Global Markets & Real Estate Outlook: A Strategic Conversation | Webinar E37

Join Ryan Garland, Founder & Chairman of Paradyme, and Michael Reveley, Paradyme’s CEO, for an exclusive webinar exploring today’s global investment climate and how it impacts real estate and private equity strategies.

They’ll cover a high-level overview of Paradyme’s evolving investment approach and offer insights into:

✔ The macroeconomic environment

✔ Family Office movement

✔ How to become a family office and control your destiny

✔ Interest rate shifts and inflation pressures

✔ The effects of tariffs and global risk markets

✔ Lending trends and construction impacts

Whether you're an active investor or watching the markets closely, this session is designed to provide clarity, foresight, and positioning strategies amid an evolving financial landscape.

Paradyme

Episode Transcript

SPEAKER_00 (00:40):
Hey everybody, Ryan Garland, founder and chairman of
Paradigm.
Thank you very much for joiningus today.
And for those of you that aregoing to be watching the
recording, I uh have a stickyfeeling this is gonna be very
fruitful for you.
So please uh uh take the timeand and go through the entire uh
video, especially if you'relooking to do some business with
us.
And I think this is uh this isgonna be again very fruitful.
So we have today our CEO,Michael Revley, and I tell

(01:02):
everybody he is my secretweapon.
He's the guy behind the scenesthat's running the day-to-day
operation.
He'll be with us for almostthree years now.
And it's been an honor to get toknow him, not only on a personal
level, but his level ofknowledge is rather impressive.
And that's what I'm gonna try tohighlight here today is really
kind of the understanding ofWall Street meets Main Street.
And uh, Mr.
Revley has a background in WallStreet.

(01:23):
So we're gonna start today withhis background, and then we're
gonna kind of chime in fromthere from you know all of these
other little attributes of thecompany and the things that I
think you guys will appreciate,how we built out our platform.
And today the the idea is totalk about a few different
topics, and these topics aregonna be mic macroeconomics.
We want to talk a little bitabout what's happening from a

(01:43):
macro side when we're scalingour projects or scaling our
platform and what it is that welook for down to the family
office movement.
I think some of you that have uhthat know us know that we're
opening up our headquarters andwe're actually naming it the
Family Office Society.
Some people don't understandwhat that is, so we're gonna
highlight kind of that movementnow.
And kind of uh the interest rateenvironment and the shifts and

(02:05):
in inflation.
That's gonna be uh a big topicbecause that has a massive
impact on the forecast ofprofits on projects and which
project projects we pick, alongwith locations in which we pick
as well.
Uh the effects on tariffs andthe risk and how that takes uh
matters, uh sorry, the risks inuh the uh the the tariffs and

(02:25):
how that has an impact on all ofour projects and really the
economy overall.
And then the lending trends andconstruction financing and how
we have to navigate those watersuh more now than ever.
And really the idea is to kindof talk more about what the
institutional level is lookinglike and then how guys like us
on the street level have tocreate that synergy to be
successful.

(02:45):
So, Mike, thanks again forjoining us, my friend.

SPEAKER_01 (02:48):
Oh, appreciate it.
It's great to be here and greatto be on with you.
I think it's should be afruitful discussion for people.
We'll we'll you know get intothe paradigm platform a bit and
obviously from a macroperspective, get into our
thoughts on where we're gonnatake the company, the things
that are affecting us as acompany.
I think that's that's reallyimportant.
Obviously, you and I spend anawful lot of time sort of going

(03:09):
through granularly things thatare impacting us, you know, as
an entity, you know, whetherit's macroeconomics or cost of
copper, right?
Uh everything from you know, allthe way down to how many nails
we've got to get or screws wehave to get in our our next uh
project.
So all these things areimportant for us.
I don't think there's, you know,there's there's nothing too
small when it comes to you knowrunning a business and in a

(03:31):
platform like uh what we'redoing.
So hopefully people get a bettersense of the things that we
think are important.

SPEAKER_00 (03:37):
Yeah, no, and that's exactly it.
You know, we we we have to, thedevil's in the details, you
know.
So we really drill down intothat, and that's kind of what
we're gonna do today.
So let's start with a little bitabout your background.
I think it's really importantfor people to understand who's
really uh you know running thecompany internally on the
day-to-day, and then we'll kindof uh kind of show how it
highlights what it is that I doand and how that's that synergy

(03:58):
uh has a massive impact on ourplatform.

SPEAKER_01 (04:01):
Yeah, my background's uh uh sort of
interesting and and I think verydifferent um historically,
right?
And it and it has moved and itshifted as everybody's careers
shift, they they focus ondifferent things.
But when I first uh reallystarted my career on Wall
Street, I was like one of thosegeeks that was staring at
Bloomberg screens all day long,right?
And trading, you know, smallmovements and interest rates and

(04:24):
you know, trying to make moneyfrom sort of looking at the big
global macro picture and thenyou know, all the way down to
trading minute changes ininterest rates.
So very focused on, you know,sort of the big picture and then
but but basically trying to pullmoney out of the markets as uh
you know, as you know, differenttrends changed, changed and and

(04:44):
volatility increased.
You know, basically there, Isort of viewed it as I'm I'm
sitting on you know New York onBroadway and I'm reaching out,
I'm sort of grabbing dollarbills as they flow down
Broadway, right?
That that was sort of the of uhyou know, at one part of my
career, my job, just trading andreally trying to be really smart
in terms of how you know I'manalyzing risks, how I'm

(05:06):
analyzing markets, and how I'mmaking money day in and day out
without any big drawdowns,right?
So, so that you know, from atrading perspective, it's very
different on Wall Street today.
Most of that's being done withcomputers and there's less you
know human interaction, which Icould spend like four days on
that topic alone.
Uh, whether that's good or bad,I would say it's it's created a

(05:27):
lot more volatility than itshould.
So, and then and then reallymigrated to uh from doing that
to working as someone at a largeinstitution.
This is UBS, large bank, uhoperating in the US and the
capital markets arena, uh, butworking with the major
companies, all the big borrowersin the US, yeah, bringing them

(05:51):
debt opportunities.
So helping them fund theiroperations and doing so in a way
that sort of met theirobjectives, balancing fixed and
floating rate debt, uh hittingtheir targets in terms of uh
where they want to uh raisemoney on a spread over LIBOR,
things like that.
So looking at uh arbitrageopportunities across various
currencies and using derivativesto swap back the dollars and

(06:12):
fixed and floating, and reallyjust working with the CFOs and
CEOs to make sure that they werepositioned appropriately as a
company and doing the samethings we're doing, right?
Reducing the overall volatilityof the platform as it relates to
the composition of their debt.
Um, and and and and and thenfrom there sort of gravitated

(06:32):
because this this is sort of ata time where hedge funds were
sort of beginning to sort ofbecome relevant and the bank
itself was moving into more ofan asset management platform.
Um, and I sort of got, you know,I got a bug.
It's like, look, I just thinkthe equity side, the asset side
of the balance sheet is moreinteresting to me as, you know,

(06:54):
just just as a professional, andsort of got the bug to start my
own asset management company,which we did with another
partner that had come out ofanother uh big asset management
company here in Los Angeles.
And really our focus was goingto be uh was going to be China.
And so we were taking mybackground in terms of trading

(07:17):
interest rates, his backgroundin terms of managing corporate
bonds, and then sort ofmigrating that expertise
ultimately to China into privateequity, believe it or not, in
the mainland of China.
We were in we're taking UScapital, raising that, and then
investing in companies that arepre-IPO situations in China.
So that really got me in theprivate equity.

(07:38):
So I've gone from trading tobringing companies funds to, you
know, to raising capital toinvesting that capital in
private companies in Asia, andthen sort of took that and sort
of brought it out to you know todo it across Asia, Australia in
particular.
So we yeah, we brought capitalfrom family offices from

(08:01):
individual investors intoAustralia.
This is post-GFC.
Things are really cheapglobally.
So we saw opportunities wherecurrencies were cheap,
especially because that's thedouble am.
If a currency is cheap and itstrengthens, then you're gonna
have a gain on the currency.
And if you do things right,you're gonna have a gain, you
know, just from the company'sperspective as they sort of grow
their way into prosperity,right?

(08:23):
So we took a lot of distressedcompanies, brought them capital
and helped manage their way out.
We also did some otherinteresting transactions, which
we were taking companies,private companies in the US and
listing them uh in Australia.
So very, very interesting timefor me and really sort of put me
in on the board of directors andoperating positions, and then

(08:45):
using sort of that background,Wall Street background in terms
of how you position thosecompanies, how you finance those
companies, and and really whatand and all that really comes to
bear, I think, on the paradigmplatform right now, because of
the fact of where we are.
I sort of view um uh us in asituation, and and we'll go
through this, but we're not asmall company anymore.

(09:09):
You know, from a headcountperspective, you know, uh we're
not a hundred uh person team,but from a platform perspective
and the and what we're puttingonto our platform and we'll put
on our platform, and we've got ahalf a billion dollars, which
which we're gonna be doing overthe next you know, five to you
know, 10 years or more.
So, you know, these are notlittle deals.

(09:29):
We've got 200 million right nowthat we're we're overseeing.
So these are, you know, theseare these are big, big projects,
complicated projects.
And you and I and the team arehelping managing through the
existing pipeline, but also youknow, thinking about how we fund
ourselves going forward and howthat, you know, how that
probably very likely will changeuh what paradigm looks like and

(09:52):
in you know how we sort ofattack, I would say from a macro
perspective, how we tack uhattack markets across the US,
right?
We're you know, you've done agreat job of being a data nerd
on this stuff, where we want togo, where the migration trends
are, where land is cheap, wherethe demographics are aligned

(10:14):
with our particular project.
And a lot of these are insecondary markets, which takes
more work.
So, you know, the these are allthings that we look at, but
exciting because I think, andwe'll talk about this, I think
the overall market from awhether it's a private credit uh
uh side of things, a familyoffice side of things, or a bank
side of things, they're lookingat secondary markets as becoming

(10:36):
their next big thing, right?
So we're sort of ahead of thatcurve right now and putting our
assets into those markets thatother people are going to find
attractive.

SPEAKER_00 (10:47):
So my you nailed it, buddy, and I really appreciate
that because I really wantedpeople to understand more of
your background and kind ofreally how you understand how
money moves and how much you'vehad your hands and not only in
understanding China, but thatalso uh going more global uh
really has an impact on tariffsand how you understand it.
And we won't get into the weedson some of our private

(11:07):
conversations, but this reallykind of does allow us to uh
create a niche and create anedge and mitigate risk all at
the same time.

SPEAKER_01 (11:17):
I think you you've been in an interesting right
since uh 200, you know, you'veobviously paradigm predated
COVID, uh, absolutely.
And and we've had projectscoming on just very near
post-COVID where there's immensevolatility in commodity markets
and labor markets, and you know,we're managing all sorts of
things, you know, within theplatform post-COVID.

(11:39):
And we're continuing to seevolatility, but we're entering a
more normal environment where Ithink we're gonna see capital
open up.
My expectation is yes, capitalopens up.
I think the economy generallydoes better on a go forward
basis.
We may have some bumps here overthe next few months, but on a go
forward basis, I think you'regonna see probably a little

(12:00):
higher than trend growth ratesand a little bit more uh capital
available from like the largerbanking institutions and family
offices for sure.
I think, and and and we're inthe private credit sector, so
we're a lender as well, right?
So that private credit has justbeen huge post-COVID to fund
projects that's ordinarily thebanks with their balance sheets

(12:20):
couldn't do, right?
So yeah, I think we sort of sitin a nexus that's super
interesting for people becausewe're a lender and we're a
developer.
And we're, you know, because westart off in the lending side
and understanding the metricsthat need to go and make a
decision on a project whether tofund it or not, those are the
same metrics that go into whatwe're doing on the development

(12:42):
side, right?
That you start there and thenyou build out your economics
around that project anddetermine if you're gonna go for
it or not.
But those, you know, thatunderwriting process is
extremely important and iscritical to you know our
construction side.
And you you cut your teeththere.
I mean, I've spent my entirecareer in sort of this funding

(13:02):
capital markets arena.
And I think, you know, as a asat some at some juncture, every
company goes from, hey, this isa mom and pop, you know, type of
raise to you know, two smallerinvestors, two family offices,
and ultimately, boom, it goes tothe point where, you know, if
you want a hundred milliondollars, you know, you can go

(13:24):
get it.
That's not a big deal.
The banks are there, the largerfamily offices are there.
It's but that's a matter ofgetting to the point where your
your pipeline is sustainable andyou can, you know, you can
actually um perform, you know,on on what you say you're going
to do.
And that, you know, that that'sjust a you know, that's just
simply a matter of experience.

SPEAKER_00 (13:45):
Yep.
And and and how to marry thatup, and that was perfect because
you'd open up as kind of anotherway for me to think of it too,
or at least explain it.
No, when we let's say for ourprivate credit debt fund now,
you know, we're ultimatelyunderwriting uh institutional
grade transactions.
And the reason is is because wedo sell our notes.
So when we fund loans, we knowwe're gonna sell them to a

(14:06):
larger institution that has fouror five hundred million dollars
in buying horsepower and areactively buying anywhere between
50 million to 150 million amonth and and uh in assets or
loans very similar to what we'redoing with other operators and
fund managers.
And when you start understandinghow to liquidate assets and what

(14:27):
who's gonna be your end buyer isreally how you sharpen your
blade to underwrite projects andunderwrite those those loans
because you know what the endbuyer is gonna look for.
So by having a debt fund andreally a lending background, now
we can really ultimately whatyou're doing is you're putting
zeros behind it when you whenyou decide to scale the company
or go do larger projects.

(14:48):
But the underwriting practicesfor the most part are the same.
And if you're gonna go to aninstitution for a big line of
credit or a revolver, like sayyou're building a uh a
subdivision and you havemultiple phases, you need to
roll that capital as you'reliquidating and selling units
and you're rotating what we donow in paradigm and how our
practices, anyways.
You know, you need to understandhow those revolvers work and

(15:08):
what they're gonna need tounderwrite.
And where I think a lot of, andI don't want to say think, I'm
gonna say I know because I workwith developers that are kind of
big children.
They see a piece of land and go,I can build this.
And that's not how it works.
You know, you really have tohave the right data and
supporting data.
And there's a lot of obviouslysophisticated people out there,
but they're that's kind of wherethey come from.
They haven't been able to undercreate the synergy necessarily

(15:30):
between the institutional guysand then them being boots on the
ground as an operator, they havea hard time being able to put it
all together properly to then goget the capital that's
necessary.
And so where I the doorcontinues to open up for us to
scale is understanding, youknow, who our exit uh what our
exit plan is and thenunderwriting it very similar to
what we're doing now.

(15:51):
So if we're gonna look at apiece of land to buy it, now of
course we're gonna scrutinizethe heck out of it because it's
a different pattern.
But we're also gonna put thedeal together very
institutionally designed to beable to go get the capital.
But ultimately, you know, wehave a lot of sophisticated uh
equity partners, you know, andand these some of these are
wealth managers and some ofthese guys are you know, have
been in other platforms and workwith other guys like ourselves

(16:12):
that have invested into.
So we had to figure out a way tocreate a niche and understand
the environment well enough.
And really, the so the next kindof segment into this, Mike, was
to talk about uh let's say aconversation we had this
morning.
I think this is the perfect timeto explain uh to our network on
what it is we're doing and howwe're migrating and where how
we're growing.
Because really, at the end ofthe day, not only paradigm

(16:34):
storage, but the barn caves hasreally put us on the map for
institutions and larger familyoffices to really consider us
for a larger debt piece, whichis ironic because secondary
markets never get those types ofinfusions.
You know, right now, just giventhe environment, and this is why
we want to talk about themicroeconomics family office and
you know risk impacts on and uhon on tariffs and so forth.

(16:56):
But you know, let's talk alittle bit about the
conversation that we had todaywithout going on too many names,
but uh, you know, we always sayuntil the fat lady sings, right?

SPEAKER_01 (17:04):
Uh but what's uh the interesting thing about the
conversation uh that we hadtoday, it's not just a single
conversation.
You know, these are this is oneconversation of of many that
we're having with largerplayers.

SPEAKER_00 (17:18):
We have had the same, but we've had the same
conversation with the samepeople well for months and
months.
This has been a courtship for awhile.
Yeah.

SPEAKER_01 (17:25):
Well, this is uh yeah, it's a relationship that
you know I sort of broughtbrought to the table.
And at the right time, you know,you and I wanted to deploy uh
those relationships at the pointwhere we felt that the the
likelihood of a close would bethe highest.
And and given our pipeline andgiven the and we're monetizing
five projects in 2025, right?
There's a lot happening thisyear for paradigm, which has

(17:48):
really brought paradigm to thepoint where a larger player, if
they're looking at a you know,$100 million debt facility,
they're gonna say, Yeah, I cansee that.
There's your track record.
Yes, this is your markets thatyou're in.
We understand what you've done.
You've you you know, you createda track record that's an
institutional track record.
So those conversations are whatwe're having right now as a
company because we're lookingforward.

(18:09):
If we have a$400 millionpipeline, you know, we're gonna
have to, you know, that is gonnabe a mix, right?
A midst of uh family officecapital, high net worth, and
we're not talking$20,000 checkshere, we're talking million
dollar, three, three, four, fivemillion dollar checks, plus
yeah, you know, from high networth, family office, and then
ultimately that debt piece.

(18:29):
So I think as the theconversations that we're having
just on the debt side, you know,I don't think we could have had
three years ago.
You know, we from uh the scalethat we've been able to operate
in and the projects we've beenable to complete or in the
process of completing this yearbrings us to the point where
there's believability andsustainability and

(18:50):
predictability, right?
So whether you're an investor,what are you looking for, right?
You're looking for value.
Where can you make money?
Where do things look cheap?
You're looking for safety andconsistency, right?
So for us, you know, are peoplelooking at us?
Okay, well, what's what do theseguys do?
What's their secret sauce?
Well, we're we build fast,right?
Steel and concrete for the barncaves and storage.

(19:12):
And you know, so we're we'rewe're a builder that builds
fast, and you know, our cost tobuild is less than industry
competitors, right?
So they're looking at value.
So this is sort of okay, I getthis.
I'm they're in the storagespace, they're they've done this
great project that sort ofmarries their storage with
residential, what they've donein other parts of the country.
I get the story, and I like themas an operator.

(19:33):
This is like immediately when Iwas in New York and had the
meeting, it was like, I get whatyou guys are trying to do, and I
get your edge.
And I think if you uh, you know,that's one of our key uh points
here is we do have an edge inthe marketplace in terms of
where we are as a market in thesecondary markets, which are,
you know, which basically that'swhere the migration is going to.

(19:57):
The land is cheaper there, andwe can identify the demographic.
So they're like, I like thosemarkets.
They're now not, you know, Idon't want to be in LA, I don't
want to be in New York, I don'twant to be in Chicago, I don't
want to be necessarily incertain parts of Florida.
I may want to be in Tennessee, Imay want to be in Missouri, I
may want to be in Arizona,right?
In the secondary markets,because they the project pencil

(20:21):
out there just land costs alonemeans it's easier to pencil
these things out from a projectperspective, and then from a
demographics and a migrationperspective, you know, that's
where people are landing.
And it's pretty clear.
I mean, that's and and that'snot going to change.
But but the way they're lookingat us is okay, they're smart,
they're in these markets that wecan understand, and their

(20:44):
project sizes are not 13 millionbucks, their project sizes are
75, 100, you know, that we'regetting into the point where
these projects are larger andlarger and larger.
And and those numbers areimportant, right?
The conversation we had todaywas if I'm gonna give you 100,
we want this to be, you know,you got to go fast, you got to

(21:04):
draw this stuff down.
We want this line utilized, youknow.
So give me your give me yourpipeline that you can actualize
over the next, you know, next 12months, right?
So so from that perspective, Iget it.
Right.
This is capital that they haveto set aside, they're gonna pay
8% on it.
So that's a cost to them.

(21:24):
They need to be making money,you know, from you know, from
paradigm.
Paradigm, because of the natureof our underlying projects, we
don't have to argue about sofaplus 300 or sofa plus 450.
You know, it doesn't matter tous.
There's enough margin for usthat those discussions really
don't aren't key.

(21:44):
What's key to us is availabilityof capital and then knowing how
much equity we have to raise tosupport you know that facility.
But you know, those these theseare these are ongoing
discussions.
It's exciting for me to sort ofsee this.
I mean, you know, in my career,a billion dollars was a small
number.
That's like, okay, that's that'sa rounding error.

(22:05):
We're gonna bring, you know, wefrom a financing perspective, I
was bringing four or fivehundred billion dollar deals to
companies all the time.
That was just what we did onWall Street, right?
And now we're yeah, paradigm,we're starting to get into those
types of numbers, which sayssomething about, you know, about
the company that you founded,the company that we're trying to

(22:25):
grow together, and thepossibilities for us.
And I I'm not saying this is youobviously we're excited as
operators of paradigm, but Ithink I'm more excited about our
investors and what we can bringto those investors, the
opportunities that we can bringalongside that institutional
debt piece, that institutionalcapital piece, to I think really

(22:48):
make a difference, whether it'sa small family office, you know,
we're, you know, we we've got aton of those now that that have
that are in our network, or youknow, or you know, high net
worth individual.
You know, I just think if youlook at our platform and what we
can bring on, I don't seeanything like it.
This is the strange thing forme.
It's like, okay, as an investor,you you know, what what what

(23:11):
projects are coming onto ourplatform and what's the
competition, right?
So what where else are you goingto put your money?
And and I've said this before toyou, and I it just keeps ringing
in my head.
It's like the variables that wehave to manage around to make
our investors, you know, their25 or 30 percent returns are so
small.

(23:31):
They're not that large, right?
As long as we're smart and wecan hedge out some of the macro
risks.
What to to be able to bringthose types of returns does not
require, you know, a thousandvariables.
It's very, very short.
They're very few.
There's three or four variables,we protect those.
Those returns are our, you know,our investors get those returns.

(23:53):
So I think that I think thebanks see that, and I think our
investors are increasingly thelarger investors are seeing that
sort of predictability,sustainability, and the ability
to bring sort of outsizedreturns in a market that's, you
know, if if you sort of look atit, the mech, the macroeconomic
environment, I think isshifting, it's improving.

(24:15):
Um, but with that, it's going totake, you know, it things will
shift where people want to puttheir money, it will shift.
And, you know, right now we'vesort of seen this sort of it's
it's you know from an equitymarket perspective, the US
equity market is lagging mostother equity markets, right?
So people are saying, I don'tknow, man, I'm looking for

(24:38):
value.
I don't, I don't think thatnecessarily the US is providing
the value from an overall equitymarket that I'm gonna find
outside the U.S.
And if you look at that, that'ssuper interesting for me.
That's value, like going back towhat we do and how we perceive
value.
Everyone's looking for that.
They're looking for value,they're looking for
sustainability, right?

(24:59):
So I think, you know, in in ifyou sort of take things from the
headlines and what we're seeingright now, it's like people are
looking, you know, awaynecessarily they they were
looking at sort of this AI trendand just throwing money at AI
and you know, five companies inthe world got all the money.
That sort of translated down toeverything else too, like most
of the big funds, private creditfunds, the huge ones, they got

(25:23):
all the money, you know, thatsort of thing.
Now they don't know what to dowith it.
I think, you know, it's sort ofthe same thing with the, you
know, the the you know, the Mag7 or whatever, they got all the
capital now.
How do we really deploy it?
They're trying to tell the storythat we're gonna do that through
AI, and that could be true ornot.
But I think the market'sbeginning to say, well, you're
expensive.
Let's go try to find other waysto basically safer ways to

(25:45):
create a return.
And they're gonna be looking alittle bit downstream.
So I do think from a from a riskperspective, people are gonna be
trying to look at at uhopportunities like Paradigm,
forget the top, you know, thetop 10 capitalized company in
the world.
Let's let's move down the valuechain.
And within this environment, ifwe're gonna see slightly higher

(26:07):
economic growth, we're notgrowing at 1.5%, maybe we're
growing at 3% or 3.5%.
And then through this tax, youknow, through these, the bill,
the great big, beautiful bill,there's lots of incentives there
for smaller companies to writeoff 100% write-off for
equipment, right?
There's a lot of stuff in therefor the smaller companies where

(26:27):
they can really use that.
The bigger companies, maybe notso much, but the smaller guys
can take advantage of this.
And so I do think I'm I'm prettybullish longer term about where
the US is from a real estateperspective, not so sanguine
about like financial assets,equity assets, that sort of

(26:49):
thing.
But I think from hard assets,real estate in particular, I
think we're gonna have atailwind.
I really do, because I thinkoverall, if I look at interest
rates, they're sort of stable.
We got a really flat curve.
You know, the Fed's sort of onhold for the time being.
But I think the Fed begins tosort of look at the overall
economic environment and say,look, inflation will come down.

(27:11):
We're gonna be able to lowerrates, because the US from rate
structure is way higher thanEurope, for instance, or Japan
or Australia.
We're just at a very, very highlevel of interest rates.
So there's no reason for the US,other than this terrible
post-COVID inflation push, tohave rates where they are,
right?
I think you look at the longerterms, inflation is trending

(27:33):
down to 2%.
That means you're gonna have ashift in the yield curve.
It's gonna be upward sloping,but you can have you know lower
rates overall over time, right?
So from a real estateperspective, nothing's more
geared towards, you know,towards interest rates than uh
than real estate.
And by the way, we're you know,from from just a housing

(27:55):
perspective, we need to fillfive to seven million dollars,
seven million homes in the USover the next five years just to
sort of catch up to trend.
So if we get that sort ofsteeping in the curve, rates
lower, then I think you know,maybe the dollar a little weak
or two.
Part of this, I think Trump issort of a weaker dollar guy.
And with this whole tariffdiscussion, what he's really

(28:18):
trying to do is bring capitalinto the US, get supply chains
sort of formed here, and thenyou know, work on exports.
So with that sort of export uhfocus, he's gonna want a little
bit of a weaker dollar.
So I sort of see that assomething that uh I think you
know people have to look at interms of how to how to negotiate

(28:41):
and uh how to uh manage theirown personal wealth around that,
right?
The dollar probably has lesspersistent purchasing power over
the next five years than maybeit had when the US was the only
game in town, right?
Post-COVID, right?
So I I think with that sort ofmacroeconomic discussion and and
sort of view, that's why I I getI get more and more bullish

(29:05):
about banks are gonna behealthy.
Banks are, yeah, I think from afrom a regulatory standpoint,
they will have some regulatoryrelief in terms of their capital
that they need to set aside tomake loans, because I, you know,
Trump is gonna want them outthere lending.
So I think there'll be somechanges from a regulatory
standpoint that is gonna free upsome of that embedded capital

(29:26):
that banks have.
And they're gonna want to getinto projects, you know, like
ours, like what we're doing,right?
That's gonna be quick projects,you're in and out in five years.
There's a, there's a, there's a,there's a ramp up period,
there's a build period, butthese are not office, you know,
50 50-story office towers,shopping malls, what have you.
These are, you know, storage,residential focused MFR

(29:49):
projects, which I think areimminently fundable.
So I think, I think just from atailwind perspective, and going
back to our conversation today,I think that's exactly what
they're seeing as well.
It's like, let's go findprojects which are a little bit
off the runway, or not projects,but let's go find managers or
developers, people likeourselves, which are doing

(30:11):
things that are, you know, notright down the center of the
fairway, but they see the valueproposition and the
deliverabilities that we canbring to them.
So those I think very smartbanks, very smart private
credit, the bigger shops arelooking for ways basically to
say what we've been doing forthe last five years is not going

(30:32):
to work over the next fiveyears.
We've got to find somethingdifferent, and they're looking
for people like Paradigm.

SPEAKER_00 (30:38):
You nailed it, Mike, and I really appreciate that.
There's a lot of fruit in there.
And I'm going to kind of give alittle bit more color too on
maybe the more microeconomics Ifocus on because clearly you
just were talking at a muchhigher level on the on the
overall um governmental sidedown to you know institutional
and how the institutional uhmarket is really shifting.
What just I'm gonna kind of backup a little bit.

(31:00):
So the paradigm, you know, a lotof people have been asking me,
how the heck are you guysgrowing in such a unique
environment?
And I tell everybody where Iactually built my business as is
in the distressed market after2008.
I was a conventional lender andI was doing some hard money
prior to that, but after themarket crashed and losing
everything, I ended up kind ofrubbing elbows with a high net
worth guy that wanted me to stayon the mortgage-backed security

(31:20):
side and started doing moreprivate lending and acquiring
distressed assets.
And that's how we were gettingyou know much lower loan to
values and acquiring assets at amuch lower price.
And that's when I really startedlearning that for you to make
money, it's all about youracquisition price.
Uh, we're bringing that practiceto our table now.
Uh, hence secondary marketsacquisition costs for land.
The other side of it was I had avery unique um, I would say,

(31:44):
vantage point.
I actually was introduced to agentleman who was actually
providing back office servicesto the largest um auction
platform in the world, which wascalled Rio Max.
So back in 2008, and this issome of the details I really
wanted to drill down into givingsome of our network because I
think a lot of not a lot ofpeople know this about me.
But in 2008, when the marketcrashed, you know, the FDIC

(32:07):
really didn't have the liquidityto be able to bail out all these
banks.
You guys, for those of you thatwere in the space, you know, you
had Wacovia, remember Wacoviagot purchased, you had New
Century countrywide.
And what happened was is Iactually was in the right place
at the wrong time and wasintroduced to a gentleman to
open up the door for me to comeinto an auction, like literally
on a day, where I was watchingbillions of dollars of
distressed assets and banksbeing bought by other

(32:29):
billionaires, not the FDIC.
This was people that were comingin and actually buying these
banks.
What this gentleman was doingwas actually providing um the
back office services for assetmanagement.
So, you know that that sayingthat uh, you know, the the
people that made a bunch ofmoney during the gold rush were
the ones that provided the picksand the shovels, right?
That's what this guy did.
Yeah.

(32:50):
Yep.
So he was very smart.
He brought a bunch of analystsin, he had all the software and
technology at the time, and hewould go to these billionaires
and say, Listen, you don't havethe back office, but you got the
liquidity.
Why don't you come in and I'llintroduce you to all these
banks, the Wakovias, the now Bof A's, all these distressed
portfolios.
You can buy them, and then myasset managers and the back
office will offload these andfocus down to the macroeconomic

(33:12):
side of these things becausethey're buying 2,500
mortgage-backed securities,2,500 foreclosures, 3,000,
5,000, 10,000 foreclosures.
I mean, it was insane how largethese portfolios were, but they
were buying them for 40, 50cents on the dollar.
So again, acquisition.
The other side was how did theyrepurpose those?
And this is where getting intoprivate money and dealing with
fix and flips and working from amore of a street level, I was

(33:36):
able to identify what they weredoing.
So just to kind of give you someadditional detail, inside this
auction block, what they weredoing is they were providing
what you call heat signatures.
They were able to collect thedata on all the remember the
option arms and the negAMs and228 LIBORs and you know, uh uh,
you know, adjustable ratemortgages and all of that fun
stuff that people were reallypushing into.

(33:58):
What was happening is they hadall the data on all of those
mortgages.
How many different so all theway down to let's say Pulti
homes, KB homes, standardPacific homes, they had their
own in-house lender.
They were able to identify allthe even the track of homes that
were being built and what thoselenders were providing those
buyers, the 228 LIBORs and so onand so forth, and they were
narrowing it down to zip code.

(34:18):
Well, with what was on for theforeclosure books or what was in
notice of default, not quiteforeclosure yet, they also had a
metric that would track, okay,you have all these that are
currently in foreclosure, goingto an auction, you have all
these that are in notice ofdefault.
And here are the ones that weexpect to come up.
So, what was happening was isthey were ultimately offloading
assets that were performing inthe middle of non-performing and

(34:41):
full tilt non-performing.
And what was happening is I wasnarrow, they I was watching them
on how they were narrowing downto how many women were on, you
know, how many wives or how manywomen owned homes individually,
down to married couples onmortgages, to just you know men
that so on and so forth.
And so the devil in the details,in essence, was so impressive on
how they're narrowing that downand really the migration trends,

(35:02):
the spending habits, theeducational levels, um, uh
generational trends, spendinghabits, all of that fun stuff
was being implemented in thisauction to project the asset
value of these portfolios.
And that's where I reallystarted understanding the level
of detail that you have toimplement to underwrite to be

(35:23):
able to, in essence, make a lotof money.
And this is where these guyswere making a lot of money.
So when the pandemic hit, nowobviously coming through that,
and and I'll touch on one thing.
So uh, if for those of you thatwere really knee deep into this,
there was a forgiveness act,which Obama uh released some
policy where if you short-soldyour house instead of go through
a foreclosure, the debt wasforgiven.

(35:44):
That deficiency from what yousold the house for and what you
owed on your mortgage wasforgiven.
And then he obviously opened upthe Kickstarter program, which
allowed investors or operatorslike me to start soliciting,
doing mass solicitation to raisecapital.
And that whole Kickstarterprogram was really to kickstart
the economy and get the becausesmall businesses are the ones

(36:04):
that employ the majority of ourpeople, right?
The US uh is really driven bythe small business owners.
That's where you see Trump rightnow is trying to create that
small business um uh growth byhis policy now.
So it's really not, it's reallykind of that whole under idea of
like understanding just howthings go and how things happen

(36:25):
you know back in the day and howmany things are happening now,
and seeing it kind of lay outfor what it is.
And then we're just implementingthose growth strategies.
And really the idea is peoplego, oh man, you really blew up
during the pandemic.
Yeah, because this is where Isaw the opportunity going the
worse the market gets, the moremoney we're gonna make.
And so I actually looked at thisas an opportunity of going,
okay, this is when we startacquiring, people are gonna have

(36:47):
to start offloading, all the waydown to, and I hate to say this,
but it's true, divorce rates andif you know, uh unemployment.
We obviously we track all thatall the way down to baby boomer
spinning habits and migrationtrends, and all of that is
obviously uh all over the news.
You know, back in the day itwasn't there.
You know, we didn't have thedata uh software systems and
technology that we have today.

(37:08):
So it's a lot easier tounderstand the markets because
that technology is now in place.
So it takes a lot of theguesswork out of it, and it's
really just kind of you knowblack and white, you know,
positive, negatives type ofthing.
So that's where understandingthe macroeconomics is a big deal
because again, it's that devilin the details and really
understanding it.
So let's roll from there, let'sgo ahead and transition into the

(37:29):
family office because we reallydid talk high level at
institutional grade.
And I like to, I've been tellingpeople, you know, again, you you
went from Wall Street to MainStreet, and how a lot of wealth
managers are leaving the largerinstitutions on the wealth
management side and coming downto more of the street level and
look going more mainstream, buthow that actually provides a
little bit more of a highertouch platform.

(37:50):
As an example, back in the daywhen they had all those
foreclosures, you know, youdidn't have the asset managers
that were just behind a desk andlooking at numbers.
They didn't have the intimacyand the intimate details of each
asset and the the politicalenvironment in the area, or you
know, what area has high crimerates and where these things are
going to trade, right?
It's really kind ofunderstanding each location that

(38:11):
you know uh that those assetswere were in.
We as a as a fund manager, uh,when you have a debt fund, as an
example, a mortgage backedsecurity fund, the it's we're
every asset we lend money on,we're a lot more involved in
that.
Not only do we lend the money tothem, but we're watching over
that project as it's goingthrough construction throughout

(38:31):
the life of it.
So we have a different vantagepoint to be able to watch how
things are going on.
So we're ultimately we're we'reintimately involved into every
asset that we manage, wherebanks just simply don't have
that process.
So let's go ahead and dive moreinto the family office, Mike,
because I think you have areally good way of teaching
people what that is.

SPEAKER_01 (38:50):
If you look at the family office um growth and and
just the emergence of a familyoffice, this is like this is
like one of the most importantchanges that that I think the US
has sort of seen.
And it'll continue to really uhchange the landscape about how

(39:11):
things get funded, howinvestments get made.
And and so it's it's a reallyinteresting discussion, right?
So what is a family office?
Well, you know, it a familyoffice is nothing more than,
hey, somebody made a bunch ofmoney in, you know, the the you
know, they had a chemicalcompany or they had a real
estate company or they had, youknow, a manufacturing company,
and they accumulated usuallyit's multi-generational wealth,

(39:34):
right?
They get to the point where theyneed to create an investment.
It's really an investmentcompany that's gonna sit back
either from the cash flow that'sbeing generated from that
underlying operating business orfrom selling that business, the
money goes into essentially a agroup of professionals, CIOs,

(39:55):
attorneys, big staffs that areessentially nothing more than
fund managers that manage thosepools of assets.
Right.
And and so it it it it becomesfor people that are let's say
paradigm, all of a sudden we'relike, okay, well, that this is a
pool of capital that uh isavailable to from an equity

(40:20):
position, from a uh a mes debtposition.
They're they want to be supercreative in terms of how they
deploy that capital.
But it's it it, you know,they're it but think of it as a
turn, think of it as a pool ofmoney, right?
So a family that has that money,they they're taking risks, they
don't want to overexposethemselves on this pool of

(40:41):
capital, right?
So they this is this is thegenerational money that's gonna
basically have this familyliving its best life for the
next five to ten generations.
So when you have a chiefinvestment officer sitting over
that pool of capital, there'susually, and there will be an
investment committee, right?
Just like if you have a PIMCOthat has an investment

(41:03):
committee, right?
You have fund managers that arelooking after certain, whether
it's real estate or it's privateequity or it's you know, you
name it, more liquidinvestments, they have portfolio
managers, whether it's one, two,three, that are just analyzing
all those risks all the time.
So these are professional,effectively money managers that

(41:24):
are deploying capital andthey're and they're writing
loans, right?

SPEAKER_00 (41:27):
They're also and they're seasoning underwriting
and vetting and yeah.

SPEAKER_01 (41:31):
Absolutely.
And and so that this this issort of an extension.
And they pull those people outof Wall Street, they pull those
people out of some of theendowment communities and
pension funds, people that havebeen in that sort of seat, CEI,
CIOs and deputy CIOs that havebeen in those seats before and
know how to effectively not onlydeploy capital, but manage the

(41:53):
capital and manage thoseinvestments once they've made
them, because that's the ongoingdecision.
Do you want to do you want tostay in in this or do you want
to migrate to something else?
Right.
So that's the job of theportfolio manager.
But as you know, as the US, um,you know, these I I see this as
just getting this pool ofcapital is gonna get bigger and

(42:15):
bigger and bigger and biggerbecause of the amount of wealth
that's been created in the US.
Real estate's obviously a hugepart of that, but other
companies that have come up, youknow, they've gone public or
they're they're private andthey're gonna be selling those
businesses.
So this pool of capital is justgetting bigger and bigger,
bigger.
So that the quest, the quest forparadigm and for people like us

(42:38):
is how do we communicate withthat family office?
What are the things that theywhat are they looking for?
Can I understand what they'retrying to accomplish as a family
office?
What risks are they trying tohedge out?
What risks are they trying totake on?
So you really have to assume aportfolio manager's mentality as

(43:00):
you approach those familyoffices and then structure deals
which fit within those riskbuckets that they're that
they're trying to manageagainst.
So that, you know, it it's it'sbeen a fascinating sort of
period, I think, and it's reallyover the last 10 years, this has
really become something that youpay attention to and you
actually are trying to locatethose family offices and pitch

(43:23):
to them.
And and I I think that that thatabsolutely is a trend that we're
gonna see grow, grow, and grow.
And it it it sort of takes, it'scompeting with private credit,
it's competing with bankfinancing, it's competing, you
know, for for private equity.
You know, they're trying tobecome their own private equity
shops too.
So it's changing the landscapeof how capital gets deployed and

(43:47):
how capital gets raised, yeah,by let's say, a paradigm, right?
So it it's purely, it's purelyportfolio management.
And it's interesting because thebigger picture on these guys is
they've created the wealth.
So they're not necessarilylooking to take huge risks.
They'll have they'll have a 10%of their portfolio, which is
like, hey, let's go for the homerun.

(44:08):
But if that goes to zero, theydon't care as much, right?
But that's 90% of their otherbuckets are things that aren't
going to lose them a bunch ofmoney, right?
This is about creating, if theycan get 9 to 12% returns,
they're happy as a fat clan.
They're like, done.
Buffett used to say if you cancompound money at 10%, you'll

(44:30):
own the world, you know, in yourlifetime.
So you don't have to get 30%returns all the time.
You can have buckets that aregoing for those 30, you know,
20, 30% returns.
And a lot of that is sort of inthat sort of PE bucket.
I have my own thoughts about thePE bucket.
I don't think family offices areparticularly good in the PE
space, right?

(44:51):
For lots of different reasons.
But for those other buckets,whether it's real estate or you
know, equities or bond trading,and those they're they're great
at that stuff.
That you know, that's just youknow it's easier to to manage
and and to navigate around.
But again, these guys are likethey're trying to create
generational wealth.
They're trying to say, what'sthe inflation rate?

(45:14):
How do I grow this pool of moneyabove that inflation rate?
And if the dollar goes to zero,how where's my hedge there?
Because their assets are indollars.
But they want to maintain alifestyle where they can be
anywhere in the world enjoyingit, and therefore they can't
just look at the uh at theirinvestments as just dollar
denominated portfolios.

(45:35):
They've got to they're they'relooking at this like I've got to
outperform, you know, very in innot only just dollar terms, but
in sort of global uh uh globalcurrency terms.
So there's that picture of ittoo.
It's like they they're reallylooking at this holistically as
as wealth preservation andwealth growth.

(45:57):
And that, and again, you know, Idon't know what the size of
this.
I haven't, I actually shouldknow that.
I don't know the size of thefamily.
It's it's uh fairly opaque, butit's hundreds of billions of
dollars that are under andgrowing.

SPEAKER_00 (46:09):
It's one of the fastest growing movements in the
wealth management side.
Exactly.

SPEAKER_01 (46:13):
So you'll be a trillion, you'll be a
multi-trillion dollar pool ofcapital that the US in
particular, you know, has going.
I mean, it's yeah, it's amazingthe capital in the U.S.
that's available, whether it's afinancial system, Wall Street,
private capital from familyoffices, high net worth
individuals.
That's a really, you know,versus any other place in the

(46:35):
world, whether it's China orEurope, or the US is so
different.
Our capital markets are sorobust.
There's so much capital that canbe deployed, you know, it it
makes it makes it from a companylike Paradigm's perspective, we
just have to think smart, right?
So how do we grow and scale thecompany knowing that the capital

(46:59):
is available, but knowing we'vegot to basically, you know,
we've got to uh tune what we'redoing into those risk buckets so
they can say yes.
And that's you know, that'sgenerally what we do.
Old school would have said youjust go to a bank and they'll
lend, you know, to put 20%equity, they'll lend 80%.
And, you know, but but thosedays are over.

(47:20):
You've got to have discussionswith private credit shops, with
banks, with family offices, withwith high net worth, and even
our crowdfunding platform, we'reseeing, you know, that as that
scales, we're seeing realadvantages where where guys are
coming in, they're writing threemillion dollar checks, four
million dollar checks, right?
So we're getting through some ofthat effort, we're sort of

(47:41):
getting into some of thesefamily, smaller family offices
with let's say$100 million tomanage, right?
That's as a family office go,that's small, but those guys
don't have the resources thatsome of the bigger family
offices have, right?
So they would really want topartner with people like

(48:02):
Paradigm.
They get to understand whatwe're doing and the
repeatability and sustainabilityand what that pipeline looks
like.
It's very attractive for thosepeople because they are more
relationship-oriented as opposedto some of the larger players.

SPEAKER_00 (48:16):
You know, and I'm gonna get I'm gonna add to that,
Mike.
You know, one of the things thatI've been kind of caught my
attention over the last fewconversations we've had with uh
some other family offices, we'rereally educating them now.
You know, they're verysophisticated in managing money
and understanding from a globallevel or some macro uh economics
level of you know, moving moneyaround and kind of where we're

(48:37):
where things are moving,heading.
What we're realizing is that alot of in a lot of these wealth
managers that are reallystarting to allocate more
capital to alternatives andspecifically real estate, when
they're more of a Wall Streetbackground, they don't really
have the real estate knowledge.
You know, they may have you knowbought and sold some of their
own homes and so forth, but theydon't really have that type of
knowledge.
Their education's at a differentkind of a different direction.

(49:00):
What we've done is we've kind ofcreated really what we've done
is we've been honest and openedup the floodgates of how this
works.
You know, a lot of people don'twant to share the secrets or the
secret sauce of what's going on,and that's not how we operate.
We're going, listen, this is howit is, and this is what we're
seeing, and here's the proof ofit, and here's what we're buying
the material for, and you know,this is how long it takes to

(49:21):
build it, and here's the trackrecord, right?
We're just kind of saying thisis where it goes.
If you want to try to mimic it,good luck.
It's a whole different level ofmanagement when you're dealing
with people and hurting cats onsite.
Um, but there's there's it's adifferent, it's a different
environment.
A lot of people, because thenature of investment right now
is going towards alternatives,again, a lot of gold, you know,
silvers and so forth, even that.

(49:42):
But what's happening is whenwe're talking to a lot of these
wealth managers that are saying,hey, look, I have a mandate to
allocate 10%, 15%, 20%, even touh alternatives and mostly real
estate.
We need a firm that we can trustthat's going to provide kind of
a red carpet service, but reallyeducate us and allow us to have
an open book kind ofconversation.
And that's where the trust ismade, really is kind of talking

(50:05):
about the hardships of whatwe've gone through in the past,
what we're like again, our trackrecord, where I understood
macroeconomics, kind of what Iwas talking about with Rio Mac,
you know, down to what we'vedone and implemented and the
mistakes we've made and howwe're correcting those mistakes.
And really the each individual,too, that has a big stick within
the company and the decisionmaking that they have in their
track record.
You know, that's really what'shappening too in the space, is

(50:26):
that people are really wantingto trust, you know, the right
operators.
And the way to do that is tosay, come to our site, meet us,
and then let me show you how itreally goes down.
And that's where the that'swhere the education and
knowledge is coming in.
So family office, becausethere's such a shift in the
market, that's why we're talkingabout the trends, you know,
really it's it's a high-levelset of education now.

(50:47):
We're we're having conversationsof why we look at things the way
we look at things, how we'rewe're underwriting the things,
why we have a constructionmanagement division, and how
that married up to fund controland the debts, the debt uh debt
fund, and how that was seamlessto oversee.
And why did we choose this toour underwriting background on
you know assets throughout thecountry?
It's really kind ofunderstanding what what you're

(51:07):
we're able to do is articulateit in a way where it's a oh well
that makes sense, and then showthird-party data that is you
know supporting our decisionmaking.

SPEAKER_01 (51:16):
Um they also get data, they also get, like you
said, they get data from us,right?
Just think about okay, bigpicture real estate.
Everybody, everybody macrounderstands real estate, and
there's been a tremendous amountof wealth that's made in real
estate.
It's a real asset, it's a hardasset, people love it.
So it's got all this haloeffect, which people generally
feel good.
Oh, I like real estate, right?

(51:37):
But once you get into the as aas a developer, you know, and
and get into these projects,we've got like data on so much
stuff.
Like if you say, okay, you know,let's talk about the input costs
that are going into ourprojects, where are they up down
sideways, right?
We if you want to get a peakabout inflation, copper, steel,

(52:00):
like it rolled steel, it's up 20plus percent.
That's but it's flat year overyear, up 20% really since the
tariffs.
Copper, you know, itessentially, yeah, we saw copper
through COVID spike like twotimes, and it's come down.
Basically, it's up 3% year overyear.
These granular things, lumberprice is another one, right?
So we're dealing with this froman input perspective.

(52:24):
Oh, you know, that's that's ourcore business and managing
around those core businesses.
And that's information that Ithink is really useful.
People love that stuff.
It's like the data that we getfrom our underlying operations
are, you know, are incredible.
From a, you know, if you're adata nerd at a family office and
you're trying to make decisionsabout where inflation is going

(52:44):
to be or where banks are, whatliquidity in the overall economy
is and where capital flows arecoming.
This is all information thatbasically is really, really
helpful.
So I think having, like yousaid, having an operator that
they can when you make aninvestment, if you can't
describe the investment in about30 seconds, it's probably not a
good investment, right?

(53:05):
So from a simplicityperspective, I love that.
I mean, you can get into infront of a uh a family office,
describe how you're gonna builda storage facility out in
probably 10 seconds.
It's like for you, it's likedone, right?
Here are the inputs, here arethe costs, here's the land cost,
boom, boom, boom, boom.
You know, start to finish this atwo-year product, you know,

(53:26):
everything you can describe in avery, very short period of time
because you've got it, it'ssimple and it's repeatable.
Same things with with ourmultifamily side of the
business, right?
So it, you know, I think thatfrom an investment thesis
standpoint, not only is itunderstandable, but people get
valuable information aboutoverall economic data from from

(53:49):
operators like Paradigm.

SPEAKER_00 (53:51):
And let's let's from from there, let's move over to
terrorists because we have alittle bit more time left.
So I because you brought it upand it caught my attention.
I want to actually shift intothat.
So a lot of people go, hey, whatare you doing with terrorists?
The 90% of our conversations,uh, that that part of it does
happen within our conversations.
And what do we do to hedgeagainst inflation?
So what we've what we what we'vecreated is really a uh

(54:15):
relationship.
So when you get to a certainpoint, and this is why people
talk about how you know uh oneor two operations within a city
kind of dominates the space,right?
You have one contractor in LakeAvasi that really kind of gets
control over the majority of thethe transactions.
You know, you just it's thenature of of uh certain
businesses.
That's what's happened with us.
We are acquiring so much steelthat we are able to have a

(54:39):
senior position with insidethese uh manufacturers.
What we've done is we'vescreened the existing
manufacturers and newmanufacturers to find out where
they're getting their steelfrom.
The majority of our steel righthere in Arizona is actually
coming from Mexico, which isn'tbeing as impacted nearly as much
as what was happening with Chinaand all the you know stuff
that's going on, and we won't gotoo far into it.

(55:01):
But that's huge.
And what we've also caught isthat a lot of our manufacturers
have been very smart, they'vebeen they've been stacking the
deck with uh old steel that theycan actually recycle.
And so we're doing much largerorders earlier on to try to lock
in our price.
And then one of the things thatwe did that was probably a
little more outside the box wasfor those of you that know us,

(55:25):
you'll know how many units wehave at Paradigm Storage.
We have Boathouse, we haveDover.
What we decided to do was goahead and do a mass order of all
of the garage doors for everyone of our projects in one shot.
And what that did is it allowedus to compress our costs.
And here's where the big, thebig thing is is you see it all
over the news and everyone's allstressed out about it, and
rightfully so.

(55:45):
But what's happening is is guyslike us have a personal
relationship with thesemanufacturers, and they don't
want us to be out of businesseither.
They want to try to ride thiswave as well.
So they're inheriting some ofthose costs while we're
inheriting them as well.
And so having an open bookcontract is really important, an
open book plus a cost pluscontract.

(56:05):
So what's happening is we're notfeeling it as much.
They're also we're feeling it,but so is everybody that's
involved.
And they want to obviouslysupply some of their bigger
buyers.
So we're gonna get a seniorspot.
What we did with all thosegarage doors is we did one big
order out of China to order allof the garage doors in one shot
and have one um uh containerdelivered.

(56:26):
And the delta was only a$30,000difference for all of our
projects and cost.
So it's those types of decisionmaking just to move and move
quickly to get that stuff lockedin so we can fulfill the
commitments that we've alreadytaken to get the projects
completed, all the way down toour HVAC and so on and so forth
with Paradigm.
We ended up ordering all theunits uh all at once and saving

(56:49):
almost$200,000.
So there's things like that whenyou have Cash is King, when you
have the buying horsepower,things shift.
We're also one of the largercontractors here in Havasu.
So we were employing more subsand and for longer periods of
time because our projects are sobig that the line items are
longer.
So you're gonna get differenttreatment.
And I know I hate to say it froma uh, I hope I don't sound

(57:11):
arrogant, but that's just how itworks.
And and what's happening iswe're continuing, we keep the
respect high and we're keepingpeople moving forward.
So we have to make the rightdecisions to keep our downline
fed too.
So it's not just our investorsor our operation and the we us
putting foot on the table.
There's a lot of peopleinvolved, and we have to make
those decisions sometimes on thefly, but right now we seem that

(57:31):
we've made those decisions, uh,have been good.
And and I think we're like yousaid, we do have some tailwinds
coming, Mike.
So I I'm not stressed about it.
I think we're I think we allagree that things are starting
to shift, inflation's come down,you know, so on and so forth.
So um, with that said, that'ssome of the things that we've
seen during the terrorists thathave an impact on us.
I think a lot of stuff that yousee on the news is is I think
it's just it's it's a bunch ofhigh school kids fighting, and

(57:54):
it's not as as aggressive on theon the ground.
And that's where I wanted totake the time today to educate
you know our network that we'renot feeling it to the impact
that I think most people arefearful of.

SPEAKER_01 (58:04):
Yeah, yeah, I think that's right.
I mean, uh we we wrote, I mean,that's the nice thing about us
too.
We'll we'll you know, we do aquarterly, we for our security
income fund investors, we spenta lot of time sort of on this
macro side of things because Ithink people are interested in
it.
And you know, our our impressionwas wait a second, these
tariffs, yeah, yeah, yeah.

(58:25):
Don't let's not stress about thetariffs, it's a negotiation.
Uh to be quite honest with you,I think you know, trade isn't
free.
There is no such thing as freetrade.
And I think Trump has sort ofrecognized that.
And and therefore, let'snormalize you know, those
tariffs uh across countries andget them ultimately to remove

(58:46):
their again.
This is not about erecting tradebarriers as much as it is
reducing trade barriers in othercountries.
Sure, maybe there's a 10% tariffglobally, fine on everyone.
I think the the market can getpast that, not a problem.
It's it's it from hisperspective, it's about removing
and reducing trade barriers soUS can export, whether it's ag

(59:07):
or you know, whatever productswe're exporting to those
countries.
It's more about removing thosebarriers as opposed to so I
think we had the right take onit.
And I think the market, youknow, was down what 20% almost
on this sort of tariff hysteria,and then has bounced right back,
right?
So there I think people aregetting, you know, sort of wise

(59:28):
to ultimately what we're tryingto do here, or at least the
Trump administration is tryingto do with the tariffs.
But you know, your conversationsort of ground up, micro
granular, is like you got tovalue engineer constantly your
budgets and find ways, you know,to save in other areas if you're

(59:49):
gonna spend more in this area,right?
So I I constantly hear you valueengineering every piece of the
project as we go through it, notas we go through it, but looking
forward and saying, should wepull forward costs?
How in and what's you know,what's that gonna mean to the
overall uh project?
What does that mean for ourlines of credit?

(01:00:10):
You know, what you know, from ayou know, from a budgeting
perspective, those are decisionsthat you make all the time.
And I think our our our uh ourdevelopment team does a good job
of uh value engineering andfinding those uh ways to save
money and then and even you knowlooking at things you know on a
bigger picture level.

(01:00:31):
Do we as paradigm set upparadigm manufacturing?
We've talked about that before.
Like, are there things that wecan bring to the table that from
Manufacturing perspective, wecan manufacture our inputs into
our projects to try to basicallythen protect margins for our

(01:00:52):
individual projects, right?
So if if we're making the steel,if we're making the garage
doors, if we're making, youknow, uh other inputs that go
into the barn caves or go intoour storage projects, then we're
gonna find ways basically toshave costs for you know for our
investors at the end of the day.
And that's so I think as abusiness, we, you know, yeah,

(01:01:15):
we're we're we're we're lookinginto the solar area.
We're having solar on ourprojects.
Paradigm Solar is a company thatwe're gonna be, you know,
getting online as a company.
So looking at ways basically tohorizontically and vertically
integrate so that we can bringto bear pricing, power, uh, you

(01:01:36):
know, as we as we develop ourprojects at the end of the day.
So that you know, these aredecisions that Paradigm makes as
a company um all day long.
And and are trying, as we grow,there'll be bigger and bigger
decisions that we have to makein in terms of scale and how we
scale up the business.

(01:01:59):
Ryan, I think you hit mute.

SPEAKER_00 (01:02:02):
Sorry, buddy, can you see me too?

SPEAKER_01 (01:02:04):
I can see it.
Yeah.

SPEAKER_00 (01:02:04):
Yeah, there we go.
Perfect.
Yeah, so I really appreciatethat, Mike.
I think we've been able to sheda lot of color on kind of the
the marriage between you and Iand how you and I both see
things um and how thatimplements into Paradigm's
platform.
So is if there's anything elseyou want to add, my brother, I
think we are pretty much good togo.

SPEAKER_01 (01:02:22):
Yeah, no, I I I think that that's I I think
that's I think we, you know, wecovered a lot of territory here,
and these things are always hardbecause you know, we could
probably spend three or fourhours on a discussion like this.
And, you know, I always getcalls after these, like, why
didn't you cover that one?
But I think look, I I thinkparadigm is an institution.
I think going back to yourvision, you know, I love this.

(01:02:46):
I mean, I love this every daybecause I'm I'm taking what I've
done in my past and I'm applyingit to a new new area, right?
To to to a real estate companythat's embedded in lending and
ground up.
I love this of what we're tryingto build together.
And I think, you know, thatthat's exciting.
I think if you don't have theenergy as a company, you you

(01:03:07):
know, you're not making theright moves as a company.
That's how that's how things getstale and don't grow.
This company is just theopposite, right?
There's so much energy right nowwithin Paradigm.
There's you know, we'reconstantly looking at you know
what our pipeline is, how can weraise capital?
How do we get more money in thesecurity income fund?
What's the next project thatwe're doing in Lake Havasu,

(01:03:27):
right?
You're having those discussionsright now.
You come back to me and say, Ijust found another one.
Let's go, let's go raise somecapital for it.
Or I've had this thought.
Let's, I uh this there's adistressed opportunity over here
that I think we should benavigating into, right?
So it's, you know, from aplatform perspective, I couldn't
be more excited about where thecompany's going and and what
we're gonna do over the next.

(01:03:48):
It's not, you know, like I Ihear people that are running
companies, you know, sort oflook at the next 10 years.
No, I think it's so excitingover the next two years, the
next 24 months are gonna bereally, really different from
Paradigm's perspective.
And looking back on it, I thinkeven you are gonna be sort of
excited, maybe a little bitshocked how far this company is
gonna go over the next 24months.

SPEAKER_00 (01:04:09):
You know, and it's a testament to the team too, Mike.
I mean, I feel honored to haveeverybody, you know, that's in
our back office or downline.
I mean, you we couldn't do thiswithout the support.
Not at all.
I try to I try to tell Briannato jump on on uh video
conference calls with some ofour clients, and she's like, I
don't want to do it, I don'twant to put my makeup on today.
You know, she's so funny, butyou know, it's it we have the
best, the best team, and I feelcompletely blessed.

(01:04:32):
And and I think what we'verealized is that we can utilize
systems and technology to keepour overhead low.
And we've really brought in ahigher level of professionals to
really take control over eachdepartment, and not only that,
we've all been together for awhile now.
Yes, you know, and that reallyis uh a marriage, truly.
And when you don't have as muchturnover within a company, I

(01:04:52):
think that's really importanttoo.
And that's obviously what FamilyOffice decides to ask.
Yeah, but I I feel blessed, Ifeel like we're on the right
track.
I think what it comes down to iskeeping our head down and
pushing hard forward no matterwhat, and really kind of having
that that uh understanding thatno matter what happens, we're in
this together, you know.
And uh, and I I feel I feelreally good about where we're
going to.
So thank you very much fortoday.
And I uh I'm actually lookingforward to for our our our

(01:05:15):
network and our audience torespond, ask us questions.
We're gonna be go ahead and sendthis out uh in a recording to
our entire network.
And for those of you that uhregistered wasn't able to make
it.
Um, thank you for watching thevideo.
And really, guys, I appreciateall the support after all the
years.
And uh, see a lot of people,familiar faces, and I'm really
looking forward to the next one.
So, guys, thanks so much.
Mike, thank you very much for uhthe color, man.

(01:05:37):
You you did great.
Thank you.
Thank you, sir.