Owner Occupied Podcast with Peter Lohmann - Episode 1
In this interview, host Robert Leonard talks with Peter Lohmann, co‑owner of RL Property Management in Columbus, Ohio. Peter shares his journey from an electrical engineering background to buying his first rental properties after the 2008 crash, scaling to a 450‑unit portfolio, and founding a property‑management firm that now serves other investors. They discuss how they grew the business by self‑managing, leveraging meet‑ups, BiggerPockets, and Twitter to network, and by acquiring other management companies through book‑of‑business purchases. Peter explains the mechanics of bolt‑on acquisitions versus full asset purchases, and how scale influences the decision to bring vendor services in‑house (handyman, landscaping, HVAC). The conversation also covers syndicating real‑estate deals, using SBA loans for small‑business acquisitions, and the challenges of the loan underwriting process. Both guests emphasize a "value‑first" philosophy: providing ten times the value they receive, building relationships publicly on Twitter, and focusing on helping others as a path to personal and business success. The episode ends with reflections on political consulting, the importance of early political strategy for developers, and how these insights shape their future growth plans.
Chapters
So Peter, welcome.
Welcome.
This is, uh, we're gonna figure this out together. Um, why don't you tell, why don't you tell, tell, tell us a little bit about who you are and then I'll, I'll introduce myself.
Sure. So my name is Peter Lohmann. I own a company called RL Property Management here in Columbus, Ohio. And by day, I run the management company here. We manage about 450 rental units. It's a mixture of single families and apartments. And I've got a family here. I've got a wife and a young daughter. I live in a neighborhood called Old Town East in Columbus, and my office is 2 minutes away from, from where I live.
How did you come up with RL Property Manager? Why that name?
Yeah, so it's just the last initials of myself and the other owner. So I have a partner who's 50/50 in everything with me. We own properties together and we own the business together. His last name is Rich. My last name is Lohmann. So hence the RL. All right.
Yeah, Russell Lowery. So the RL.
Beautiful.
Yeah, the RL connection. The RL connection is there. You mentioned that you own own properties and, and manage. Um, you, you mind sharing a little bit how— usually you have to do something, make a little money before you can get into ownership. How did that come about for you?
Yeah, so my background is as an engineer, actually. So my degree is in electrical engineering, and I worked as a control— I graduated in 2007. I worked as a control systems engineer for 2 different local consulting engineering firms here in Columbus. And so during that time, I was making good W-2 income as an engineer, and that's where we got that initial kind of cash flow that we used to buy the first few rental properties. And this was 2008 to 2012, we were buying 1 property a year or so, myself and my business partner, he's also an engineer. So that, it was essentially that. And back then, of course, properties were a lot more affordable. You know, it was right after the crash. And so we got some incredible deals that I don't know that I'll ever see again in my lifetime. In a way, it kind of, it was almost too good because now everything I see, like my benchmark is, you know, what could I pay for that property in 2009? And it makes me, it makes it hard to pull the trigger with today's valuations.
Understood, understood. Um, well, my, my, I have a couple of companies, uh, one Highview Strategies and another one Competitive Edge, but I'm a public affairs, uh, PR person. A lot, most of my clients have a political issue, um, which defined broadly, they have some political problem and I figure out a solution for that problem.
We've got a few of those here in Columbus. We'll have to talk about that one day.
Everyone, everybody does. Um, and so I figure out solutions to those problems, uh, and, and try and, and, and bill accordingly. Uh, I got interested, I got interested in the property space. Um, I, I'd made money, I'd been successful in building that business up, and I had been looking to get into an equity position. And so I had a developer, and I have what I charge for PR services or whatever. And I met a developer and I thought, well, here's your solution. Here's your public affairs problem. You know what, instead of charging you a full rate, why don't I do a discounted rate and, and, and trade you just a little piece of equity? Like, I didn't even know what to ask for.
Yeah.
And you talk to a developer about a piece of equity. And it was like I was, like I was asking for his firstborn child. He said, you want what?
He said, come again? What was that?
He said, no way, not even like a percentage, like teeny, like just a little something.
I'm just trying to get 1%. Yeah.
And, but it worked out because I figured if he was not willing to give up any equity, he was what he was, uh, I probably— maybe I wasn't charging enough.
Yeah, run the numbers on that. Well, if you won't even give me 1% for—
yeah, yeah, it worked out.
So, so it did work out? He, he did give you a piece?
No, no, he didn't give me a piece, but, uh, but I got on that side of understanding the development process, what they needed, and came up with some creative solutions to get, uh, stuff built California.
It's—
maybe it's a challenge everywhere, but California has a, a reputation for it being especially hard in California. And so, um, I started doing some work in Berkeley, which is, uh, California is difficult, Berkeley is, is insane. Um, and we had some success there, and they did very well in that. Uh, um, anyway, that helped develop one, one line of product that I work on. But I've— I met all of these other people. So I've been learning about small business and property stuff outside of my political wheelhouse. And, and some of the— I think our connection came over, over small business Twitter. Yeah. But I'm in the middle of acquiring my first business out outside. In addition to buying a property. Okay, small business loans and that sort of stuff. So it's been It's been a transition. And when you tell people, hey, I learned how to do this from some of these cool guys on Twitter. Yeah, it sounds—
you get some looks.
They react the same way I react when I hear people selling Bitcoin, not to create any controversy, but it sounds odd.
So yeah, it's amazing. I mean, I had coffee with a guy this morning that I met through Twitter who lives locally here in Columbus. And I think we'll probably end up working together in the future one way or another. But yeah, I mean, the opportunities are coming through Twitter. You and I met directly through there. And there's a— certainly if you're interested in learning about real estate and small business, I mean, it's a goldmine. I mean, there's stuff— you can see stuff on there being freely shared that just is not available anywhere else. I've been in the business for a while and I've been owning property, managing property, owning a small business. And it's incredible the value that's being given. It's almost the times we live in where to build value and to build an audience, you essentially give away all your best secrets in public. You build in public and that demonstrates your expertise and your authority in the domain. And then when folks need specific advice or when they need to completely hand something off, you're the first person they call. And whether that's investing as a limited partner in a deal like you want to do or we're trying to do, or whether that's hiring someone as a consultant. I had a call earlier this week with a marketing guy that I met through Twitter. We're probably going to work with them. So it's pretty incredible.
That's great. When you, when you first started as a, as a property owner, you got your W-2 income. Did you hire a property management company or did you do it yourself right from the start?
We did it ourselves from the start. My business partner and I, you know, it was really easy with just a small handful of properties and we were single and young and we had nothing better to do. So it was very, you know, there was no shortage of time. 'cause we were just working our day jobs. So yeah, we self-managed and we kind of limped along and figured it out. And in the process of doing that, especially once we got a few more units, we put together some systems and processes to do that and make it a little bit more streamlined. And then, you know, we started kind of networking and talking with other property owners and they were all complaining about their property managers and they couldn't find one they liked. And at the same time, we were kind of getting sick of working for other people. We wanted to do our own thing. And that's how the property management company came about. We saw an opportunity like, "Hey, there has to be a way to do this, to create a property management company that's designed for real estate investors. It operates with transparency. It operates in a way that puts the owner's interests ahead of our own as the managers." Because we wanted that for our own properties and we couldn't find it. So that really kicked off, we went and got our real estate licenses, and then in 2013, I quit my job and started this business. And when we started, it was nothing. There was no units, there was no clients other than the ones we owned. I was just operating out of my apartment, and then just slowly, and then a little bit more quickly, built up some momentum and started getting clients, started getting units, started building some scale. So yeah, it was, it was just self-managing to start and then eventually managing for others.
So you put— you shared the growth trajectory of your business in Twitter, on Twitter, which I found, which I found remarkable. How did you go about meeting other property owners? I mean, I mean, you had to get outside your apartment. They're not swinging by to chat you up in there. How'd that How'd that happen?
Let me think back. So the early days, I tried to attend to every real estate meetup group that I could, and there's a bunch of these in every city if you just Google real estate meetup or multifamily meetup, single-family rental meetup. So I would go to those and chat up investors. I started to befriend realtors who are working with investor clients. We very quickly got a website up and started sort of optimizing that to try and rank for, like if you search Columbus property manager, we wanted to appear in those search results near the top. We bought some Google AdWords so we'd be, again, getting some traction through Google searches. And then word of mouth, I had a small network even then of folks I knew. So I think I was on BiggerPockets, which is a big community for real estate investors, especially for people who are just starting out. So I jumped in there and just started chatting. So it took a while. You know, I still have a— I took a screenshot. You know, the old thing, like, you know, you'll see the dollar bill of the first money a restaurant ever made, they'll frame it and put on the wall. Well, unfortunately, our first money we ever made was like a Chase QuickPay or something. So there was no physical, but I printed to PDF the email that we got. And I I still have it. This is the first money we ever made in the business. So yeah, it was hard getting started. I mean, it was a little scary, right? I quit my engineering job and I had just gotten engaged, right? So my wife's kind of like, "What are you— You said what? You're quitting your engineering job? That's not what I signed up for." But it worked out. So she's happy now, I guess.
[Speaker:ROBERT_LEONARD] That's great. Do you expect to just grow your property management business? Is that your ambition? Or do you— Do you have other thoughts or is that where you're— that's what you're going to do?
Yeah. So definitely want to grow the property management business. I'm all in on the property management company. I spend pretty much every waking moment thinking about it and how can we grow and how can we make our clients more successful with what they're doing with their properties. There's other opportunities that you see. The more The longer you've been in business and the more you bump up against the limits of what's possible in a given domain, both the software that's available and the constraints, whether geographically or with what customers are coming to you with, you start to see opportunities, right? So we've seen a few different opportunities, probably 2 or 3 good ones over the years where we're like, "Okay, there's something there." We can take what we know about property management and real estate with our engineering backgrounds and maybe make something happen there. So there's a few things kind of on the back burner that we're sort of moving along slowly and thinking about, but the management business really is 100% of the focus. We had this funny idea when we started that we'd have all this extra time since we weren't working at our day job, we would be able to kind of manage properties for a couple hours a day, and then we'd be able to run around and go look at properties to buy and have all this extra time to, you know, walk properties and scour the MLS and search for off-market deals and everything. Well, it just immediately we were overwhelmed with work with the management company. And we barely have bought any properties since we started it. So that didn't work out as planned. But We do. We did syndicate a few deals back 2012, '13 time range. So we got our feet wet with that. I know that's all very—
what do you mean syndicate a few deals?
Sure, sure.
So when—
and you'll see people on Twitter talking about this a lot, like, if you're, if you're a general partner in a real estate deal, yeah, you're syndicating, you're bringing in outside investors, the limited partners. It goes by all these different names like syndicating, or sometimes people call it joint venture or GP, general partner. So yeah.
Okay. So, but when you say syndicate a few deals, was that to buy property or to pick up property management business?
It was to buy property. Yeah. So a couple single, like 3 or 4 single family and maybe a 2-family. We brought outside investors in for those deals and we still own all those properties right now.
One of the books I read, and I forget now who recommended it, but it— Buy Then Build. And it— I started my business with bare walls and that phone not ringing, that inbox zero is terrifying. Yes. Yes. Does any—
Hello?
Hello? Is there anybody out there? And I wouldn't change. I gained a lot of experience and I'm appreciative. But I made so many mistakes and it was so expensive. Knowing what I know now, I would, I would, I would much rather start with something and then build on what I already have. Do you think in terms of buying a property management business from other people or just adding a property by the one-off owners that want to hand it off? How do you think?
Yeah. Great question. So we do buy other management companies. In fact, twice in the past 5 years, including once last year, we bought a book of business from another management company locally here. And so we could spend quite a while unpacking all this, but to summarize, when you buy a company, you can either buy the book of business if it's a services business, which means You're essentially just taking over the servicing of the contracts from that provider. So if you think about like a dentist, if a dentist was going to sell their business, they're going to sell their books, they're going to sell the customer list to a colleague, right? They're like, "Oh, I'm going to retire," and the young guy's coming up, they're like, "I'll sell you my customer list." And the outgoing, the seller will try and make it a smooth transition. "Oh, we're partnering up with this new guy and we're going to migrate all your patient records and everything." It's the same thing with property management. So You buy a book of business and you essentially just bolt that on your existing operation. And in property management, that involves the contracts, right? So, so the way property management works is you have a 1-year agreement or a contract with the property owner where you're going to manage their property. And that's, you know, it's a 1-year agreement. So you can buy those agreements and you can construct the agreements so that they're assignable, which is, which is ideal. So that's the first way to buy a business. The other way is you can do like Essentially a stock sale or an asset purchase where you're literally buying the entity like the LLC or the S corp and everything that goes with it. You know, it could be trucks, it could be property, it could be large equipment. Of course, the customers could be employees coming along with it, could be operating capital, and it could— it also includes all the liabilities that go along with that business as well. Any other debts and any other, if they have any angry customers that then want to sue, you have to be on the hook for that. So there's different pros and cons to that depending on what your goals are and the setup. We did book of business purchases for our two transactions and those worked out well. And we're still looking, right? So we stay friendly with a lot of the local property managers and I always kind of tease them a little bit like, oh, you're getting ready to retire, old man. You know, we'll buy your business. Try and keep it, you know, fun and lighthearted, but also a little serious. Like, hey, I actually do want to buy your business.
I want you to know, if you want it, I'm open to this. Yeah. Yeah. You use that term bolt-on. And I, when I got, when I got the acquisition bug, when I got convinced that that was the way I ought to go, I talked to a million people looking for different PR businesses, different add-ons that I could do in my direct sphere of work, and there just wasn't anything for sale. There just, it just wasn't for sale. And so, yeah, and so I got, I started looking at what I was spending money on. What were some of my biggest expense items? And I spent spent a lot of money on printing. And I looked at it and said, well, how much would it cost me to buy a printer? And I looked, and that was a significant expenditure. How much would it cost me to buy a printing business? And that led me down that trail to where I'm going, I'm going to have a printing business. And there's a story around that. But I thought about that in terms of I know a couple property managers here in California and I started thinking, what are some of the expenses that you've got? And you can, I'd love to just, you feel free to tell me why the idea doesn't work. And I know, I think you mentioned that you don't even recommend vendors because of different problems.
That's right, yeah.
And the idea I was saying, if I bought a landscaping company, me, or, and I mow grass and I, you know, nothing, not designing yards, I'm just mowing grass and tending to it. That business would have a certain value. And then if I approached a person like you and said, if your, if your properties are allowing you to pick who mows the grass, or if that were part of it, if I added and the one, the person that I'm talking to felt fairly confident that they could get me 30 grass mowing accounts if they, if they, if that's what they wanted to do. If I could do that competently, they wouldn't care. They don't care who mows the grass. Yeah. And I could do it, you know. So I was, I'm looking at that and saying property managers buy so many different services and need so many different vendors that And you need people who can reliably service your customers. Have you thought about owning any of those vendors that you use underneath so that you know your clients are getting high-quality service? 'Cause you're not maybe necessarily in-house to the property management, but as a, I don't know what the right phrase is, but that's how I think about a bolt-on or a related business. Related entity?
Yeah, we absolutely have thought about that. So a couple things come up when you, when you mentioned that. The first problem that we have is, is scale. So if I was to buy a landscaping company, for example, although we do have responsibility for mowing the grass at a lot of the properties that we manage, in the grand scheme of a landscaping company, we're still kind of small. So if I were to buy a landscaping company, I would basically be owning a landscaping company and I would have a tiny little percentage of the revenue from that company be guaranteed basically because I would be giving it from my management company. So I think the higher of— the more you can scale, the more that starts to make sense. If I'm managing 2,000 units, and they all need their grass cut, now it starts to make a lot more sense to either buy a landscaping company or— I think what most property managers end up doing is they just bring the services in-house because there's— I think, as you know, if you, if you run a landscaping company, you're dealing with the general public, right? You're dealing with Susie Smith who calls you up and says, hey, how much does it cost to cut my grass? And now you've got invoicing and you've got scheduling and you've got different business, right? Yeah, it's just all the rigmarole that goes on with that. Whereas when you're servicing properties that you manage, it's just easy peasy, right? You're guaranteed to get paid because you pay it right from the rent. You essentially are your own client. It's very simple. So property managers will bring tradespeople in-house. And we, for example, at our management company, we employ 6 handyman guys as W-2 employees who work directly for us. And are doing work on all the properties that we manage all day, every day. It's really simple. It's somewhat profitable. We don't, you know, we try not to make it a big profit center because we want to provide value for our clients and give them, you know, a great, great handyman service at good prices. And I know that as property managers get bigger, they'll bring in like plumbing and HVAC is kind of the next logical step. We're not quite there in terms of scale that we could support an in-house plumbing or HVAC person. But we're getting close.
Um, landscaping, I was thinking, um, from the scale standpoint, and sure, if you brought a big plumbing company or a big HVAC or a big landscaping company, it would be, um, you're— would— you would be a tiny percentage at 450 customers. But if you bought a, uh, if you bought a small one, maybe if it wasn't even that profitable, it was, I mean, under $100,000 SDE, it was just really small. Where, um, maybe like for your 6 handymen, if you had a handyman business and, and you're 450, you've already got 6 employees who can do that kind of work and they're primarily busy with your clients, but now you're getting the efficiency of kind of filling in their hours with— correct. External stuff. They're always going to be primarily focused on your stuff, but they're able to do business with the public in other places. But you're sort of their priority customer, um, where you're getting a better return for that investment in those employees because they're busier, uh, that sort of thing. And you could build those different— it could be a way to, um, to learn, uh, to, to scale a smaller business slowly and then add the expertise over time.
Um, yeah, so that, that's exactly right. And we actually are kind of doing that. So we offer to the public wood window restoration, right? Um, it was kind of a side passion of mine. I was— I learned how to restore wood windows years ago, and I I had been restoring the wood windows on my historic home here in Columbus. And as I kind of got involved in that community a little bit, I realized that there was a huge demand for this service. It's very specialized, and it's, it's actually kind of mandated by the local governments here. The, the cities and historic districts in certain cases require that you keep the original windows and restore them. Versus replacing them. So I was like, hey, there could be, you know, some money in this. And exactly along the lines of you were thinking, this can keep our guys busy during the slow season, which right now is our slow season in the wintertime. So I threw together a quick little website, threw together some marketing material, we did some direct mail, put together, you know, some marketing collateral. And right away we got some business. So we were operating that as a very small side business. We have just a few customers that we're slowly restoring all the windows in their house. And because of the nature of that work, we can charge a premium because that service is in such high demand. And what's beautiful about it is it's not urgent. It's not like, "Hey, my sink's leaking. I need you here now." It's like, "This year, next year, whenever we get to it." I can schedule 6 months out with people and they don't bat an eye. Right. And, and we just, we have a little wood window shop now in our, in the basement of our office. And so we bring them back to the shop and the guys work on them when they have 2 hours between jobs or whenever they can. So I think you're exactly on, uh, the money there. I think the details matter of like what's the, the nature of the work matters a lot because if you get into like plumbing work, for example, like in my example, I mean, if people need a plumber, they need a plumber. You can't schedule 2 weeks out usually. And if your guys are already busy doing work at the properties you manage, that's going to be hard to do. But if you could get into a type of business where, like, landscaping might be a great one because that's never going to be like critical. You can always push it forward or back a day or two and not, you know, no big deal. So, yeah, I like that thought a lot.
I'll let you know how it goes. You can— I got to digest this print work, this print work first, but I definitely I, the, the community we've got and learning and that searcher model and people looking, you know, to maximize that $5 million SBA loan, uh, I found it great. I'm working very hard on a, a small acquisition. I, I've already sold— I've already— I, I will double the revenue in year 1 because I've already sold what they were doing in revenue last year. So that my My, my strategic advantage was I know how to sell printing because I know a lot of print consumers and I know what are happening. So I, I, so I kind of de-risk the whole thing.
Yeah, it makes complete sense.
I learned who the— I learned— I found a great banker, I found a good lawyer. I am overpaying because my strength has never been accounting, but I've found somebody who can explain the whole thing to me, and I'm doing a 13-week cash flow analysis, and, and they're training me on how to do this and what all the margins and industry standards in this business ought to be. And I can sort of cherry out the experience. Nobody would pay what I'm paying for the advice that I'm paying for, for this tiny transaction. But I really wanted to be able to prepare for a larger one down the road. And build skills.
And so, so you're, so you're in, in contract to buy this business?
Yeah. Okay. Yeah. And, and somebody— I, I'm gonna go back through, but somebody can— like, I didn't need the cash to buy the business, but someone was explaining the leverage and the small business loan, and they're waiving the fees, and they're giving me 6 months worth of payments.
That's right.
And so I'm going through the nightmare of going through the SBA loan, but mainly because I wanted to find the banker.
And so we're doing the exact same things. I feel your pain.
We're—
we are looking at another local business, um, which I'll hopefully be able to talk more about as we get closer. But, um, so we are in literally in the middle of SBA underwriting, which it sounds like you are too, um, and it's painful. I saw someone on Twitter was like— it was like, SBA loans are the government's gift to entrepreneurs who can stomach a marathon of paperwork and a personal guarantee. I think that was like almost word for word what it was. Maybe it was Brandon— maybe it was Brandon Laffridge's pinned tweet that gets so much traction. Yeah. But I think that's correct. I mean, you know, the SBA is asking us for a business plan for a franchised company, right?
It's like, uh, right, like it's the franchise, like Anyway, so yeah, I have to write up, uh, I have to write up that, uh, I have to write up a business plan, but I, I've just described it to you. I called, I called 3 colleagues in the business and, and said, do you, if I, if I buy this printer, can I have, will you print with me? And they said yes. That's my plan. I'm gonna figure out the rest, but exactly, I know that I'm good. I know that I'm covered here. Um, But I'm also buying, I wound up buying, now I'm buying a building to house the business. And that pumped up the value of the transaction and brought in the personal guarantee. But I'll own a piece of real estate that I wouldn't have otherwise.
[Speaker] Well, that's great. I mean, there's a lot of tax advantages of owning real estate. So that's a great thing. And yeah, the— so what I'd love to hear a little bit more about your background, how you got to where you are and what you, what you love doing and helping people solve. It sounds like you solve tricky political problems. How did you get into that and what specifically within that domain is like where you like to operate?
I, I'm, I'm a bit of a deal junkie, but I I grew up in the Bronx. I grew up in the ghetto. I had no vision of going to college or anything like that. I thought college cost $35,000 a year and I hoped to make $35,000 a year. I thought one day if things worked out, I could be the assistant manager at the grocery store. That was my ambition. I joined the military, 2 years. Everybody in my family did. It's what you did. And in there, I took some tests and somebody said, what are you doing in the military? You need to go to college. Wow. They— I, I, I'm the— all of my family have been born in New York City, in the Bronx. That's where we were born and raised. And I got shipped to Treasure Island in San Francisco. I went to community college, went to University of California, Davis. And got involved in politics in Sacramento.
And find that person who pulled you aside and, you know, give them a medal or something.
Know what he was doing. I don't remember his name. I didn't realize the kind— I didn't realize what he was doing for— I didn't realize it was a life-changing trajectory.
It's funny how those moments pass you by. You don't really know.
I know now what he did for me. I had no clue at the time. Uh, I don't even remember his name. And, uh, and, and, but I went to UC Davis, I got involved in politics, and, and I'm breaking Sweaty's rule, but I can't talk about my business without talking about politics. And I was always a conservative. I'm a Republican. And I made my way in California politics as a conservative staffer. And then I rose through the ranks, legislative aide, chief of staff, And then, eventually leading the entire Senate Republican Caucus and negotiating budgets and bonds and deals, hundreds of billions of dollars worth of deals. And I loved it. I loved doing the deal and being that junkie. I had no idea how lucrative those same skills would be externally. But then, I got a job as a lobbyist for the largest utility in California and I did that for several years. Years. And then I got tapped to be the lead staffer at a tax agency and, and negotiating tax controversies and that sort of thing. And then, and then I, I decided to open my own shop. And it's been, it's been great. And so those political controversies, it's, it's so hard to do anything in California. So if you want to build something, It's near certainty that you're going to get challenged legally on your right to build that or expand that or grow that.
That is starting to happen even here in Columbus. I mean, they're trying to build a 5-story apartment building 3 blocks from here and the neighborhood's all up in arms and they're fighting it tooth and nail. For me, it's like, okay, you say you want affordable housing, we're trying, like, you need housing for it to be affordable, kind of supply and demand type thing. Anyway, we could probably, we could probably talk for hours on that.
But those kinds of problems, I help, I help, I try, if I get in early, developers often will go it alone, go it alone, they want to keep their costs down before there's any stick in the ground. And then And then it gets to the end and you try and hire a lobbyist to push something through a city council at the last minute. And I've kind of flipped that on its head and just, and just said, to the degree I can get in touch with the developer early enough and just saying, if you use your LPs, if you use your vendors, your architects, your gardeners, your the, the, your construction teams, your entire network, and you think about that and construct a political plan to get your project approved before you start, you save yourself a lot of expense and headache because all of those people have political relationships already. So that's one nature and that, that's one vein of client. And then there's people who have, um, who have business before the state legislature. And I call myself a bit of a translator, but it's a leftist progressive legislature. And so you have to explain your issue in words and language that they're gonna understand and care about. And it probably doesn't involve your balance sheet or how much your margin is or how much you're gonna make. We have— that's not unimportant because if you can't build it, then the good that they care about can't happen.
Right.
And so if you can explain language and consequences to a progressive legislator or decision maker in a way that makes sense for them, you can still move your project forward. I just had a little Twitter exchange with, with Moses Kagan. This morning, but the city of Berkeley, the bastion of liberalism, just voted to eliminate parking requirements for development in, in the city of Berkeley. The consequence for that is the yield on a piece of property is much greater than it otherwise would have been, which means people can afford to build more stuff. But if you'd known that was coming, you could have, you could have profited and invested in that and change the economics of property. And that's, yeah, that's my task now is, is sort of for my job. Developers generally think they understand the political process. And so they it's not expertise they want to pay for because they think they know it. And so, I wind up— I have to first convince a client that they know less than they think they do.
That's always a fun task.
Yeah. But I don't need many of them. I don't need many of them and I don't bang my head against the wall if they don't. But when I get one and we're pretty good at doing that and I So it's fun where I don't have to unpack their balance sheet before the deal. I'm more than happy to, to get on the other side of it.
And yeah. And how long have you been out on your own then?
It's only— it's been 3 years. It's been, it's been 3 years out on my own and it's been, it's been great. And so the learning and growing that sort of the business I learned that I was really, I wound up creating and buying a job for myself. It's not sellable to anybody else. I didn't have a platform that anybody would buy.
We'll work on that.
That'll be good. But I learned, I've learned, and now I, okay, this is how I would have to structure this. I've hired, I've staffed up, I've got people to help now, and I'm building systems to try and capture more of that value as we go forward. And so, But I've learned from you. Before we go, one of the things that attracts me to kind of talking to you and learning with you in public on this is, and it doesn't sound at all like a— it's not a marketing idea. You've talked about adding value, beginning every day on how you're going to add value to each of your interactions. Can you talk a little bit about that and how you how you came across this or why you've embraced it.
Yeah, I'd love to. So this is a new, relatively new approach for me. I think maybe a lot of people can relate to this, but right out of college, got, you know, got my first job, and even through starting my own company, I've been very inwardly focused. I would say that I was very concerned with how much money can I make, How can I grow my net worth? What am I getting out of this? Even from the big things all the way down to you get an email from someone and you're gauging their status relative to you, and is it worth your time to engage with them and go have coffee with them and everything? And I think that works to a certain extent. You almost need some of that, especially when you're starting, because If you don't, you're just going to get pushed around and you're going to end up working for somebody and they're going to be profiting off you. And I think almost by definition, an entrepreneur is somebody who says, I'm smarter than you or the other people who have tried to do this before. Otherwise, why would you even go out on your own and try and do your own thing? You just accept things the way they were. So Clay Finck: I think as I grew up a little bit, I got a little bit older, I got a family, I had a little bit of success in business and real estate, and I'm a lifelong learner, so I'm always reading, I'm listening to podcasts, I'm trying to learn from people and trying to not make the same mistakes they've made. Why not learn from someone else's mistake? You don't have to make it yourself then. Warren Buffett and Charlie Munger always talk about that. So So I think some combination of hearing it enough from other people and sort of coming to my own realizations in my life, it's like really the way to be is to help other people. And obviously I'm not saying anything revolutionary here. I mean, the greatest thinkers in all of history have said this from day one, but you're going to be happier and you're going to be more successful if you're outwardly focused, if you're thinking about others and how you can help them and how you you can make them successful and where you can add value. And so for whatever reason in 2020 or here in early 2021, that just became real for me. And you can hear it 100 times and it just bounces off. And then for whatever reason, someone says it a certain way, or you finally get to the stage in life where you're receptive and it becomes real for you. So now in the mornings and when I'm thinking about my day and looking at my inbox and my calendar, I'm like, "Okay, I want to make other people successful. I want to help. I want to provide 10 times the value than I'm receiving." So if it's a client and they're paying me whatever per month, I want them to receive 10 times that amount in value. And the old saying is, "Price is what you pay, value is what you get." And same thing, everything from people I'm interacting with on Twitter. I try to make sure that for every ask I make on Twitter, I'm providing value 10 times. I don't sit there and calculate it, but—
It's definitely there.
It's definitely there.
Yeah.
And even there's all this research on what makes marriages last. We're kind of getting in the weeds here, but if you look at it, it's like you have to have 7 positive interactions for every 1 negative one. And that could even be something as simple as saying, "Hey, you look nice today," or, "Hey, you did a great job with this," Hey, thanks for picking up the kids. That was really nice. You didn't have to do that. Those little things are cumulative and they strengthen that relationship. And I think that extends to more than just romantic relationships. I think it's for everyone really. So just thinking first about others and how you can provide value and how you can make them successful. First of all, it's just it's a more rewarding way to go through life, right? So you get to the end of the day and you feel good because you're like, "Okay, awesome. I'm seeing these other people be successful. I'm helping them. They appreciate what I had to share." You feel good about that rather than the end of the day and you're like, you're sort of counting your, how much money did I make for myself today? And it's not enough. And Ebenezer Scrooge type mentality. So it's Again, this is nothing that hasn't been said 100 times before, but for whatever reason, it became true for me and I've really been trying to live it and it's been really fun. That's the irony of the whole thing is that that attitude will make you more successful than seeking success for yourself first. You know, I'm early, early days on it, but I think I've turned some sort of a corner for myself. And it's been, it's been fun and interesting to sort of think about how to make that a reality in, in even the smallest day-to-day interactions.
Well, if we can use this podcast to do that, I think, I think, I think it'll be good for me and good for you. And hopefully it's good for other people that stumble across it as we, as we do these in the weeks ahead.
