The Art of the Deal: Advanced Real Estate Investment Strategies for 2024

I just see the chessboard and like I said, I'm not the only one who does that, but I definitely think that is like a superpower when it comes to putting deals together is I don't take a deal at face value. You can always, like I said, you can always go take out 25% cash out of your pocket, 75% from the bank, boom, do it. God, is it Kiyosaki? I forget. Someone was like, if you use your own money to buy real estate, you're fucking lazy. And I definitely subscribe to that. That is the lazy man's way to buy real estate. And that is also the way to not expand your portfolio. Cause you run out of money pretty fucking quick if you do that.

Welcome to the She's Got Assets Real Estate Investing Podcast. I'm the host, Shona Leppis. Follow along as we unpack and demystify real estate investment strategies through expert interviews and personal experience. From how to find off-market deals to creative financing to long-term and midterm rentals, we aim to educate and inspire others to gain financial freedom and generational wealth through real estate. And as always, please subscribe so you never miss an episode. We really appreciate reviews. It helps others find us and just helps us get found. All right. Welcome to the She's Got Assets podcast. I'm the host, Shona Leffis. Today I have a really special guest on, Bob Thomas. He is the CEO of Peak Asset Management. I think I first heard him talk in Portland with Greg Pinneo, and I was like blown away that what they were talking about. So Bob, thanks for taking the time. You have a really impressive entrepreneurial journey. I'd love for you to tell us a little bit about how you got started and what you're up to, because it's pretty cool stuff.

First, thanks for having me on. We've known each other for 4+ years now, I think, give or take. So yeah, really excited to see the podcast and all you're doing with the rental stuff and just general real estate. Yeah, appreciate you having me on. Quick intro. So yeah, I, I'm a real estate eel junkie. I guess is the easiest way to put it at a very macro level. I am super passionate about real estate. I love doing deals, new deals, deal structuring, et cetera. So that's kind of where I live in the space I play in. I wear a ton of hats in real estate. I'm a licensed broker. I own an investment management company. We focus on mid-sized commercial assets, mostly value-add stuff. We're about $50 million in portfolio value, so not huge, but not small. We syndicate a fair amount of our equity. We're about 60% multifamily, 40% retail office. So we run that company, have an internal property management company as well that manages those assets as well as third-party assets. And then I'm a licensed broker, I think I said, and then I also work with Merchant's Mortgage, which is a hard money debt fund. So I run our Pacific Northwest branch for that. Like I said, a deal junkie. I love brokering real estate deals. Putting debt on real estate deals, buying it for myself. And my background is I studied accounting, went to work in, and not tax, more financial reporting and then audit. Went to work for a large public accounting firm and really got good insight and training with mergers and acquisitions and company valuation and et cetera. And then I switched to real estate with CBRE, where I brokered mid to large size institutional real estate deals, mostly in the Bay Area, focused on office buildings. So I came to Portland and started what I'm doing now with the debt and buying my own deals, syndicating stuff and brokering deals on my own. So I don't know if I was too long or too short, but that's kind of me in a nutshell.

So you're not busy at all.

No, not at all. I've got a 4-year-old son and a 3-month-old daughter, and I know we're a Life's cake.

Yeah, super. I think, yeah, as entrepreneurs, I think we thrive on kind of deal structure, deal junkie.

Yeah. I, I, total manage.

Gosh, there's so much to unpack. I love that. I think to me, and I'm very small scale, a big part of investing is calculated risk. I'm curious how you brought your background into what you're doing. Cause I think a lot of people get dealitis and they don't really understand how to underwrite and they maybe get into things that don't pencil.

My background is definitely very math intensive and all that to say, I think Algebra 1 in high school, I got like a C- or something. So I'm not a math guy, like in general, I've become able to do reasonable math, but a lot of what we do in real estate finance and stuff really isn't that complicated. You've got a lot of inputs that you can make things as complex as you want, but it's not like you're doing multivariate calculus, right? You're thinking about a deal and all the various inputs that can go right or wrong and change things. And then you're modeling. So when you're thinking about underwriting a deal, that's what they call it is. And the more granular you can get, usually the more you're able to sensitize and say, hey, this deal, like if this works, how well is it going to work? If this variable changes, What does that do to my analysis? And yeah, definitely learned that. Got training on that in corporate mergers and acquisitions, looking at company valuations, 10-year cash flows, et cetera, et cetera. And what various inputs do to that. And then at CBRE where we were doing office deals, you're, if you're selling a few billion dollars a year in office deals, you're working with large institutions that really hone in on the numbers and They've got a multi-tenant office building with 100 different tenants in a tower and they bought it at different lease structures and how that all works. And then what your market rent assumptions are, growth assumptions, how expense reimbursements work, inflation rates for expenses versus rent. So yes, like it can get very complex, but it can be pretty simple if you want it to as well. It's really just like trying to tease apart what's important. Is that really the driver? If not, and such things, right? In a good scenario, what happens? In a shit scenario, what happens? And in that shit scenario, am I going to lose my ass or am I going to be okay? And that's really my risk calculation is I try not— you see a lot of guys or real estate operators who are syndicating deals and they're putting a ton of market rent growth in their numbers and all these like things that, yes, if you put 5% market rate growth year over year into perpetuity on everything, a 3% expense growth on everything, your deal's going to look great. Like it doesn't— in 10 years, your deal's going to look phenomenal. And so really being sober with your assumptions and seeing if in a sober underwriting case and looking at what like your breakeven or less would look like, do you think that those numbers are going to hit there? And that's really how we manage risk. We try to only do deals where No, we've got, even in a bad scenario, it still works pretty well. And then at a good scenario, I just let it happen and it ends up.

That makes sense. I just, to compare it to a really simple thing like a flip, right?

I think people overestimate the ARV and it's just sky high and you're like, I, so we do the flip financing and stuff and I'm, like I said, I'm a deal junkie. So I love talking to people about deals, helping them think through different structures and whatever else. When you've got a 9-month hold on a flip and someone puts market appreciation into their ARV numbers, oh, I comped it here today. It's going to be knocked up higher. I'm like, are you nuts? Let that happen. If that happens, great. But comp where things are today and let it sit. And if you think there's upside, you know, if you think there's downside, you know, the market's going to decline for sure, haircut your ARV. But if you think there's upside, let it happen. If that upside in 9 months is gonna make or break your deal, holy shit, find a new deal.

And I think that's where you do the first flip and it's like your ubiquitous learning experience, right? Which, okay. But back to, to bring it back to commercial, I think my, I think our audience is a little bit newer and I think commercial, there's a lot of scale and you're getting into cap rates and there's leverage. So I guess my question is, how did you get into commercial? I think you've always been in commercial, but any tips for someone that's been in single family looking to get into commercial and scale because there's, it's hard to do smaller deals.

Yeah. So I'm like, and people have asked me that before, I am the wrong guy to ask that just given the background. Like I started in commercial when I moved to Portland. I had to learn residential. It was way like, I didn't know how residential real estate worked. And, and I realized that a lot of it's just because it was very math. Based for commercial real estate, it's a lot more soft feeling, qualitative versus quantitative. I know how to value in an apartment building. I could tell you like what a backsplash in a kitchen does to a value because you can look at, all right, do I get $100 more in rent? What is it about? In a flip, your backsplash, I have no fucking clue. What that does to your value, but it for sure does something, right? And so it's way more qualitative, different way to look at it. But I went from that commercial into the resi space and I did fairly well to this. I think that getting into commercial isn't actually as challenging. It's more like mentally daunting than in actuality. I think partnerships are huge. And not being greedy about your first deal. If you want into something, like just do it. Find someone to partner with who's doing it already that you can add value to. So there's, in my world, there's 3 different like legs of the stool of my company and most of the commercial real estate. And you can plug into any one of those legs to see if it's— there's acquisitions, so deal finding, there's asset management or running the deal, and then there's like capital markets, basically the money side, right? And the money could be putting equity in, it could be raising, help raise equity. There's some securities law implications there. Signing on a loan in the capital bucket, you can figure out where you plug with some operator or with buddy up with some other people and get a deal done. And you don't need to do like a couple hundred unit apartment complex. You can start with the 8-plex, right? And you and a few other buddies put some money together, figure out who's going to manage it and whatever. That's like a pretty— if you're already doing house flips and you've done a deal that's $750 grand, $1 million, it's going to still be a 7-figure deal. Even with an 8-plex or 10-plex, it's not that much different. It's literally just, I think, getting rid of the hash of I can't do this because it's so complicated. And thinking through, all right, let's make sure that all of the different things that can go wrong, I'm bolstered with partners. Did I, do I know how to underwrite a deal? Do I know what all the risks look like? If not, shit, you shouldn't be the one underwriting the deal. Partner with someone who does. Can you find the deal though? Maybe. Can you raise capital for the deal? Maybe. Can you help operate it? Maybe. Right? So like, even if you can't do one thing, maybe you can plug in somewhere else and just don't be like your first deal, just do it. So you get resume experience. Don't worry about making a couple million dollars on your first deal. It's more important to get through that cycle and then you're able to get a rinse and repeat, learn wrong and right and do better the next time.

That's interesting. I feel like as maybe it's me as entrepreneurs, I have this mindset like I can do everything myself cuz I'm usually, I can figure things out, but that's not the most strategic approach, right? So I'd love to hear your point of view on partnerships and how I think I'm a little, honestly, there's a lot of pieces in finding the right complementary skills or how do you, how do you vet someone to make sure they're a good fit? Because a bad partnership, right, it can be equally complicated.

Yeah, you're gonna get kicked in the teeth in when you're, when you do partnerships. So let me back up. I have never owned a piece of real estate 100% myself ever. In my primary residence in Portland, I owned it with my partner Kelly. But so I've always done the partnership thing and I've started other businesses. I've always had other partners. I think what is— when I started out and you don't really know what to add into partnership agreements or what to think about or look through, we were doing smaller stuff. And so when it goes wrong, if there's some financial implications or whatever else, you're usually able to push your way through it. I think after having done a few of those, I started being able to get a better sense of what a good partner looks like, how to divide up responsibilities to really have like a, a, a good working relationship where it's the, the word would be accretive, right? Where 1 1 3. And I've learned never to get into a partnership with someone who I don't know. And so I had an experience where I had a really good buddy and we were going to start a construction company and he had a really good buddy who was also going to do some of the operational stuff around it. Oops, that went really wrong. Ended up with some litigation stuff and the mid-sized 5-figure settlement that came out of my pocket for that, just because the wrong people were in the place and I trusted someone else's opinion of someone. So getting into a partnership, like there needs to be a full level of trust between the partners and like an understanding of how they operate, right? And that. Really detailed like segregation of duties in terms of who's doing what. And that's really, it's a lot back to how partnerships work with commercial real estate. Same thing. Who has a reputation, build a relationship with them and then partner in with them and like very clear delineation on what everyone's doing. And like I said, you can be the asset manager if you want to help run the construction crews after you buy the place, that can be your value add. You might get a little equity for that. That's great. But you're not going to step in on the underwriting side of things if that's not your job. Let them do that. You do you, maybe you have some discussion about it, but that's not your lane. Stay in your lane on these deals. That's anyway, I don't know if that's helpful, but that's really what I've found is the most critical thing when you're picking partners.

Yeah, because I think it's the whole J thing. It's tossed around a little cavalierly, I think sometimes in real estate circles. And I think partnership is awesome, but I think you have to vet them to your point. So I just wanted to—

And, and our, and our level, like on my level, it's, you need to do, you can't do it all. Like I tried for a while, but like you end up not doing anything as well because you're trying to do everything. And so that's why I started scaling up my deal size so that I can narrow the focus on what I'm doing, build a company so I'm paying other people to do other stuff. And partner, I always do like strategic partnerships on acquisitions where someone else is doing something else. And if you are giving away half the pot because of that, then 3x your deal size and you're coming out ahead.

Yeah. Yeah. That is a good point. The scale there. And I think the focusing on what you're good at, because it's easy to burn out and you can't do everything well and you just end up dropping balls. So where is, are you, I, What's your focus as far as the, your role in the kind of your business?

So when I started, we started the proper, so the business generally is we're a, we're like the quarterback of a real estate deal. So we find the acquisition opportunity, we go and raise the money for the deal, and then we execute the value add on the deals, and then we operate it into perpetuity. If you look what that looks like from a revenue perspective for the company, it ends up being you get some like acquisition fees, like when you buy the deal and then you get some asset management, property management fees while it's ongoing and you get a bunch of equity in the deal. So on dispo or refinance, that's really where like the true money comes from. So those acquisition fees and property management asset, that's stuff to just keep the lights on. And so like I started knowing that I needed that property management company to have the revenue and everything to grow the company and payroll, all that stuff. But we didn't have payroll when I started and we had 15 units that we owned. And so it was like, you're not really making enough money to even pay yourself anything to do it. I was going out and getting calls in the middle of the night to leaking roofs and toilet issues, all that shit, literal shit. And you had to do it. But as you keep scaling, you're able to start pulling pieces off of what you do and building out that team. So we ended up building a property management company somewhere in like the 8 to 10, I think 7 to 10 people full-time is what we've got on our team right now. And that was, I was doing a lot of that. Now my focus on that is more like high-level financial reporting and making net not even like owner reporting, but we have a financial reporting manager for that, but just like CFO-level financial controls over the property management company. Then generally where I focus is acquisitions and capital markets. So working my network to find new deals and then raising the money for those deals, working the debt side of it, like all that sort of stuff. So like financial financial related, deal related, deal structuring. I pass it off to my team to go and run the execution on the business plan.

That's it. Is that kind of, clearly you're a deal junkie. Is that kind of, are you in your element when you're doing that? It doesn't feel like work.

I love it. Oh my God. Some people, they'll do drugs to get that like high or whatever. When I get like a new sweet-ass deal under contract and it's, or we're hard on the deal, right? We, or we're through diligence and we just want to have the deal. We're pushing to closing. I get that. Oh, that is like better. I haven't done like heroin or something, but like you hear people who are like, I'm addicted to this shit. It's like that, that gets me. I feel like the fucking serotonin, whatever the shit, whatever that shit is, that gets me going. So yes, I love like a sweet deal, getting it under contract, pushing through to closing, that is for sure where I'm in my element.

Yeah, it is. It is a bit of a hunt, right? And there's a lot of things that's really, I totally get it. I, on a smaller scale, I can relate. So how, I guess I hate this question, buy box, but like what, when you're analyzing a deal, right? Clearly it's value add. Like what are you looking for? Like what's a good, if you can go over a case study of how you structured a deal, I think that'd be really interesting.

Yep. So here's, look, let's zoom out a little bit. Our business model, if you look at what, you know, what I just said with management fees and everything, kind of running the business, like I went probably 3, 4 years ago from being like, I want to do all these deals and I want to grow to, there's no way that I can do all this myself because I'm just dropping the ball and things are getting out of control. I need to build a company that does these deals and I'm going to own part of the company. And by that, by my net worth and everything will grow more than me doing all these deals myself. So to do that, we needed all those revenues to support it. So that's why I scale this up is I might own 25 to 30, 40% of these deals, maybe more, but not in, I think across the portfolio, I think it's like a 35% ownership stake in all of them. But we get management fees on 100% of them. Right. And so you're able to do more deals. Because you're getting larger, like fee base instead of what I can do on my own. Couple that with, we then want to hold them long-term so we maintain those revenues to keep supporting the underlying business and keep growing and everything like that. So with that said, we want to hold our deals. We value add. We like to do a commercial BRRRR effectively where we buy a really cheap basis property, put a bunch of capital in to fix it up, whether it's rehabbing apartments or lease up on a commercial building or whatever it is, get the value to pop large enough where we can refinance out all of our equity while still holding the property that maintains the revenues for my company on the management side and redeploy the equity to all the investors to then go and do it again. So my buy box is a commercial, mid-size commercial, sub-institutional. I can get into why. But self-institutional commercial value add where I can burn at the end of the day. And I can get more specific, but that's basically it is in markets that I like.

Okay. Yeah. I'll, really interesting. I just thought of a question. Forgot. Yeah. I'm curious when you're pitching that model to, or I don't know what, proposing to investors, what is like the timeline or their returns or how clearly you have a model that works. So again, you have it dialed in, what's the kind of like returns they can expect or how do you— because I think money, private money raising, I think for a lot of people is uncomfortable, but if you have a good deal, it usually works.

And that, and that, that's what's nice is my investor base, a lot of them are commercial real estate brokers, bankers, people who make half a million to a few million bucks a year because they're doing deals, but the deals they're doing are too big for them to invest in. And so it's, I could put together an analysis on a deal where they're like, oh shit, this is a really good deal. I see these all the time. This is awesome. And oh, I can invest in it. Yes, let's do that. Because they can't do it in their day to day. So our investor base is tailored to wanting to do those kinds of deals. And then our other kind of set of investors is more like medical related or like high net worth with, we're able to make a non-working spouse into a qualified real estate They're able to use some of the depreciation benefits they otherwise wouldn't. We've got like a dual trade avatar and like our dealable investor. But we're seeing, I'm trying to think, I went off a little on a tangent there. What was your question?

Oh, I guess the timeline and how you, I mean, clearly it's, you have a—

Oh yeah. How we pitch it. So given that where we've, our investors know what a good deal looks like. In general, or we're pitching like good tax benefits and other on top of the actual underlying investment. What we kind of pitch is that no, call it an indefinite investment horizon. You see a lot of funds, other people, we have a 5, 7, 10-year hold. We're going to exit, give you your money back. That's not the way that large, high-net-worth families That's not the way they make money. That's not the way they build wealth. Like, that's the way to pay the government a lot of money because you end up paying a lot in taxes. And then he's right back. And so we, I tell people, look, I'm going to force you to get wealthy over time. And the way that you're going to do that, I'm so sorry, like it's an indefinite investment horizon. What we, our value-add strategy is such where in 2 years, We're going to be ready for a refinance. You'll be able to pull out most, hopefully a lot of your money and give it back to you. And then after that, we're going to hold it into perpetuity. If we ever sell it, we're going to ask you, but we're going to want, because we don't want to pay the taxes and we want to keep growing your underlying wealth. And that's really the pitch. So the numbers, everyone's about, well, what's your IRR? For individual investors, IRR is fucking meaningless. Like you don't have these hurdles that you need to hit and everything else. Like people are just trained to want to hear IRR, but you're not going to be reinvesting every dollar to hit that compounded return and everything else. That's not the metric that people should be looking at. So with our deals, my base metric is after the refinance event, what's your cash-on-cash return? So post-liquidity event cash-on-cash return. If you put in $100 grand, I give you $80 grand back after REFI, you got $20 left in that thing. If we're spinning out $10 grand a year to you, that's a 50% post-liquidity levered cash-on-cash. That's the metric I'm looking at. And it's not always 50%, right? The higher the proceeds that come out, the better it is. If you get a full bummer, right, then it's infinite, which is great. But we target at least like mid to high teens plus in terms of post-leverage or post- liquidity, leverage, cash on cash.

Is that, so I, this is a silly question, but is that the mindset of, I get higher wealth individuals that they're always going to put their money to work versus one-offs? I'm used to just people wanting to flip in and out for a flip. Is that pretty common to know that it will be always working for you? So it's easier to—

Yeah, it was. Yes. I mean, that's our investment thesis, right? And so if people don't want to invest in it, like they can go and flip some properties, pay off to the government. But that's just, that's not like, if you look at all the large family offices and everyone else, they played with debt, right? They either are tax efficient with sales and they exchange, right? Or they're in markets and we do the same thing. We invest in markets where we think due to supply constraint and demand growth that the underlying investments are going to outpace inflation. And that's like our base case. We need to invest in those markets or else you're just going to eat away by inflation. So you do that and then you do a value add where you can hopefully pull all your capital back out of it when you're done in 2 years and just spin that flywheel. And so you own it, you have no money in it. Great. Do it again. Own it, no money in it. And you keep doing that and you keep building this wealth over time. And yeah, that cash flow isn't amazing off the bat because after you do the refi, but you got all your money back. So who cares? And keep doing that. And then over time, inflation's going to outpace— your investment's going to outpace inflation. So over time, you're going to have compounding growth on your revenue and cash flow. And so that's, that's our model. That's really what you see in a lot of like large, large high net worth families. They don't sell stuff. They just pull out with debt, go buy more.

Yeah. It's a debt. It's a chessboard of debt, right? It's really, I think for Todd.

No, I mean, we're on the, we're pushing the edges of leverage, right? Just because we want to keep it working and we're in heavy growth mode. I was heli-skiing a couple of weeks ago and there was a family office investor out of Toronto and he's got, I think, $750 million, $1 billion in portfolio value. He's got one mortgage. He's got like a $15 million mortgage on one property, on $2 million of portfolio value. So you're not always playing at the top, but he said, he's like, hey, we're trying to scrape some NOI to get some more for down payments for new deals. But if things come up, oh, I'll just slap leverage on my portfolio, pull down and do it. They're not going to sell stuff. Like there's no point to do that, especially in Canada where there's no cap gain, but you're just paying like 50% tax anywhere.

That's so interesting. Okay. So I guess to circle back a little bit for someone that may— the syndication model, right? Clearly you can scale, you have different— can you just explain just for someone that maybe hasn't come across it or how it's structured? Um, cause that's how you're—

Yeah. Like the way we're the operator, we're like the general partner in a deal. So we're that quarterback. We find the deal, we raise the money for the deal, we execute the deal. And so we get relative to the dollars we put in, we get significant, like yield on those than just a little partner who's putting in money, but isn't doing all the work. So it's You're not getting paid for sweat equity or getting a bump on your returns for sweat equity is the way to think about it as a general partner. So just for ease of reference, like if we put in 10 or 15% of the required equity, we're getting somewhere between 30 and 50% ownership in the deal. So usually we structure that where all the money that goes in, all the cash that, that gets a preferred payout. So it gets, it's usually accruing an interest rate that gets paid before anything else. And then everyone gets their capital return before anything else. But after the capital's returned, then that promote, the promoted interest, the 50% ownership, that crystallizes. And then I would get 50% of every dollar that comes out after that. So it's like, if a deal goes south, I'm not getting any upside. I'm getting, you know, my pro rata share of that, you know, of the actual capital invested. But if it goes well, that's when I make my money.

That's true leverage, right? To get that.

And not everything, when like in real estate, it does not matter. Like if it, it's all a cost of capital, whether it's structured as debt, whether it's structured as equity. Like if you're sitting at the top there, everything else is debt to you. It's literally just, it's a capital stack, right? Where you layer in different cost capital, then you just blend it out and that's your weighted average cost of capital. So everyone should think if you're an operator, that anything that's not you is debt or is just like an expense. And that's the way we look at it.

Interesting.

And so, yeah, so it works really well from a leverage standpoint if it all goes well and if it doesn't go well, then the deal went sideways.

That's why you find the good deals, right? I guess to jump around a little bit, I think we all love creative financing. Are you able to involve sellers in some of these commercial deals?

More than I thought we would when we first got into this. So yeah, and that's, I talked about we focus on sub-institutional properties. So there's a couple reasons for that. One is when you start getting over $10, $15, $20 million in deal size, you start competing with large, really well-funded companies who are able to make you bar, but pay more because they pay their investor base less because they're bigger and they're more well-known. So we don't want to deal with that competition. So we like to stay in that middle market commercial real estate. Also, you're not buying from institutional owners when you're in that kind of smaller bucket. You're buying from individual owners who, you know, made a good investment 20 years ago and they're exiting now. And they bought something 20 years ago for $800,000, now $6 million. And they're like, oh, this is great. But they're still an individual. And so they don't have these if you're buying from an institution, you're much less likely to be able to involve the seller because they have those IRR targets that every day that they don't get a payoff to their investors, they're making significantly less money. Not the case with an individual owner. They're just like a residential house seller. They've got these tax implications they're thinking about. They're thinking about generational legacy, all this other stuff. And so yeah, it, at that point, it just becomes the relationship with the seller. Their needs and the best how you can negotiate and the best way you can get it done. That's hopefully a win-win.

Yeah. Assuming there's brokers involved. So they're, are they involved in the negotiations with the seller for them carrying?

Yeah. Yes. And so I'd say probably 75% of the deals we do have brokers involved on the seller side. I'm usually the broker, one of the brokers on the buyer side. It's just a way to help fund the general partner contribution and more finding the deals. I'm, I'm, like I said, I'm a deal junkie. I love just looking for new deals. That's where I think that I add the most value to the company. Me being the buyer broker just makes sense. But yes, but there, there usually are brokers involved. However, as well as anyone, the more you can get to direct a seller, the better. What's great is a lot of times these brokers are going to make so much on one deal. That they don't care as much about the etiquette piece as just getting the damn deal done. And so if they need to put you in a room with the seller to go hash shit out, they're gonna do it, right? They might try it first, but if they see that they're just being like a fucking roadblock, dude, get out of the way and let me do this. And we've had that happen a fair amount wherever you actually get in the room, you start talking, figure needs and everything else, and, you know, take it from there.

Okay. Is it the same? I'm familiar with it from like a smaller scale. Is it the same thing with how you're listening to them, figuring out what their goals are and then saying, hey, this could be help with deferral of cap gains? Is that a similar—

Well, like a lot of, like a lot of times they'll, they're going to involve attorneys on their end. You can't like slide shit past them. So a lot of times they're going to be sophisticated enough to like know. If you say, hey, I can't do the deal this way, but if there was a way to carry a piece of this or you were to carry all of it, like That could make, that can make this work. Like, is that interesting? And they'll be like, oh, let me talk to my attorney and CPA and see if that's a thing. And if it's honestly better if you propose something like that and then their CPA says, oh my God, that's awesome. You're going to save so much in taxes. You should totally do it. And then they'll go to their attorney and they're like, I want you to get this done. And so the attorney is, and usually when attorneys get involved, it all blows up. But if you get the, if you get the client of the attorney saying, get this fucking deal done. Like they're not going to, they're going to be more concerned about getting the deal done than getting everything right on the, on their structure. So yes, it's a little bit easier. So in some ways, not a real crazy deal because usually they're more sophisticated. It's a little harder than others because they involve a lot of other parties and you can't like, you can propose all the red pino, lettuce and tomatoes. Probably just going to get a very basic cheeseburger.

You can get something.

A dry burger.

I guess that made me think of like positions, right? Clearly they wouldn't be in, I guess how you structure the debt. And I don't know syndication, so probably a dumb question, but like, how are you, if you are doing part owner, they're obviously going to be in a subsidiary position, right? As far as the structure of it.

It depends. Like we've done deals where the seller's been in first and we've just brought in equity and They've carried the balance, like they had a free and clear property or nearly, they needed just enough to pay off the debt and they took first and it was great. And we did the value add with cash out of pocket. You couldn't also get like a junior loan to do that. And then we went and refinanced the guy and he was like, fuck, now I'm going to have all this tax implication. Do you have anywhere else you could put me to keep the loan out? Sure do. So, you know, there's that you can have sellers who were in second, like it's Again, it's deal structure. It's like you start to see these little flags waving of, hey, there could be something here. There could be something here. You always know that you can go and pull money out of your pocket and go to the bank and at the right price, there's a lender out there who will do the deal. That's like your base case. But then you start to see other things. What if I syndicate this? And what if I get a real estate broker fee so I don't have to put any money into the deal? And then the seller comes in and funds a second And I walk out with clothes, putting money in, I walk out with a $200,000 check, right? Like you start to layer it up and it looks like really sweet.

That's pretty amazing. That's so, because as the broker, that's your investment. Wow. That's really cool. I want to do one of those.

And that's why everyone should get a real estate broker license. It is the only credit on a settlement statement that any lender will fold into the purchase price. And so you can, if you figure out, if inking the goddamn contract, if you think through how you're structured and you're getting a below-market deal anyway, why not raise the price a little bit and increase your broker commission a little bit, right? And then boom, there's your down payment. If you're syndicating, so like the easy math, 2.5% broker fee. You sit, you're syndicating the rest of the equity and you're getting a 75% LTV loan. So 75% LTV, that means you need 25% as equity, right? What's 2.5% of the purchase price? That's 10% of the 25% needed for the down payment. There's your GP contribution. Raise the rest of the money. You just said the deal for nothing. I literally, I bought a 30-plex doing that. Like I put $5,000 out of my own pocket for a 30-plex. Because we bought the deal. GP was a 15% contribution. We got $150K from broker. You rolled that in, put $5K in for like inspections and shit. And now me and a partner own 50%, 55% of a 30-unit for $5K. Like, yes, let's do more of those.

That is mind-blowing. I, so I, that's, I've been on the fence about it and I think I like being in this gray area, but you're making me really consider it. So how much of this is I, I'm gonna go around the sort of mindset, right? Thinking that's even possible. 'Cause I, you hear that and you're like, that's just, that's a unicorn, right? But clearly you're doing it. So do you think it's skills and mi— or how much of that plays into this? I'm just curious.

So I've never had an issue with the mindset thing. So I'm not like, I don't have lived experience not believing in myself. Mm-hmm. And thinking And it's weird, at least on the real estate side. And it's weird to say that, but if you think about the background, right? Like I'm coming from doing billions of dollars of real estate on a transactional basis. And that's how I learned it. And I, like, a guy is doing it very biased. We were full-stack capital markets. So we would go find the deal to sell, but we would help, we would find the operator, we would help them find a capital partner. We would help them get preff and mezz and your debt. Like we did the whole damn structure. So I feel like I knew it and it's just like, all right, I used to do it with 8 zeros and I do it with 7. Okay, so that's good. Like it doesn't feel very daunting to me, but I would say that like in general, like you need to believe in yourself, crystallize what you want, right? It all starts with that. It starts with like your 10-year big hairy audacious goal. Like it starts with beginning with the end in mind, right? God, there's so many ways to say it. If you think about your resume, what's the last fucking thing you want on your resume, right? You start there and then work your way back, like figure the fuck out how to get there, but don't start with a how am I going to get there? Figure out what the, where the fuck you want to end. And if you think about that with real estate or anything else, like figure that piece out and like firmly believe it. And like you need to, Visualize it very detailed and concretely in your mind and almost make yourself subconsciously believe that you're already there. And then you just work your ass off to get it. I mean, all those mindset books are the same. Rich Dad, I mean, Rich Dad, Poor Dad, no, but like, what is that? Thinking Grow Rich by Napoleon Hill. That's like the granddaddy of mindset books. But like, if you think about every other mindset book, like Cardone's shit on time, like everything else, it all goes back to those 3 things of believing it. And it's dreaming it, believing it, and then working your ass off to get it. And you need to do all of those in that order. And there's detail behind how to do each one of those. But if you do that, you can really accomplish like anything. And so like get that fucking head trash out and clear that head trash out. And then you have space to actually think about what you want and really think detailed and think big, like think 10x and then 10x again bigger than you actually like thought you, you could think.

That's so true. I've been, I'm a self, self-procrastination, self-help junkie. I'm always working on that stuff. And I've come to realize thinking bigger is actually easier and it forces you to scale versus staying at a small level. You're clearly a very big thinker, but I, yeah, it's interesting.

Like it's really, if you read all those, they all have such a common thread, the, the visualization and all this stuff. There's Silva, there's all this, but it all ends up being the same. It's like you need to, you need to fucking crystallize it super detailed in your mind and then repeat to yourself you've already gotten it until you like trick your mind into believing you've already gotten it. And then you just fucking work until it happens. And that's it. That's really it.

Yeah. So I have to ask, like, you have some pretty big goals. How are you, are you tracking on that? And how is Clearly you're very, you're doing stuff.

Yeah.

What are your goals?

I, yeah, we're, I would say that given the current economic environment with real estate, it's probably pushed us about 2 years off of our, of our 5-year target, which is tough, but at the same time everyone's dealing with it. So are we tracking? Yes. Do we have the, I think what would I Our goals at the end of the day are we want to get, we want to hit institutional investability. So instead of having to go and raise money from small family offices or high net worth individuals, we want equity commitments from like pension funds and sovereign wealth funds. So a CalPERS or Abu Dhabi sovereign wealth fund, something like that. You need to have about a billion dollars in portfolio value to be at that like scale to be able to get those commitments. And so that's really what we're targeting in the next 3-ish years. Is to take the $50 million and about 20x it into a billion dollars of portfolio value. I think we're hitting it at a perfect time where there's a ton of opportunities presenting themselves right now to be able to get that. We've worked super hard over the past, what, we started this company about 6 years ago, to really build the operational base of the company. And so like, we are now a super well-oiled machine. We've hired the right people. We hopefully are incentivizing them well and everyone's aligned on our targets to the point where yes, we've got our company that can digest basically any size asset. I couldn't have said that 3 years ago. We've got a capital base that, you know, we have the ability to go and execute $1 billion of real estate. And it's really, it's always been the case that capital isn't the issue, but now operations isn't the issue. It's finding a fucking deal that's worthy of investment. That hits our parameters and is in line with our long-term ownership growth goals, right? Like we only bought one. I wanted to buy $75 million in new real estate last year. We bought like $6 million. Like we bought one deal last year. We looked at 16. We bought one. And I mean, but by luck, we were in contract diligence, the whole shebang, put a shitload of money out on diligence. But like the one deal we bought was a 50-plex in Portland for $90,000 a unit. That was a good deal. Like even in a shit interest rate environment, that's a really good deal. So like we, we were, I'm not going to let my high level acquisitions target make me do a shit deal. And I think our investors have seen that and that's why they're willing to, I mean, 75% of our investors are repeat investors in multiple deals because they see that even we had some cash out refinance business plans that haven't gone through yet. We're about a year late on them because of the interest rate environment. But like, we're cash flowing like a motherfucker because we're done with the rehab and like they're doing great. It's just, it's not time to refinance. I think they see that we're not buying shitty deals. We execute them well and we're always improving our operations on the execution. And we're not going to, we align incentives in a way where I get, I waste my time and I waste money if I do a bad deal. I waste a lot of time and time is honestly most more important because like I could be focusing on good deals. So every deal we do has been pretty killer and that's where we want to keep it. So no, I'm super excited about the future of the company. Did I want to be at probably $250 million of portfolio value right now? Yeah, close to. Do I think that We've got a ton of upside from here. Yeah, definitely.

It's a very strategic approach cuz yeah, bad deal. So I have to ask the crystal ball question, the current market, right? Finding deals. What's your take on where we're at in April 2024? It's an interesting time, right? I'm curious.

Yeah. So I don't have a crystal ball and I think anyone who tells you they have a crystal ball is shit.

Yeah.

Even Jerome Powell doesn't know what the fuck he's talking about. You know, like he's so back and forth on interest rates or not. And half of that is him trying to turn dials in the economy without turning the dials just by saying he's going to. But look, he doesn't even know. I think that what concerns me is that some of the really big players in the economy, like Jamie Dimon, he is very bearish, right? And he runs the biggest bank in the fucking world. So he sees a lot of what's going on and everything else. And so when you see those top-level people saying, you know, stagflation is a big concern and we're still over 50% potential for a recession and things like that gives me pause. Do I think that we've generally bottomed? On the commercial real estate market, like, yes, I think that if you can buy a deal to your return requirements, whatever you have in today's environment with today's debt, you should, like, I don't see a lot more downside from here unless there's a very large recession that causes a lot of small business bankruptcies that trickles down to a lot of increased unemployment and stuff like that. That could be an issue. That's a risk you've gotta take. And I don't foresee it as being like an '08 level small business season, bankruptcy season, resi foreclosures and all that shit. So I think we're at like a cyclical bottom. I don't know how long we're down here for, but if you can make deals work in today's environment, I think you should go ahead and do 'em. And that's where I'm at.

Yeah, that, that makes sense. I think it's all, it's every market has its nuances, right? That made me remind me of something. It's another jumping topics, but being like in a, on the West Coast in a, what we consider a landlord unfriendly place, a lot of people are going out of state. What's your take on that? I feel like it's tricky, but there's higher rents. Just curious how you navigate that as a risk thing. Totally different topic.

So, so I'm not as concerned about the landlord-tenant law stuff. I think for small investors who are self-managing, it's challenging because you have a lot of litigation exposure and everything else. But that's why I started a property management company. We carry insurance, we're doing third-party management. I think we're pretty fucking good at what we do. And so I honestly see it as a benefit where you see all these owner-operators who don't have that same base wanting to exit because they're sick of paying $10,000 every time they try to settle something with a with a tenant because they screwed something small up. We don't screw small shit up. Or we know how to settle stuff now. Like we've, we've taken our licks. Like I've, trust me, I've paid a lot of $10,000 settlements to tenants to figure out what not to do. But so I don't see the landlord unfriendly stuff as it being an issue. I, what I don't like is like Multnomah County, they put in that capital gains tax. I, that's stuff where I don't know. So that comes out of the blue. That comes from liberal states as well, or liberal locales. But there definitely is some local political risk. I don't see it as much on the landlord-tenant side, but I see it as just more of a kind of a pervasive investment risk. 95% of our portfolio is Portland MSA-based, and I don't like that geographic concentration risk, but I'm not divesting to limit that exposure. We are looking at about 7 other national markets. That we're looking at getting into and we're actively looking at acquisitions in those and everything else. But our plan is to reduce that Portland exposure through acquisitions in other markets, not divestiture.

Okay. Yeah, that's interesting. All right. So I guess, I know I'm jumping around a little bit here, but what's coming to mind, if somebody wanted to get into this, how can they add value without just saying, hey, I want to meet for coffee? Because I get that and it's great, but I'm sure time is very valuable. Is it bringing you a deal? How, how can you, like, if someone comes to you, what's the right way to approach you to learn more about this or get involved on some level, if that makes sense?

Yeah, I, I think if people are trying to participate, if someone brings me like a deal and they've like, I'm, I'm happy to, to JV if I know the person or to know the person. Again, that's a big partnership thing for me. I'm not just going to, oh, this is a good deal. You're in, right? Unless I can firewall them off and say, all right, you get X for bringing the deal in. Now fuck off. Then I'd be fine doing it. But unless I know the person, I need to make sure that there's that kind of legal firewall just because partnerships can and often do go sideways or people's needs change or everything else. So yes, happy to bring in people, especially if I know them to go partner on a deal or if, well, you know, let's make a relationship and then it'll be cool. I used to say, yeah, you know, you can try to get involved in any of those 3 legs of the stool as just like a one-off. But given the growth of the company, we pretty much have those pieces figured out. And we're always looking for potential new talent to come in-house and hire new talent in the business. But I don't need someone to come and say, oh, I'm going to help run construction management, right? Or I'm, you know, so give me a bunch of equity to help run construction management, or I can raise money for you. Like, we don't need, like, money isn't the issue where it's really the deals are the issue. So you bring a deal, I want to see it, like, that's great. I can cut you some equity. You can see how it works. If you want to raise some money for it, like, that's cool. But isn't, I don't, people, a lot of people value capital raising extra, like more highly than I do. And so they'll be like, oh, I want 50% of the deal to raise the money for it. And I'm like, I can do the same thing. Like, it's not that hard. A lot of times there's a gap between what people are looking for to raise money and not, but as long as we can figure it out, I'm not unreasonable with, at least I think so. I'm not unreasonable when it comes to valuing like contributions to deals. And I'm totally willing to give people what they're worth for bringing something to a deal. But if someone brings me a deal and they're like, hey, check this address out. And then I have to do all the fucking work. Like, I don't have a lot of money. Like, I'll kick you like 10 grand if we close the deal. But if you come to me and you're like, hey, here's this deal, hits your boxes, here's all the numbers behind it, here's how I would capitalize it, we got some cool seller financing that makes this thing hit everything up. All of a sudden, I walk into calling a bank and saying, hey, let's go find a deal and raising some money versus like negotiating with the seller, building the relationship and doing a ton of diligence and The, like, the further along you can bring me the deal, the, the more it's going to be worth. The more I would value that. At the same time, don't fuck that up because if there's a potential to get a seller involved and you screwed it up because you didn't know how to structure it, then it's probably worth less, right?

Which is a balance. I think people lead with that and it's, that's not how that works. You really have to build relationships. So that's helpful. Do your homework, basically.

Come to you with some Yeah, just like when people send me addresses all the time and then they're like, oh, can I like get 50% of the equity? And I'm like, for what?

We're looking on Zillow. Oh, we're coming up on an hour here. I, I could ask you so many more questions. I, is there anything that we like left out about your model or what you'd want to share for maybe a newer audience? Clearly you've figured a lot of stuff out and you're on a huge trajectory.

No, I think that what we talked about earlier about partnerships, like, and I think that's key to if you're trying to scale, like, again, it goes back to what do you want, right? Like, do you want to own 10 house rentals and, you know, have a little portfolio that pays off your income needs for the rest of your life and, you know, work a little bit until Social Security kicks in. You can do that. You can do that just by flipping a house and burying it and doing it. That's cool. Our goals are a little bit different and it's not that yours are right and mine are wrong, they're just different. And so you have to push different levers, work harder, build something different to achieve those different goals. So I think figuring out what you want and if it's large, trying to figure out how to not do it all yourself, but bring in partners is like super critical. And then, you know, just not being like scared to think bigger. I think all those, like when you put all that together and you figure out what you want, Making sure what you want is big enough, right? It's not just, you're not limiting yourself by some preconceived belief, but what do you actually want? And then really asking people who've been there, have done it, like how they got there and having that kind of inform how you're going to get there. And then just working your fucking ass off until you get it. That's really how to do it. So I think that was out of everything we talked about here. I think that's like the, that's the sauce.

And I think that's a really good focus. Cause I, again, I just hear that term thrown around a lot and I think it's an important way to scale, but it's also doesn't mean to be judicious about it. Yeah. I guess just really quickly, if someone, you said talk to people, but how do you do that without kind of just, hey, I wanna pick your brain. Like that doesn't seem like it's an equal exchange of value. Is that, or that just, you just have to be like, hey, I just starting out. Or is there a way to do it in a way that feels more like you're giving something back versus just, I wanna pick your brain. That's a silly question.

So I've always been like, so I'm busy as shit. And if I want to, I'm just not going to really respond and I apologize, but like at the end of the day, that happens. If you don't hear back from me, I'm sorry. Like I was busy, but the other day I was on the phone with two guys out of Salem who were trying to, they were like, hey, you're speaking at this thing. See that you're doing some stuff with fundraising. We're interested in starting a fund. And I spent like 45 minutes talking to him about considerations around starting a fund and whatever else. I'm not getting anything for that. It's just like, yeah, like I'm like, if I have the time, I'm going to, I'm going to help it. If I don't, like, let's set up a meeting for later or go talk to someone else. So no, I think the equal exchange for value shit is a bunch of crap. I think you need, I think you need to give when and where you can and as much as you can. And so like for me, like I'm happy to help people who have questions. I'm a deal junkie. I love just looking at deals. I get a dopamine hit just from talking about a deal. So thank you for You know, bring me a deal to talk about and then I'll let you know if I can't chat. So like, I think that's the biggest thing. Like if you really want to ingratiate yourself, it's more like, hey, I'm not here trying to like, I want to get into real estate. I want to get into your size deals. I want to try to find deals that work for you. So can I have half an hour to talk about your buy box and then like try to bring you some stuff? No one in their right mind is going to say no to that. So that's a really good like way to start a conversation.

Wipe that coffee. Yeah, that is on that note, this has been really fun. I have a couple wrap-up questions, but thank you so much for all this like sage advice. I think we covered this, but I'll just ask it again. You might have a little bit different take, take it how you want. I always like to ask like that your, your top business advice to live life on your own terms. Clearly that's what you're doing there.

Yeah, we talked about it. I think so, like when I wouldn't be here today if I hadn't taken the path I took and all about no regrets, living life the way you're doing it and looking back for learning experiences, but not wishing you could go back and change stuff. So like my background in accounting and everything else. That was instrumental and foundational to what I'm doing today. Was I doing that? Did I choose to do that for myself? No. Like I was living someone else's life at that point, living someone else's desire for what I wanted to do. I just think at some point, if you're living life for someone else's terms, right? And you're not like, you either need to be very okay with that and make that what you want or fucking change the direction of the boat, right? And there's this— what do they say? It's like, it's— and Stephen Schwarzman, actually, I heard him say this recently too. Stephen Schwarzman, CEO, co-founder of Blackstone. He said, you can, at the beginning of your career, it is totally reasonable to go and try to get some really legit work experience that isn't totally aligned with what you want to do long-term just to build that foundation. But at some point you need to find something that you're passionate about, that the world needs, and that you can make money at and find where those 3 things intersect and then fucking hit it. And unless you do that, like you're going to feel like something missing, or you're going to feel like work is work. When you can find those 3 things, you want to do that every day because you love it. You're making a difference and you're making money at it, validating what you're doing. And so I think finding that and making sure you're not living for someone else's life, someone else's ideal of yourself, really thinking about what you'd want to do, that dreaming part. What do you want to do? What do you want? That's like the first thing. And if you're not doing that and you do not see a path to getting there, you need to fucking change something. So that's how I see living life on your own is at some point either get okay with it Or pull the ripcord and take the off-ramp.

Yeah. And once you do that, it's hard to go back.

Yeah. No, it is the burn the fucking books, right? If that's not what you want to do, that's why I said be okay with it. Either, either get okay with it or fucking stop bitching and change. You like, or you're just going to live this life where you're like, oh, I wanted to do something else, but you didn't. You can always go back and get a job. You can always go back and get a job. And so if it's a job that's keeping you in or like, oh, healthcare, fucking Obamacare, like they put it in place so you can go and like, you know, just pay a little money and get health. Like if healthcare is keeping you on a fucking job or like your retirement and pennies or something else, at least in the line of business that I'm working in, you should be able to make more on one deal than you would've in 10 years of putting money in your retirement. So it's like, find something that you can do that in, right? That's that intersection. What you want, what the world needs, and making fucking money.

And it doesn't feel like work, right? If that's, that's—

well, then it doesn't feel like work because you love it. You love it. You're making a difference. The world needs it and you're getting validated if you're making the money.

Yeah. It really, that is the goal. Yeah. I meant by not going back once you've been on your own, like someone once said, you're like an outside cat. Like I, I couldn't, yeah. I, awesome. All right.

This is— I wouldn't be happy. I wouldn't be happy. I don't know if, so we've we play it on like the business I'm in is such where people go bankrupt, right? And the game ends and you can restart it, right? Or you can go and get a job. If I had never done what I was doing today, if I never got out of public accounting and started going on my own and not just estate and real estate brokerage, I would feel like what we were talking about where like I was not living my potential, what I wanted to do. I always knew I wanted to do this. Now that I've done it, if it all blew up, I would consider if I would restart it or if I would just go work for it. And I don't know the answer to what I would do. I think I would need to be in the moment really thinking about it, but it would not just be like, no, I'm not going to go back and get a job. Like I have a shitload of experience where I can get paid really well to do what I'm doing for someone else. Starting a company is so fucking hard. There's so much that goes into it and it's just a grind day in and day out and I love it. But if it all got wiped again and I had already achieved the goal, like I feel like I'm working towards the goal that I want, but just having done it and building it in the process is really probably 75% of the accomplishment that I wanted. I don't know. I hope I don't have to have the discussion where, hey, what's your thought process there? Because that means something went fucking wrong. I would still feel like, hey, it's I, I don't know, maybe you could cage the wild cat, the outside cat at potential.

No, I, but I think you've lived on your terms and you would never regret that. The worst thing is regretting not taking that risk.

Not at all. I would never regret it. Never.

Yeah. And I think it is a leap, like you have to just make that leap and pull the bandaid off and work extra hard and yeah, but it, it's well worth it. I think some days I question it, but okay, this is a silly one.

I think you can always make, there's always a goddamn job out there you can go get. Like you can always go do that. So if you want, like, it might not be, you might lose tenure with your company and the, but whatever, like work harder, fucking work harder, find a growth company, like find a different industry that's growing faster. And like, instead of waiting for your ladder, expand the business and then you'll just not, you know, if the business grows and you're up here, like everyone's growing beneath you, like you just, you know, skip 15 rungs instead of waiting 10 years to skip 5.

Yeah, so true. Okay, silly one. What is your superpower and how do you use it in your business?

I think that, and I'm not the only one who like has this ability, but I think I've seen that a lot of people come to me and they'll be like, hey, I'm in this deal. And I'm like, you shouldn't do that. Go rip up that purchase and sale. These 3 things in here for this way. And it'll be a way better deal. And like, people don't even understand. Like, a lot of times when I say that, like, they don't even get it. I'm like, just don't do it the way you brought it to me. Just fucking tear it up, write these 3 things and do it. And then they come back after the deal's closed or after it's gone full cycle. And they're like, holy shit, I am so glad you told me to do this seller financing extra credit. I got $200,000 out at closing. How did that work? I just see that, like, That's just like innate to like how I look at deals. And I think it comes from having done all that, like high-level syndication, capital markets shit, and learning about seller carry and involving all them, how you can use sellers to be part of your equity. So I can, I just see the chessboard. And like I said, I'm not the only one who does that, but I definitely think that is like a superpower when it comes to putting deals together is I don't take a deal at face value. You can always, like I said, you can always go Take out 25% cash outta your pocket, 75% from the bank, do it. God, is it Kiyosaki? I forget. Someone was like, if you use your own money to buy real estate, you're fucking lazy. And I definitely subscribe to that.

That's that. Yeah. It's, that's the, yeah, I like that. Okay.

That is the lazy man's way to buy real estate. And that is also the way to not push your, not expand your portfolio. Fully out. Yeah. Because you, you run out of money pretty fucking quick if you do that.

Yeah. That's really good advice. But you, it's, yeah. Okay. I'm gonna leave it at that. That's really sane advice. Okay. I, I always like to ask like a book or a podcast or a resource that you, you find helpful or you'd recommend.

What It Takes by Stephen Schwarzman, who's the, uh, co-founder and CEO of Blackstone, is my favorite business book. Really good insight in there. Takes you through how he grew the company. Blackstone, they started in the late '80s with $400 grand and a dude, a couple dudes from like Lehman Brothers, I think. And they've turned that into the biggest alternative asset manager in the world. They own the most real estate out of anyone in the world. They're always, they're just the smartest guys in the room. So anyway, I highly recommend that for a business book. I think the other one we talked about, it's like the mindset thing. And I say any mindset book, as long as you look at it through the lens of what we talked about, where like, just try to pick a part in the mindset where they talk about dreaming it and then making yourself believe it. So dreaming it to the point of being very vivid with what you want and thinking big enough, and then believing it and like really trick it. It's literally, so Think and Grow Rich is a perfect example of, of the book where like the guy has you write down on a piece of paper What you, your goal, he makes you write it in, in, I have already accomplished this. I already am a real estate, I'm the owner of a successful real estate firm that has $1 million to blah, blah, blah, blah, blah. And then you literally 2 or 3 times a day say that to yourself until you trick your fucking mind to thinking you've already achieved it. So dreaming it, crystallizing it, very specific, believing it, literally tricking your brain into thinking that you've already done it. And then working your ass off for it. Any mindset book, as long as you look at it through those lenses, will be great. Think and Grow Rich is like the granddaddy of all books. It's a little 1900s era. Yeah. Verbalize it. It's a good one too.

Yeah. It's, you're right. That's the thread. Right. But I think it's taking the time to do that and really know what you want, which often isn't, we want passive income. What does that really mean? Right.

Oh, okay. Passive income. What's your dollars? Like, When, how is that coming from? Is that from one property? That's, you know, what kind of property? Where? Get fucking specific. The more specific you get, and then the more you tell your brain that, the more it, it just works. I don't know how it works, man. There's different theories. It's Dispenza or whatever. Joe Dispenza's got this thing about how manifestation works and it's, he tries to be scientific, but like you actually talk to someone who knows quantum physics and they're like, he's full of shit. But in any event, he's something about how, and you could go read Dispenza if you wanna hear more about it, but there is something to manifestation. I don't know how the fuck it works. I just know that it does work if you do it right. And it's being very detailed and then tricking yourself into thinking that it's already done. Yeah.

And what, and you're, if you look at someone coming from the outside, the fact that you're saying that you believe in that, I think, 'cause I think people just assume you're just really smart and you just get good deals, but you're, you're doing the work and you have a vision. And I think that people forget that. It's important to know what we want.

I've worked more than anyone else I know. I have worked literally since the time I got out of school, right? I got 2 degrees in accounting over 5 years, and then I went right into fucking busy seasons year round with PwC. And then I was working 70 to 90 hours a week. I did— anyone who says that they've done 120 hours a week, I congratulate them because I've done it 2 weeks in a row once. And what that means is that you are sleeping at the job. You're working 7 days a week. You only go home enough to potentially get like 3 hours of sleep and shower and brush your teeth and you're back at it. And you do that repeatedly and you go fucking crazy. So anyone who says they're working 30 hours, like they're full of shit because you can't do that. But that was about the edge of what I was working, but I was always working in the 90 to 100 hour range. Like when I tell you, and I still do, I still, it hasn't changed. It's just that I found that. Intersection where it doesn't feel like work anymore. But I've been doing that ever since I was like 22. And so when you do that in combination with doing something where you're seeing deals and a lot of volume of deals, a bunch of companies getting sold, a bunch of real estate deals going through different structures and everything else, you get a shitload of experience really quickly, but it takes a lot of fucking work. So yeah, it's, it didn't just happen. Like I worked my fucking ass off.

Yeah, I think we see successful people and we just, we don't see the hard work and the vision and it just magically you've got all these doors and this capital. And I think it's really important that we all started somewhere and you have to put the work in and be really clear. Okay, last question. How can people possibly work with you, uh, just, yeah, connect with you?

I think there's two ways. I think that if someone's trying to be very entrepreneurial and not get involved in employee. Find a deal that hits that buy box, right? It's sub-institutional commercial in Portland, Charlotte, DFW, and Austin, Salt Lake City, Denver. Find a deal that works in those markets that does with silver underwriting assumptions. And I'm going to slash your fucking assumptions if they're in any way If that works with a full bird, let's do a deal. We'll figure out in some way where you can get cut in on the equity and you'll feel good about it. Alternatively, like where I think where I'm really pushing is we have an awesome team at my company and we're always looking to hire 10s. And so if you are super motivated, like 10 out of 10 kind of person who wants to come and work in a high-performing shop. Push us to get to a billion dollars of portfolio value in the next 10 years and hit competitive Blackstone in the next 10. Like we're looking for those kinds of people to come and work and we're going to comp you fucking well. And it's not, it's going to be a lot of equity in deals and it's going to be like a reasonable base salary, but I'm just looking for people who are hungry and fucking driven and love real estate and are 10 out of 10 people. And so if you're that kind of person, come and help the company grow. It's way more fun than we don't want to do.

That's an opportunity when listening to this. That's amazing. Bob, thank you so much. This has been really fun. I appreciate your time and yeah, thanks for having me on.

This was great.