EP 226: Building Wealth with Build-to-Rent: Unlocking Tax Benefits and High ROI with ChrisTopher Smith

[00:00:00] [SPEAKER_00]: Hello, and thank you for joining us today on The Gentle Art of Crushing It Show, where we focus on learning and sharing with our listeners all there is to know about how to create success in our lives. This show stands on the shoulders of giants. Our mission is to empower and inspire our listeners to create the life of their dreams whilst having a blast in the process. Let's celebrate life together. Welcome to the show.

[00:00:26] [SPEAKER_02]: All right, welcome back to The Gentle Art of Crushing It podcast. My name is Randy Smith and I will be your host today. I am really excited. I'm always excited, but today I'm really excited because I just wrapped up an in-person podcast with Christopher Smith in his studio. We actually recorded an episode for his podcast and then he allowed me the opportunity to jump in, use his great equipment and interview him about his trip.

[00:00:58] [SPEAKER_02]: And I'm really excited to see the success of the success that he's been in the business. So Christopher is the founder of CMS Equity. He specializes in the build-to-rent space within commercial real estate. He's got 20 plus years of experience doing projects in 48 states and he 100xed his growth in his construction company. We talked about turning underperforming retirement accounts into high yield real estate investments. And he just brought a ton of valuable insights on building wealth and gaining financial freedom. So stay tuned. I think this is an episode.

[00:01:28] [SPEAKER_03]: You're really going to be a great place.

[00:01:56] [SPEAKER_03]: You know, even when I was in high school, you know, I had a lot of friends that were jocks. I had a lot of friends that were nerds and, you know, the AP class kind of guys. And I was always able to kind of do this group. But I was also in that group. I was a little rogue because I was friends with these jocks.

[00:02:18] [SPEAKER_03]: And then these jocks I was friends with were, you know, I was a little rogue because I was always the nerdy kid in that group that was always in the AP classes and things like that.

[00:02:28] [SPEAKER_03]: So I've always kind of been this this kind of kid that's been a little rogue. And then and then obviously, you know, when finished up high school, went to college and failed out of my college my first semester.

[00:02:41] [SPEAKER_03]: I say I lost my mom and dad scholarship my first semester and and had a great time in college.

[00:02:47] [SPEAKER_02]: And then where'd you go to school?

[00:02:48] [SPEAKER_03]: So, uh, Northern Arizona and Flagstaff. Yeah. Northern Arizona University. Um, didn't have any clue what I wanted to do with my life. And then since I got, I didn't get kicked out, but I essentially lost mom and dad scholarship.

[00:03:01] [SPEAKER_03]: Sure.

[00:03:02] [SPEAKER_03]: They're like, you know what, if you're just going to go up there and waste our money, like take a hike, you know, come back and stay in our house.

[00:03:09] [SPEAKER_03]: But, you know, we're not paying for school. So I came back to came back, came back, live with my parents and, um, was working construction, doing drywall.

[00:03:19] [SPEAKER_03]: I was hanging drywall and doing more taping and framing. And then the tape and texture, I was working for a big commercial company.

[00:03:25] [SPEAKER_02]: Okay.

[00:03:25] [SPEAKER_03]: And, uh, did that, had a girlfriend, had fun, had all things. But then there was this pivotal moment where I was, I was, um, working on a job and, you know, we have either drywall taper, you've got a drywall, you've got a pan of mud and you've got knives and you just started doing all this stuff.

[00:03:50] [SPEAKER_03]: Yeah. And it was time to go to lunch. So I went to lunch and the foreman from the framing crew thought it would be funny to like sprinkle in all these screws into my butt.

[00:04:02] [SPEAKER_03]: And, and, you know, it's kind of just like a nuisance. It's like, uh, but it's like a practical joke.

[00:04:07] [SPEAKER_03]: Sure. Sure.

[00:04:07] [SPEAKER_03]: And I remember thinking like, like, I'm just, I didn't even know anything was wrong. I just started picking the screws out. Just like, uh, wait, whatever happened.

[00:04:15] [SPEAKER_03]: Right. But then he comes over and he's like kind of joking and doing all this stuff. And I remember thinking, God, what a, what an idiot.

[00:04:24] [SPEAKER_03]: Yeah.

[00:04:24] [SPEAKER_03]: Like what an idiot. Like you're probably 40 years old and you're playing practical jokes on a kid that's, you know, 19, 20 years old.

[00:04:34] [SPEAKER_03]: And I remember thinking like, that's this guy's life. Right. Not that there's anything wrong with this. I don't know. I want to, I want to preface that, but there's nothing wrong with it.

[00:04:44] [SPEAKER_03]: It's just that it's just that I don't want to be his age fucking with the kid that's trying to work with him.

[00:04:55] [SPEAKER_03]: Sure.

[00:04:56] [SPEAKER_03]: You know, and, and think it's funny. I just don't think that's funny. And, and I said, well, I don't want to do this anymore.

[00:05:04] [SPEAKER_03]: If that's where I'm headed, I don't want to do it.

[00:05:07] [SPEAKER_03]: You saw the writing on the wall.

[00:05:07] [SPEAKER_03]: I saw the writing on the wall and I said, I am not going to do it anymore.

[00:05:12] [SPEAKER_03]: So I think I, I, I finished out the job or I finished what we were working on.

[00:05:17] [SPEAKER_03]: And I told my, the guy that I was working for, I said, listen, man, I just, I just, I'm just going to quit.

[00:05:21] [SPEAKER_03]: I'm not going to do this anymore. And he was like, yeah, cool. All right. Fine. You know, good to, you know, I get it.

[00:05:27] [SPEAKER_03]: Sure.

[00:05:27] [SPEAKER_03]: You know, we'll see. Well, wish you the best, you know?

[00:05:30] [SPEAKER_03]: And so change, that was the, that was a serious change, change in direction because, because I quit my, I quit my job hanging dry, doing the drywall.

[00:05:43] [SPEAKER_03]: At the time, I think I was doing like one class, one class at the community college at night.

[00:05:49] [SPEAKER_03]: Okay.

[00:05:49] [SPEAKER_03]: Just kind of trying to, you know, the stupid kid not really knowing which direction to go. Right.

[00:05:54] [SPEAKER_03]: Yeah.

[00:05:54] [SPEAKER_03]: And so, but then I changed my whole mindset almost in that moment and quit the job, got a job at night, working at Olive Garden, waiting tables.

[00:06:05] [SPEAKER_03]: Okay.

[00:06:06] [SPEAKER_03]: Started taking a full boat of classes, you know, a full semester of classes at the community college.

[00:06:12] [SPEAKER_03]: Sure.

[00:06:13] [SPEAKER_03]: And just said, nope, well, I want to go do this instead.

[00:06:18] [SPEAKER_03]: I don't know the exact direction, but I know I'm not going to do this.

[00:06:22] [SPEAKER_03]: I said, this is the direction I'm headed, so I'm going to, boom, change directions.

[00:06:25] [SPEAKER_03]: So change directions pretty quick.

[00:06:27] [SPEAKER_03]: And what were you going to school for?

[00:06:30] [SPEAKER_03]: Nothing.

[00:06:31] [SPEAKER_03]: Okay.

[00:06:31] [SPEAKER_03]: Okay.

[00:06:32] [SPEAKER_03]: Just taking classes.

[00:06:33] [SPEAKER_03]: Just taking classes.

[00:06:34] [SPEAKER_03]: Yeah.

[00:06:34] [SPEAKER_03]: But I'm taking, but I'm taking the basic classes.

[00:06:37] [SPEAKER_03]: Sure.

[00:06:37] [SPEAKER_03]: Like the histories and the Englishes.

[00:06:39] [SPEAKER_03]: All the real study stuff.

[00:06:40] [SPEAKER_03]: Yeah.

[00:06:41] [SPEAKER_03]: The stuff that, you know, would easily transfer into any university at a 100 level course and that kind of stuff.

[00:06:49] [SPEAKER_03]: So, so did that for two semesters, a full year, and then said, okay, it's time for me to go back to school.

[00:06:57] [SPEAKER_03]: So quit my job, went all the way back up to NAU, took out student loans, did that kind of stuff, and started my college career.

[00:07:07] [SPEAKER_03]: And I started, I was, at the time I was in the communications college.

[00:07:12] [SPEAKER_03]: And that was really good.

[00:07:14] [SPEAKER_03]: That was, I had a great time.

[00:07:15] [SPEAKER_03]: But it really wasn't, I didn't fit in with that group.

[00:07:19] [SPEAKER_03]: And then at the time my dad had, was in construction.

[00:07:23] [SPEAKER_03]: He was a construction manager for a big company here locally.

[00:07:28] [SPEAKER_03]: And they were global at one point.

[00:07:30] [SPEAKER_03]: But a big project manager, you know, senior project manager for them.

[00:07:34] [SPEAKER_03]: And just started the, he just started the construction company on this square.

[00:07:44] [SPEAKER_03]: And I said, well, maybe one day I'll take over the business, right?

[00:07:48] [SPEAKER_03]: Who knows?

[00:07:49] [SPEAKER_03]: Sure.

[00:07:49] [SPEAKER_03]: And so I'll go into the construction management school and go take construction management class.

[00:07:54] [SPEAKER_03]: Okay.

[00:07:55] [SPEAKER_03]: And so I said, I went to the one class.

[00:07:58] [SPEAKER_03]: I was like, these are my people.

[00:08:01] [SPEAKER_03]: Yeah.

[00:08:01] [SPEAKER_03]: This is where I fit in.

[00:08:02] [SPEAKER_03]: These are my people.

[00:08:03] [SPEAKER_03]: I love the people that we were with, all the classes and everything.

[00:08:07] [SPEAKER_03]: So just, I was around, you know, round peg, round hole, found it.

[00:08:11] [SPEAKER_03]: Like, this is it.

[00:08:12] [SPEAKER_03]: Yeah.

[00:08:12] [SPEAKER_03]: You know, changed my major, you know, started building relationships.

[00:08:17] [SPEAKER_03]: You know, it was really easy to build relationships with people that you're aligned with.

[00:08:21] [SPEAKER_03]: Sure.

[00:08:21] [SPEAKER_03]: You know, so we're building, you know, I made relationships, got relationships.

[00:08:25] [SPEAKER_03]: Relationships with my teachers and all the professors and everybody, you know, business minors or going to business school.

[00:08:32] [SPEAKER_03]: And just kind of really kind of figured it out.

[00:08:36] [SPEAKER_03]: Sure.

[00:08:36] [SPEAKER_03]: And then after I finished school, it was actually, I actually had a whole semester left.

[00:08:42] [SPEAKER_03]: But I had amounted to a massive amount of debt, you know, going to school.

[00:08:47] [SPEAKER_03]: I had, you know, the last couple months, I put my apartment on a Visa card.

[00:08:51] [SPEAKER_03]: Oh, no.

[00:08:51] [SPEAKER_03]: And so it was terrible.

[00:08:54] [SPEAKER_03]: You know, bad financial decisions.

[00:08:56] [SPEAKER_03]: Sure.

[00:08:57] [SPEAKER_03]: And then go into, you know, like, well, they had this construction management competition every year that we would go to Reno.

[00:09:05] [SPEAKER_03]: We would compete.

[00:09:06] [SPEAKER_03]: And I led the heavy civil division of that, which was building, you know, heavy civil is like the earthwork and the bridges and the roadways and that kind of stuff.

[00:09:16] [SPEAKER_03]: And so I led that competition team.

[00:09:20] [SPEAKER_03]: And I think we got second or third place, which is the best that NAU had ever done in history.

[00:09:26] [SPEAKER_03]: Usually they're like a footnote.

[00:09:28] [SPEAKER_03]: But, you know, that year I think we took second or third.

[00:09:31] [SPEAKER_03]: And they had a residential team and a commercial team that did pretty well.

[00:09:35] [SPEAKER_03]: So we kind of, that year we kind of put NAU on the map in the construction management deal or schools, I guess.

[00:09:44] [SPEAKER_03]: And so it was really kind of, it was really, really a lot of fun.

[00:09:47] [SPEAKER_03]: Made a lot of great connections and friends and things like that.

[00:09:51] [SPEAKER_03]: And took the granite construction company hosted the, or sponsored or hosted the heavy civil.

[00:09:59] [SPEAKER_03]: And so coming out of school, I wasn't, I didn't really have my college degree yet.

[00:10:06] [SPEAKER_03]: So I was still a few credits short, but I needed to get out of school.

[00:10:10] [SPEAKER_03]: I needed to get a job.

[00:10:11] [SPEAKER_03]: I needed to get a career going pretty quick.

[00:10:13] [SPEAKER_03]: So granite was the only one that was going to hire me as a full-time salaried employee and all these things.

[00:10:23] [SPEAKER_03]: And so fantastic.

[00:10:25] [SPEAKER_03]: Going with granite.

[00:10:26] [SPEAKER_03]: I like granite anyway, like the people in the company.

[00:10:32] [SPEAKER_03]: And one day one of the project managers called me up and says, hey, this is Michael.

[00:10:38] [SPEAKER_03]: Michael Dirksen out of, you know, the southeast division of granite.

[00:10:43] [SPEAKER_03]: Do you want to come work for me in North Carolina?

[00:10:47] [SPEAKER_03]: And I was like, yeah, sure.

[00:10:49] [SPEAKER_03]: So I think it was like, that's how the conversation went.

[00:10:52] [SPEAKER_03]: He's like, great.

[00:10:53] [SPEAKER_03]: Well, when can you be here?

[00:10:54] [SPEAKER_03]: And I said, well, I've got some, it was like Friday and I was out of, I was out of, I was packed up a U-Haul and driving across the country the next week.

[00:11:03] [SPEAKER_03]: Okay.

[00:11:04] [SPEAKER_03]: And so made it to, made it to North Carolina.

[00:11:08] [SPEAKER_03]: Had a great time in North Carolina.

[00:11:11] [SPEAKER_03]: Worked as an engineer for 13 bridges.

[00:11:13] [SPEAKER_03]: Okay.

[00:11:14] [SPEAKER_03]: On I-40.

[00:11:15] [SPEAKER_03]: Writing from, you know, Chapel Hill to Raleigh.

[00:11:20] [SPEAKER_03]: Coming out of college with, you know, a little bit of money.

[00:11:23] [SPEAKER_03]: Sure.

[00:11:24] [SPEAKER_03]: You know, you're next to UNC, NC State, Duke.

[00:11:27] [SPEAKER_03]: Wait for all of these massive ACC schools.

[00:11:30] [SPEAKER_03]: Sure.

[00:11:31] [SPEAKER_03]: Just fun times.

[00:11:32] [SPEAKER_03]: And living right in the heart of it.

[00:11:34] [SPEAKER_03]: You know, but I had a job and I had a career.

[00:11:36] [SPEAKER_03]: And so I wasn't, had a little bit of money.

[00:11:38] [SPEAKER_03]: So I had a great time.

[00:11:40] [SPEAKER_03]: And then after two years of working for Granite, it's time to come back to work with my dad.

[00:11:47] [SPEAKER_03]: So I came back in, this was 2000, 2002.

[00:11:53] [SPEAKER_03]: Started working with my dad.

[00:11:54] [SPEAKER_03]: Okay.

[00:11:56] [SPEAKER_03]: Started out building homes for the Indian Reservation.

[00:11:59] [SPEAKER_03]: My dad had a couple of projects with the Indian Reservation building homes.

[00:12:02] [SPEAKER_03]: Up north?

[00:12:03] [SPEAKER_03]: No, south.

[00:12:05] [SPEAKER_03]: Gila River.

[00:12:05] [SPEAKER_03]: Gila River.

[00:12:06] [SPEAKER_03]: Okay.

[00:12:06] [SPEAKER_03]: Gila River.

[00:12:07] [SPEAKER_03]: And started building homes and figuring out how to do commercial construction.

[00:12:14] [SPEAKER_03]: Learning about the business side of things.

[00:12:16] [SPEAKER_03]: Sure.

[00:12:17] [SPEAKER_03]: Negotiating subcontracts and those kind of things.

[00:12:19] [SPEAKER_03]: And, you know, I had always enjoyed that side of it.

[00:12:24] [SPEAKER_03]: But at the same time, I wanted, always wanted to run the business.

[00:12:27] [SPEAKER_03]: So after a couple of years, I had a conversation with my dad.

[00:12:30] [SPEAKER_03]: I said, you know, you really like doing the jobs.

[00:12:34] [SPEAKER_03]: He likes to go out and do the jobs and work with the subs and, you know, figure out how to do the thing.

[00:12:42] [SPEAKER_03]: Right?

[00:12:42] [SPEAKER_03]: Whatever it is, like the project gets really involved in the detail and what is it and how are we going to do this?

[00:12:49] [SPEAKER_03]: How can we do this a little bit better?

[00:12:51] [SPEAKER_03]: Yeah.

[00:12:51] [SPEAKER_03]: You know, really kind of innovative in how he approached it.

[00:12:54] [SPEAKER_03]: It's really meticulous.

[00:12:56] [SPEAKER_03]: And so I wanted to go play with the accountants, learn about the business side of things, deal with the attorneys and all of those things.

[00:13:07] [SPEAKER_03]: And really grow the business.

[00:13:09] [SPEAKER_03]: Talking about going out and meeting clients and new clients and doing these kind of things.

[00:13:14] [SPEAKER_03]: And learning what the clients needed in order to really, you know, get the job.

[00:13:20] [SPEAKER_03]: Sure.

[00:13:21] [SPEAKER_03]: You know, sales essentially.

[00:13:23] [SPEAKER_03]: And so I said, why don't I do this and you just go do the job.

[00:13:27] [SPEAKER_03]: I'll go do this.

[00:13:29] [SPEAKER_03]: Yeah.

[00:13:30] [SPEAKER_03]: You go do that.

[00:13:31] [SPEAKER_03]: Right.

[00:13:31] [SPEAKER_03]: Because I didn't really, you know, I was fine going out in the field, but it wasn't what I really enjoyed.

[00:13:36] [SPEAKER_03]: Sure.

[00:13:36] [SPEAKER_03]: And so I would, this is what I liked.

[00:13:41] [SPEAKER_03]: And so I started, he said, yeah, fine.

[00:13:45] [SPEAKER_03]: Okay.

[00:13:45] [SPEAKER_03]: Do whatever you want.

[00:13:46] [SPEAKER_03]: He was game for it.

[00:13:46] [SPEAKER_03]: Yeah, he was game.

[00:13:47] [SPEAKER_03]: I was waiting for the, no, I don't want to do that.

[00:13:49] [SPEAKER_03]: No, because he hated dealing with the CPAs.

[00:13:52] [SPEAKER_03]: All right.

[00:13:52] [SPEAKER_03]: Yeah.

[00:13:52] [SPEAKER_03]: He hated dealing with the bonding company.

[00:13:54] [SPEAKER_03]: He hated, because the bonding company is asking him for this and this and all these things.

[00:13:58] [SPEAKER_03]: Sure.

[00:13:58] [SPEAKER_03]: And he's like, you know, I don't want to do that.

[00:14:02] [SPEAKER_03]: Yeah.

[00:14:02] [SPEAKER_03]: And so it's, let me handle all this.

[00:14:04] [SPEAKER_03]: And so I started handling those types of things.

[00:14:06] [SPEAKER_03]: And it was, it wasn't like a dramatic shift.

[00:14:09] [SPEAKER_03]: It was more of like just a, like a changing, changing roles and things like that.

[00:14:14] [SPEAKER_03]: And I thought it was, I think he enjoyed it and I enjoyed it because now he's doing what he wants to do.

[00:14:19] [SPEAKER_03]: Yeah.

[00:14:19] [SPEAKER_03]: And I get to do what I want to do.

[00:14:21] [SPEAKER_03]: And we did, did everybody in the company kind of jump behind you guys?

[00:14:24] [SPEAKER_03]: Yeah.

[00:14:25] [SPEAKER_03]: Oh, yeah.

[00:14:25] [SPEAKER_03]: Yeah.

[00:14:26] [SPEAKER_03]: Yeah.

[00:14:26] [SPEAKER_03]: For sure.

[00:14:26] [SPEAKER_04]: Yeah.

[00:14:27] [SPEAKER_04]: For sure.

[00:14:27] [SPEAKER_03]: They were, you know, it was fine because nobody really, it was our company.

[00:14:34] [SPEAKER_03]: So nobody was really going to say anything.

[00:14:36] [SPEAKER_03]: But, you know, I made a few mistakes along the way, but essentially we really started growing.

[00:14:42] [SPEAKER_03]: We really started doing bigger jobs and bigger jobs because I looked at how much time we were spending on just the little projects.

[00:14:51] [SPEAKER_03]: Sure.

[00:14:51] [SPEAKER_03]: And why not do the bigger jobs?

[00:14:53] [SPEAKER_03]: Sure.

[00:14:53] [SPEAKER_03]: It's the same amount of time, whether it's $100,000 or $10 million, it's the same amount of work.

[00:15:00] [SPEAKER_03]: Sure.

[00:15:00] [SPEAKER_03]: Yeah.

[00:15:00] [SPEAKER_03]: There's other infrastructure that we need to do these types of things, but it's really, you know, it's the same amount of work.

[00:15:08] [SPEAKER_03]: So, so we started doing bigger and bigger jobs.

[00:15:12] [SPEAKER_03]: And then, and then we started doing federal government work, which is a lot of fun because the federal government comes up with some wacky things to do.

[00:15:23] [SPEAKER_03]: And so, and these are always big, expensive projects to do.

[00:15:27] [SPEAKER_03]: So.

[00:15:28] [SPEAKER_03]: Good margins though, probably.

[00:15:30] [SPEAKER_03]: Oh, huge margins.

[00:15:32] [SPEAKER_03]: Huge margins.

[00:15:32] [SPEAKER_03]: I'll take a 40%.

[00:15:33] [SPEAKER_03]: Okay.

[00:15:34] [SPEAKER_03]: 40, you know, most contractors buy 10% on a commercial project, 20%.

[00:15:39] [SPEAKER_03]: We're doing 40% margins on it.

[00:15:41] [SPEAKER_03]: And so, but we're doing those margins because I got so good at understanding what the government wanted.

[00:15:49] Got it.

[00:15:50] [SPEAKER_03]: And being able to push those buttons that they were calling me saying, Hey, Chris, can you figure this out for us?

[00:15:58] [SPEAKER_03]: Sure.

[00:15:59] [SPEAKER_03]: And when you have a client that says, Hey, can you figure this out for us?

[00:16:03] [SPEAKER_03]: Well, how much, how much budget do we have to fix this problem?

[00:16:07] Right.

[00:16:07] [SPEAKER_03]: You know, like you've got this big problem.

[00:16:10] [SPEAKER_03]: I can find a solution.

[00:16:12] [SPEAKER_03]: Right.

[00:16:13] [SPEAKER_03]: But is it, is our budget a thousand dollars or is it 10 million?

[00:16:19] [SPEAKER_03]: You know, what, what's our budget?

[00:16:20] [SPEAKER_03]: What are we dealing with?

[00:16:21] [SPEAKER_03]: Right.

[00:16:22] [SPEAKER_03]: And then the next question I always ask was, well, what if that's not enough?

[00:16:26] [SPEAKER_03]: Good question.

[00:16:27] [SPEAKER_03]: You know, like somebody says, well, I've got 200,000.

[00:16:30] [SPEAKER_03]: Well, what if that's not enough?

[00:16:32] [SPEAKER_03]: Sure.

[00:16:32] [SPEAKER_03]: Go get more.

[00:16:33] [SPEAKER_03]: Right.

[00:16:33] [SPEAKER_03]: And the government is one of the few clients.

[00:16:37] [SPEAKER_03]: It's the prince throwing money.

[00:16:38] [SPEAKER_03]: They just get, go get more.

[00:16:39] [SPEAKER_02]: They just go get more.

[00:16:40] [SPEAKER_03]: Sure.

[00:16:41] [SPEAKER_03]: And so, and so I said, well, this is great.

[00:16:43] [SPEAKER_03]: And I figured out how, but, but I also understood them.

[00:16:47] [SPEAKER_03]: I also understood what they needed to get their job done well.

[00:16:52] [SPEAKER_03]: And so because I was able to really understand what their needs were and how to get, to make them look like all stars.

[00:17:02] [SPEAKER_03]: Yeah.

[00:17:02] [SPEAKER_03]: They wanted me to do all their work.

[00:17:04] [SPEAKER_03]: So that's how we really, that's how we really started doing projects in Montana, downtown San Francisco, Washington, D.C., Connecticut, Texas, Seattle, all over the country.

[00:17:20] [SPEAKER_03]: But here's the thing is if you look at it from a, from a multifamily marketing perspective, like looking at a market, 48 states is our market.

[00:17:32] [SPEAKER_03]: Right.

[00:17:33] [SPEAKER_03]: You know, one client, federal government, these, this is our client.

[00:17:37] [SPEAKER_03]: They have the same rules that they do in Seattle that they do in Florida or Texas.

[00:17:42] [SPEAKER_03]: And what are you building?

[00:17:44] [SPEAKER_03]: Everything.

[00:17:45] [SPEAKER_03]: Okay.

[00:17:45] [SPEAKER_03]: Anything and everything.

[00:17:46] [SPEAKER_03]: The most complex, weird projects.

[00:17:48] [SPEAKER_03]: Okay.

[00:17:48] [SPEAKER_03]: That you can come up with.

[00:17:50] [SPEAKER_03]: You know, for example, we had to, one of the projects that we did in Glacier National Park, there's a dam there.

[00:17:58] [SPEAKER_03]: I forget the name of the dam.

[00:17:59] [SPEAKER_03]: I want to say it's Hungry Horse Dam, but maybe that's another project.

[00:18:03] [SPEAKER_03]: Maybe that's the one in Montana.

[00:18:04] [SPEAKER_03]: I can't remember the name of the dam.

[00:18:06] [SPEAKER_03]: But we had to, we had to figure out how to, so the problem was, I'll start with the problem.

[00:18:13] [SPEAKER_03]: The problem was, is they have these, it snows up there pretty heavily.

[00:18:17] [SPEAKER_03]: Sure.

[00:18:18] [SPEAKER_03]: And so they have these snow clouds that come by and plow the sidewalk.

[00:18:21] [SPEAKER_03]: But they have these light fixtures that are from when the dam was ready to be built in 1910 or 1920 or something like that.

[00:18:29] [SPEAKER_03]: Okay.

[00:18:30] [SPEAKER_03]: But they stick out about this far, you know, 10 inches or so.

[00:18:34] [SPEAKER_03]: Sure.

[00:18:35] [SPEAKER_03]: So the snow plow comes by and clips these off as they drive down the sidewalk.

[00:18:41] [SPEAKER_03]: So we have to figure out how to make these lights flush, but they need to look like they're from 1920.

[00:18:48] [SPEAKER_03]: Okay.

[00:18:48] [SPEAKER_03]: And they need to be LED.

[00:18:50] [SPEAKER_03]: Okay.

[00:18:51] [SPEAKER_03]: And so energy efficient.

[00:18:54] [SPEAKER_03]: Yeah.

[00:18:55] [SPEAKER_03]: So we figure it out, right?

[00:18:58] [SPEAKER_03]: Right.

[00:18:58] [SPEAKER_03]: What's the solution?

[00:18:59] [SPEAKER_03]: So we budget these things for, I think it was, you know, we said, I don't know what it's going to be, you know, $1,500 a light, you know?

[00:19:08] [SPEAKER_03]: And so we got the contract.

[00:19:12] [SPEAKER_03]: We got the award.

[00:19:13] [SPEAKER_03]: And so, but we presented it in a way that says, this is our solution.

[00:19:19] [SPEAKER_03]: This is what it's going to cost.

[00:19:21] [SPEAKER_03]: Yeah.

[00:19:22] [SPEAKER_03]: And then through the process, we said, well, we figured out a better way, right?

[00:19:27] [SPEAKER_03]: We used our ingenuity and things like that.

[00:19:29] [SPEAKER_03]: And it was, it was, it was, it was a fixed price contract.

[00:19:35] [SPEAKER_03]: Got it.

[00:19:35] [SPEAKER_03]: So we're going to get paid X dollars.

[00:19:38] [SPEAKER_03]: If it costs us $2,000 to make the light, we're out.

[00:19:42] [SPEAKER_03]: But it ended up only costing us about a hundred bucks a light.

[00:19:45] Wow.

[00:19:46] [SPEAKER_03]: So we capture all of that because we figured out a better way.

[00:19:49] [SPEAKER_03]: Sure.

[00:19:50] [SPEAKER_03]: Here we are.

[00:19:51] [SPEAKER_03]: And then we do, we just happened to go up in wintertime and put these lights on.

[00:19:57] [SPEAKER_03]: Okay.

[00:19:57] [SPEAKER_03]: And so we had to replace all these lights.

[00:19:59] [SPEAKER_03]: So those are the kind of problems where they have these, these, they don't know how to solve it.

[00:20:04] [SPEAKER_03]: Sure.

[00:20:05] [SPEAKER_03]: They just have this, this snowplow that keeps clipping these lights off and they need to figure out a better way.

[00:20:10] [SPEAKER_03]: So we figured out a better way on how to help them fix their solution.

[00:20:14] [SPEAKER_03]: And so we did that a hundred different times.

[00:20:18] [SPEAKER_02]: You know, when I worked for the environmental services industry.

[00:20:22] [SPEAKER_02]: Yeah.

[00:20:23] [SPEAKER_02]: Um, the, the magic button was if you can be involved in building the RFP that you're going to answer for.

[00:20:30] [SPEAKER_02]: Yeah.

[00:20:31] [SPEAKER_02]: Then obviously you're the one that's going to get chosen at the end of the RFP process.

[00:20:34] [SPEAKER_03]: Most of the time.

[00:20:35] [SPEAKER_03]: Okay.

[00:20:36] [SPEAKER_03]: Most of the time.

[00:20:37] [SPEAKER_03]: There were a couple of times where we came up with solutions in the government because they still have checks and balances.

[00:20:41] [SPEAKER_03]: Sure.

[00:20:42] [SPEAKER_03]: They have processes and things like that.

[00:20:43] [SPEAKER_03]: And we helped them come up with solutions that we weren't competitive on.

[00:20:48] [SPEAKER_03]: Okay.

[00:20:48] [SPEAKER_03]: And so we still lost out on some of that, but that's okay because we're, we're just here to help.

[00:20:54] [SPEAKER_03]: Yeah.

[00:20:54] [SPEAKER_03]: You know, and we're not making money here.

[00:20:57] [SPEAKER_03]: There's plenty.

[00:20:57] [SPEAKER_03]: There's, we had, I got a report twice a week of every construction and maintenance project that got bid.

[00:21:05] [SPEAKER_03]: Wow.

[00:21:06] [SPEAKER_03]: That was bid in the next 30 days.

[00:21:08] [SPEAKER_03]: And that report was anywhere in, in the fiscal year.

[00:21:11] [SPEAKER_03]: Their fiscal year ends, I think it's either August 31st or September 31st.

[00:21:16] [SPEAKER_03]: It's one of those, one of those days.

[00:21:17] [SPEAKER_03]: But it would, a month before it would grow to like 60 or 80 pages.

[00:21:22] Wow.

[00:21:22] [SPEAKER_03]: But then in October it would only be 10 or 15 pages.

[00:21:25] [SPEAKER_03]: Okay.

[00:21:26] [SPEAKER_03]: And so it would grow over the year because as the year, as the fiscal year closes out, they're trying to spill again funds.

[00:21:32] [SPEAKER_03]: Yep.

[00:21:33] [SPEAKER_03]: And so just got really great at understanding what these contractors, officers needed.

[00:21:39] Okay.

[00:21:39] [SPEAKER_03]: How to talk to them and how to, you know, talk to them to get them what they needed.

[00:21:46] [SPEAKER_03]: Sure.

[00:21:47] [SPEAKER_03]: To get the job done.

[00:21:48] [SPEAKER_03]: And, and because they're just, they're contract managers, they're paper pushers, and they just need dies, eyes,

[00:21:55] [SPEAKER_03]: dotted, and T's crossed.

[00:21:56] [SPEAKER_03]: Yep.

[00:21:57] [SPEAKER_03]: And that's my job.

[00:21:57] [SPEAKER_03]: Okay.

[00:21:58] [SPEAKER_03]: And so to make sure that we had all of that covered.

[00:22:00] [SPEAKER_03]: And then there's, I can go into the details.

[00:22:03] [SPEAKER_03]: Sure.

[00:22:04] [SPEAKER_03]: Yeah.

[00:22:04] [SPEAKER_03]: We don't have enough time for that today.

[00:22:06] [SPEAKER_03]: But no, it was just a great experience.

[00:22:09] [SPEAKER_03]: And then in 2018, my dad wanted to retire.

[00:22:12] [SPEAKER_03]: Got it.

[00:22:13] [SPEAKER_03]: And so after doing that for a lot of years, having a lot of fun, enormous amounts of success, just wanted to change.

[00:22:22] [SPEAKER_03]: He wanted to retire and I didn't want to do that anymore.

[00:22:25] Okay.

[00:22:26] [SPEAKER_03]: And so that's how I got into the real estate side of things.

[00:22:30] [SPEAKER_01]: Are you interested in real estate investing, but don't know where to get started or think you don't have the time or money?

[00:22:36] [SPEAKER_01]: Are you stuck in your W-2 because the golden handcuffs make it hard to walk away?

[00:22:41] [SPEAKER_01]: If this sounds like you, check out impactequity.net and schedule some time to talk with the founder, Randy Smith.

[00:22:48] [SPEAKER_01]: Randy went from massive income to leaving his W-2 through passive income, and he can help you do the same.

[00:22:57] [SPEAKER_03]: Don't forget, I woke up, I was taking a nap on a Sunday afternoon and wake up and there's like a commercial for, you know, real estate investing 101 class.

[00:23:11] [SPEAKER_03]: Okay.

[00:23:12] [SPEAKER_03]: And so you've been there, done that, gone down those rabbit holes.

[00:23:15] [SPEAKER_03]: And so I go to this thing and then we go, they teach you how to fix and flip and do all these things and buy all this expensive coaching.

[00:23:22] [SPEAKER_03]: Sure.

[00:23:23] [SPEAKER_03]: And then in hindsight, I think, well, that was stupid for me to invest all that money.

[00:23:27] [SPEAKER_03]: Sure.

[00:23:29] [SPEAKER_03]: But still made some good connections out of people I still talk to today.

[00:23:33] [SPEAKER_03]: Right.

[00:23:33] [SPEAKER_03]: And some good mentors.

[00:23:35] [SPEAKER_03]: I got some good mentors out of it.

[00:23:36] [SPEAKER_03]: Okay.

[00:23:37] [SPEAKER_03]: So that was kind of the impetus of that and then sort of fixing and flipping, you know, homes in Paradise Valley.

[00:23:42] [SPEAKER_03]: Okay.

[00:23:43] [SPEAKER_03]: You know, buying them for $700,000, $800,000, a million dollars and investing half a million into them and then selling them.

[00:23:50] [SPEAKER_03]: Okay.

[00:23:50] [SPEAKER_03]: And did that for a couple of years and then bought a couple of small multifamily properties and kind of got that, you know, cash flow side of things.

[00:24:01] [SPEAKER_03]: Sure.

[00:24:01] [SPEAKER_03]: And then tried the short-term rental piece.

[00:24:05] [SPEAKER_03]: And then a couple of years ago, I just, you know, I just said, this isn't really what I want to be doing.

[00:24:12] [SPEAKER_03]: I don't want to be doing fix and flips.

[00:24:14] [SPEAKER_03]: And coming from a commercial industry into now basically doing home renovations, that's a night and day difference.

[00:24:25] [SPEAKER_03]: Like my expectations were commercial grade, you know.

[00:24:28] [SPEAKER_03]: Right.

[00:24:29] [SPEAKER_03]: I'm going to hire a sub that has an accounts payable, accounts receivable department and I can.

[00:24:34] [SPEAKER_03]: Sure.

[00:24:35] [SPEAKER_03]: They have crews and things like that.

[00:24:37] [SPEAKER_03]: Now it's changed and I'm hiring guys that work out of the back of their trucks.

[00:24:42] [SPEAKER_03]: Yeah.

[00:24:42] [SPEAKER_03]: Well, you know, they don't communicate very well.

[00:24:47] [SPEAKER_03]: And, you know, I'm expecting them to show up on a job site and now he's fishing.

[00:24:52] [SPEAKER_03]: Right.

[00:24:52] [SPEAKER_03]: You know, and it's like, well, I don't need any more money this week.

[00:24:56] [SPEAKER_03]: Right.

[00:24:56] [SPEAKER_03]: I'm like, well, I need to get my job done.

[00:24:58] [SPEAKER_03]: Sure.

[00:24:59] [SPEAKER_03]: And so that really frustrated me.

[00:25:03] [SPEAKER_03]: Yeah.

[00:25:03] [SPEAKER_03]: And it really, you know, making that understanding that this is like, I need to change my brain.

[00:25:09] [SPEAKER_03]: Sure.

[00:25:10] [SPEAKER_03]: Because this is now how things are getting done.

[00:25:13] [SPEAKER_03]: And it never, it hasn't sat well with me.

[00:25:17] [SPEAKER_03]: So, so a couple of years ago, I just said, you know, I need to do, go back to doing what I originally, the intent was is to do new development.

[00:25:30] [SPEAKER_03]: Sure.

[00:25:30] [SPEAKER_03]: And so go do new commercial development and started looking at property, started looking at land, started doing things, bought a couple of pieces of property.

[00:25:41] [SPEAKER_03]: They're now for sale or being there and we're under contract to close.

[00:25:46] [SPEAKER_03]: But I partnered with a guy or a company out of Northern California, a light tech project.

[00:25:53] [SPEAKER_03]: We're coming in as, as kind of helping them out with some of the light tech pieces that they need, some, some nonprofit stuff and kind of helping them check their boxes and doing those kinds of things.

[00:26:05] [SPEAKER_03]: So, so kind of getting that kind of situated.

[00:26:08] [SPEAKER_03]: And then I had this, this last year, I had a whale of a project come.

[00:26:16] [SPEAKER_03]: Okay.

[00:26:16] [SPEAKER_03]: Perfect.

[00:26:17] [SPEAKER_03]: Great project.

[00:26:18] [SPEAKER_03]: I know I, I, I could do the project with, I could build it.

[00:26:24] [SPEAKER_03]: Right.

[00:26:24] [SPEAKER_03]: Yeah.

[00:26:25] [SPEAKER_03]: I could do it.

[00:26:26] [SPEAKER_03]: I knew I understood that I understood enough about the real estate side, about the development stuff.

[00:26:30] [SPEAKER_03]: Sure.

[00:26:31] [SPEAKER_03]: Um, to understand how to develop it.

[00:26:34] [SPEAKER_03]: And this is the Florida project.

[00:26:35] [SPEAKER_03]: This is the Florida project.

[00:26:37] [SPEAKER_03]: Yeah.

[00:26:37] [SPEAKER_03]: And so, but then the capital stack, I hit the capital stack and I go, holy shit, I got to raise $26 million in equity.

[00:26:45] [SPEAKER_03]: Sure.

[00:26:45] [SPEAKER_03]: And I got three months to do it.

[00:26:47] [SPEAKER_03]: And so I'm doing everything I can to call everybody I know, you know, Hey, you know, look for money and do this.

[00:26:56] [SPEAKER_03]: I need 26 million.

[00:26:57] [SPEAKER_03]: Everybody kind of laughs.

[00:26:59] [SPEAKER_03]: Right.

[00:26:59] [SPEAKER_03]: Right.

[00:27:00] [SPEAKER_03]: Come on.

[00:27:01] [SPEAKER_03]: But then after all of that, I, you know, we're like, shit, not able to execute on, you know, close a lot of escrow, get earnest money back.

[00:27:10] [SPEAKER_03]: Okay.

[00:27:11] [SPEAKER_03]: So you did get your money back.

[00:27:12] [SPEAKER_03]: Oh yeah.

[00:27:12] [SPEAKER_03]: Go hard on it.

[00:27:13] [SPEAKER_03]: No, no, no, no, no.

[00:27:13] [SPEAKER_03]: We didn't.

[00:27:14] [SPEAKER_03]: We know.

[00:27:14] [SPEAKER_03]: It was coming down to the wire and I said, can't do it.

[00:27:19] [SPEAKER_03]: You know, you got to take that deep breath and just say, shit, you know, I, I, I didn't, I didn't win this time.

[00:27:26] [SPEAKER_03]: And did you have investor capital at all?

[00:27:28] [SPEAKER_03]: We, I had, I had some soft commits, but I wasn't ready to, to say send it until I knew we were going to close.

[00:27:38] [SPEAKER_03]: If I had, if I had had 26 million soft commits, I would have said, let's do it.

[00:27:42] [SPEAKER_03]: Sure.

[00:27:42] [SPEAKER_03]: Wire that money tomorrow or you're out, you know, kind of thing.

[00:27:45] [SPEAKER_03]: And so, so it kind of, you know, you take it, take the hit and you're like, ah, you know, it wasn't a loss, but it wasn't a win either.

[00:27:57] [SPEAKER_03]: So what went right and what went, what can we do better and those kinds of things.

[00:28:02] [SPEAKER_03]: And so, so I said in three months, I built some good relationships with some huge private equity guys.

[00:28:09] [SPEAKER_03]: Okay.

[00:28:11] [SPEAKER_03]: And that's a huge positive to come out of it because a week after we had pulled out, I had had a term sheet come in the email and God damn it.

[00:28:22] [SPEAKER_03]: It was just a, just a week late, you know?

[00:28:25] [SPEAKER_03]: And so, and the terms were, weren't perfect.

[00:28:31] [SPEAKER_03]: They were, they were negotiable.

[00:28:32] [SPEAKER_03]: I felt like, but they were, but it was done.

[00:28:34] [SPEAKER_02]: Sure.

[00:28:35] [SPEAKER_02]: It was done.

[00:28:35] [SPEAKER_03]: And I said, holy cow, this.

[00:28:39] [SPEAKER_03]: So, built some good relationships.

[00:28:41] [SPEAKER_03]: And then I kind of took a step back and said, okay, well, let's kind of revisit this.

[00:28:45] [SPEAKER_03]: Let's go build relationships, find the right people that are aligned in what we're trying to accomplish here.

[00:28:54] [SPEAKER_03]: Yep.

[00:28:55] [SPEAKER_03]: And so the next time I have a project like that, I'm only making 10 or 15 calls, not 100 calls.

[00:29:03] [SPEAKER_03]: Sure.

[00:29:03] [SPEAKER_03]: And not going, well, if you don't know somebody, who else does?

[00:29:06] [SPEAKER_03]: Right.

[00:29:06] [SPEAKER_03]: You know, and I got to go, you know, that kind of thing.

[00:29:10] [SPEAKER_03]: So, so that was kind of how I kind of restructured things and kind of thought about it again.

[00:29:14] [SPEAKER_03]: I said, okay, well, let's, let's revisit this, but let's approach it from a different perspective.

[00:29:21] [SPEAKER_03]: And that's how you and I got connected.

[00:29:23] [SPEAKER_03]: Yep.

[00:29:23] [SPEAKER_03]: Because I'm out here just, I actually Googled.

[00:29:26] [SPEAKER_03]: I just went to Google and said real estate private equity companies and just started knocking off the list, calling people, emailing people, and just reaching out.

[00:29:36] [SPEAKER_03]: Yeah.

[00:29:36] [SPEAKER_03]: You know, in the last couple, last week I've, I've actually physically driven out to different companies.

[00:29:41] [SPEAKER_03]: Right.

[00:29:42] [SPEAKER_03]: And just, you know, just to meet people.

[00:29:46] [SPEAKER_03]: You know, I'm not pitching a deal.

[00:29:47] [SPEAKER_03]: Right.

[00:29:48] [SPEAKER_03]: I'm not coming to, you know, and, and, and I know what it's like to get pitched deals all the time.

[00:29:53] [SPEAKER_03]: Yeah.

[00:29:53] [SPEAKER_03]: So I don't come to you with a deal.

[00:29:55] [SPEAKER_03]: I come to you with like a relationship.

[00:29:57] [SPEAKER_03]: How, how can, how can I help you get to where you're at?

[00:30:03] [SPEAKER_03]: And that was, and I thought this would be a great spot to kind of come together.

[00:30:08] [SPEAKER_03]: It's just started this, just kind of reformulated our studio here.

[00:30:12] [SPEAKER_03]: Got a cool TV, got all this stuff.

[00:30:14] [SPEAKER_03]: So, so I thought, why not just come in and, and shoot the shit and have a record a podcast on both sides.

[00:30:20] [SPEAKER_03]: I think it's great.

[00:30:21] [SPEAKER_03]: And then kind of build a relationship.

[00:30:24] [SPEAKER_03]: Yeah.

[00:30:25] [SPEAKER_03]: So that was kind of, that's my story from, from, from, from high school to now.

[00:30:31] [SPEAKER_02]: I love it.

[00:30:32] [SPEAKER_02]: I love it.

[00:30:33] [SPEAKER_02]: So that's, I mean, that's a hell of a journey.

[00:30:35] [SPEAKER_02]: You've done a lot of interesting things.

[00:30:36] [SPEAKER_02]: You've had a lot of success.

[00:30:39] [SPEAKER_04]: Yeah.

[00:30:39] [SPEAKER_02]: Certainly some bumps along the way, I would imagine.

[00:30:42] [SPEAKER_02]: Sure.

[00:30:43] [SPEAKER_02]: But here we are today.

[00:30:44] [SPEAKER_04]: Yeah.

[00:30:45] [SPEAKER_02]: And so the goal now is setting up private equity firm.

[00:30:50] [SPEAKER_02]: Yep.

[00:30:51] [SPEAKER_02]: And your goal is to go out and find projects that you can connect capital with your resources and do some deals.

[00:30:59] [SPEAKER_04]: Yep.

[00:30:59] [SPEAKER_04]: Right?

[00:30:59] [SPEAKER_02]: So what, what does that look like?

[00:31:01] [SPEAKER_02]: What are you looking, what are you chasing right now?

[00:31:04] [SPEAKER_02]: What type of deal looks attractive to you?

[00:31:07] [SPEAKER_02]: What's, what markets are you looking at?

[00:31:10] [SPEAKER_03]: All of that.

[00:31:10] [SPEAKER_03]: Yeah.

[00:31:11] [SPEAKER_03]: Well, right now I'm, I'm only looking, well, I, I, I lied.

[00:31:15] [SPEAKER_03]: I say, I was going to say Phoenix, but Florida, anywhere that's that.

[00:31:19] [SPEAKER_03]: I love Texas markets.

[00:31:21] [SPEAKER_03]: Okay.

[00:31:21] [SPEAKER_03]: Um, places where number one, people are moving to obviously job growth.

[00:31:27] [SPEAKER_03]: You know, I love Phoenix, North Phoenix, uh, Northwest Phoenix, particularly for new development.

[00:31:34] [SPEAKER_03]: Um, there's a lot of, you know, for, for lots of reasons, quite frankly, because we can't go further south.

[00:31:40] [SPEAKER_03]: Yep.

[00:31:40] [SPEAKER_03]: Um, because the Indian reservation can't go further east because of that Indian reservation.

[00:31:45] [SPEAKER_03]: So there's this tiny little corridor going out towards gold Canyon that, that can kind of squeak out some, some, some new development out there, but everything is west and north.

[00:31:56] [SPEAKER_03]: And if you look at the metrics along the 303, there's, you know, Amazon has huge, you know, warehouses out there.

[00:32:05] [SPEAKER_03]: Walmart has distribution facilities out there.

[00:32:07] [SPEAKER_03]: Um, there's huge amounts of industrial growth overall off the 303, which is way out west.

[00:32:14] Yep.

[00:32:14] [SPEAKER_03]: And you go out towards Buckeye Goodyear.

[00:32:18] [SPEAKER_03]: Same thing.

[00:32:19] [SPEAKER_03]: Microsoft has huge plans for that.

[00:32:22] [SPEAKER_03]: Go out north.

[00:32:23] [SPEAKER_03]: You've got Taiwan Semiconductor.

[00:32:25] [SPEAKER_03]: So, you know, the moniker of Phoenix, you know, depending on which circles you're in is the Silicon Desert because, you know, when COVID, everybody left California.

[00:32:35] [SPEAKER_03]: Yeah.

[00:32:36] [SPEAKER_03]: And want moved to Nevada, Utah, and Arizona.

[00:32:40] [SPEAKER_03]: In Texas, of course, too.

[00:32:41] [SPEAKER_03]: But, you know, just close enough to California that we don't have to deal with the rules of California.

[00:32:47] [SPEAKER_03]: Sure.

[00:32:47] [SPEAKER_03]: But we can still visit every once in a while.

[00:32:49] [SPEAKER_03]: Absolutely, yeah.

[00:32:50] [SPEAKER_03]: And we don't have the hurricanes like this, right?

[00:32:52] [SPEAKER_03]: Yeah.

[00:32:52] [SPEAKER_03]: We don't have, we don't have hurricanes.

[00:32:53] [SPEAKER_03]: We got monsoons, but that's only for like 30 minutes.

[00:32:56] [SPEAKER_02]: Yeah.

[00:32:56] [SPEAKER_02]: Exactly.

[00:32:57] [SPEAKER_02]: Every two years.

[00:32:58] [SPEAKER_02]: Yeah.

[00:32:58] [SPEAKER_02]: Yeah.

[00:32:58] [SPEAKER_02]: Right.

[00:32:58] [SPEAKER_02]: So.

[00:32:59] [SPEAKER_02]: And so what, what type of projects are we talking?

[00:33:01] [SPEAKER_02]: Built to rent.

[00:33:02] [SPEAKER_02]: Okay.

[00:33:03] [SPEAKER_02]: Yeah.

[00:33:03] [SPEAKER_02]: Built to rent.

[00:33:03] [SPEAKER_02]: Built to rent.

[00:33:04] [SPEAKER_02]: Built to rent.

[00:33:05] [SPEAKER_02]: So talk about that.

[00:33:06] [SPEAKER_02]: We haven't talked about that a lot on this show.

[00:33:08] [SPEAKER_04]: Yeah.

[00:33:08] [SPEAKER_02]: And I'm fascinated with the, with the asset class and it's like, we are in the mecca of

[00:33:14] [SPEAKER_02]: build to rent here in Arizona.

[00:33:16] [SPEAKER_02]: Yeah.

[00:33:16] [SPEAKER_02]: So yeah.

[00:33:17] [SPEAKER_02]: Talk about that a little bit.

[00:33:18] [SPEAKER_02]: What is the build to rent for the listener that doesn't even know what it is?

[00:33:22] [SPEAKER_03]: Well, built to rent is essentially, I hate to use the word tiny home because there's,

[00:33:29] [SPEAKER_03]: tiny home kind of has this, this moniker of like, it's like a trail.

[00:33:33] [SPEAKER_03]: Yeah.

[00:33:33] [SPEAKER_03]: It's like a, it's like a trailer and that's it, you know, but a tiny home is, you know,

[00:33:38] [SPEAKER_03]: six, 600 to 1200 square foot house.

[00:33:41] [SPEAKER_03]: Yep.

[00:33:43] [SPEAKER_03]: And nice house.

[00:33:45] [SPEAKER_03]: There's no, you know, it's like, it's like a, it's like an apartment only.

[00:33:49] [SPEAKER_03]: You're not, you don't have anybody above you or on the side of you.

[00:33:52] [SPEAKER_03]: You're showing walls, you know, no shared walls and that kind of stuff.

[00:33:56] [SPEAKER_03]: Might even have a backyard.

[00:33:57] [SPEAKER_03]: Or you probably have a little patio backyard, like a little patio that you think an apartment,

[00:34:02] [SPEAKER_03]: but on the ground.

[00:34:04] [SPEAKER_03]: And so, you know, you don't, number one, you don't get the density that you would in a,

[00:34:08] [SPEAKER_03]: in a multifamily development.

[00:34:10] [SPEAKER_03]: But I think that's, I think that's the direction a lot of, particularly Phoenix because of our,

[00:34:15] [SPEAKER_03]: our massive population growth, but is going only because I think we are still,

[00:34:22] [SPEAKER_03]: I think our, the, we talked a little bit about the younger generations,

[00:34:26] [SPEAKER_03]: but the younger generation is going to be a rental market.

[00:34:29] [SPEAKER_03]: So if they're, if they own a home, you're going to have to hire somebody to fix it.

[00:34:33] [SPEAKER_03]: But if they rent, they're going to have somebody else fix it.

[00:34:36] [SPEAKER_03]: Right.

[00:34:37] [SPEAKER_03]: You know, the landlord or you or me fix it or something.

[00:34:41] [SPEAKER_03]: So, um, the built to rent stuff.

[00:34:44] [SPEAKER_03]: And what I like about it too, is the multiple exits.

[00:34:48] [SPEAKER_02]: Talk about that a little bit.

[00:34:50] [SPEAKER_02]: Cause I've dug into that before and I hear different answers on this.

[00:34:53] [SPEAKER_03]: So yeah, well the one, the depends on the property and it depends on how well your relationship

[00:34:59] [SPEAKER_03]: is with the County and the state.

[00:35:02] [SPEAKER_03]: Sure.

[00:35:02] [SPEAKER_03]: The County and the city.

[00:35:04] [SPEAKER_03]: So for example, if you go into, into a lot of con, you know, like condo developments,

[00:35:11] [SPEAKER_03]: you know, or, or town hall developments, which is, which is essentially built to rent,

[00:35:16] [SPEAKER_03]: but it's just on a smaller scale.

[00:35:18] [SPEAKER_03]: You've got companies like BlackRock, Blackstone, KK&R.

[00:35:22] [SPEAKER_03]: Those guys are all funding like the Taylor Morrison's and the Katie Ulms to go out and

[00:35:25] [SPEAKER_03]: build these massive tracks.

[00:35:27] [SPEAKER_03]: Yeah.

[00:35:28] [SPEAKER_03]: These 20 acre, 250 unit properties with build to rent.

[00:35:34] [SPEAKER_03]: And, you know, those are, those are different types of developments.

[00:35:39] [SPEAKER_03]: Now those are on, those are on a traditional R3 type zoning, multifamily zoning.

[00:35:45] [SPEAKER_03]: Um, that would, you know, give you, I think a 15 to 17 units per acre, but then they don't,

[00:35:52] [SPEAKER_03]: they never get close to that because they're all single family houses.

[00:35:56] [SPEAKER_03]: So, but it has, it comes with a clubhouse pool, all the amenities you would have.

[00:36:01] [SPEAKER_03]: Common area stuff.

[00:36:02] [SPEAKER_03]: Yeah.

[00:36:02] [SPEAKER_03]: Common area stuff.

[00:36:03] [SPEAKER_03]: Um, so what I like about it is I just think that's the direction of the next generation.

[00:36:10] [SPEAKER_03]: Yep.

[00:36:10] [SPEAKER_03]: And so, uh, but the, going back to some of the exits and the town home type stuff, you can,

[00:36:18] [SPEAKER_03]: I won't say easily, but it's, it's an easier pitch to the city to say, we want a condo plat

[00:36:26] [SPEAKER_03]: this.

[00:36:27] [SPEAKER_03]: So each unit has its own.

[00:36:28] [SPEAKER_03]: So you rezone it.

[00:36:30] [SPEAKER_03]: So you, yeah, you're not rezoning it.

[00:36:34] [SPEAKER_03]: Okay.

[00:36:35] [SPEAKER_03]: But you're replatting it.

[00:36:37] Okay.

[00:36:37] [SPEAKER_03]: So you go to the, you create a plat and you send it into, you know, the city has to approve

[00:36:42] [SPEAKER_03]: it.

[00:36:43] [SPEAKER_03]: And then once the city approves it, then you can take it to the County and they'll record

[00:36:46] [SPEAKER_03]: it.

[00:36:47] [SPEAKER_03]: Okay.

[00:36:47] [SPEAKER_03]: So once you, what I like about that is if you say we want to, you know, rentals aren't

[00:36:58] [SPEAKER_03]: working, you know, we can sell it.

[00:37:00] [SPEAKER_03]: You can sell an individual law.

[00:37:02] [SPEAKER_03]: Individual.

[00:37:03] [SPEAKER_03]: Individually.

[00:37:04] [SPEAKER_03]: Yeah.

[00:37:04] [SPEAKER_03]: Interesting.

[00:37:04] [SPEAKER_03]: Okay.

[00:37:04] [SPEAKER_03]: And we've looked at properties where we have these condo plants and it's phenomenal because

[00:37:15] [SPEAKER_03]: we can give as an investor standpoint, we can say, okay, we're going to build 10 townhomes.

[00:37:22] [SPEAKER_03]: We're going to sell these three and you get your, you get your return of capital through

[00:37:28] [SPEAKER_03]: these three.

[00:37:28] [SPEAKER_03]: Right.

[00:37:29] [SPEAKER_03]: So you're, you're, you know, we're going to take debt, do all the things like a, like

[00:37:33] [SPEAKER_03]: a traditional development, but we sell these three, you get your capital back.

[00:37:38] [SPEAKER_03]: So now it's after two years or however long it takes to do the development process, you're

[00:37:45] [SPEAKER_03]: now get your capital back.

[00:37:46] [SPEAKER_03]: Like, isn't that great to hear from an investor?

[00:37:48] [SPEAKER_03]: Infinite returns from that.

[00:37:49] [SPEAKER_03]: So after that, it's free cashflow.

[00:37:52] [SPEAKER_03]: Yeah.

[00:37:52] [SPEAKER_03]: And so as long as the property's performing and things like that, there's, you know, there's

[00:37:57] [SPEAKER_03]: obviously, you know, but there's things that have to happen.

[00:37:59] [SPEAKER_03]: You know, you've got to make sure that rents are covering the debt and all the other things.

[00:38:04] [SPEAKER_03]: So, so there's, there's that, but so that on an investor standpoint, I think is really

[00:38:11] [SPEAKER_02]: valuable.

[00:38:12] [SPEAKER_02]: So you could do the same thing with a builder rent or maybe you're building a hundred units.

[00:38:17] [SPEAKER_02]: You sell off 10, provide the return to capital.

[00:38:20] [SPEAKER_02]: And then you still have the 90 that are cashflow.

[00:38:22] [SPEAKER_02]: Huh?

[00:38:23] [SPEAKER_02]: That's what, and as long as you get the condo plat, condo plat is the key.

[00:38:28] [SPEAKER_02]: Yeah.

[00:38:29] [SPEAKER_02]: And do you do that from day one or do you have to wait until after development to go after

[00:38:33] [SPEAKER_02]: the condo?

[00:38:34] [SPEAKER_03]: We'll see these, if, if you've looked at some of the older properties, they've had some developments

[00:38:40] [SPEAKER_03]: like this, you know, townhome developments that were R3 zoned and they're single, they're single

[00:38:49] [SPEAKER_03]: APNs, but there might be 10 units in there or 20 units or whatever in a townhome development.

[00:38:55] [SPEAKER_03]: So it's not unheard of for somebody to buy that, buy that piece, buy that, those 20 townhomes,

[00:39:03] [SPEAKER_03]: buy that R3 development and which is a traditional multifamily development, go to the city, get

[00:39:10] [SPEAKER_03]: a condo plat and then sell those off individually.

[00:39:13] [SPEAKER_03]: So it's not unheard of.

[00:39:15] [SPEAKER_03]: It's just a new twist on a old thing.

[00:39:20] [SPEAKER_03]: And I've heard of, and I've heard of people taking old apartment complexes too and splitting

[00:39:27] [SPEAKER_03]: those out, condoing those and selling those off as well.

[00:39:30] [SPEAKER_03]: Condo conversion.

[00:39:31] [SPEAKER_03]: Condo conversion.

[00:39:32] [SPEAKER_03]: It's the same thing.

[00:39:33] [SPEAKER_03]: It's just, instead of having it for 50 years, you're just doing that right at the front.

[00:39:37] [SPEAKER_03]: Got it.

[00:39:38] [SPEAKER_02]: So, and are these, is this like infill projects or?

[00:39:42] [SPEAKER_02]: Yeah, predominantly infill stuff.

[00:39:44] [SPEAKER_02]: Interesting.

[00:39:44] [SPEAKER_02]: Okay.

[00:39:45] [SPEAKER_02]: I like, so can you share with the audience what, what infill means as well?

[00:39:49] [SPEAKER_03]: Yeah.

[00:39:49] [SPEAKER_03]: Infill is just an area that's been developed and there might be one piece of dirt that's

[00:39:55] [SPEAKER_03]: undeveloped or maybe it's, you know, everything around it's R3 multifamily and then you

[00:40:01] [SPEAKER_03]: have like the one guy that didn't sell for a hundred years, it's still there, finally

[00:40:07] [SPEAKER_03]: passes on.

[00:40:08] [SPEAKER_03]: And then now you've got an infill lot and it's maybe zoned R16 or, you know, for single

[00:40:13] [SPEAKER_03]: family, but everything else around it is R3.

[00:40:17] [SPEAKER_03]: And you can easily go in and say, everything is R3.

[00:40:20] [SPEAKER_03]: We just needed R3.

[00:40:20] [SPEAKER_03]: And boom, now you've got an infill lot.

[00:40:22] [SPEAKER_03]: Yeah.

[00:40:22] [SPEAKER_02]: And you're pretty, like the listener is probably driving by these all day long.

[00:40:26] [SPEAKER_02]: All day long.

[00:40:26] [SPEAKER_02]: And seeing them everywhere.

[00:40:27] [SPEAKER_02]: All day long.

[00:40:28] [SPEAKER_02]: Like I had a plot of land that I drove by for 10 years and I'm like, oh my, that would

[00:40:31] [SPEAKER_02]: be perfect for either self-storage or maybe just a strip of single family homes.

[00:40:37] [SPEAKER_02]: And sure enough, self-storage went up there.

[00:40:39] [SPEAKER_02]: Yeah.

[00:40:39] [SPEAKER_02]: You know, eight years I was driving past that thing and now somebody finally pulled the

[00:40:42] [SPEAKER_02]: trigger.

[00:40:43] [SPEAKER_02]: Yeah.

[00:40:43] [SPEAKER_02]: So, yeah, very interesting.

[00:40:45] [SPEAKER_02]: It's neat to see the progression of your career and how it's, you know, ebbed and flowed

[00:40:51] [SPEAKER_02]: and a lot of different angles.

[00:40:52] [SPEAKER_02]: And now you land at this spot where really the stars just align.

[00:40:56] [SPEAKER_02]: You have all of your experience over many, many years and different facets are all coming

[00:41:01] [SPEAKER_02]: together to create this opportunity, not just for you.

[00:41:05] [SPEAKER_02]: You're actually starting a private equity firm or you've started a private equity firm

[00:41:10] [SPEAKER_02]: that's going to make these type of investments available to investors.

[00:41:13] [SPEAKER_02]: Yeah.

[00:41:14] [SPEAKER_03]: Yeah.

[00:41:14] [SPEAKER_03]: I mean, the start of it is we just launched it.

[00:41:18] [SPEAKER_03]: We just launched the marketing of it.

[00:41:20] [SPEAKER_03]: Okay.

[00:41:20] [SPEAKER_03]: We haven't even really gone out and said, hey, invest with us or anything like that.

[00:41:24] [SPEAKER_03]: Sure.

[00:41:24] [SPEAKER_03]: So, we're not doing that yet.

[00:41:27] [SPEAKER_03]: But, yeah, so we're going to launch this, the branding of it, and we're getting ready

[00:41:33] [SPEAKER_03]: to launch it.

[00:41:34] [SPEAKER_03]: We haven't decided exactly how we want to structure the PPMs and things like that.

[00:41:39] [SPEAKER_03]: Okay.

[00:41:40] [SPEAKER_03]: Which funds do we want yet?

[00:41:41] [SPEAKER_03]: But, you know, we're, I'm toying with the idea.

[00:41:44] [SPEAKER_03]: I'm talking to different investors and trying to figure out what investors really want.

[00:41:50] [SPEAKER_03]: And then we'll build a fund to kind of suit that.

[00:41:52] [SPEAKER_03]: Sure.

[00:41:53] [SPEAKER_03]: So, but initially it's to raise funds into a build to rent fund, you know, through the

[00:41:59] [SPEAKER_03]: relationships I've just made in the last couple of weeks.

[00:42:01] [SPEAKER_03]: Yeah.

[00:42:02] [SPEAKER_03]: The connections that I've made.

[00:42:03] [SPEAKER_03]: I was in an office yesterday with a huge developer in Scottsdale.

[00:42:09] [SPEAKER_03]: And these, I just walked into their office and said, hey, I'm a developer.

[00:42:13] [SPEAKER_03]: I'm looking to grow my business.

[00:42:15] [SPEAKER_03]: Sure.

[00:42:15] [SPEAKER_03]: And they said, great.

[00:42:17] [SPEAKER_03]: Okay.

[00:42:18] [SPEAKER_03]: Do you want to do some build to rent?

[00:42:19] [SPEAKER_03]: And I said, let's sit down and talk about it.

[00:42:21] [SPEAKER_03]: And then we sat down in their conference room and I talked to their CFO for like, you know,

[00:42:26] [SPEAKER_03]: a half hour about the various projects that they're doing now and what they believe in

[00:42:31] [SPEAKER_03]: it and how they're doing things.

[00:42:33] [SPEAKER_03]: And I said, this might be a good, you know, I'm going to keep in touch with you.

[00:42:39] [SPEAKER_03]: And when I have something, we'll sit down and I'll, we'll sit down and talk about it,

[00:42:44] [SPEAKER_03]: how we can partner up and do this together.

[00:42:45] [SPEAKER_03]: So, you know, there's, there's just, and that's just from going around and I call us

[00:42:52] [SPEAKER_03]: all shaking hands and kissing babies, you know, because.

[00:42:55] [SPEAKER_03]: That's it.

[00:42:55] [SPEAKER_03]: Awesome.

[00:42:56] [SPEAKER_03]: Honestly, just driving around.

[00:42:57] [SPEAKER_03]: I mean, it sucks because it's hot outside.

[00:42:59] [SPEAKER_03]: Yeah.

[00:42:59] [SPEAKER_03]: Yeah.

[00:42:59] [SPEAKER_03]: And it's worse because you can drive from here, you get in your car and it finally starts

[00:43:04] [SPEAKER_03]: cooling off and you get out.

[00:43:05] [SPEAKER_03]: Right.

[00:43:06] [SPEAKER_03]: And, you know, but you know, you've lived here.

[00:43:08] [SPEAKER_03]: I do indeed.

[00:43:08] [SPEAKER_03]: But yeah, so it's not the easiest thing, but I love it because I'm actually going out

[00:43:12] [SPEAKER_03]: there and connecting with the people that I want to do business with in the future.

[00:43:16] [SPEAKER_03]: And it's, you know, and I think showing up with, with the idea of what are you guys

[00:43:22] [SPEAKER_03]: working on?

[00:43:23] [SPEAKER_03]: Right.

[00:43:23] [SPEAKER_03]: How can I know?

[00:43:25] Right.

[00:43:25] [SPEAKER_03]: You know, this is what I'm trying to do.

[00:43:27] [SPEAKER_03]: Is there any kind of synergy here where we can, we can work together?

[00:43:31] [SPEAKER_03]: And every meeting, every time I walk in, it's not always like that.

[00:43:34] [SPEAKER_03]: It's a lot of time.

[00:43:35] [SPEAKER_03]: It's like, yeah, cool.

[00:43:36] [SPEAKER_03]: You want to talk to, you want to talk to Josh or you want to talk to Peter or somebody

[00:43:41] [SPEAKER_03]: and they're, they're out to lunch or whatever.

[00:43:44] [SPEAKER_03]: Sure.

[00:43:44] [SPEAKER_03]: And they don't really want to talk to you.

[00:43:45] [SPEAKER_03]: So there's a lot of that.

[00:43:46] [SPEAKER_03]: Right.

[00:43:47] [SPEAKER_03]: But at the same time, you get great meetings with CFOs that are like, hey, we're hungry

[00:43:53] [SPEAKER_02]: for this.

[00:43:54] [SPEAKER_02]: Right.

[00:43:54] [SPEAKER_02]: And so it's like, all right, cool.

[00:43:55] [SPEAKER_02]: I like it.

[00:43:56] [SPEAKER_02]: And going back to what we discussed earlier, like now is the time.

[00:43:59] [SPEAKER_02]: Yeah.

[00:43:59] [SPEAKER_02]: To be investing in real estate with the way the market is.

[00:44:02] [SPEAKER_02]: So, yeah.

[00:44:03] [SPEAKER_02]: Well, if, if the listeners were intrigued and want to learn more about what you're doing

[00:44:08] [SPEAKER_02]: and stay in contact with you, how could they find you?

[00:44:11] [SPEAKER_03]: Yeah.

[00:44:12] [SPEAKER_03]: Redgravitycapital.com is, is we just launched the website, I think a week and a half ago.

[00:44:17] [SPEAKER_03]: Okay.

[00:44:18] [SPEAKER_03]: I don't know that our systems are all up, all on all cylinders, but I think so.

[00:44:24] [SPEAKER_03]: Sure.

[00:44:24] [SPEAKER_03]: So I think you can, there's a form there you can connect with us there and, and you reach

[00:44:28] [SPEAKER_03]: out to me directly.

[00:44:29] [SPEAKER_03]: I mean, that, that connects right into me.

[00:44:31] [SPEAKER_03]: So you can book a call.

[00:44:33] [SPEAKER_03]: I think there's a link on there to book a call with me.

[00:44:36] [SPEAKER_03]: So if you're interested in it, you can book a call with me and it's a nice little 15 minute

[00:44:40] [SPEAKER_03]: introduction.

[00:44:41] [SPEAKER_03]: And yeah, I'd love to talk to anybody that wants to interested in investing or interested

[00:44:47] [SPEAKER_03]: in build to rent, or maybe you've got some land that you're not sure what to do with.

[00:44:52] [SPEAKER_03]: Maybe it's a good, maybe, maybe it's a build to rent.

[00:44:55] [SPEAKER_03]: Maybe it's not.

[00:44:56] [SPEAKER_03]: Maybe you just don't know what to do with it.

[00:44:58] [SPEAKER_03]: You know, that's, I could be a resource for you.

[00:45:00] [SPEAKER_03]: I love it.

[00:45:01] [SPEAKER_03]: So that's, that's yeah.

[00:45:03] [SPEAKER_03]: Redgravitycapital.com.

[00:45:04] [SPEAKER_03]: Very good.

[00:45:05] [SPEAKER_03]: And yeah.

[00:45:06] [SPEAKER_02]: So I do have a few questions I like to ask you, everybody.

[00:45:09] [SPEAKER_02]: Yeah, sure.

[00:45:10] [SPEAKER_02]: Let's do it.

[00:45:10] [SPEAKER_02]: So a couple of serious ones, but then a couple of fun ones as well.

[00:45:14] [SPEAKER_02]: So the, the audience is the newer, newer passive investor.

[00:45:18] [SPEAKER_02]: So folks that are, you know, getting ready to place their first, or let's say the first

[00:45:22] [SPEAKER_02]: 10 LP investments.

[00:45:24] [SPEAKER_04]: Okay.

[00:45:25] [SPEAKER_02]: So what type of resources or educational materials could you suggest to them so they can learn

[00:45:32] [SPEAKER_02]: more?

[00:45:33] [SPEAKER_02]: Maybe it's short term or build a rent.

[00:45:35] [SPEAKER_02]: Maybe it's something else, but any educational resources that could be a good fit for the new

[00:45:39] [SPEAKER_02]: guys.

[00:45:41] [SPEAKER_03]: It's honestly, when you had mentioned the 80 point checklist, that to me was, you know,

[00:45:48] [SPEAKER_03]: I seriously want that because I want to know what that is because I want to share that

[00:45:52] [SPEAKER_03]: because I think that so, I mean, even when I first started passive investing, I had no

[00:46:00] [SPEAKER_03]: idea.

[00:46:00] [SPEAKER_03]: And everybody gets, you get so excited about investors.

[00:46:02] [SPEAKER_03]: Like I can, yeah, here's the money.

[00:46:04] [SPEAKER_03]: Right.

[00:46:05] [SPEAKER_03]: But, you know, having an actual list of like, these are kind of, these are the things you

[00:46:11] [SPEAKER_03]: want to ask.

[00:46:12] [SPEAKER_03]: Yeah.

[00:46:13] [SPEAKER_03]: These are the things that you really want to.

[00:46:15] [SPEAKER_03]: So I'm intrigued by that, but I, you know, cause I haven't seen the list, but I, but I

[00:46:19] [SPEAKER_03]: think that would be a good resource.

[00:46:21] [SPEAKER_03]: Okay.

[00:46:21] [SPEAKER_03]: And so, you know, obviously I want to share it and I'll share it with my group.

[00:46:25] [SPEAKER_03]: Sounds great.

[00:46:25] [SPEAKER_03]: It's okay.

[00:46:26] [SPEAKER_03]: Cause I think that's important for passive investors to know, like, these are the things that

[00:46:30] [SPEAKER_03]: you should know.

[00:46:31] [SPEAKER_03]: Absolutely.

[00:46:32] [SPEAKER_03]: And no matter what the dollar is, I was on a pitch, I was on a pitch yesterday where

[00:46:37] [SPEAKER_03]: it was extremely, in my mind, it was extremely $7,500 was the, was the basis.

[00:46:43] [SPEAKER_03]: Okay.

[00:46:43] [SPEAKER_03]: And the only, he was only asking for 45, but he wanted six investors at 7,500 and it was

[00:46:49] [SPEAKER_03]: a passive investment and it was going to, he was going to return at the minimum.

[00:46:53] [SPEAKER_03]: It was going to guarantee a 30%.

[00:46:55] [SPEAKER_03]: Okay.

[00:46:55] [SPEAKER_03]: But it could have been upwards of 90%.

[00:46:57] [SPEAKER_03]: I was like, I don't know.

[00:46:59] Okay.

[00:46:59] [SPEAKER_03]: It just wasn't my cup of tea, but at the same time, understanding, understand the deal.

[00:47:06] [SPEAKER_02]: Right.

[00:47:07] [SPEAKER_03]: Understand a barbox as well, which you can compare it to and whether it fits your investment.

[00:47:12] [SPEAKER_03]: Know what you're investing in.

[00:47:13] [SPEAKER_03]: Yeah.

[00:47:14] [SPEAKER_03]: Know the investment and don't, you know, really understand it.

[00:47:18] [SPEAKER_03]: Not that you need to understand all the nooks and crannies and then all the little detail,

[00:47:23] [SPEAKER_03]: the initial, but really understand what it is.

[00:47:27] [SPEAKER_03]: I think I've listened to a lot of pitches and a lot of investors go into extreme detail,

[00:47:33] [SPEAKER_03]: which is good.

[00:47:34] [SPEAKER_04]: Yeah.

[00:47:34] [SPEAKER_04]: Yeah.

[00:47:35] [SPEAKER_03]: But they lose the big picture.

[00:47:38] [SPEAKER_03]: Yeah.

[00:47:38] [SPEAKER_03]: You know, what's the big picture?

[00:47:39] [SPEAKER_03]: What's the story?

[00:47:40] [SPEAKER_03]: What's the real story?

[00:47:41] [SPEAKER_03]: Yeah.

[00:47:41] [SPEAKER_03]: Okay.

[00:47:41] [SPEAKER_03]: We're buying this apartment complex.

[00:47:44] [SPEAKER_03]: We're going to have the cost, the price of it is $10 million.

[00:47:47] [SPEAKER_03]: We're going to invest $5 million in value add stuff.

[00:47:51] [SPEAKER_03]: Yeah.

[00:47:52] [SPEAKER_03]: And so our basis is going to be 15 million and we're going to sell it for 20.

[00:47:55] [SPEAKER_03]: Right.

[00:47:56] [SPEAKER_03]: In five years or seven years or whatever it is.

[00:47:58] [SPEAKER_03]: Just tell that story.

[00:48:00] [SPEAKER_03]: You know, so that's, maybe that's, that's probably a lot of answer there.

[00:48:05] [SPEAKER_02]: No, I think it's great.

[00:48:06] [SPEAKER_02]: So the 80 point due diligence checklist that he referenced is something that we have and

[00:48:12] [SPEAKER_02]: just reach out and we will get it to you.

[00:48:14] [SPEAKER_02]: I'll get it to you, of course.

[00:48:15] [SPEAKER_02]: Please do.

[00:48:15] [SPEAKER_02]: Make it available to anybody.

[00:48:17] [SPEAKER_02]: So, all right.

[00:48:18] [SPEAKER_02]: So we talk about due diligence.

[00:48:21] [SPEAKER_02]: Yeah.

[00:48:21] [SPEAKER_02]: Um, what is a due diligence question that you ask that maybe the newer, newer investor

[00:48:28] [SPEAKER_02]: might not be asking or might not even know to ask?

[00:48:36] [SPEAKER_02]: And I, normally I tell folks what these questions are before we get going and I didn't do that.

[00:48:41] [SPEAKER_02]: So I'm putting you on the spot here.

[00:48:42] [SPEAKER_02]: Sure.

[00:48:43] [SPEAKER_02]: Yeah.

[00:48:43] [SPEAKER_03]: Well, no, I mean, when I invest passively, you know, I look at it, number one, do I understand

[00:48:51] [SPEAKER_03]: it?

[00:48:52] [SPEAKER_03]: And then number two, I underwrite it as if I'm doing the deal too.

[00:48:56] [SPEAKER_03]: So, but you know, if I'm investing in a real estate project, I feel like I might have a

[00:49:00] [SPEAKER_03]: little bit more knowledge than most.

[00:49:03] [SPEAKER_03]: So when I underwrite it, it's, it's, I'd probably go into a lot more detail.

[00:49:09] [SPEAKER_04]: Yeah.

[00:49:10] [SPEAKER_02]: But, um, you know.

[00:49:12] [SPEAKER_02]: But I think that's a good answer.

[00:49:14] [SPEAKER_02]: Like the good answer is understand basic underwriting.

[00:49:17] [SPEAKER_04]: Yeah.

[00:49:17] [SPEAKER_02]: Right.

[00:49:18] [SPEAKER_02]: And the only way to understand it is to start doing it.

[00:49:22] [SPEAKER_02]: Yeah.

[00:49:22] [SPEAKER_02]: Even at a very high level.

[00:49:23] [SPEAKER_02]: It's just even the simple math that you said, we're buying from 10, we're putting five, we're

[00:49:27] [SPEAKER_02]: going to sell to 20.

[00:49:28] [SPEAKER_02]: Does that math make sense?

[00:49:30] [SPEAKER_02]: Yeah.

[00:49:30] [SPEAKER_02]: Right.

[00:49:30] [SPEAKER_02]: In today's market.

[00:49:31] [SPEAKER_02]: Right.

[00:49:31] [SPEAKER_02]: Yeah.

[00:49:32] [SPEAKER_03]: Well, it doesn't make sense in today's market or does it make sense in five years?

[00:49:36] [SPEAKER_03]: Right.

[00:49:37] [SPEAKER_03]: Five year market.

[00:49:37] [SPEAKER_03]: And that's where the speculation or the, the, the pro forma or the guessing games.

[00:49:42] [SPEAKER_03]: And that's where the investing comes in.

[00:49:44] [SPEAKER_03]: Yeah.

[00:49:45] [SPEAKER_03]: The risk versus reward.

[00:49:46] [SPEAKER_03]: Yes.

[00:49:47] [SPEAKER_03]: So I think, um, yeah.

[00:49:50] All right.

[00:49:51] [SPEAKER_02]: Yeah.

[00:49:52] [SPEAKER_02]: Okay.

[00:49:53] [SPEAKER_02]: And then a couple of kind of fun questions.

[00:49:56] [SPEAKER_02]: Yeah.

[00:49:56] [SPEAKER_02]: So I'm a, I'm a bucket list guy.

[00:49:58] [SPEAKER_02]: Bucket list guy.

[00:49:59] [SPEAKER_02]: And, uh, I like to hear about other people.

[00:50:01] Bucket list.

[00:50:02] [SPEAKER_02]: So is there a recent bucket list item you've checked off your list or when you're hoping

[00:50:06] [SPEAKER_02]: to in the future?

[00:50:07] [SPEAKER_02]: One that I checked off my list.

[00:50:11] [SPEAKER_03]: I'll tell a great story.

[00:50:13] [SPEAKER_03]: Okay.

[00:50:13] [SPEAKER_03]: This was, this was, this isn't a bucket list, but this was along the, along the lines of

[00:50:20] [SPEAKER_03]: that was kind of like a manifestation because I actually have, I did an exercise, uh, a

[00:50:26] [SPEAKER_03]: couple of years ago where I put, I made a list of 100 things that I wanted to do in my

[00:50:33] [SPEAKER_03]: life.

[00:50:33] [SPEAKER_03]: I have experiences I wanted to have.

[00:50:35] [SPEAKER_03]: Okay.

[00:50:35] [SPEAKER_03]: And then a hundred material things that I wanted.

[00:50:39] [SPEAKER_03]: Okay.

[00:50:39] [SPEAKER_03]: And so that way I went through that.

[00:50:40] [SPEAKER_03]: So that's kind of like a bucket list thing, but I'll tell you a little story about manifestation

[00:50:44] [SPEAKER_03]: and things like that, because it was at the time, at the time it was, it was something

[00:50:50] [SPEAKER_03]: like this would be cool, you know?

[00:50:53] [SPEAKER_03]: And so when I started the real estate thing, I said, I want to do 5 million by this year.

[00:51:00] [SPEAKER_03]: And I was like three years.

[00:51:01] [SPEAKER_03]: I said, okay.

[00:51:03] [SPEAKER_03]: And so I had kind of written it down, kind of put it away and kind of forgot about it.

[00:51:10] [SPEAKER_03]: Yeah.

[00:51:10] [SPEAKER_03]: And then I was going through, I think when we were moving offices, we were going to

[00:51:14] [SPEAKER_03]: move offices or I was doing something.

[00:51:16] [SPEAKER_03]: I was going through a bunch of old stuff and I found it.

[00:51:19] [SPEAKER_03]: Yeah.

[00:51:20] [SPEAKER_03]: And I was like, quick books.

[00:51:23] [SPEAKER_03]: And I said, we did it.

[00:51:27] [SPEAKER_03]: We did it.

[00:51:28] [SPEAKER_02]: Nice.

[00:51:29] [SPEAKER_03]: And it wasn't, it wasn't that, it wasn't that, that it was, I mean, I'm getting goosebumps

[00:51:36] [SPEAKER_03]: just thinking about it.

[00:51:37] [SPEAKER_03]: Just because of the, and I kind of forgot about it.

[00:51:39] [SPEAKER_03]: But then, and I was like, man.

[00:51:42] [SPEAKER_02]: Right.

[00:51:43] [SPEAKER_02]: I think it's T. Harbecker.

[00:51:46] [SPEAKER_02]: One of the guys, one of the greats, right?

[00:51:48] [SPEAKER_02]: Yeah.

[00:51:48] [SPEAKER_02]: He goes through, actually it might have been a Jim Rohn thing where he has you go through,

[00:51:54] [SPEAKER_02]: because I do this goal setting session every year.

[00:51:56] [SPEAKER_04]: Yeah.

[00:51:56] [SPEAKER_02]: A lot of people do it.

[00:51:57] [SPEAKER_02]: I had you write down what you want life to look like in five years.

[00:52:02] [SPEAKER_02]: And like literally all aspects of your life.

[00:52:04] [SPEAKER_02]: Yeah.

[00:52:04] [SPEAKER_02]: Health, finances, relationship, like everything, spirituality, all that kind of stuff.

[00:52:09] [SPEAKER_02]: And then get it into like less than a five minute read and then read it in the morning

[00:52:14] [SPEAKER_02]: and read it at night.

[00:52:15] [SPEAKER_02]: Right.

[00:52:16] [SPEAKER_02]: And actually, actually say it out loud.

[00:52:18] [SPEAKER_02]: So your voice, you hear it being said.

[00:52:21] [SPEAKER_02]: So I actually recorded it into my iPhone, into an audio file.

[00:52:26] [SPEAKER_02]: And I would play it and listen to it.

[00:52:28] [SPEAKER_02]: Same thing.

[00:52:29] [SPEAKER_02]: Lost it.

[00:52:30] [SPEAKER_02]: Didn't think about it.

[00:52:31] [SPEAKER_02]: Played it.

[00:52:32] [SPEAKER_02]: I don't know, seven, eight years later.

[00:52:34] [SPEAKER_02]: Every single item in that had come true, except for where I lived.

[00:52:39] [SPEAKER_02]: I had this idea of living on the side of a mountain.

[00:52:41] [SPEAKER_02]: I still live in the same place.

[00:52:42] [SPEAKER_02]: No shit.

[00:52:42] [SPEAKER_02]: But everything else, like completed an Iron Man, made X amount of dollars,

[00:52:46] [SPEAKER_02]: traveled to the places that I wanted to travel to.

[00:52:49] [SPEAKER_02]: You did an Iron Man?

[00:52:50] [SPEAKER_02]: I did.

[00:52:50] [SPEAKER_02]: I did.

[00:52:51] [SPEAKER_02]: Which one did you do?

[00:52:52] [SPEAKER_02]: So I did Boulder.

[00:52:54] [SPEAKER_02]: Wow, that's a tough one.

[00:52:55] [SPEAKER_02]: I did Arizona Half.

[00:52:57] [SPEAKER_02]: I did one in Vegas, which killed me.

[00:53:00] [SPEAKER_02]: Yeah.

[00:53:02] [SPEAKER_03]: Awesome.

[00:53:03] [SPEAKER_03]: Yeah, good stuff.

[00:53:03] [SPEAKER_03]: It's tough.

[00:53:04] [SPEAKER_02]: Because of the elevation.

[00:53:05] [SPEAKER_02]: Yeah, it's insane.

[00:53:08] [SPEAKER_02]: And so that kind of ties into a mindset piece, too.

[00:53:11] [SPEAKER_02]: Like you have a podcast.

[00:53:13] [SPEAKER_02]: What's the title of the podcast?

[00:53:14] [SPEAKER_02]: Modern Mindset.

[00:53:15] [SPEAKER_03]: Yeah, we're just coming out with a new one.

[00:53:17] [SPEAKER_03]: It's brand new.

[00:53:18] [SPEAKER_03]: Brand new.

[00:53:19] [SPEAKER_04]: I think I know the guests.

[00:53:20] [SPEAKER_04]: Yeah.

[00:53:20] [SPEAKER_04]: Yeah.

[00:53:21] [SPEAKER_02]: Okay.

[00:53:22] [SPEAKER_02]: And then the last kind of fun question.

[00:53:24] [SPEAKER_02]: If you had 100 grand, you had to invest today, but you couldn't put it into one of your deals.

[00:53:30] [SPEAKER_02]: God, this sounds so cliche, but Bitcoin.

[00:53:33] [SPEAKER_03]: Okay.

[00:53:33] [SPEAKER_03]: I get that often.

[00:53:35] [SPEAKER_03]: I think Bitcoin.

[00:53:37] [SPEAKER_03]: Okay.

[00:53:37] [SPEAKER_03]: Well, it depends on where it's at today.

[00:53:39] [SPEAKER_03]: I mean...

[00:53:40] [SPEAKER_03]: Right.

[00:53:40] [SPEAKER_03]: You know, if it's still hovering around, what is it?

[00:53:43] [SPEAKER_03]: I refuse to look at it.

[00:53:46] [SPEAKER_03]: I refuse to look at it.

[00:53:46] [SPEAKER_03]: But I'm up.

[00:53:47] [SPEAKER_03]: But I think if it's still in that 30,000, 30 to 40,000, I don't know where it is today.

[00:53:53] [SPEAKER_03]: Yeah.

[00:53:54] [SPEAKER_03]: But if it's still in that 30 to 40,000, I put it in there.

[00:53:56] [SPEAKER_03]: Awesome.

[00:53:57] [SPEAKER_03]: Awesome.

[00:53:57] [SPEAKER_03]: But I don't know that that's a great answer.

[00:54:00] [SPEAKER_03]: But it's your answer.

[00:54:02] [SPEAKER_03]: So it's kind of interesting.

[00:54:03] [SPEAKER_03]: It is my first gut reaction.

[00:54:06] [SPEAKER_03]: But I think if I actually thought about it, I might buy a small business with it.

[00:54:17] [SPEAKER_03]: Okay.

[00:54:17] [SPEAKER_03]: I might buy a small business.

[00:54:18] [SPEAKER_03]: Well, if I can't put it in my own deal, I would buy a small business with somebody else's deal.

[00:54:24] [SPEAKER_03]: Yeah.

[00:54:24] [SPEAKER_03]: That's probably what I would do.

[00:54:25] [SPEAKER_03]: That would be the smarter play.

[00:54:27] [SPEAKER_03]: That would be...

[00:54:28] [SPEAKER_03]: The smarter, more conservative.

[00:54:29] [SPEAKER_03]: I'm going to Vegas.

[00:54:30] [SPEAKER_03]: Right?

[00:54:30] [SPEAKER_03]: Yeah.

[00:54:31] [SPEAKER_03]: Put it all on black.

[00:54:32] [SPEAKER_03]: I'll put it on black.

[00:54:33] [SPEAKER_03]: There you go.

[00:54:33] [SPEAKER_03]: Yeah.

[00:54:34] [SPEAKER_02]: Well, I've done that before, too.

[00:54:36] [SPEAKER_02]: Yeah.

[00:54:37] [SPEAKER_02]: You know?

[00:54:38] [SPEAKER_02]: Well, good stuff.

[00:54:39] [SPEAKER_02]: Well, this has been fun.

[00:54:41] [SPEAKER_02]: Yeah.

[00:54:41] [SPEAKER_02]: Thanks for having me here for your first episode and my first in person for my podcast.

[00:54:48] [SPEAKER_03]: Well, good.

[00:54:48] [SPEAKER_03]: Well, you should feel free to come by.

[00:54:50] [SPEAKER_03]: And if you want to bring somebody by here, absolutely.

[00:54:52] [SPEAKER_03]: You can come use the space.

[00:54:54] [SPEAKER_03]: Fantastic.

[00:54:55] [SPEAKER_03]: Sure.

[00:54:55] [SPEAKER_03]: We've got a beautiful view of your setting here.

[00:54:59] [SPEAKER_03]: There you go.

[00:55:00] [SPEAKER_03]: So, yeah.

[00:55:00] [SPEAKER_03]: Good stuff.

[00:55:01] [SPEAKER_03]: Well, thank you.

[00:55:03] [SPEAKER_03]: Well, yeah.

[00:55:03] [SPEAKER_03]: Fantastic.

[00:55:04] [SPEAKER_00]: Well, there you have it, ladies and gentlemen.

[00:55:06] [SPEAKER_00]: Another episode of The Gentle Art of Crushing It.

[00:55:10] [SPEAKER_00]: It was an amazing episode.

[00:55:11] [SPEAKER_00]: We know we sure learned a lot, and we hope you did as well.

[00:55:15] [SPEAKER_00]: We want to take a second and thank you so much for viewing or listening to this episode.

[00:55:20] [SPEAKER_00]: And please just know that we only ask for one favor, and that is to make this life magnificent.

[00:55:26] [SPEAKER_00]: Thank you, and have a wonderful day.

[00:55:28] [SPEAKER_00]: We'll see you next time.