Partnerships, Delegation & Hiring with Nick Huber

Peter Lohmann's Podcast. Peter Lohmann's Podcast. Peter Lohmann's Podcast. Brought to you by Lead Simple. Yum. Your job as a business owner— I hate the advice, go find great people, go find great people. The key is great people. You interview titans of business and they'll sit here on a call and they'll say, what's the key to success? And they'll just be so humble. You know what? I was just blessed with such amazing people around me. All you got to do is go find amazing people and you're going to just succeed. That advice is such bullshit. No, the unicorn who feels about the same way about your business as you do, the person who's gonna, you know, care about your business like you do, that person doesn't exist. They are a unicorn. They don't exist. If you're looking for them, they sure as hell aren't gonna apply for the job on Indeed and come walking in your office and wanna work for you and just like, oh my God, I just can't wait to work for Nick and Peter. No, you have to build a business that normal people can thrive in.

Welcome back to Season 3 of Owner Occupied on operational excellence in property management. Owner Occupied is a show about property management in the real world. I'm your host, Peter Lohmann, co-founder of RL Property Management. For Season 3, I have a different guest each week and we go deep into conversation about what actually works when trying to grow and streamline your property management business. Thanks for listening. Now let's go. Welcome back to Owner Occupied. I'm thrilled today to introduce Nick Huber. Nick Huber is the man who needs no introduction, but we actually are going to do an introduction because some of you are unfortunate enough to not be familiar with his backstory. So Nick, thanks for coming on the show today. I'm excited to get into your background and dive into a lot of the projects that you have going on right now. If you wouldn't mind, just start by giving us a 90-second to 2-minute background for those who may not be familiar with you.

Yeah, man. I'm a fan of your work and appreciate you having me on. So I'm 33. I have 3 kids. From Southern Indiana. Went to school in upstate New York. Out of college, I started a moving and storage company for college students. Ran that from 2011 to 2015. 2015 came around. We had a little bit of money sitting in the bank from this business. At its max, it did about $2 million, $2.2 or so in revenue, and it was the hardest business ever. We did pickup and delivery student storage in 25 colleges in 12 different states. So 6 full-time employees and 250 part-time employees. Learned how to operate a business there. 2015, put some capital to work in a self-storage facility, built it from the ground up, in upstate New York, went way over budget, bought the neighboring facility across the street. Our all-in basis was about $2.9 million. Put in $500,000 of our own cash, raised about $500,000 from investors, did a cash-out refinance that changed our life in 2019 when it was worth about $6 million, and went and bought more storage. Ran out of investor capital in 2020, got on Twitter, and since then, my whole world has exploded and we've raised $40 million of outside capital. In 2021, we bought $50 million worth of storage. We now have 45 employees at the company, started a couple other companies, and here we are.

Love it. So moving company to self-storage to a bunch of other stuff is the short and sweet trajectory here. And I know a lot of my audience isn't on Twitter, especially for those who are kind of deep in the property management world. But Nick Huber has, and I think you would agree with this, truly built his businesses off the back of Twitter. He's got almost, as of the time of this recording, nearly 300,000 followers on Twitter. And I know you've talked before about what percent of investor capital was raised basically through your contacts through Twitter, something like 98% or something like that.

Yeah. I'm not from big money. So I tapped out basically all the investors in my county by going kitchen table to kitchen table to raise money for that very first deal. Spent the next 3 years trying to raise money for the next couple deals and failed. So me and my business partner Dan put a chunk of our own cash in a couple small acquisitions, 4 more facilities, all of them sub-$600,000 properties. And then I started tweeting. And It turns out when you talk openly about self-storage and people kind of get a look into your brain on Twitter, it's not just a place where people argue about politics. It's a place where people go who do a lot of deals, as you know, Peter. So there's a lot of killers on Twitter. I started to build relationships with those people. Fast forward to today, as I said, we've raised over $40 million. We have over 200 active investors with us and 1,500 interested limited partners on our mailing list, 95% from Twitter.

Unreal.

It's crazy.

Yeah, it's— yeah, so, you know, I'm not— we're not going to go deep on Twitter today because Nick's talked a lot about his journey on Twitter elsewhere. If you're curious to hear more about how you get to 300,000 followers, he even has a course on how to grow your Twitter audience if you're interested in that. What I do want to zoom in on today, because this is nominally a show about property management— we, we definitely won't spend the whole time talking about property management, but I want to zoom in on your self-storage company, Bolt Storage, and I'd love to hear a little bit about some of your backend systems for property management, some of your software stack. Are you using global talent? Are you self-managing everything? Do you do any third-party management? Some of those nitty-gritty operational details is super interesting to me as someone who's in the property management space.

Yeah. Everybody thinks that commercial real estate is, or just real estate in general, is passive and you buy real estate and then you go to your mailbox and cash checks. In reality, you and I both know, Peter, that real estate is just a small business disguised as a building.

Love that.

So yeah, we've built a team that can manage these properties well and we wouldn't be able to do what we do without it. Because a home, a single-family rental, even a duplex is kind of valued based on comps in the area, what this other property sold for. Commercial real estate is this amazing game where it's valued based on how much money it makes. So if you can get in and you can drive those factors, drive revenue, get better at marketing, get better at leasing, just run a business well, which is what I'm used to doing, you can make these properties exponentially more valuable. And we can kind of talk about, if you want to, how we pull levers inside of our property management company and an example deal of how we make a property more valuable, how commercial real estate's valued. But yeah, so we only manage for ourselves. We don't third-party manage. And back in 2017 when we started, everybody had a manager on site of their self-storage facilities. So we're like, "Wow, not only is this a really good business, but we think we can manage these things remotely." So in 2017, when our first building opened, pull up to our gate, go to a website, rent a unit in 5 minutes, and get a text message with your gate code, go to your gate, go to your unit. And since that day, we haven't had a ton of problems with it yet. And we don't accept cash, we don't accept check, we only take payments online, we only do rentals over the phone and online, none in person.

So how, how crazy and how unusual is that in the self-storage world? Like out of all the self-storage facilities, What percentage of them are at the technology level that you just described? Is it 1%, 50%?

[Speaker:ELLIOT_BISNOW] I think that we are the best operators in the country at self-storage. I mean, it's not easy. There's a lot of moving parts to this. There's people living in units. We had a bomb squad go to one of our facilities last week because there was a pistol and a grenade inside. I don't know if you saw my business partner's tweet. I make it sound fun and sexy on Twitter, but managing these things. I mean, our average property has over 300 tenants and they're moving in, they're moving out, they're not paying, we're auctioning off units, we're cutting off locks, we got to maintain the doors, the signage, the gravel lots or the paved lots, you know, the yards, the pest control. There's a lot of moving pieces to it. We can talk about how my company is structured. But yeah, it is our competitive advantage, the fact that we manage these properties. And 2017, not many people were doing it. 2020, still a lot of good deals to be had. We could buy properties, they were mispricing, The whole market was mispriced for storage. Small mom-and-pop operators were charging $60, $70 for a 10x10. We would buy these things and rent units at $125 for a 10x10. That's massive alpha, and you can increase revenue 20, 30% year one, which does amazing things to profit margin, and that's the value of the facility. 2021 was the gold rush. 2022, rates have gone down a little bit. Not as many houses are selling. We're early 2023 now, more of the same. Rates being high, not as many local movers, and occupancy across my portfolio is sitting about 73% versus 80% this time last year. And also the gold rush for self-storage facilities, I don't want to say that it was a small window in time, but a lot of people are remotely managing now and our management is, I'd say it's still a competitive advantage over the long haul, but not as much so.

Robert Leonard: Got it. And so the software that you're using to manage these facilities, is this commercially available? With some of the features that you're describing, or is there custom software you had to build out?

We're like you. I mean, we use some— we use a lot of different out-of-the-box softwares. I don't know if you guys have built any of your own software. We have not. We've elected not to do that.

We haven't.

So we pay for Easy Storage Solutions. It's out of the box, about $100 a month per facility. We have Notion, we have Slack, we have Airtable. We have a lot of different project management, you know, softwares throughout our company.

At a typical facility, am I correct in saying that there's no one in the little office with a clipboard walking around? There's no permanent employee who's stationed at any of these facilities?

You're absolutely right. Yeah. Ithaca is a good example. We have a facility with 51,000 rentable square feet. It does almost $900,000 a year in revenue. We spent $17,000 in onsite labor last year. That's sweeping out all the units, right? Doing all the auctions. Our competitor down the street has a similar, similarly sized facility between $700,000 and $900,000 a year in revenue. They have 2 full-time employees on the payroll.

Full-time. Yeah. So that's like 8 times the payroll burden or more versus—

Yeah, yeah. And upstate they probably spend, you know, after, after FICA, $130,000 to our $17,000.

Yeah. So, so share a little bit about— So in, in the residential property management space, we were fairly early adopters here with using global talent. And so the sort of tidal wave of folks hiring folks from the Philippines and Mexico and many different places worldwide, there were folks in the residential property management space doing that 10 years ago when it was like no one was talking about it. And it started to become quite commonplace 5 years ago, whereas I feel like a lot of small businesses are kind of like just now hearing about it. But Because in property management, residential property management, you sort of live and die by your labor cost. It's basically like a labor arbitrage game. And your number one expense by far, and it's not even close, is labor. There's no assets, there's no COGS. There's, yeah, it's basically just your labor. So we were quick to like look at, hey, how can we reduce the labor costs here in our industry? And I know you've been a big, a big vocal advocate for using global talent. Somewhat controversially on Twitter, somewhat non-controversially among actual business owners. So I'd love to hear about how you guys are using global talent at Bolt Storage. Do you have any domestic employees? Is it all global? Tell me a little bit about how that's structured and how you're leveraging systems and processes to help these folks be successful.

Yeah, so we do. We have 8 Americans on our team. And then the rest of our 45 employees are either in the Philippines or in Colombia or Brazil in South America. All of them were sourced through Support Shepherd, a company that I've been affiliated with, and Marshall, the founder, is a friend of mine. But yeah, I mean, it's a tremendous competitive advantage for us in that we can operate 62 self-storage facilities and our annual payroll is $1.25 million a year for our overhead. That doesn't count our onsite vendors. It doesn't count our onsite labor. It doesn't count the pest control company, the lawn care company, the maintenance on the ground. That's just our overhead to handle acquisitions, underwriting, closing loans, dealing with our bankers, raising all the money, managing the $40 million that we raised inside the private equity entity. And then once we close on a property, it's the property improvement, it's the collections, it's the auctions, it's the customer service and leasing of these units. So Yeah, we have a lot of Colombians and a lot of Filipinos and they're phenomenal. We can run 24/7 customer service at 62 self-storage facilities for under $1.3 million a year. That's $20-something thousand per employee on our payroll. So it's a tremendous competitive advantage and I don't think it's really catching on to the level that it may, but I mean, probably less than 1% of businesses under $5 million in revenue have a foreign worker on their payroll. I think every company should. I mean, literally the restaurant down the street where I'm waiting, I'm calling and the bartender's answering the phone to take the order of what I'm trying to order. It makes sense in so many different areas. We have a construction team in the States now where we're expanding. We're doing about $3 million of expansion on current properties. And all of our traveling construction managers have a VA in Colombia that's in the background doing their RFPs, soliciting, you know, contractors, helping them stay organized. It's just, it can make somebody, it can make our on-the-ground folks 3 times as effective.

Totally agree with that. I think that's a great way to phrase it is you're leveling up the whole company and especially the folks who are domestic here by pairing them with outstanding global talent who can, you know, work on hours, work off hours, be available, get stuff done overnight or take calls during the day. It's a huge advantage. So I'd love to hear a little bit about, did you ever use third-party management or was this from day one you were self-managing? And then also, would you ever manage for other self-storage owners or that's kind of like you're not interested in going that direction?

Yeah, I think for self-storage management, for our first year that I ran one facility, it was Nick Huber that was managing. There was one employee and it was me. I was answering the calls, I was handling the auctions, I was leasing units. Anytime day or night a customer rang and it went to my cell phone and I rented the unit. But I think our property management, would I third-party manage? The answer is no, because how do I make my real estate a lot more valuable? And how did I buy $100 million worth of storage that now is worth somewhere between $150 and $200 million? It's because I have that property management tool in my tool belt. It's not wildly profitable. It spits off a couple hundred grand a year. It's just self-sustaining. And do I want to help other real estate owners make their properties a lot more valuable, or would I rather focus on buying more properties and doing more of that? I think it's a tool for me to buy and operate and invest in more real estate. And that's what I think That's what I think is so beautiful about property management is that you have the data, you have the ability to find either an underpriced asset or something that you can make a lot more valuable. And you can pull those levers and you can own a lot of real estate over time.

Love it. Great answer.

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I got one more question on self-storage and we'll kind of move on to some broader topics here. You mentioned some levers you can pull to increase the value of a self-storage facility or, or any piece of commercial property. And I love the distinction between single-family rentals, which is where a lot of A lot of the work that I do and that my audience does is with single-family rentals. The distinction there with those are valued on comps, right? How much did the property next door sell for versus commercial property, which applies to larger multifamily and other types of commercial real estate where the valuation is a multiplier of basically the net operating income and the cap rate or divider, sorry. So that has some interesting implications for how you should operate a property. Basically, small changes to net operating income can have outsized impact on property values, and that cuts both ways. I think a lot of people forget about that. And the other piece of that is the prevailing cap rate, which is affected by interest rates and a bunch of other factors like the perceived risk of the asset and and a bunch of stuff. But basically that cap rate is not directly within your control. There's certain things you can do, but there's other things that are not within your control that affect that cap rate. And classically, famously, we had cap rates that were compressing for a 10-year run and now they're starting to expand again. So as you think about, hey, we're buying a self-storage facility, we're going in, what are these levers we can pull to really move the needle?

Yeah, let's do an example deal. I mean, the beautiful thing about real estate, and I say this and people get— because these opportunities aren't here now. We're in a different market now. We can talk, if you want to spend 5 minutes just on my outlook on where commercial real estate is, it's pretty crazy right now. But 2019, we bought a 28,000-square-foot portfolio of 3 properties at public auction in Western Pennsylvania. For $600,000 and I don't remember the exact number, $640,000 or $660,000. I think it was $642,000. It was doing about $3,000 a month. The owners were almost 90 years old, had already made tremendous wealth over the years by operating this property. It had got away from them. They collected all their rent by check. They did all their unit move-ins in person. And we took over this facility Basically, me and Danny, we had maybe $200,000 in our checking account. We sent $130,000 as a down deposit to secure this property that was non-refundable at public auction. And ended up getting a loan and closing the property a month and a half later. We put about $100,000 of our own money in, or $150,000 of our own money in. We went there, we auctioned off all the units that had been abandoned basically. We had to try to find the tenants. There was no leases. We opened units and there's dust all over it. It had been sitting there for 5+ years. It was a real operational mess. But you fast forward to late 2021, the property is doing $21,000 or $22,000 a month of revenue. It's spinning off a lot of cash flow, and it's worth $2 million. Beautiful. So this is one deal, 3 properties. We bought it in 2019 for $642,000. We put a 60% loan on it for $1.2 million. At the end of 2021, it still spits off $20,000, $25,000 a year in cash flow. And we pulled out $600,000 tax-free out of this one property. That's one property. That's one deal. And just because we know how to manage that property, we know how to lease units, we know how to increase revenue, we know how to maximize its value. And it's a beautiful thing. And when you do that at scale, you can get extremely wealthy extremely quickly.

Yeah, and this is a perfect segue to what I want to talk about. You mentioned that you're able, you know, you understand how to manage these properties, right? You come in, you've got a system, you know how to modernize the equipment, you know how to replace onsite staff with global talent, you know how to bring in technology and do online payments. And all these, all these things that you're describing have direct analogies within the space of residential property management. And I think a lot of folks who are listening are thinking to themselves, yeah, that's exactly what I know how to do with residential properties. We take over properties all the time that have been mismanaged. We come in, we get the right lease in place, we screen tenants, we do deal with deferred maintenance, we set up systems, we're doing the correct tax reporting, like everything we're supposed to be doing. And I want to challenge my audience a little bit and something I've been thinking a lot about, which is moving folks from third-party management to owning their own assets. And there's a lot to talk about here, one of which is leveraging the skills and talent that you articulated that me and my audience have developed in managing property for others. Like, hey, let's take some of those skills and develop our own assets. And there's a few things we have going for us beyond just the experience and know-how to do it. One is deal flow. You know, we're in the stream of deal flow as third-party property managers. But the other one that no one really talks about is our real estate professional tax status. So an advantage that we have here is as property managers, as owners of property management companies, is we are real estate professionals, which is a very special situation with regards to income taxes. There's a particular way the IRS looks at taxpayers. And if you qualify for this real estate professional tax status, what that means is you can offset earned income with paper, essentially paper losses, real estate depreciation. And Nick, you've been a huge advocate for folks doing cost segregation studies and accelerated depreciation, which I know that window's starting to close. And you've even launched one or two businesses that operate in the space. So I'm going to hand it over to you here and let you speak more articulately than I have about why folks need to be aware of this and how real estate professionals can really take advantage of this?

Yeah, I think it's mind-blowing to me. We run a company called RECostSeg, recostseg.com, and it's pretty mind-blowing because so many real estate investors who either manage or own a lot of property have never done a cost seg. They've never heard of what a cost seg is. And so they don't have the accelerated depreciation that you can take severe, significant paper losses and defer a lot of taxes. Since we went on our buying streak in 2021, we acquired $32 million in 2022, I'm able to personally shield $2 to $3 million of income annually on the back of the paper losses because I'm a real estate professional. So I mean, yeah, it's a no-brainer to do a cost seg on your real estate. So yeah, we started a firm. The cost seg space is quite antiquated as well, and they had reps flying around to different properties to take pictures. So We do remote, basically video-conferenced cost segs where we walk through your buildings and we can turn them around quicker and do them at half the price basically. So it's a pretty good product.

Yeah, it's fantastic. And it's pairing deep sort of niche-specific knowledge with technology, which is I think where huge opportunities lie. When I look at a lot of the folks that I know who got wealthy, They paired deep knowledge within a specific industry with technology that they were aware of because they were paying attention to other things happening in the world, right? And when you can take technology like video conferencing, right, which isn't exactly new technology, but it's a lot more powerful with, with phones now and, and wide availability of, of 5G and things like that. And you can pair that with an sort of an ancient, you know, because what the situation with these cost segregation studies, I'm a little bit familiar here because the engineering company that my partner and I bought 2 years ago does these here locally in Central Ohio. And we had one done on this building I'm sitting in 2 years ago when we bought it. And it saved me a lot of money on taxes that year. I mean, it was ridiculous.

Do you want me to give the 30-second spiel on what a cost seg is? Yeah, absolutely. For folks listening who are wondering. So when you buy a property, if it's a commercial property, 39 years, and a residential property, I think it's 27.5. I don't know the exact numbers. Yeah, it is. But that's basically what the government tells you that you can deduct that cost over time. I buy a computer mouse for my business and I get to deduct the $19 right away because it's a one-time expense, whereas real estate has a lifetime value. So if it's a million-dollar property, you're in Your 2.2% a year is what you get to deduct, $22,000 a year for 39 years until the depreciation runs out.

Of the property value, not the land value, but the property value. What do you see these days? I always heard 80/20, you can attribute 80% of the purchase price to—

So luckily, the local property tax boards have the land value and the building value separated anyway when you have your assessment. So you just look at those figures, and go from there. But yeah, anywhere from 15% to 25% will be land value. The other $750,000, let's say, of a self-storage facility, it's not all 30-year, 39-year lifespan. There's ground improvements, there's windows, there's sidewalks, there's overhead doors, there's movable walls inside of self-storage, there's HVAC inside of homes. There's all these different things that have shorter lifespans. So our engineering team goes through a building, we take pictures, we count light sockets, we count all the square footage of carpet, all these things that have shorter lifespans, we assign them values and we can basically depreciate it quicker. And there's a part of the tax code called bonus depreciation where anything 15 years or under as a lifespan, you can deduct a certain percentage of it all in year 1. 2022 was 100%. This year it's 80%. Next year it's 60%. It's going away, but somebody else will get elected and it'll change again. So yeah, that makes massive tax deductions. If you buy a million-dollar piece of real estate, it's not uncommon for a self-storage facility or multifamily home to have 20 to 30% of the purchase price year 1 in bonus depreciation. So in 2020, 2021, we were buying good deals. We had cheap debt. We'd put $300,000 down on a self-storage facility and we'd get $250,000 right back in a deduction expense year 1. It was extremely powerful.

Yeah, it's a beautiful thing. And just to be crystal clear here, if you just work as like a W-2 employee at— in corporate America, you can't take advantage of this to offset your W-2 income, your earned income. You can offset—

there's two different types of—

yeah, yep, you can offset income from the property.

Yep, there's passive income that you're making from things that are outside your wheelhouse, basically. Third, passive investments, a business that you may own shares of that you're not involved in or real estate. And then there's active investment, which is your W-2 income. And those can't offset each other unless you're classified as a real estate professional. Again, I'm not a CPA. I just know this stuff pretty well because I do a lot of work with cost segs and real estate. But yeah, unless you have a short-term rental, and short-term rental, there's a loophole with it being actually active income. So yeah, there's, there's, there's a lot of complexities.

Yeah. So if you're listening to this and you own a property management company, you are a real estate tax professional. Consult your CPA. This is not legal advice, etc. But you're likely a real estate professional, which means you get to take advantage of this very unique situation. And historically, this deduction was— historically, this was available to everybody. They— and it was so powerful and so ridiculous that they had to closed the loophole. I think this was back in the '70s or '80s. And they were like, because what was happening is a bunch of rich people were buying up properties all over the place to shield income. And they closed the loophole and they're like, no, no, only real estate professionals can do this. So you're literally getting access to a tool and a technique that historically was used by the mega rich, but now you as a property manager can still take advantage of that. And the other— the only other thing I wanted to—

go ahead. In 2017, something really fascinating happened in that the tax law changed and people who bought a property were— bonus depreciation applied. Before that, it was only if you built a property from the ground up did bonus depreciation apply. So in 2017, that changed, and now you can deduct a building that you buy and not just a building that you build, which is a huge, huge part of all this.

And one final point on this before we move on. If I bought a building in 2022 and I've already filed my taxes, is it too late to get this done, or can I go back and still have it completed?

We're catching up properties with depreciation that were bought by people in 2017, '18, '19. If you've never filed it and you've never put a depreciation line item on your tax return, which is very common, You can do the cost seg study at any time and catch up the back depreciation.

Love it.

Awesome. And yeah, just to shout out the firm, it's recostseg.com and it's literally $1,000 cost seg on a single-family rental, which makes it make sense. Before that, a lot of firms are $2,500, $3,000. And when you're only getting $10,000 in depreciation, it's not quite worth it. But we're doing a lot of single-family homes.

I love it. All right. I got a couple other things I wanted to chat with you about, Nick. So I was kind of catching up. I always do some prep work for these shows to make sure I don't cover all the exact same topics that you just talked about with 5 other people. One of the things I really admire about you is your passion for the written word. And you've talked about this in a few different places that you have a huge respect for written communication. It's how you operate your businesses. It's how you have built your brand quite literally. It's how you communicate with your audience through a great email newsletter. I feel like in a lot of ways this is a lost art in our culture. Video and audio dominates from TikTok to right now, right? We're on a podcast. It's audio. And when I read your writing, your voice comes through crystal clear. Like if just from listening to this podcast so far with Nick, if you then go and read his newsletter, you'll hear it as if he's reading it like in your mind. It's It's very clear. So I'd love to hear a little bit about sort of your history with the written word. Where did you develop this expertise or this respect and appreciation for written communication? And then for folks who are looking to level up their game here, do you have tips for writing well in a business context and developing a unique voice in the way that you have?

Yeah. So number one, I think, It's pretty clear that in today's world, the written word through Slack, email, and text message is the number one way that most people communicate. It's the way that I interact with my employees. It's the way that I lead other people. It's the way that I sell myself and my idea and convince other people to do what I want them to do. As a business owner, you're simply an influencer. You cannot get people to do things unless they want to do them. You cannot make people do things. So I'm persuading people all the time to do what I want them to do, and the written word is exactly how I do that. So the people who can write well, the business owners who can write well, they have a competitive advantage in everything that they're doing, whether it be managing people, negotiating deals, interacting with people who are contractors with work. How many times, Peter, have you had a conversation with a contractor and you followed up with an email with a very clear understanding of what you wanted them to do And all of a sudden, whoa, that's not what I said. So it's a policy inside my company that if you have an important conversation with a third-party vendor, somebody we're paying to do something, follow up every conversation with a bullet point list, a record of exactly what was said and how it was said. And many, many times you'll get a response right away that something was misunderstood and you'll save yourself massive problems down the road. But yeah, I started writing to try to promote one of my podcasts. It was on Reddit and people hate me on Reddit because I'm a capitalist and I got brutalized. My friend Moses Kagan said, "Hey, Nick," in 2019, he said, "Hey, Nick, I love your stuff on Reddit. I love your podcast. Why don't you come to Twitter? This is where people do deals." I said, "Moses, that's—" He was reading your stuff on Reddit?

He was.

He came to me and said, "Nick, you got to come to Twitter. Your people are on Twitter." I'm like, "No. Twitter is where people complain about Trump and yell at each other. That's ridiculous. I'm not going there." He called me again 6 months. So I ignored him. I didn't come to Twitter. He called me 6 months later and said, "Nick, I'm serious about this. Just trust me. Come to Twitter. Release a couple tweets." Moses had 5,000 or 6,000 followers at the time. I made a tweet. He welcomed me to the community. It got 500 followers pretty quick and it went from there. But copywriting is what it's called, the art of writing in a sales or persuasive manner. And it's 100% practice. You have to practice it a ton and you have to read it and copy, um, copywriting that other people write. And I just have a lot of experience writing and now I'm quite good at clearly and concisely conveying my ideas. I think the number one example of this is everybody's got an email from a coworker or somebody that's walls of text. It's way too long. You're not gonna read it, you're not gonna understand it. So the ability to clearly and succinctly write a message is a superpower in today's world. And I'm good at it and I make sure that everybody on my team is good at it.

Yeah. I've had a similar experience. And something that I've noticed is writing, for me at least, it helps me get clear for myself on whatever the topic is. So a lot of times I'll go to write a blog post. I publish a new blog post maybe once a month or once every other month on some property management-related thing. And I'll go in with an idea of what I want to say. I'll start writing, trying to articulate it. And the process of writing forces me to get super, super clear about what I actually believe and what makes logical sense. And so occasionally I'll even find myself slightly changing my mind or shifting my perspective about a topic because writing forced me to actually be logical and rational in how I lay out the thought and the argument.

That is such a brilliant and true point. I mean, so many people who hang out in today's society have not done the work to form their own opinion on anything. They read, they listen, they consume short videos on their phones all day long, and they have done zero work to form their own opinions. When you're writing, whether it be directions to your employees or a blog post or a Twitter post, you are forced to do the work to form your own opinion. And there's no better exercise than that. Yeah, if you can have an open mind and you can get feedback and think logically, it's an amazing practice. That's a really good point, Peter.

Thanks. Yeah. So you're a guy who's built an audience with the written word. You're not a TikTok star. You're not a YouTube star, although I do like your YouTube videos and I watch those. One of the things that you do write about is the fact that Doing a VC-backed startup is a bad idea for most people. It has a low success rate. So I want to ask you, like, is building an audience through the written word, through Twitter, through blogs, is this, is this something that most people should pursue? Do you feel like everyone has the capability or everyone should pursue the challenge and the, and, and, and try to build an audience in the way that, that you have? And we're going to talk about the value of that audience and what you've been able to spin up as a result of that. But I'm curious, is this something you feel like someone either has it or they don't, kind of like people who are good at sports? Or is this something like, hey, this is a skill that everyone needs to develop and work at and try to not only write for the sake of clear communication with employees and vendors and things like that, but also for the purposes of building up an audience?

So I have a really controversial take on this and something that a lot of people probably don't want to hear, but step one to getting influential on the internet. So yes, everybody should write. The answer to your question is absolutely. Everybody should tweet, everybody should write blogs, everybody should keep a journal and write their thoughts and organize their thoughts. But if you want to have a powerful distribution model now, I can reach 20 to 30 million people a month on Twitter and I can explode my businesses And it's an amazing asset for me. I have that for one main reason, and everybody wants to skip this step. I am out in the trenches doing interesting stuff. I'm building companies. I am taking chances. I have built a real estate portfolio. I've hired 45 people. We've bought $100 million worth of storage. I'm building companies, and I'm actually a doer. If you're not doing anything and you're just regurgitating ideas of other people, A, it'll be really, really hard to get an audience, and B, once you do, your audience won't be worth anything.

Simple as that. Yeah, I love that point. I mean, you have to actually do interesting things in order to have something interesting or original to discuss.

If you looked at a list of the top 300 most followed people on Twitter, yes, there are exceptions. There are some people who just write so cleverly and so persuasive, or they just work so hard that they've literally written themselves into fame. All the others, the 99%, they have a lot of followers on Twitter because they're interesting people and they're doing something amazing. Either they're a great actor or actress or they're an NBA basketball player or they've built giant businesses or they've run an amazing fund and they've raised a lot of money. People want to learn a lot on Twitter. My niche and why my distribution is so valuable is that the people who follow me They want to learn how to make money. They're buying real estate, they're running companies, and they want to learn about management, they want to learn about hiring. And so my audience, my 65,000 people on my email newsletter and my 25,000 people who subscribe to me on YouTube and the 290,000 people who follow me on Twitter, yes, half of them are wantrepreneurs. They're not in the trenches, they're not building businesses, they're not doing anything. Another 30% of them are, they're working on it, they just haven't gotten the things going yet or they're trying or whatever. But there's a small sliver of my audience, and it's a relatively big sliver compared to everybody else, who are killers. They're running companies. They're like you, Peter. They're like the people listening to this show. They're hiring people, they're moving and they're shaking. And that audience is extremely valuable to me. Because when you're doing real estate, when you're building businesses, you need a lot of things. You need knowledge, you need cost segregation studies, you need property and casualty insurance, you need SEO help, you need recruiting services, you need foreign labor, or you need a place to deploy your capital. That's why they reached out to me. Like, I am providing them a service, which is return on their capital and real estate exposure in the self-storage space. So I've built this massive following, and now I'm giving them what they want.

Today's episode is brought to you by Second Nature. Most property managers can't survive on management fees alone. Which means you need new revenue streams. But if you just charge an owner or resident without bringing new value, why would they continue to use your company? There's a better way. We need to create new value and create a rising tide for all boats so residents, investors, and managers win. The most powerful place to start is a resident benefits package, or RBP. It's a collection of ancillary services and products that professionalize and experience residents pay for and stay for. SecondNature is the industry leader in this space, and I'm a happy customer, by the way. Their RBP hits triple-win outcomes like ensuring 100% of residents have renters insurance, air filter delivery, rewards cash and credit score bumps for on-time payments, on-demand pest control, and more perks customized to your portfolio and needs. Residents get convenience and higher levels of service, Investors get protection against risks and costs, and managers get a new profit center they can use to build their business. Second Nature is the only 5P National Vendor of the Year because it is fully managed by them. So that means less work for you and your team. Thank you to Second Nature for sponsoring this episode. I want to lean in for a minute on how you've leveraged your distribution. So I was listening to a, a podcast of yours in the car on a long drive a couple months ago. And you started detailing all the different companies that you've spun up recently, either with a partner or as a minority investor or in a few different ways you described. I won't go through every single one of those, but I'd love for you to give the audience a taste of maybe one or two examples of companies that you've started recently where you're leveraging your audience and your distribution, which I think is interesting in and of itself. But what I also think is interesting is You know, there's a spectrum of business ownership that I think a lot of people don't really get their mind clear around. At one extreme, you have like buying Apple stock, right? Yeah, in theory, you own 0.000001% of that company. That's one way to own a business. Another way to own a business is you run a bakery on Main Street and you're there 3 AM to 2 PM every day, 6 days a week, and you're doing all the work. And in the middle is maybe like some guy who owns a $20 million company and he works in the business 5 hours a month, and for the rest of the time he's vacationing and traveling and doing whatever he wants. But basically there's like a spectrum of involvement you can have in business ownership, and there's also a spectrum of ownership interest you can have from 100% to 0.00001%. And I'm fascinated by The, the possibilities there, because a lot of people just, they glom onto one idea here and they don't really consider that there's different ways to do this. So the other, so, so to bring this full circle, the one thing I think is interesting about what you're doing is the distribution and the audience and the eyeballs that you bring through your network. The other is the way that you're spinning up these companies with different levels of ownership interest and involvement. So maybe share one or two of these that are relevant. Because I think actually my audience might be able to take advantage of a few of these companies, including RE Cost Seg. How you spun these up and what's your level of involvement and ownership? And I'm just fascinated by this.

Yeah, I got started with folk, business owners reaching out to me on Twitter and saying, "Hey Nick, can you promote my Cost Seg firm for a fee or for a revenue share, like an affiliate fee?" Well, one year into promoting a Cost Seg firm for a friend of mine, His business had grown from $300,000 a year to $1.5 million a year of revenue. And I realized really quick that, "Hey, I need to own some of this company." And I went to him and I said, "Hey man, no hard feelings at all. This has been an amazing thing for both you and me. You've sent me a lot of money and I've tripled the size of your company. This has been great. But I need to own 30% of your cost seg firm or I'm going to go start my own. No hard feelings. It's your decision." And he said, "No." He said, "I don't want to do that." So the next day I called Mitchell Baldridge and we registered the domain for RECostSeg. It was on May 1st, 2022. So we actually, one year ago, it's May 10th, one year ago we got, or last week we got the note that one year ago we registered the domain recostseg.com. I had an operating partner. I found my CPA and the most brilliant guy I know, Mitchell Baldridge. His tax accounting firm had already done 100+ cost segs. He's super, super knowledgeable. And we started rocking and rolling with RE Cost Seg. And we're 1 year in and we have 24 employees and we've done well over $1 million in revenue. We're doing over $200,000 a month. And it's a company that I wouldn't sell for $10 million right now. 1 year in on the back of my distribution. So that's the scale that we're talking about. SupportShepard.com, I was an early customer in early 2021. I went to Marshall and said, "Hey, I need to own some of your company or I'm going to go start my own." He said, "Yes, I want you to own some of my company." Since then, it went 7x in the first year that I was working with them and it's tripled since then and it's a $25 million business today. So I'm on to something special and I'm doing a lot of that. I think some of the ones that I'm excited about right now is the property and casualty insurance company called Titan Risk. My business partner, Dan, and the guy who operated that student storage business with me for a really long time, he's one of the one of the best operators I know. He's the CEO of that company. We also have an operational partner, but we're just insurance brokers. That's all we are. Nothing wild about what we do except work really hard. And we took over Bolt Storage's broker of record right before renewal and went out to market, and we were paying $380,000 for insurance, and we busted it out on the market, and our insurance now is $280,000. We saved $100,000 by doing a lot of work because our other broker was out playing golf like all insurance brokers do instead of really working hard to get us a cheaper policy. So that's Titan Risk. We have an SEO firm that all of my companies are a customer of. We provide backlinks and structural SEO work to help people show up on Google. That's called Bold SEO. Got a web development firm because all my companies needed web development and landing pages, and that's called WebRun Labs, webrun.com. We got a tax credit business for the business owners who haven't done their ERC credits. So yeah, it's getting— we have RecruitJet too, a recruiting company that we're 40 days old or so and we've done— we just got our first placement inked. So we've collected $31,000 fee to place somebody in a recruiting role already. So I'm pretty excited about the future and just how powerful this distribution is.

Yeah, it's really incredible. And there's a couple things to take away here, at least for me, is one, audience, And content and distribution is extremely powerful. And I think it's, it's way more powerful than a lot of people realize. And there's, I feel like there's some tipping points here where it's like you go from 0 to 1,000 followers and, and very little changes. You go from 1,000 to 10,000 and like a cool, a couple cool things start to change. Then you go from like 10,000 to 100,000, which I haven't done yet, but you did a while ago and like a whole bunch of stuff opens up. So when you, and it seems like the model here is like You're pairing distribution. And then one thing I want to really highlight is that you're not going out and like starting these companies from nothing by yourself. What you're doing is you're finding kick-ass partners who have a proven track record, track record of success, and who are either already in the space or have a lot of experience in that area. And you're like, hey, let's partner up somehow. I've got audience. I've got maybe some experience in this area. You've got X, Y, and Z. How can we work together? How do we set up the equity? But let's do something and let's make this happen. And I heard you mention on another podcast that you think of yourself as a people collector. Part of what you do is you got your eye out into the world for people who excel at what they do, who are 10Xers, and you sort of put a little picture, Nick, you put a little pin on their name. Or on their tag on Twitter or something, you're like, okay, I want to do something with this guy. Maybe like, maybe not right now, but like in the next year or two. So like, let me, let me keep an eye on this person, see what they're up to. Like maybe they're getting unhappy with their job. And then like when the right opportunity comes along where like we can pair my audience with this person, I'm going to like, I'm going to sell them. I'm going to get them excited, get them involved. We're going to spin something up and within 40 days we're going to have a profitable business.

You really need two things to start a business. You need customers and you need people. Every problem in business is either a customer problem or a people problem. You either don't have enough customers or you don't have the right systems and the right people to deliver a service to those customers. Most service businesses have a people problem, not a customer problem. But I can get both of those things on Twitter. I can get customers and I can find great people. The amazing thing about Twitter is that it's a look into people's minds. On Instagram, it's a look at people's bodies. That's what it is. It's a look at what people are doing.

Look at me. Look at— Yeah.

Twitter is a look into people's minds. You're reading how they write, you're reading how they think. So I can follow somebody on Twitter for a couple months and I can know if they have it or not. It's just, a natural gift that I have is spotting 10xers. And I also have to say that since I got on Twitter and since I started really casting a wide net, the measuring stick of what is a 10x employee has really changed. Somebody who I used to think was maybe a 9 out of 10 employee, the scale is shifting and those people are now 4s. And the amount of talent out there, the true 8s and 10s, has totally blown my mind. The access to these folks that I have. So yeah, I'll make a tweet that I'm interested in hiring McKinsey consultants and I get 10 videos recorded by McKinsey consultants who are tired of their freaking job and want to go run companies with me. So I'm in a very lucky— I feel very blessed that I'm in this situation.

What's your take on these consulting companies that churn out these young— they don't churn out, they absorb these young MBAs they go through this track within these groups. Sounds like you've had a lot of interactions with them. Do you find that they're actually as smart as they seem like they claim to be, or how has that been?

Look, we can argue whether they're playing the right game all day. Is the game that you want to play to do all the extracurriculars so that you can get into Stanford and study for the test so that you can get into Stanford and then When you're in Stanford, get all the right grades, do all the right internships, do all the right interview prep to then be one of the 600 kids that go to McKinsey every year because everybody wants that. They think they want that. I didn't want that. You didn't want that, Peter, but it's a way, it's just a big machine that weeds out 99% of people who try to get there. Same with Harvard, same with Stanford, same with all these colleges, it's not necessarily that when you go to Harvard, you're going to learn something spectacular. It's the fact that Harvard as a machine weeds out almost everybody who tries to get there. And that weeding out process separates the fakers from the real people, period. So yes, I think I've seen some ex-McKinsey grads grow tremendously large companies. And yeah, of course, a lot of them don't have operational chops and communication ability, but I think a lot of people find themselves in these jobs, they find themselves down this path, and they're 28 years old, they're a couple years away from being partner, they've worked 70 hours a week for the past 4 years, and they look down the hall at their boss in that corner office and say, "Holy shit, is that really where I'm headed?" They look at their boss and their boss is divorced, overweight, no hobbies, working 70 hours a week and wealthy. But is that really where I want to be? And then they look at the business owner at the country club who has control over their lives. And my goal through all of this is pretty simple. I'm trying to build an empire here where If any one single person calls my cell phone and I don't want to talk to them at that moment, I can hit the red button. Period. How many people, how many people, and you might be there, Peter, like that's, that's a level of freedom where not a single person's emotions, how they feel, maybe they pass away, maybe something happens to one person and my whole life changes, how they feel about me, what they want from me. So it's why I haven't raised We have a lot of investors at Bolt Storage who say, "Hey Nick, I want to give Bolt Storage $10 million. I want you to not raise money from anybody else. I want to be your capital partner." But you know what that means. It means that A, they have a lot of negotiation leverage on me, and B, I then work for them. I have a boss. I want to build enough, I want to be diversified enough that if I get canceled on Twitter, I don't care. I want to be diversified enough that If any one person decides that they don't want to work with me or they want to fire me or they want to try their hardest to take me down, I can just hit the red button, man. And I'm not dependent on them.

Yeah. I resonate with that deeply. And I've been careful even in growing the management company. We've said no to clients who came to us with hundreds of units because exactly what you just described. I don't want to have to answer the phone when they call. I don't want to have to worry that they see me on vacation and they're like, I thought this guy's supposed to be managing my units. I don't want them to have outsized negotiating power when it comes to renew the agreement. So yeah, that tracks with me very closely. And I think that's why I was unhappy as a W-2 engineer was I just wanted to do my own thing. I wanted, Dan Sullivan, Strategic Coach, they talk about the different types of freedom. There's financial freedom, which is like, hey, you can buy what you want to buy. And I think there's 3 of them, but the second one is time freedom. Which is I can do what I want to do when I want to do it. And those, like, a lot of people conflate those. Like, they think that if you're just because you— they think that because you're wealthy that you can do whatever you want. And that's not true. As, you know, ask any doctor, ask any lawyer, ask anyone working at a big, you know, Fortune 500 company in the C-suite. Yeah, they're doing well, they're rich, they're making money, but they are on call basically 24/7. And I don't want that life. I'd rather have a lot less money and be able to take June off, which I'm about to do and go.

What I said is not necessarily, "Oh, I need to have F-you money." It's not necessarily— I do want to have F-you money. I'm fairly financially driven. I want to build an empire here because I think that if I can build an empire and we're starting a business brokerage with my dad, having a ton of fun, that's run through nickhuber.com. And The goal, the long-term goal is to have a fund where I'm deploying a lot of my own capital into small businesses where we're doing more than just amplifying things with my brand. And I have a flow of operators that are rising up through my companies that I can continue to invest in and give opportunities in and make a lot of other people wealthy. That's fun. Seeing other people, employees, partners, even strangers on Twitter, seeing them win and seeing them get rich is just fun. I like to see people win. I like to surround myself with people who— like seeing people who win. A big problem is that a lot of people, when they see people win, it makes them feel insecure. It makes them feel worse about themselves. They get jealous. They become crabs in a bucket. They're the ones throwing the jabs on social media. And it's just, you know, those are not really the games that I want to play. I want to play the game where I can do what I want to do. I can build really deep relationships with people. And if any one person is being stressed, stressing me out and keeps calling my phone, I can hit the red button.

Yeah, that's a great metaphor. Yeah, you know, there's, there's people playing status games. I think it's Naval talks about like the futility of status games and how so many people get trapped and they, they become obsessed with like being liked and being popular. And like, that's— there's nothing fulfilling at the end of that road.

It's really hard to not though, I'll be honest. I mean, if you're in your shoes, Peter, with a podcast and you have your own very influential platform that you may not brag on while you're here, but you and I are both in unique situations where it's really hard not to care what other people think, right? It's really hard when somebody that we respect on Twitter says something that's a zinger that's meant to put people down. I get a lot of that, right? I get a lot of people who want to put me down. They want to see Nick Huber lose. And as much as I can sit here and act like that doesn't bother me, I'm not perfect, right? I'm a human being just like you and anybody else.

I've got 2 more questions, then we're going to wrap. I want to get one from Twitter. We had a fantastic question come through from Eddie Nasser, and I think it's a question that a lot of people have, which is, how do you balance priorities between so many ventures?

I spend— so first of all, inside of every company that I have, I don't have any direct reports except for my operator. And their job is to run the company. I don't have an email address at these companies. I delegate to the extreme, right? And look, delegation is so uncomfortable because you're going to have to accept some loss. You're gonna have to accept some lost time. A perfect example in your everyday life is me and my wife, we were going to hire a full-time nanny just so that we really had somebody that we could count on, even though a couple of our 2 of our 3 kids are in daycare. We have the parents across the street. We needed a full-time nanny just because when we were traveling, it was just so important that we had a lot of help in certain time periods. And my wife was very insecure about it because she's like, Nick, I only need them for 30 hours a week. Like, where are we going to fill all this time? And I'm like, the loss— the lost time is just a part of it. And when you hire somebody, they can never do— so there's the financial lost time of like, hey, employees aren't going to necessarily work and add value every minute of every day. You got to get comfortable with that. And then there's the fact that I can do it better. I can take care of my kids better than a nanny could. I can take care of my business better than an employee could. So when I put another employee on this big account, that's important. There's money on the line. They're not going to do as good of a job as me. They might make— they might say one word that cost me $5,000 or $10,000. They might make one mistake that's very costly for me. I'm okay with that. That's part of it. It's part of it, like letting other people sink or swim, get them out if they're sinking, embrace them, give them more trust, give them more responsibility if they're swimming. If you get good at that, there's no limit to what you can accomplish. People give me shit. They're like, "Nick, you're not focused enough on self-storage." My self-storage company is a sleeping giant. 2021, super stressful. We went from 6 to 40 employees. We bought $50 million worth of storage. We're building out all these operations. We have some killers there now. That company is ready. If we bought $100 million worth of storage by the end of 2023, so over the next 3 quarters, 2.5 quarters, I honestly don't think I would have to step in and work all week to make that happen. That company is ready to go. I have a CFO who thinks better than I think about risk. I have underwriters who can underwrite better than me. I have leasers and property improvers who understand how these contractors think, and it's just so freeing to see these people really win. So that's part of it. Second thing is that when you pick good businesses with good solid business models, you don't have to be world-class to win. It's like, hey, you can go to the NBA and you can try to compete against LeBron James, and if you're not 7-foot tall and extremely athletic and you got the perfect mindset, you're never going to be able to do that. In a lot of these companies, a lot of dumb people make money. A lot of dumbass real estate rich people. Let's be honest, Peter. There's a lot of really dumb people who have gotten phenomenally wealthy in the real estate business. You pick good businesses and you actually do things right and you enable them with technology and you can feed the search engine optimization and you can get all these tools set up that you're so good at and I know a lot of people listening are good at, it's hard to lose if you pick the right businesses. Another part of it is that I have a team now at the holding company level, an operations, a killer operator, a marketer, and a copywriter, and a video editor, and a media person that all just work on all my businesses at the same time. So like an employee at, you know, my operator at the recruiting company says, hey Nick, I need to set up all the payroll. We're gonna make our first hire. It's not me that's setting up Gusto and getting all of our codes and making all that happen. It's Simon over at my, you know, my operator, my holding company. They kind of, as they need things, they're not reaching out to me, which is, it's not always perfect. And there are times when I'm stressed and I'm definitely sprinting right now. Right now in my career is a sprint. I'm up off the rock, I'm chasing the gazelle in the field. 2022 was a slow year. I played a lot of golf. Right now I look at, hey, every business opportunity, whether it's my distribution, whether it's real estate, there are small windows in time where The opportunity is like, it's real and they're not going to last forever. Business is transitory, competitive advantages go away. And right now I feel like at a time where I got to get up off the rock and I got to make some things happen.

So I'm busting it right now. Love it. You got to make hay while the sun shines. What I'm hearing in your answer is people, right? The way that you run all these businesses without losing your mind is you have great teams. You have great teams at the individual opco level, you have a great team at the holding company level. And going back to the first part of your answer, you articulated that you need to let your employees do things. You can't do everything yourself and they're going to make mistakes. And I just wanted to add one thing there because it's been a game changer for me when I first was able to get comfortable with this going back 8 or 9 years ago, shortly after I started my company, You need to get comfortable with 80% is the way I think about this. Your employees, just like you, just like you said, they're going to do like 80 to 90% as good a job as you are. They're not going to do 100%, especially when you start and you're just bringing in kind of entry-level people because that's all you can afford when you first start a company. So you need to get comfortable with 80%. And this goes against everything in your instincts as an entrepreneur. And as a perfectionist and as someone who wants things done right, you like, it's so hard for business owners to make this mental shift of like, yeah, it's okay if there's mistakes, right? Because one, that's how your employees learn is by making mistakes, observing the impacts of those mistakes. Like you have to let them fail just like kids. I loved your thing on Twitter about how you had your kid like navigate the airport and stuff. Like let, let them figure stuff out. That's so important for their growth. And if you're constantly swooping in and guiding and fixing and correcting and not letting stuff get out the door, you're actually stunting their growth as a human.

I love the way you're saying this, and I fully agree. When an employee comes to you with a problem, which they do often if you're the boss, you have a kid, a kid comes to their parent with a problem, You have a choice. You can get out of my way and solve the problem. Like, hey, move over, I'm gonna step in and I'm gonna solve this problem. 90% of business owners do that. They do it all day. So they become the bottleneck of their business. Every problem ends with them. And, and employees are trained that, holy shit, I better not try to solve this problem. I'm gonna get in trouble. I'm gonna go right to Nick and I'm gonna ask him what to do and he's gonna take care of it. So you have a line of people outside of your office and, and it's the monkey on the back analogy that everybody has heard. They're lining up outside your office, they're showing up at your desk, and they're bringing a problem. And that problem is a giant monkey that's on their back just beating them up and saying, you know, oh my gosh, this is a fire that needs to be put out. And when they walk in and they tell you the problem, that monkey jumps onto your desk and it's now your problem as a business owner. You have an option. You can give them their damn monkey back and send them on their way, or you can collect an office full of freaking monkeys and never get anything done. So when employee, when an employee comes to me and says, "Nick, I got a problem," I'm following up with a question 99% of the time. A question. "Hey, all right, what would you do? All right, how do you think about this? All right, what are your goals? What are our goals here?" And what happens is that the employees get to start flexing their decision-making muscles and they get to start exercising it because decision-making, the most important skill in the history of the world, is A learned skill through practice. It's a muscle. Decision-making is a muscle. You have these kids that grow up and their parents are solving all their problems. They're never making any of their— never making their kids make decisions. And when they make bad decisions, they bail their kids out. So they don't know what's a good decision, what's a bad decision. I showed up at an Ivy League school in Ithaca, New York, a ton of very baby kids that were raised in bubbles that never had to make any decisions their whole lives. They were on the phone, Peter, with their parents saying, hey, there's a party, but it's a little bit— it's snowing out. I don't know if I should walk there. Um, will you help me look at the bus schedules? Yeah, like, I'm, I'm very, very serious that decision-making is a muscle that my dad— he, he made me do this crap way too young. It was borderline traumatic for me because I was having to make such hard decisions as such a young kid running that damn lawn care company when I was 13 years old. But what it did is it made me feel, A, it made me feel more comfortable, and B, it made me better at decision. It made me better at decision. So when you do this to employees, something else amazing happens. You get to see how they think. You get a look into their brain. An employee shows up with a problem, you respond with questions, you get to start seeing how those employees think. Oh, this employee, he is not thinking about this. She is not thinking about this the right way. Oh wow, this employee, she's thinking about this the right way. Like, oh my gosh, this person, is actually really good at this. I can empower this person to make more harder— yeah, more harder and bigger decisions. And what you can do is you can level up your employees, and before you know it, you're not the bottleneck. The phone doesn't ring, and your employees are solving problems without you. And that's when you can really grow.

Yeah, I've observed that a lot of small business owners undervalue their employees in a lot of different ways, but one of the ways they do is they don't realize the the asset they have in their employees because they're constantly doing everything for them. I think the more you step back and let your employees take things over, make decisions, some of them are going to really surprise you and you're going to be like, oh wow, like I didn't realize they had that level of skill or talent or management ability. And those folks are going to rise. And then some folks are going to not surprise you at all. And you'd be like, yeah, that's pretty much exactly what I thought was going to happen if I let them do it.

I got something else. Like people, people may, if you got time, we'll keep riffing on this because I'm pretty passionate about this. There's a lot of people who think, oh, Nick has access to all these amazing people. That's his competitive advantage. I could never find these people. How am I going to find McKinsey grads? That is not the way that I think about business. And frankly, it's not really the way that my business operates either. You build a business that normal people can do really well in. Okay? That's your job as a business owner. Your job as a business owner, I hate the advice, go find great people, go find great people. The key is great people. You interview titans of business and they'll sit here on a call and they'll say, what's the key to success? And they'll just be so humble. You know what? I, I was just blessed with such amazing people around me. All you got to do is go find amazing people and you're going to just succeed. That advice is such bullshit. No, the unicorn who feels about the same way about your business as you do, the person who's going to, you know, care about your business like you do, that person doesn't exist. They are a unicorn. They don't exist. If you're looking for them, they sure as hell aren't going to apply for the job on Indeed and come walking in your office and want to work for you and just like, oh my God, I just can't wait to work for Nick and Peter. No, you have to build a business that normal people can thrive in. And another sad fact about the world is that most people just don't friggin' have it, man. They don't have it. They'll let you down with their decision-making. They're not good decision-makers. They're not emotionally stable. They've been through traumatic stuff and they're just not contributing members of a high-functioning, high-performing business. Your job is to get rid of those people as soon as possible.

There's a fantastic quote that I love here on this exact topic. The author is Doug Tatum, and he's got a quote that says, sustainable profits must be built on normal people doing normal things for normal compensation. And until you systematize your business to the point where you can just have ordinary folks succeeding and helping your customers succeed. Like you said, you can't rely on heroics, you can't rely on superstar amazing. Yeah, you need those folks at big companies at the management level for sure, but you can't have a whole building filled with A players. It's just not reasonable. You're not going to be able to pay the salaries for that. Yep.

And another huge problem is that a lot of business owners go to the other extreme. They assume that employees love the chaos that they love. They assume their employees want autonomy. They assume their employees want to be their own bosses because they, as entrepreneurs, they love the chaos. They love solving problems. They love uncertainty. 90%— look, newsflash to the business owners— 90% of people, they want you to tell them what to do. They want a clear deliverable with a very simple method so that they can be good at their freaking job and they can go home and watch Netflix. That's what they want. They don't want to be their own boss. They don't want chaos. They don't want decisions. They don't want just madness inside of a business. They want a well-oiled machine where they can do a simple job, they can do it well, and they can feel like they're contributing. That's what most people want. So as a business owner, give people that.

That's your job. 100% agree. All right, let me close with this. So I was, you know, I was thinking about you, Nick, as I was getting ready for the show. And, you know, one of the things I've observed is that You've really leveled up your mindset. Even in the short time that I've sort of watched you and gotten to know you a little bit, it's become really clear to me that over time you're leveling up your mindset. I don't know of a better way to say that. A lot of people read books and they listen to podcasts and they read email newsletters. So I think folks are really familiar with those resources as a way to expand your mind and kind of level up your mindset. But what would you say, what else is required or what's worked for you to sort of fracture your old ways of thinking and start to think big as part of a mindset shift? Is this peer-to-peer? Is it masterminds? Is it in-person meetings? Is it conferences?

Yeah, I got to say that if you would've told me when I was 21, just getting out of college, starting that moving company, If you'd have told me that I have the amount of money in my bank account that I have in my bank account right now, that I own the amount of real estate that I own and my company is the size that it is when I'm 65 years old, if you said, "Nick, let's fast forward 40 years. You're 65 and this is where you are," I'd have said, "Sign me up." I will work my whole life. I will work my whole life to get there. That's beyond my wildest dreams. I couldn't imagine that. And that has happened and I've never been more driven. Like, I, I, first of all, it was the injury that happened to me in February, like 4 months ago. I had a foot injury where I couldn't walk for a month. And I just got, I was just sitting there and I was like, Nick, like, holy cow, the opportunity, like the opportunity is here. Like you're not understanding how big a deal this is. You have 300,000 followers that are all business owners and real estate investors on Twitter. You can get it. You can get in their minds 150,000 at a time with thoughts. You're very— you have the world ready to build an empire if you want to. And you're going to regret it if you miss this opportunity and you watch other people build these empires and you're sitting on your— and you're sitting rich playing golf at 65. You're going to regret not taking a swing while this opportunity is here. And it might not be here forever. But the one thing that has allowed me to continue to level up is the fact that I started really small. I started really small and all of this is just varying levels of uncomfort. Everything that I'm doing, whether it was 21 moving boxes, whether it was 24 having a mental breakdown on the side of the road in Boston because of just the sheer stress of that business that I was in, whether it was at 26, getting married, and 3 months later sleeping in a freaking warehouse and working 100 hours in a week and brutalizing my body to deliver boxes. All of it is just varying levels of discomfort. We built that first building. I said we built it for $2.4 million. We bought the one across the street. We came in with a $1.8 million budget. I had to go out to those same investors that didn't have that much money in the first place. My dad mortgaged my childhood home to make his investment in that deal. He didn't tell me. That was serious, serious stress. I had to get on a conference call as a 27-year-old, 26-year-old and say, "Hey guys, I know you just wrote me a check for $100,000 to $150,000. I need $50,000 more from each of you or we can't get this thing done." That was serious, serious stress. Last year when interest rates were running and I had to lock in my rate and interest rates went from 3.25% to to 5.85% in 6 months, and that was $800 grand of my promote that disappeared. $800 grand of the money on the top that I was earning disappeared. That's uncomfort. And I'm just getting used to varying degrees of uncomfort. The discomfort is something that I'm— Entrepreneurship, doing anything worth doing, whether you're LeBron James playing in Game 7 of the Finals, it's all varying levels of uncomfort. We look at LeBron as a god and what he can do on the court, but think about how uncomfortable it would be with 40 million people watching you play basketball and the whole team looking at you and passing you the ball the whole freaking game and saying, "If we're going to win, you're going to win this game for us." That's uncomfortable. So doing anything spectacular is uncomfortable. And you have to walk before you can crawl. You got to start small, get uncomfortable, make another hire, get uncomfortable, make another hire, get uncomfortable, go buy a business, get uncomfortable, build an empire, get uncomfortable. And I'm just, I've just trained myself to thrive in discomfort.

I love it, Nick. I think we're going to end it there. That was perfect. I appreciate you coming on the show today. And for folks who want to follow along, with your journey and watch you become uncomfortable and then level up, where can they do that?

I have two podcasts. One's called The Sweaty Startup, one's called The Nick Huber Show. The Nick Huber Show is more about real estate. Sweaty Startup's about small business and management and the ways I think about people. Follow me on Twitter @SweatyStartup. I have a blog, sweatystartup.com. I have an email newsletter that I write every week that I spend a lot of time on sharing some of these thoughts about management, business, you know, making more money, you can sign up for that at Sweaty Startup too. Perfect. Thank you, Nick. Peter, thanks for having me.

Thank you for listening to Owner Occupied. I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.