Episode #705 - Transparency And Responsibility In Investment Deals with Shawn Moore, CEO of Vodyssey

Welcome to this edition of the million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell.

We're going to have some fun today, talking with Sean More. Hello, Sean.

Larry, how you doing? Appreciate you having me.

I've got to congratulate you. You started Vodicea, you're in real estate. You started Vodicea Collective portfolio in I think 2018.

Yeah, yeah. The way, the way it sits today. Yep. Yeah.

And you're up to a what we as far as our count is a thousand properties, is that right?

Yeah, we're, we're actually getting close to the 1500 mark at this stage and so we just, yeah, it's been, it's been a wild ride.

Now 2018 is not that darn many years back. That's like five years.

Yeah.

So 365 days in a year you've been rolling and talk about the uniqueness, why what you're doing is caught your imagination, you know, why did that jump out to you as you know, a niche in the market that held a lot of excitement for you and a lot of other people?

Yeah, it's, it was an interesting ride. I've been in a full time real estate investor for 23 years and so it's been, it's been a long time. I've dabbled and invested in a lot of different asset classes. Really got started with a lot of fix and flip stuff and got it back in the day I was, you know, a cocky 23 year old and bragging about how awesome I was at fixing and flipping properties. And this old guy named George put us his arm around me at one point and said, John, you got to quit. Quit sticking your chest out at these meetings and acting like you're this big shot investor. And he said you're not an investor. You're just a kid that knows how to fix up houses and sell them. You got a job selling houses. And, and he said, and it his lesson to me at the time, he said until you buy assets that bring in some passive income and you make some money on your, on your portfolio with some passive income, you're not really an investor. That's what an investor is. And so at the time, George really hurt my feelings. Right. It was like, okay, well this and, and my ego was kind of shot. I was, you know, the, the cockiness kind of dissipated a little bit and I went home to my wife and I was like, Teresa, this, you know, this guy says, I'm not an investor. And you know, I feel like I'm killing it out here. And we started talking and we're like, well, I think he's right, actually. I've never, I really do just have a job buying houses, fixing them up and selling them, and just continue to do it over and over again. So at the time, naturally, I just started buying long term rentals. I was like, well, I'm gonna, I'm gonna go buy some long term rentals and so I can start making some rent and passive income and everything else. And so as we kind of navigated through the long term rentals and they just weren't that exciting. They were good investments for the, for the most part. But when you're in your 20s and 30s, you just don't, you feel like, you know, waiting for 10 or 15 years for an asset to mature, you feel like it's an eternity, right? And I'm like, well, you know, I, I bought, I ended up building up to about 52 long term rentals and I was making like $5,000 a month on 52 properties. And I'm like, man, this is a lot of properties to not make that much money. But they were paying for themselves. And I was making, making some passive income, but I could do a flip and make 30 or $40,000 on one flip. And so at the time, about 2005, I decided to, to sell these assets and said, I'm gonna, I'm gonna pocket them. I made some good money on them. I'm gonna put the money back in. I started doing development deals and, and then about two years later, the market started really crashing and I still at the time was acting like I was smarter than I was. I got rid of them because I was bored with him and not really that interested in them. And then I started saying, well, I was pretty smart time in that market, right, because then everything started crashing around us. But that wasn't the case at all. I still was at a stage in my career where I was thinking I was smarter and acting like I was smarter than I really was. But as you kind of navigate through different asset classes and different, different things, I started to buy and we started develop land, we started doing bigger development deals. I started working on resort type properties and just didn't really think much about the resort game. We ended up working with a really high end resort, a private ski and golf resort here in Utah that was getting developed and my wife and I were the, we actually went to the developers who were the owners of that resort and they, they were lenders, they were hard money. They had a hard money lending business and we were buying, getting some short term bridge loans and I was trying to get some money for a development that we were working and they said, no, Sean, we're not going to lend you that money. And, but we've got a development we want you to come and work with us on. And we think you and Teresa are the perfect fit to help us on themselves and marketing side of this. And it was, I mean, it was a big deal for us. We had never. These were like 25, $30 million homes. You know, they were, they were not cheap properties. It was a world that we had a couple private jets in Salt Lake International Airport and we'd fly across the country and pick people up and helicopter them into the property. So it was an amazing experience. We met some amazing people. But about four, three or four years into it, everything shut down. The feds came in and, and all of a sudden the office, the computers are locked up, file cabinets are locked up and, and it's, it's over. The, the owners of that resort got indicted on securities charges. And we, yeah, so we're, we're sitting there looking like crap. We've never really done anything or worked for anybody, but we put all of our eggs in this basket. And at the time, to be honest, Larry, I was, I was, you know, we were making really good money again really early thir. And I sat and gave myself, and threw myself a six month pity party and you know, pointed fingers and acted like it wasn't my fault and, and you know, well, we did everything right and how could this happen to us?

Did they just shut the company down or did these guys wind up going to jail or.

Yeah.

How bad did it get?

It got really bad. Yeah. So it shut down immediately. Right. Because they were in the very beginning stages. Jack Nicklaus was a partner and bringing, doing the golf course, like there were some big names involved and those guys were like, hey, we're not, you know, we're having, being involved in this. So everything shut down overnight. The, the trial and everything lasted about three years. It was super messy. They ended up settling out at the end and so they didn't, they actually didn't end up spending any time in jail, but it was a, it was a messy deal. They ended up, you know, paying a lot of restitution and things like that. And I guess you got interview, you.

Had to go through a period of time and For. Okay. For an action step, for people listening to this, a takeaway is if the feds show up at your office. It's not a good day.

It's not a good day. Yeah, you can. You can. I promise you that's not going to be a day you want to remember and. Or. Or live through.

And a certain amount of things are going to start cascading away from you, like all of your friends.

Everything. Yeah.

Nobody. They don't know you. I don't know who you are.

Yeah.

I wasn't there.

And everybody saw it coming, by the way, too. You know, everybody that you talk to, everybody's like, I knew that was going to happen. I knew something was there. Right? Everybody.

I could smell that a mile away.

Yeah. So it was. I wasn't smart enough to smell it. And. And so we. We actually had a. We thought it was a pretty good deal that we were working on, but it turned out not. It wasn't.

And was there a time where you felt like, oh, Lord, they're going to suck me into this too?

Yeah, absolutely. They. They. They were.

Talk about the anxiety and the. The trauma of that, because we all want to be successful, but nobody wants to go to jail.

Yeah, absolutely. And we were, you know, we were just working on the sales and marketing side of it. We weren't. We weren't a principal or an owner at all in this resort, at this. At all. And so. But they came to. They came to me, and we were one of the. I mean, we were intimately involved in the people who were coming in and the investors buying properties and everything. El. So they tried to get us to say things that really weren't happening. Right. They were saying this was a big Ponzi scheme and everything else. I was like, no, really, I don't see it that way. I didn't feel like. I didn't feel like the owners really were doing. That wasn't their intention. I do believe they had the intention of building this out. They just were not doing it correctly. And they did make some big mistakes that we, you know, we weren't aware of. But I remember that was the. It was the day after Christmas because it was on my birthday. My birthday is the day after Christmas. I remember sitting in a parking lot in Utah and it was snowing. And I got a call from my. An attorney. They. Originally, they were asking me to be a witness. Right. So I was in the AG's office all the time. And it was, you know, and we were on their side, if you will. We were going to testify and, and be a witness in the case against. Of what was going on. Right. Well, all of a sudden the, the, the script completely flipped and I get this call from my attorney and said, hey, they're going to. They want you to waive your. Your statute of limitations is about to expire. They want you to waive that indefinitely or else they're going to file these 11 charges against you, the same charges that they filed against the owners of resort. And I was. You want to talk about feeling like everything just gets pulled out from under. I remember sitting in my truck that day snowing and not knowing what to do. My. I, you know, I called Teresa. I talked to her about it. I'm like, I'm not going to. Because what they wanted me to do is say something that wasn't. That I. That would help their case, but really wasn't what happened. They were trying to Bully you absolutely 100%.

And that was an easy way for. They could bully you to go in there and say something that wasn't really right. They could put these people in a.

Yeah, it's kind of okay, now we're. Now the case is done.

Now they own you. Now they own you, and you're a.

Puppet, and if you don't, you're in big trouble, and we're going to file charges against you.

That was an empty threat, really, when it came in.

It was. But what's scary for me, I've never done. I've never even been on that side of anything and never even experienced that. But my attorney was telling me, you probably should sign it because at least then you don't have to. Yeah, my attorney and I. And so I have my. I called the attorney and they're, they're saying, you know, your, My advice is to sign it, and then let's, let's work on it afterwards. And yeah, it was, it was crazy. My parents, I called my, my, my parents and my wife and we're trying to decide what to do. And I'm thinking I'm. My career is going to be tanked if. I mean, I'm not going to. I'm not going to sign something that one that we didn't do to. If I get charges filed against me. I mean, in the world we live in, all of a sudden, it's almost like you're guilty until proven innocent. Right. And so it's. Especially in the world of investing. And this is a, this was a really, really scary time, especially because we weren't intimately involved on the inner dealings of the company. Right. And now all of a sudden, we're getting pulled into it and I, I chose not to do it. I chose not to sign it and said, I'm not going to do it. I called their bluffer.

Say your parents advised you to fire the attorney.

Yeah, yeah. At the time, at the time, they were saying. They actually were saying, hey, if your attorney's saying this, you probably ought to do it. And so even wrong, to me, it was, it was a. It was really scary because of basically what was going on at the time of the. And it was. I mean, without getting into a lot of the details, if anybody looks up the AG's problems in Utah, the Utah Ag Department in 2000, you know, 8, 9, 10. I mean, these guys all went. They were. It was a big. There was a big problem here.

And Attorney General.

And with the Attorney General.

Yeah, I've got a. I have a friend who got attacked by them for no reason and went through the same thing. You know, the FBI SWAT team helicopters, the TV studio, dog sniffing for things. You know, all they're going to sniff is files. But they did, they did, you know, put a big smear job on them. And so as.

And that's hard to recover from. Right. And so it, and it's. And we ended up, you know, we ended up being fine. Right. I called their bluff. I said, I'm not doing this. I'm not going to play this game.

Good for you.

And, and we ended up. We actually, at the time, the Attorney General actually got pulled completely off the case. And it's partly why the owners of the resort got, you know, ended up being. Getting off of it. And, and really, they made plenty of mistakes that were, you know, that needed to be corrected. The restitution should have been paid. I'm not saying that they were, you know, crystal clean either, but the way that it was handled was really scary. In fact, you know, the other lesson that I take away from that, Larry, at that point in my life is I don't believe a whole hell of a lot of things, read or see until I see the details. Because you. I, I've been on the side of seeing articles written, things about different things that were completely falsified. Right. And so it, it's funny how skeptical I've become with all of that stuff. Even now, today, a little more people are skeptical on media and things like that, but back then it wasn't. You read it in the news, you just kind of believed it. Right.

But it's just going to get worse with AI and yeah.

Yeah.

The thing is that, you know, even the documentation proving, you know, the, the false accusation, you know, they can, they can make all that stuff up. And so the thing is that what I like about what you did was you trust somehow and over the course of your life you had learned to trust your instincts.

Yeah.

And to not let yourself be bullied into, you know, you just have to, you know, you have to develop those instincts.

Yeah.

But for, you know, this one thing I want, I wonder about the usefulness about. You hear about their teaching ethics at Harvard and my, my thing, you know, if you, if you're going to have to teach a 20 year old right and wrong, it's a lost cause.

You know what I'm saying? Yeah. The foundation's laid. Right.

You could tell them in good times how to act ethical and pretend ethic but if the ethic is not in their bone and their marrow, you know, it's like proverbs in the Bible has talks about the wise man and the foolish man. You're really only two people in this two, you know, there are two camps. You're wise or you're foolish and is going to take shortcuts and the wise person is going to be looking down the road and you know, not, not get off track for a short term gain or be bullied into taking a stand for something they didn't believe it. Now what I would say to you, another lesson for people listening in. If you are in a marketing role with a company, you better be darn well sure you have checked them out and what they're telling you in their sales presentation and no matter how many jets they're putting you on.

Absolutely.

What because you're the mouthpiece? You know, the one vulnerability you had in this situation is you were the mouthpiece.

Absolutely.

And they weren't saying it to the people. You were saying it. And so that's a way, you know, you could have been sucked in but fortunately you weren't. You know how. So your life is totally disruptive. How do you keep. Well, I'm going to ask you one lesson. I mean one, one thing before I want to get into how you made the trip, how you kept yourself going, you know, how you kept income coming in.

Yeah.

Doing something like this, where your credibility shot. You're, you know, you, you this, you cut your ties in other areas and this is the way you're going to, you know, I'm sure you threw yourself into it 100 and now you got to start something else. And usually when you Start something else. It takes a while to get it going. So I want to talk about that. But when you look at what they did wrong, what lessons, if any, did you pick up that you've carried forward as, you know, like, you know, make sure you don't do this. Make sure you do this. What, what. Any lessons from that that you learned about running your, that you use in running your business today? Today?

Yeah, the biggest lesson that I learned was one, I learned a lot of really good things from them, right, because they did big deals, they understood different, different levels of business. I was exposed to different levels of entrepreneurs and business owners and things that I never had been exposed to. So there was a lot of really good. And there was really good lesson of, for me that I've taken from, from that point forward was don't get so too far out in front of your skis. Really. What, what I felt like that they did is, you know, that I don't. I'm. I'm sure that you're familiar because of, you know, you're up in, in the Aspen area, but you're probably familiar with Yellowstone Club up in Bozeman and Tim Blixeth and how he was putting that together. That's really the type of club we were putting together. And the owner wanted to be. You know, we had this. We always, we always said, man, we've got this great thing, everybody wants it, we're building it. But he wanted it to happen overnight instead of over a certain period of time. And so the big. And that's what really got him in trouble is saying, okay, I'm going to pull money from here and here and here so that I can make this, this go faster. But then all these other things over here start to suffer, right? And, and I've always felt like, you know, you, especially in the real estate game, and this is what I've. I have never. I actually haven't raised any money since this lesson. And I've been really. I've always said, if I can't fund it and I'm not going to be. It's not my money in the deal, then I'm not going to do it. And so that has probably held me back quite a bit, right? There's a lot of. There's a lot of leverage in real estate using, you know, bringing on investors. And at this today, because of our success, I have a lot of people that will invest with us. We have a lot of people that will say, hey, listen, we really like what we're doing. And there's another level of responsibility when you've got other people's money involved. And that was a good. That was the biggest lesson I learned back when I was 30, right when, when we went through that. Because as long as things are going good, everybody's happy. But when things start to hiccup a little bit and look, we're going into a shifting market right now. I think you're going to see some people that got into raising money and using other people's money on investments that are going to. Maybe the deal's not going to go as well as they had planned. And there's going to be people that are facing those same type of implosions. Maybe not with, you know, the Fed shutting it down and everything else, but the lesson is when you, when you get out in front of your skis too far and you're using other people's money, there's just, there's just this whole other level of responsibility that comes with that. And I think that, I don't think that people think of that when they're doing that. We think of all the good things.

And you can say that. Well, that might. And you said this about. Their intent was to do this. Intent was to do, you know, the right thing. However, it's really no different. You know, you're. They, they were robbing Peter to pay Paul, you know, and, well, whatever their intent was, you see all the time people get embezzled, you know, they're caught embezzling for a big company and they say, well, you know, my mother was sick and we had to do radiation treatments. And, you know, what am I going to do? I had to come up with, you know, $120,000. I was going to put it back. Doesn't matter what your intent was. Right. The thing is, if you do something illegal or immoral or get, you know, that's right. They have so many checks. You know, I've lived. You've lived your life in real estate. I've lived mine in financial services. And it's, you know, they put the strangle regulations on you. And there's a reason.

Yeah, there is a reason. And for good reason.

You let people get away with. They'll get away with.

Absolutely. And you can justify anything. Right. That's the other thing. Like most, most people that are out there doing, there's, there's rights and wrongs. Right. And then there's, there's some gray area in a lot of things. And, and what I feel like is a big gray area. And when you start to deal with other people's money is, you know, your intent and you know, you better be a damn good expert at what you're doing and you better be very, very upfront about, hey, this is not, there's no guarantee in anything. And especially when it comes to any sort of investment, right?

And when you're, you're guaranteeing based off that for this is going to go, this is going to go, this is going to go. Better be very conservative and those things super conservative.

And you, and when it's, when it's your own money, you can take risks, take as many risk as you want, right? Like you can be a lot riskier with your own money than somebody else's money. And that's what I have that I get that I struggle with a little bit for ever since that's happened, when I hear of all these people raising money and doing deals with other people's money that don't have a lot of track record of doing their own deals with their own money and you know, that that becomes, you know, and maybe, maybe my opinion of that would be different if I didn't go through that.

Thanks for listening to the Million Dollar Mastermind. If you felt there were any valuable takeaways from this episode, please take a minute and leave us a five star review. Your feedback is important and really helps us get the word out to a wider audience. Remember, we have a valuable webinar that is absolutely free. Register for it right now@whiteallonwinning.com thanks for listening.