we're making acquisitions, we always have always tried to do well on the buy. And I want to like, close on a deal in that day, feel like I have positive economics. Right. And that got harder and harder to do. But on that particular deal on 124th street, we certainly felt that way at the time of closing that we were buying it at a really good basis and, and just saw some, some real architectural potential in the asset that we knew we could capitalize by. By. By renovating it.

Yeah, I mean, spectacular loft building, southern facing views of the city, which was really amazing. And again, a record. I think that was the first time a unit had ever been sold at over a thousand a foot. Like the comp set was like, in Harlem, 5, 600.

Yeah. Yeah.

So after that, I know you successfully specked a couple Townhouses in the West Village. Again, you saw an opportunity. I can buy these old rundown brownstones and reposition them as single families to spot an opportunity. And, and I'm sure converting and specking a single family is different than a condo or converting a loft building. So again, learning along the way and I'm sure each time, and at this point I think you'd really curated a brand. Right. So there was a certain aesthetic and, and feeling at this point. Had you built, what kind of company had you built? Was it still just kind of you and a couple people or at this point you, you had kind of built out an infrastructure? What did it look like?

At our peak, we were about 10 people in New York in terms of just in the office people working on the development side. So still, you know, pretty small company and, and sort of, you know, breaking into more kind of mid sized projects, but yeah, still relatively smaller company.

And at that point you started ramping up and you started taking on much larger projects. And again, to what extent. And you know, not every single investment goes as planned. And I know sometimes, I mean, I know there was one investment that we were involved with where Sandy hit this resort property and there was a fire. I mean it's like anything that could go wrong went wrong. So it's probably, I think it's in the book if you talk about that.

So.

Well, okay, so what was, what did you learn from that investment? Because when you showed me that, that opportunity in Fire Island Pines, again, it seemed like one of those too good to be true. I mean, I think when we looked at the numbers, we're like, ye, this is, you know, right now you've got kind of a local operator who's driving an 8, 9% return out of these, you know, this old hotel and bar and everything. And so, and you said, look guys, we have the opportunity to come in and control pretty much all the commercial real estate in this area. So what, what transpired after that? Yeah, what could possibly go wrong?

Well, the reality is, and none of us developers like to admit this when we have successes, but there's a lot of luck involved in what we do. And if you do enough projects, you're going to, you're going to have somewhere everything goes your way. And we had that in the two that you mentioned. Well, certainly the second one. And then you're going to have others where like nothing's going your way. And this was certainly one where nothing was going our way. And so yeah, we did have, we had Hurricane Sandy. There was during the off season, there was a fire and we had a nightclub that burnt to the ground. And we of course had insurance, but.

Thank God everybody was safe.

It was, yeah, yeah, yeah. No, no, nobody was hurt, but, but financially we were really hurt. I mean, just the amount of time and energy it took to, you know, rebuild a new nightclub on the water, on an island, you know, was incredible. And, but I think the, the bigger thing that actually that really was challenging for us is we bought that asset in 2010 and sold it in 2015. And during that five year period in the United States, no other social issue gained more positive progress than gay rights. And that's a really wonderful thing for, for humanity, for society in the United States. And it's not a wonderful thing though, for the people who own the assets where that is a sanctuary for people of gay who are gay to, you know, to vacation and to have a great time and to be among themselves. But once that need started slowly going away and more gay people started going to the Hamptons and lots of other places and a lot of it is because of social progress. And so the great social progress was actually not great for our investment. And so I'll take it anyway. You know, I think net net, it's positive. I'd rather we had the social progress that we made money on that.

But you know, it's, it's interesting because I've never thought of, I just figured, you know, it was bad luck, like you said, natural elements and you know, challenges of operating a destination, seasonal business, incredibly challenged. And it wasn't just a real estate play. It was heavy on the F and B and operations. So. But when you put it like that, it definitely does put a more, you know, positive perspective on the whole thing, but also for our listeners to consider. I don't think we spent a lot of time on the show talking about some of these kind of macro social type considerations where you might think, hey, I've developed the best possible real estate project I can, but I wasn't really aware of this new trend or this new thing thing. And so, I mean, I don't know, maybe it's a great time to transition to talk about what prompted you to move to Costa Rica? Well, was it Panama first where you started building hotels down there? Was it, did it just get to the point where you said, I can't, you know, make New York work anymore? And if so, I mean, there's plenty of investors today who have been running down to the Southeast or wherever it is. But how did you choose Panama? I mean, that seems like a pretty big jump to me.

Combination of things. It was partially having trouble to make New York work just because it got so competitive. And these opportunities and open windows that I saw, I just couldn't find any. And it was also more personal that I knew that my business and life was really grounded in New York, but I did want to have an existence somewhere else. So a lot of these different types of projects are also just a product of my own intellectual curiosity. I enjoy taking on challenging things and there's a learning curve always. It sometimes isn't the best financially in a way, because each time you have to learn something completely new versus just doing the same thing over and over again. You can kind of run a machine that way.

And it's not just the real estate business. I mean, to be clear, you're going into another country. I mean, to me as an investor, that would be, you know, you'd be feeling like, okay, I'm going into the unknown where, you know, here in the US we understand how things operate. You know, what is the unknown of. And if I'm not mistaken, the hotel conversion you did was a UNESCO World Heritage site. So now. And I don't know what levels of regulation that added, but I mean, there was a lot of unknowns when you went into that market to figure that out.

There were. And what it really came down to is I took a quick trip to Panama. I had a friend in the Peace Corps there that I wanted to visit and I thought I'd check out some real estate while I was down there. And whenever I travel at that time or now, I like to stay at boutique hotels. And in a city, in Panama City, there was no boutique hotel at that time. And I couldn't believe it's a major banking center. It's a, it's a big size city and they didn't have a boutique hotel. I also fell in love with the commercial, with the UNESCO heritage site, Casco Viejo, with its character. And I could see just great opportunity, how it was transforming. And somebody had a deal teed up. They were looking for a partner to develop a boutique hotel. And so it was just sort of like, okay, this isn't what I was planning on doing. It was very much opportunistic. And we could kind of see what the future of that area looked like. And it looked like a no brainer in terms of the area continuing to develop and evolve into similar to what you see in old San Juan, Puerto Rico or Cartagena, Colombia today. And so that's how it kind of. How kind of.

So did you end up moving to Panama to do that? No. So you were just managing that remotely.

From New York and just had, you know, project manager going down every few weeks. And. But. But we ended up. We had a partner in the deal who ended up really losing his shirt in the financial crisis. And so he was actually in charge of building it with somebody on site. We had to buy him out because he couldn't continue. So that was never the plan. And so all of a sudden it was like, okay, I guess we have to figure out how to build a project in Panama. And. And we did. And, you know, I hired someone that was fluent in Spanish and I went down there a lot myself. And. And we managed to get it. Get it built in, in a good time. And. And it opened. And it was the. Not only was the first boutique hotel, it was the first public rooftop space in the historic district. So we opened a rooftop bar at the top of it. And it literally, the day we opened, people, like, went there and just to see people's faces as they get out of the elevator, like, oh, my God, I can't believe this. And, you know, and people start, you know, texting their friends and, and. And next thing you know, literally on our first day of opening, we were a success. And it's been. And that was in 2012.

And you still own that and you have another hotel.

We bought a nightclub.

A nightclub.

Nightclub. And we owned some other restaurants. And so I went down there as a developer and really became an operator. So that wasn't really the intention, but we developed a really phenomenal team. We have managers that joined our team, Roxana and Lorenzo, almost 12 years ago and are still running the whole show for us and have just done such an amazing job that because we have great people, it made sense to. To expand. And again, never really planned on being an operator, but now we really are in, you know, we still own the real estate, but we're in, you know, certainly in the operations business down there.

Amazing. And then was Costa Rica the next logical step? I mean, at this point, you did pick up and you moved to Costa Rica. And was that. And then I want to talk about what you're doing with. With shift living as well. So maybe talk about what you're doing in Costa Rica.

It. There are a confluence of events. The first is that as I've gotten older, I just felt like I needed more nature in my life and I felt more disconnected. The second reason is professional. And as I was doing more projects in New York. And, you know, I always had. When I started, I had a dream of really breaking into the big leagues and building big buildings. And I was starting to. As we were starting to move in that direction, I got a taste of it, and I actually didn't. I didn't really like what I saw. And I felt like I was evolving as a person. And it became more and more important to me to do projects that have a positive social mission. And I started really pitching that idea to different investors and lenders and partners. And I was really just getting blank stares back. And so it really felt like, well, I can't pitch conscious projects to people where that's not a priority. I was speaking a different language in a way. And that was sort of the impetus for really saying, New York's been great and I've had a great run and I've learned so much, but I've changed. And I'm expecting the industry to change with me, but that's a completely unreasonable expectation. And when I was young and getting my start, I was really driven by money. You know, as I said, I didn't, I didn't come from a lot of it. And I think I was very insecure as a kid. And that's a really great motivator. And I think you'll find that a lot of very wealthy people maybe share that. And, you know, but as I started making more of it, I just got a sense that more of it was not going to make me happier. And especially when I kind of had everything that I needed in life and doing this other large project that you were involved in as well. And at one point, the financing market really imploded while we were trying to finance it. And so we decided to try to bring in a co developer. And so we really reached out to the sort of the good ones, the ones that we thought were people with higher levels of integrity and, and, and see who we might want to work with as a co developer. And so we're doing the rounds and meeting these, you know, titans of New York real estate. And for me personally, there wasn't anybody that I met where I said, okay, this is how I want to grow into being. You know, there wasn't like a model or an example that really resonated with me. And, you know, so that was a very interesting lesson that I just, you know, I just felt different and I felt that I should be working somewhere else and that I really wanted to do projects that had a higher and clearer social mission than what I could even do. In New York. But I also needed to work with people who shared those values and wanted to be a part of that, which, which I was just having a lot of trouble finding. And so that's really what you know, and, and I, I've thought a lot about this and I think part of it is like, you know, maybe I just met the wrong people, you know, and, and, and, you know, I like to think there's a lot of great people in New York, and I think there's definitely a lot of people in New York real estate that operate with, with a, a good level of integrity. But what I'm talking about is really beyond integrity. What I'm talking about really is priorities and values of really working with people that money is not the chief goal. And that's, that's, those are the people I had trouble finding. And, and, and the funny thing is if you don't make the money, the chief goal, I actually believe you probably will make more money that way. That's not my goal. That's not what I'm, I'm focused on. But I actually think for the people who are just focused on money, it's sort of a missed opportunity to not take on projects that have more of a positive social mission.

Wow, that is really powerful. I mean, I'm thinking we've done over 150 interviews, have never kind of gone on this level thinking of. Because I'm sure the challenge is on one hand you have to make a project bankable. You know, it has to make it a success, but to also accomplish that mission. So how do you. And now there is this movement of mission driven investing. I mean, the whole esg, and I know you're talking even more broader than that, but wow. I mean, again, for you to recognize that and to say, look, I need to go and find whether it's a new environment or where I can carry this out, where you don't feel like you're swimming upstream. So I mean, that is really. And again, you had a really successful business here. This is where all your contacts were. And so, you know, once again, I think it probably took, sure took a lot of courage to, you know, pick up and leave, but no doubt going to Costa Rica, I'm sure you've had some, some fun down there as well. But talk about shift and what you're doing now for the way people live.

Well, interestingly, the thing that I needed, that I felt I needed in my career is just a greater sense of purpose in my work that I wanted to do work that had A positive impact on the world, on people and on the environment. And the way that strangely manifests itself is shift is about creating a real estate model that actually will help other people improve their lives. That's the goal of it. So I'd like to think at some point I kind of got off the treadmill. And by having purpose in our work, part of the business model is actually helping other people get off the treadmill and showing people that there is another way to live and to change priorities around just working all the time. So that's how it came about. But the project really has two elements. It's about people and it's about the environment. The people idea is, you know, real estate in my mind has always been a very non innovative industry. I've always felt like, you know, we're pretty much building housing the same way for the past 70, 80 years maybe. Yeah, we have more open kitchens and more bathrooms and things like that. But the general model of housing hasn't really changed. And you look at society, which has changed a lot. And you think about as a society in this country, we are overall, not across the board, but overall wealthier than we've ever been. People have all these incredible successes and conveniences and everything they need at their fingertips, yet we have the highest levels ever of depression, of anxiety, of loneliness, of obesity, of drug addiction, of suicide. And so something we're doing is not working. And you know, people don't really talk about that. And, and our thesis is that a lot of it comes down to the way we live. And throughout all of humanity, people have lived in community. And it's really. So what we're doing with shifts is not some, you know, new thing. It's actually a return to the way people have always lived. It's really in the past, you know, 50, 70 years that people have slowly and continually gotten more isolated. And the thing you see is actually, generally speaking, often the wealthier people are, the more isolated they become. As you get more money, you get your bigger house, you can't even see your neighbors anymore, you have no sidewalks in your neighborhood and you know, the only way your kids can play is if you make a play date for them. And you know, and that's what success looks like for a lot of people. And you know, so that's part of our thesis that it's sort of like, you know, we've lost our way a little bit as a society. And so we've been doing research for over a decade on different housing models on how do we create real Estate that will actually enhance people's lives. And from a business model, the thing that I liked about it, and this is just more as a pure entrepreneur, is, well, how do you create value in real estate that has nothing to do with square feet? You know, because all of us developers do the same underwriting, same. We underwrite the same rents or sellout price per square foot, and that's all you can do. And we're really selling commodities. But how do you decommodify it? How do you create more value for people that people will actually pay for? And, you know, on the social side, it's. Well, by doing that, you're actually improving people's lives. That's the goal. The second element of it is the environmental element. So a lot of Costa Rica. Costa Rica really is a model for conservation today and has done an amazing job overall relative to other countries. But it wasn't always that way. It had an incredible level of deforestation after World War II. And so we bought an old cow farm. And so it was once a jungle, but all the trees, most of the trees were removed. And so a lot of it's naturally grown on its own because it hasn't been farmed in about 10, 15 years. But we are really using human inputs to turbocharge that. So we're completely regenerating the land and the soil. And we have a team of permaculture consultants and workers that are just doing an environmental transformation of this land in many ways. And so that will lead to growing food that the people who live in the project will actually eat. But it will also lead to a whole host of different environmental benefits for, you know, for people who live there and for the world at large. And so that's one of the things that really turns me on that I just couldn't do. In New York, we do rooftop gardens and things like that and plant things here and there where we could, but working with nature. And we've planted thousands and thousands of trees. By the time the project is done, shouldn't be easily 50,000, it could be 100,000. And for me, that's really gratifying to be able to do that.

So how did you pull that all together? How did you get your team? So you have this vision, obviously done a lot of work studying this and perfecting it, but it still costs money, right, to do this. So is this just something that you're passionate about and you're just self financing, or is there still a business model that would actually support this to be replicated?

It is Very challenging to go into a new country and move there and try to, and set up a business, especially when you don't really know the culture. I want to, I want to thank my wife Ginger, who is, who has been along this ride with me and supported me in all of this, because it's, it has not been, it's been a very challenging transition to completely, you know, wind down a business here and move there with a kid and, and, and all that comes with that. It's at the same time, from a pure business standpoint, I have often thought that it actually feels a lot like getting to New York the first time in terms of, I don't, we don't have this insanely competitive environment. And so we bought this amazing piece of land for not a lot of money and we did a underwriting as a condominium project on it. And there's almost no other condominium projects in our whole area. And we live in the most expensive real estate market in Costa Rica yet there's not, you know, sort of, there aren't any big sophisticated developers there. So, you know, when you bring a great parcel to market in New York, you're going to have 50, you know, very qualified, well capitalized groups bidding on it, all doing the same underwriting. And you know, there I saw this piece of land and no one else had seen it, and I don't think anybody, I suspect, I'm not, I don't know for sure, would actually have the sophistication to underwrite it as a condo project. And so we're the only ones who looked at it that way. Right. And so that makes for a very forgiving environment. So, you know, trying to do, say, a community project in New York where let's say you have to convince a bank that there's some spaces that are going to be shared that you're not going to either rent or sell and you're just giving those away, basically. You know, most banks and investors are going to run for the door when they see that because nobody's done it and nobody wants to try something new when you have a thin margin. But when you have a lot of room because you buy your land really cheap, it gives you room to do all sorts of things and that's been a really wonderful experience. So it's a project that, because things move at a different speed in Costa Rica, you know, which is both a challenge and a blessing, we have to be more patient. But what's missing in my work that I was used to having in New York is existential threat. You know, like this idea of, like, okay, you signed a contract, you know, you have a gun to your head, and you got to finance it, you got to close, you got to get your construction loan. And, you know, we always, you know, managed to pull it off, but very stressful existence. And this is a lot more relaxing, actually. It's low leverage, the land is cheap and.

Well, I was going to ask you about the. It's interesting that you're going there because, you know, having known you and been involved in a lot of transactions over the years, I've never seen you lose your cool. And it's. I mean, we're kind of, you know, I guess in hindsight and looking, some of these deals did not work out well or some of the pressure. I mean, you at times were under enormous amounts of pressure and risk where your name is on the line, personally guaranteed. And it was like, you know, you are. To me, you are always focused on the solution, like the eternal optimist. So tell me, like, at some point, were you. Did you have sleepless nights or is that just part of your DNA? And maybe it's from the start where it's like, hey, I failed before. What's the worst can happen? Because, I mean, again, over the years, you've been involved in some. Some really challenging situations.

I'll take the optimism over pessimism. Anything. It works a lot better. I mean, that's the reality. Sure. I've had plenty of sleepless nights. Yeah, I mean, it's, It's.

You didn't show it.

Yeah, I mean, I try to always stay grounded. You know, that's, that's, you know, that's my work, my process. And I think I've gotten much better at it as I've gotten older. And those times when I was probably more emotional, when at our, you know, our, Our early years, you know, I. I probably didn't share it with you.

So maybe I forgotten. You always seem like very cool and under pressure.

Yeah, I'm not one for raising my voice much. And. And, well, it's funny, in New York, I even had to, like, learn to fake it, you know, to like. Like let me get really upset because otherwise I'm not going to get this person to really listen to me. And it's not my nature, but I'm gonna. I'm gonna learn how to get really upset. And then. And it's interesting. And then you go to Costa Rica, you have to completely unlearn that. All right. I don't like that where it's A very, very friendly environment. Right. Getting upset does not get you very far.

Okay, I like that. I like that.

But, yeah, it's meditation, practice, reflection. 15 years. Okay, good, good.

So with only a couple minutes left to go on the show, and usually at this point I asked for advice to the aspiring investor, but I really want to talk about this. You know, thinking about your. It's almost your. Why, you know, it's. It's really that. That's, you know, that move and that decision. You know, what advice would you give to the listeners right now to go outside the box? You know, as you mentioned, there's a track. And if you're. If you're a master's student right now in real estate or you're working for a developer, I mean, there's a track, you know, and everyone's more or less doing the same thing. You know, what's the advice you would give to that person to do something where you're going completely outside the box?

So I'm going to answer your question in two ways. I'm going to answer your question. I'm also going to answer an additional question which is related. I think before you answer that question, the first question is, what are your goals? And for me, when I started, my goal was to make money. And as I got older, I realized I was mistaking my goal of making money with my goal of being happy. Because I actually thought making money meant being happy. And I've since learned that making money is really independent of happiness, joy, satisfaction in one's life. And so I actually would suggest your listeners start with really being clear on their goals. Is your goal to be happy and really think about what it is that's going to make you happy? And it's, for me, it really comes down to having purpose and having purpose in my work. And I'm much happier doing this project than I was doing the projects, my earlier projects, which I really was more focused on making money. And I only need to look at, say, our farm workers who don't make a lot of money. And they're an amazing team of guys. And these guys are really happy. They live simple lives and they're really happy. And it's sort of like I go to Costa Rica and I can learn so much from the local people there. And so if you start with purpose, and you start with the idea that you want to do something that actually has a positive impact on the world, you actually will find that the economic opportunities follow. And so because most people are not doing that, you know, if you Are, you know, have many your database of potential buyers and you're selling a multifamily building. The vast majority of those say multifamily buyers or ground up developers, they're all pretty much doing the same thing. But it's really easy to actually differentiate yourself as an investor, as an entrepreneur by finding a positive social mission. And I feel that I did that at an early stage either just by focus on building sustainably and building creatively with a focus on design. That in itself was enough of a social mission that got us some notoriety for our projects. So it's a perfect example of a way to set yourself apart by. But it has to be genuine, you know, and so you see all this greenwashing and people just putting labels and trying to get, you know, lead certified just so they can say they're lead certified. And you know, maybe it works to some extent, but it doesn't work as well as it really is a true passion. And once as an entrepreneur you can see that it really is gratifying that in a way that you know, a big payout can't satisfy, that goes a long way. And once you really embody that, that I think becomes palpable to all the people that you're doing business to your market, to the people that might buy or rent your product. And, and people are going to want to rent from you, they're going to want to buy from you, they're going to want to work with you in a way that they wouldn't if it was just, if you were just producing, you know, money focused commodity product. Love it.

That is an incredible way to end. I mean it's all about purpose and finding that deeper meaning. And look, it's a message that so needs to be heard because especially for the kids. And I've got three sons, 18, 16 and 12. I didn't have any kids. I don't even know if I was married when we first met. But you know, in hearing what they are exposed to today and it's all about the cash and prizes and it's everywhere and it's, it's, you know, of course easy to fall into that trap. So I mean this is really incredible. I mean first of all to you know, to see you after a couple of years and it's so wonderful to hear what you're, you're doing and I really invite our audience to take a look and, and, and find out more about what you are, are doing. I mean it's, it's really, it's much broader than you know typically what we we talk about on this show. So I want to really thank you for joining us today and sharing your story.

My pleasure. If people want to see the project, it's@shift living.com okay, good. Thanks so much for having me. It's been really great to catch up with you.

Awesome. Thank you everyone, as always, for joining. You can go to james nelson.com where you can find show notes, you can find out how to connect with Matt and just really appreciative of your spreading the news. And if you like this episode, share it with a friend. That's the way we get the word out. If you like what Matt had to say, let's let people know about it. So thank you as always. Until next week.

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