Navigating Wealth Creation: Real Estate Insights and Man Cave Investments | Jordan Belfort E1

Unlock the vault of wealth-building wisdom with none other than the Wolf of Wall Street himself, Jordan Belfort. As he shares his arc from beachside hustler to sales sensation, we unravel the fabric of financial myths, proving that a nine-to-five isn't the only ticket to prosperity. Our conversation with Jordan is a masterclass in spotting opportunities, embracing sales and marketing, and why a conservative approach to risk can be the very shackles that bind you to mediocrity.

Venture with us as we sift through the clutter of investment advice, landing on the golden nuggets that genuinely matter. Together, we dissect the allure of simple investment strategies, the underestimated might of the S&P 500, and how a disciplined approach to contributions can unlock the magic of compound interest. We even take a sneak peek into my latest book, a treasure trove designed to steer your investment ship through the murky waters of financial advice toward the lighthouse of informed, strategic decision-making.

From the comfort of custom luxury man caves to the tranquil shores of Lake Havasu, we traverse the changing landscape of the real estate market, adapting to the post-pandemic world. We examine how demographic shifts influence the market and how unique amenities can transform real estate projects into communities. This episode is a journey through the strategies that shape the fortunes of the savvy investor, revealing not just how to grow wealth but how to live a life rich with opportunity and success.

Paradyme

Episode Transcript

Speaker 1 (00:03):
Hello, ryan Garland, I am your host of the Paradigm
Shift.
I cannot wait to expose thetrue inner depths of
institutional wealth buildingand how to dig deep into real
estate investing.
Hello, ryan Garland, I am yourhost of the Paradigm Shift.

(00:26):
I cannot wait to expose thetrue inner depths of
institutional wealth buildingand how to dig deep into real
estate investing.
Alright, ryan Garland here.
Founder and chairman ofParadigm, I am honored today to
be able to have Jordan Belfordhere.
We are going to do a podcast tokind of share with you guys a

(00:48):
little bit about what it is I amdiving into, get his ideas on
our investment strategy, butjust kind of start from scratch
and see where this ends uptaking us, to be honest with you
.
So this is exciting.
So, jordan, thank you very muchfor having me my pleasure I
really appreciate it.
Alright, so to kind of dive in,let's talk a little bit about
your history and kind of whereyou were raised and, you know,

(01:08):
just kind of give a littlebackground on yourself before
you kind of end up where you aretoday.

Speaker 2 (01:11):
Sure, yeah, so I mean , I was born in New York City,
one of the suburbs, queensBayside.
I grew up in an interestingfamily in the sense that we were
like a lower middle class,right.
My parents were highly educated, brilliant, hardworking and
broke.
They are professionals, theyare both CPAs and I am like what

(01:33):
the fuck?
Like I didn't take long.
I was under 10 years old and Iam like I just think my parents
should be making more moneybecause, like you know, they are
really smart, educated,hardworking people and there
were some things that you know Ithink I probably came a bit
later what was causing them tosort of struggle financially,
but it didn't take long to startlinking up that.

(01:53):
There were a couple of thingsmissing from their own life
strategy, and one of them isthey were completely risk averse
.
They were depression, error,mentality.
They refused to even buy aplace.
They rented an apartment andback then you could have bought
a house of $5,000 back in theend when they were looking for
houses, right, but they justnever took risk.
And they also were really antisales and marketing.

(02:19):
So like, for example, they areboth CPAs, right, then as a CPA,
you can work for someone elseand get a wage or you can also,
you know, do people's taxes andbooks, you know, on the side and
make extra.
And you know my parents couldhave made a lot of money doing
that but never did because theythought that the idea of putting
their services out there andsoliciting in some way was, if
not evil, simply not ethicalright.

(02:41):
So what did they do?
They worked for other peopleand they got paid a wage and
eventually, as you know, as Igot older I mean my early teens
I was always entrepreneurial,with paper routes and shoveling
drawers at the snowstorms and Idid everything all sorts of odd
jobs, magic shows, I did.
But I hit it big for the firsttime and I was 16, selling ices
on the beach and I, you know,went down there with one cool

(03:04):
the first day and sold it out,you know, and no one was doing
it back then.

Speaker 1 (03:06):
I had this regular ice ice cream.
Ice cream.

Speaker 2 (03:09):
Ice cream ice cream and Italian ices and chip
witches and fudgicles, frozenfruit balls, milky waste things
with dry ice on top and astyrofoam cooler.
And I came up with the ideabecause I was on the beach with
Jones Beach in New York, whichis massive and a hot summer
Sunday, there's a million peopleon the beach, right, and
everyone's bitching and moaningis that they take this long walk
to the concession, which is asolid 300 yards away.

(03:31):
It was not close, or 200 yardsaway, right.
So I'm like I wonder what wouldhappen if I just, you know,
loaded up a cooler with icecream and stuff and went down to
the beach and, sure enough, Isold it out the first day and I
made I think it was 120 hours inone hour.
How?

Speaker 1 (03:44):
awesome.

Speaker 2 (03:44):
And then that was 1978.
Wow, now just to give you somecontext here.
Right, I'm old, right.
So next day I went back withfour coolers and sold those out
and made almost $500.
So on today's dollars, $500 isprobably like $2,000 in a day.
Right, it was a massive.
So at least $1,000 more thanthat, you know, $1,500, right,

(04:08):
and that first summer I made$26,000.
It was more than my parentswere making, it was more than
anyone my neighbors parents weremaking.
I mean, it was a ton, a shitton of money.
Right, next summer I went backand made $50,000 by having three
kids walk behind me sellingcostume jewelry, you know.
And so I did all that stuff asa kid, right, and I think my

(04:29):
upbringing really showed Irealized that if you want to go
out there and be successful, youknow you're not going to really
do it by working for someoneelse for a wage.
So here's the one example.
That one exception is if you'regoing to be, if you're in the
investment world and you knowyou get a job at a really great
investment back in the Goldmanor one of the others, jp Morgan

(04:50):
I guess you can make millions ofdollars.
But it does take time.
It takes time, but because inthat situation you know you're
leveraging off of a huge capitalbase they have.
So there are advantages and thebrand equity behind those
investment banks.
But generally speaking, it'svery difficult to become wealthy
, truly wealthy, working for asalary.

Speaker 1 (05:10):
Yeah, no, absolutely.
And you know it's kind of coolthat you're going down that road
, because when you ended up kindof moving into Wall Street, you
dove into sales, which iscompletely opposite, and then
you're the way your mom and dadkind of looked at scaling their
business.

Speaker 2 (05:24):
Well, I think that you know, when it comes to
beliefs, about life and takingaction, and you know what's
right, what's wrong, either youend up adopting sets of beliefs
that are very much like your ownparents or the exact opposite.
You know, I went the exactopposite way.
So to me, you know, I embracedit and also I was good at it,
naturally.

(05:45):
So I think that you know youtry something and it works for
you.
You naturally great at it andit feels good, so you do it more
and then you start to practiceand maybe you read a couple of
books about it back then.
Now you go on the internet,right, but for me, I was a
natural born sales person and itfelt great, you know, just, and
also the hustle of that thing.
You know all these earlyexperiences I had, whether it

(06:05):
was, like you know, knocking ondoors to expand my paper route,
you know, putting an end in thepaper to do magic shows when I
was 13, shoveling driveways,knocking on strangers doors when
I was 11 years old, right,ultimately, the beach, which was
just literally hard work,entrepreneurial stuff, right,
but I linked up.
I'm like you know, if I workreally fucking hard and I do it
for myself, by my own boss.

(06:27):
I want to make a fortune versusgetting a job as a catering
company for $1.13 an hour, whichis what my friends are doing
right, which is like insanemaking $40, $13, making $150 an
hour.
So like, how do you compare thetwo?
So you know, those are some ofthe time I emerged from from a
graduate from college.
You know I think it wascemented in my belief systems

(06:49):
that you know I need to work formyself, be my own boss, I need
to get rich like that, asopposed to the way that, like
when I was growing up I don'tknow if this is so much a thing
now, but when I was growing upin the 70s and 80s, in public
school and high school and stuff, it was like the path to wealth
is get a good job, go work at abig company, you know, work

(07:09):
your way up to corporate ladder.
You know you're gonna have apension when you retire and
they'll give you a nice goldfucking watch and you'll save a
little money in your IRA and allthat will be enough, including
your social security, to live anice, happy retirement and the
fact is that this day and age isprobably enough to pay for your
diapers when you're in anursing home, if that right you
know so it's not really a pathto success or wealth.

(07:30):
I don't think it ever was.
I think it was a big lie formost people not to say that.
Listen, that the world ismostly consistent people that
work for others, and that's fine, there's nothing wrong with
that.
But if you do that and you'redesigned to be wealthy, you're
gonna have to take the moneythat you save and put it to work
, whether it's in real estate,which is a very good way to get
rich.
On the side, you'd have someside I don't wanna call it a

(07:51):
side hustling, that demeans itbut multiple streams of income,
whether investing in the stockmarket, wisely investing in real
estate, maybe even a sidebusiness, a franchise that you,
whatever it might be.
So I think that you cancertainly succeed working with
someone else there's nothingwrong with that.
But if you're a desire to bereally wealthy, well, probably
not the best path.

Speaker 1 (08:11):
You know, and I think it's so much easier to scale
and open up a business, even ifyou have a W-2 job, to be able
to go out and find another.
In essence, side hustle, butwhether it's, like you said, a
franchise, invest into stocks orreal estate.
What have you, I feel like,with all with the internet and
data, and you can pretty muchfind pretty good investments if
you do your research.

(08:31):
But, everything's at yourfingertips for the most part,
much more now than it was backin your era, when you were
investing.

Speaker 2 (08:37):
Right.
So I mean the answer to that is100% true.
However, on the flip side,though, you need to be very
careful, because there's a lotof shit and bear traps on the
internet, a lot of bad advice.
So if you're going on Instagramor TikTok and you have these
shawlt and still, oh, take thesefive hot, these coins are gonna
moon, or this is the next greathot stock these fucking

(09:00):
nonsense people don't know whatthey're doing there.
People that get rich from thatare the people that are giving
the advice, and even worse isJim Kramer on CNBC.
If you follow Jim Kramer,you'll end up with financial
whiplash.
The guy changes his mind likethe fucking wind blows right.
So I mean, like there's a lotof what you're saying is 100%
true.
The ability to succeed rightnow, I think, is great, and it's
ever been, and all theinformation you need to succeed

(09:23):
is out there.
The question is, how do youfilter out the bad information
from the good information?
How do you get to the realstuff versus all the bullshit?

Speaker 1 (09:31):
Let me ask you this that's perfect segue into this,
because that's really one of thequestions I want to ask you
anyways what would be if youwere to look at an investment
firm that you want to investinto?
Let's say, you're just lookingout the internet, you're like,
oh, I want to invest in stocks,invest in real estate, whatever.
Something pops up on a Googlesearch, right, and you start
looking them up.
What would be the determiningfactor for you to want to look
into them further and what wouldbe kind of an ideal in essence

(09:55):
firm?

Speaker 2 (09:56):
structure.
So let's separate it out fromlike this.
So it's real estate, which is avery unique thing into itself.
It's a separate asset class,right?
So let's put that to the side.
Then let's talk about equities,stock investments, investing in
bonds or whatever.
Right?
Small cap, big cap.
I just actually wrote this book.
You see this book right here.
It's called the Wolf of theBest.
I just wrote it.

(10:16):
I had to promote my book, but Ijust wrote this book.
It was a best seller, right?
It still is.
And when it comes to investingin the stock market, it's so
stupid simple to make money inthe stock market, and the reason
for that is all you have to dois go and buy the fucking S&P
500 and hold it Like the bestinvestment in equities.
If you investing in the stockmarket, which should be a very
large portion of yourinvestments, okay.

(10:38):
Trying to pick individualstocks, trying to time the
market, is a suckers game.
Some people can make money.
Very few buy in large unlessyou're a professional investor
and, by the way, even all theseprofessional investors.
Now.
If you're a professionalinvestor working for yourself,
you got a shot.
If you're really, really good,most people can't beat the S&P

(10:58):
on a consistent basis.
But if you're looking to giveyour money to a money manager
who's gonna charge you 2%management fee, 20% of the
profits expenses on the fund,it's the ultimate suckers game.
Because after you deduct thefees and commissions and
everything else and the tradingfees and the tax inefficiencies
that come from that because whensomeone is managing your money

(11:19):
they have to show activity butthey can't just buy and hold you
say what the fuck am I payingyou for if you're just buying
the S&P and holding it right?
So that's why I would stronglyadvise and all the data is there
to support this Every studythat's been done in the last 75
to 100 years that's been instudies, like academic studies
right.
The best investment in equitiesis simply to buy the S&P, hold

(11:43):
it, reinvest your dividends andthen make frequent contributions
and use long-term compoundingto do the heavy lifting for you.
That's the stock market.
So, like anything else, to meit's like it's odd that Wall
Street or say financial serviceslike stocks.
They don't add value.
It's like the one.
Everything else you do, likeyou're gonna go by real estate.

(12:04):
Right, you better have someonein those fucking real estate
advising you or you're gonna getyour head handed to you, you
will.
There's a million things to know, a lot of variations, when to
buy, what to buy, what to lookout for what areas is very you
know.
If I was I'm not an expert inreal estate myself If I was
gonna go out and invest in lotsof real estate, I'd bring in an
expert to be my partner.

(12:25):
Right, that's smart.
Same way, if my pipes broke inmy house and I had to leak in my
house and they're flooding, I'dcall a professional plumber and
pay his fee to fix my pipes.
If my electricity shorted out,I wouldn't try to fix my own
electricity.
If I kill myself with anelectrician, right, I'd call an
electrician right, who wouldknow how to do it and they get a
better result Right.

(12:46):
Same things with medical care.
If I'm sick and I have to getmy appendix out, I'm not gonna
operate on myself for a.
Hey, bro, you want to operatingon me, right?
No, I'm called fucking doctor,who's licensed, an expert who's
gonna do a good job.
Right, and I'll pay his fee.
So we go through life and thisis the trap and we've been
trained, and properly andrightfully so, to seek out
experts, to find experts, to getthe best results possible on

(13:08):
the things that we need toaccomplish.
The one exception that'sfucking Wall Street.
They don't add value.
They do not add value in thesense that if you hire an expert
to manage your money, you'renot gonna get as good a result
as if you just put it into anS&P 500 index one and hold it.
That's been proven over time.
And here's the thing you have afew amazingly successful money

(13:28):
managers right that can beat theS&P.
There are a few, very few.
But there are a handful of rockstars, guess what.
They're not taking your moneyyou can't give them.
They're not accepting moneyfrom people like you or me, if
that matter.
They're not accepting moneyfrom anybody.
They're training their ownmoney and maybe a couple of few
multi-billionaires right, butthey're not gonna go out there

(13:51):
and take money from the averageperson.
But then the rest of the hedgefund managers are bathing in the
afterglow of these rock stars.
So people are like, oh my God,this is the hedge fund.
No, they're mostly fuckingsub-par performers.
That and this has been provenagain many, many times over.
So that's stocks.
I just simply and that's what Iwrote this book about that about
.
It explains to you really indetail how you go about building

(14:14):
a world-class portfolio withouthaving to hire a money manager
who's gonna charge you fees andrape you and put you into
short-term training, things likethat.
That's a suckers game, right?
Sure, now, that's not to saythat Wall Street doesn't create
massive value.
They do the public offerings,they finance companies, they
finance debt, they make thefinancials to go.
So this is how you extract thevalue, your share of the value

(14:35):
that Wall Street creates, butdon't get caught up in their
suckers game letting them manageyour money, right?
Sure.
But now you want the real estate.
Very different.
I think real estate is anamazing asset class.
I have so many friends of minewho've gotten super rich on real
estate.
It's one of the great ways toaccumulate massive wealth, right
?
A lot of tax advantages as well, right?
So in that case, very different.

(14:57):
Now you're back into where youis.
Hiring an expert is a verysmart thing to do until you know
enough yourself and you canfind your own properties and
whatnot.
So I think real estate is aphenomenal way to build wealth.

Speaker 1 (15:09):
Most of my investors currently.
They want to.
In essence, they're high-touch.
They don't wanna just give itto a manager and let them manage
their capital right as far aslike stocks and so forth, right.
So what I'm seeing, though, isthat a lot of my investors are
baby boomers and they believe inreal estate.
They wanna be kind ofhigh-touch.
They wanted some liquidity andshort-term investments.

(15:30):
They don't wanna be in a fundfor too long or in one deal for
too long, and if so, then atleast they have some sort of
liquidity event and they can getsome principal back, some sort
of dividends.
But what I'm seeing, though,right now, in this current
market, that a lot of investorsreally want don't really know
what to get into right.
So they're like well, we're alittle more comfortable in real
estate.

(15:50):
We don't know much about stock.
We definitely don't know muchabout crypto.
A lot of it seems like a lot ofmy clientele are really leaning
more towards real estate,because it's something that
inflation.
It's always been real estatewhen you have a recession, so I
feel like a lot of people have alot of fear and they're going
well, okay, I'm gonna pull back.
Everyone's moved to a cashposition Out of their 401ks,

(16:11):
iras, stocks.
Everyone's pulling money out,looking for tax advantages as
well, like, oh, I'm gonna gointo real estate.
What are your thoughts on that?
Do you think that's kind of?
Are you seeing that happeningright now as well?

Speaker 2 (16:21):
Well, I think that you have to look at it in more
of a percentage terms.
So I would find it odd that atruly wealthy person, let's say
with a net worth of over $100million, that they're gonna have
money in the stock market.
Oh, for sure, so it's not likethey're gonna say I'm selling
all my stocks, I'm gonna sit incash.
No one sits in cash Because ifyou're sitting cash, you're just

(16:43):
getting destroyed because ofinflation, right?
So when you talk about likepeople are saying, well, I'd
rather be in real estate, Iwould say, yeah, that makes
sense.
But it's like.
So let's say, normally they'dhave 10% of their cash in real
estate, 20, whatever that numberthey feel comfortable with.
Maybe they'd move that to 30 or40%, but it wouldn't be.
I couldn't imagine a very smartinvestor saying I'm taking all

(17:05):
my money out of the stock market, all my money out of the bond
market, I'm gonna sit in cashand try to deploy in profit.
That makes no sense.
What you would do is relativelywhat you would wait at.
You would wait your portfoliomore heavily towards real estate
, but you certainly wouldn'tconcentrate in one asset class.
It doesn't make any sense, butespecially because you wanna
have some capital gains as well,some gains that offset tax

(17:28):
deductions from real estate aswell.
So I think it would be the rareperson who would say I'm out of
everything.
I mean, sitting in cash is justnonsensical, at least right,
and that means-.

Speaker 1 (17:40):
Well, if they're gonna move to cash, they're
already got an eye on anotherinvestment.
But they're looking at eithersome sort of deferred sales
trust or they're looking at somesort of tax advantage or some
tax benefit to move money outbecause they're going into some
sort of taxable event, butthey're gonna go okay.
I just want so you're right alot of people who are going into
30%, even 40% of theirportfolio, but they still wanna

(18:01):
be diversified.
So they're not gonna put alltheir money in one deal.
They're gonna diversify maybegeographically different asset
classes, apartments, singlefamily.
What have you right?

Speaker 2 (18:11):
I mean, I think that right now and again, it's always
like about when you're lookingto allocate money right.
Diversification is always agood thing.
It really is.
I mean, I guess it all gives me.
Well, there are some schoolswith what it gets them, but
generally speaking,diversification is very smart,
right?
So I think that you'd find thatpeople that were more

(18:34):
frightened of the market rightnow, they would just simply
reduce their exposure but noteliminate their exposure.
And also, that whole thing alsogoes against smart investing,
meaning like if someone said tome, wait until the S&P's gonna
go this year, I don't know, splast was up 25% last year.
I wrote the book two years ago.

(18:55):
It came out last year.
I look like a genius, like, ohmy god, I said put your money as
some.
But that's a, that's bullshitlike I didn't know the.
Oh, it's just simply.
The SFB goes up on average10.5% a year.
Right, some years it goes down,some years it goes up 25%
overall.
How do you so?
How do you know what she'sgonna be the good year bear?

(19:15):
You fucking know right.
So you have to hold for thelong term.
So, but, but.
So it's very difficult to try tosay, well, I'm getting nervous
about the stock market right now.
Well, guess what, if you'renervous about the stock market
means he's probably going up,like it.
Most most of the time peopleare wrong and people have the
worst fucking timing, sure, okay, generally speaking, you know
when everyone is scared of thestock market, it's what it's
probably about the roar and gohigher.

(19:37):
When everyone thinks the stockmarkets oh my god, market, so
hot, it's great is when it'sabout to go down.
That's just you know, broadlyspeaking.
So I just think that humanbeings, buy-in-large, are really
bad stock pickers.
They're really bad at timing.
That you let your emotions rulewhen you're gonna buy or sell.
I I think a far better strategyis like so we buy it, hold it
and just don't even fucking lookat it, and be in a position

(19:57):
when you have, with the amountyou have exposed, you can, you
can pass what I call the sleeptest.
They know, can you sleep atnight?
The mark goes down 25% one yearare you gonna be in panic?
Oh my god, no, you know, I gotmy other, I got my bonds.
I have real estate as well.
So it's really all about youknow.
You know what percentage inyour asset allocation makes
sense.
Now, yeah, I mean, if they getit, start weighting heavily

(20:19):
towards real estate, that'sgreat, I think it's smart.
But you know, right now andagain, this and again it goes
into timing, but I think wherethis is pretty poignant is, like
I think this major fundamentalissues right now a commercial
real estate.

Speaker 1 (20:32):
You know?
I think you know yeah.

Speaker 2 (20:34):
I think there's some asset classes that are in
trouble right now, and for anumber of reasons.
One is that you know a lot ofthe loans that were taken out
when interest rates were lowcoming up in the next you know
it's starting next few monthsand up for the next 20, for 18
months.
I think there's a lot of Moneythat's gonna be their balloon.
They have five year loans,whether they were right, and

(20:54):
Interest rates are now much,much higher than they were.
Those properties suddenly aregonna be upside down Cash.
Well wise when you know therent rolls not gonna cover the
payment anymore and a lot ofthese people Are gonna default
or walk away from their property.
That's one aspect of commercialreal estate and even worse I
think Equally problematic isthis shift that we have right
now of people no longer workingin offices, which is still.

(21:17):
You know, even myself, which Iwas like, I hated this idea
virtual.
You can't deny the savings offrom, from virtual employees and
and and they, once you learnhow to manage them, they can be
very productive.
Now it's obviously this majoradvantage that people in the
same place and some companiesare making people come back to
work, but they still.
It's you can't.
There's a trend, yeah, towardsvirtual and that's reducing the

(21:39):
need for office space andwhatnot.
I think those two thingscombined are making it very,
very problematic.

Speaker 1 (21:45):
Well, so we're seeing two things.
So I think I was sharing withyou before.
You know, I manage a hundredmillion dollar debt fund and
that debt funds forfirst-trusted mortgages,
short-term loans in and out,groundup construction, fix and
flips.
What was happening with, like,small regional banks are there
lending money to guys that arebuilding homes, tearing down
houses, doing groundupconstruction.
Fixing flips would have you, oreven larger commercial

(22:06):
multifamily you know, pick anumber of fifty million hundred
million dollar projects.
The biggest issue is when,let's say you, you when the
rates were low, you borrowedmoney at six and a half seven
percent for a construction loan.
When interest rates spike likethat, the bank typically has a
line of credit that they'regoing to release the draws for
construction To the borrower asthey are finishing each phase

(22:28):
Right.
The issue is is that those, allof those lines of credit are
typically on a floating ratevariable.
They're not fixed a variableright, so as those as rates
climbed cost of building getshigher.
Well, not only the cost of thecost of money we got went up.

Speaker 2 (22:40):
So what happens?
Cost of building, right yeah.

Speaker 1 (22:42):
So that now the line of credit for the bank has gone
above and beyond what the noterate is that they gave to the
borrower.
Yeah, so now, now, as theborrowers borrow, you know,
asking for a draw, the bank isgoing to issue them a draw for
the construction and the costwent up for the capital for the
bank.
And now they're saying we don'thave any money to release.
Yeah, that's a big issue rightnow.

(23:03):
Special was smaller regionalbanks or even some other private
lenders.
They just they would lean on aline of credit or some sort of
facility.
They, you know, they they wereissuing loans two, three years
ago for six and a half, sevenpercent, and now interest rates
spike up to ten, eleven percentto be able to even keep that
fund at any way at par.
Right, so now that cost ofcapital went through the roof
and as they draw, they can't,they're upside down, we're, they

(23:26):
gonna make their money.
So a lot of issues are brokenprojects.
So you have a lot of, inessence, distressed assets.
It's just you're not seeing iton on the news, right?
And then you have a lot ofsmart investors that were, you
know, went through the 2008crash and Lost everything, or
going hey, I'm going to a cashposition, I'm gonna wait until I
identify some assets.
Sure but they've already.
They've already figured thatout.

Speaker 2 (23:48):
There's no doubt that if there's gonna be a massive
you know problem in commercialreal estate, it also creates a
massive opportunity incommercial real estate, right?
Because it just means that youknow those properties, no one
will make sense at that priceand if people stop paying their
their, their loans and thoseproperties you know get
foreclosed on, they go back onthe market, price will come down
and you'll be able to scoop upthese properties at at at prices

(24:11):
that where it makes sense inthe new paradigm.
Right, that's the idea,absolutely.
A company good one.

Speaker 1 (24:16):
I don't think you even need to talk about that.
But yeah, so that's one issuethere.
And then we know we we hadquoted out of Nashville and
there was a lot of office likeAmazon was building, I think,
like a two million square footoffice building, and they closed
about 50% down and went tomulti-family.
So you're seeing a lot ofoffice convert to multi-family
and so a lot of banks areoffloading those assets for, you
know, 75, 80 cents on thedollar because they're on

(24:38):
default.
Right so you have kind of guysthat are in the multi-family
world going hey, we're gonna godo a value-add deal, we'll pick
this up for pennies on thedollar in essence, and we'll
just convert it intomulti-family and stick people in
there.
But that's still a hard, a hardpill, depending on your
location.
You need to be in high-denseareas more than anything and you
need to be able to get in theright price and still consider
Some sort of rate adjustment andor rent adjustment and have

(25:02):
rents come down a little bit.
I think, a lot of people areexpecting that rents are going
to continue to go up.
Some data does show that, butit's usually the mass migration
areas.
You know people going intocertain areas in Texas or
Tennessee or Florida that thoserents will still increase
because you demand.
Right but if you, if you're not, if that demands not there
because office is slowed downand not a lot of people want to
drive into the city, that can bean issue, right, so you got to

(25:23):
be careful with your rents.

Speaker 2 (25:24):
Yeah, I think these are all like the things that you
know would trip up a novice,which is why you really need to
be advised, you know, prudently,by something really knows the
business, not just someone who'slike read a book on how to get
Richard Mills Totally.

Speaker 1 (25:39):
Yeah, and that's a thing, and I think, for for the
most part, you know, I think Ithink there's certain, there's
certain data points that showthat we're gonna have a soft
landing.
I, I don't see that.
I'm actually probably I ratherbe safe than sorry, kind of like
I rather be prepared than notprepared, because in 2008 I
literally lost everything.
So I can have a differentperspective.
I'm a little more, a littlemore conservative in my approach

(26:00):
.
I'm looking at more oflong-term plays, like you and I
were talking about landacquisition, entitlements,
planning, design, sell thebuilders that type of stuff.
But that's also good because,god forbid, if something happens
we go to war, market crashes, Iown land, I Just have to go on
the land.
Well, man.

Speaker 2 (26:16):
I think a big issue you know, I anything, whether
it's real estate, stocks, crypto, whatever it is leverage is.
You know your exposure in termsof how much leverage you
putting into your portfolio.
So, at the end of the day, thepeople like if you would have
went through the whole financialcrisis in 2008 and warrant

(26:37):
leverage.
You came out great things,bounce back and made new highs,
but if you were in a positionwhere you couldn't maintain the
debt, right, you just doing aposition where you're upside
down and the cash flow is hugelynegative and you're
over-leveraged or in your fucks.
I think that the lesson youknow, I've always learned, is
that you know leverages adouble-edged sword.
It's great on the way up, butnot so good on the way down.

(26:58):
And if you, if you haveleverage, you need to make sure
you also have, you know,sufficient cash flow coming in
From multiple sources to makesure that you can, you know,
service the debt good builders,good developers, are looking for
non-recourse loans.

Speaker 1 (27:09):
Right, because what they went through in a way, but
not all banks, especially inthis market, are giving
non-recourse, it's fullguarantees.
Yeah that's income for otherassets and so forth.
So that's where I, that's wherewe are looking at just things a
little more conservative.
When you see bottlenecks likethat in the market, in the debt
space, you can kind of startseeing there's some guys that
are that are moving a lot ofmoney around there, kind of
making.
They're seeing things thatwe're not seeing too.

Speaker 2 (27:29):
So what do you think of the best areas right now in
terms of like?
You know if you were lookingfor raw land, or you know
Apartments that had beenforeclosed on, or you know
multi-families Well, so you'lldig this this is my, this is our
forte.

Speaker 1 (27:42):
So I actually were them the largest man cave
developers now in the country.
So we basically build man cavesfor millionaires, guys who want
to put their cars in there.

Speaker 2 (27:50):
I just saw this like online that goes on Instagram
post about man caves, you knowit probably was us, but yeah.

Speaker 1 (27:56):
So basically we're the largest man cave developer.
Now, what's the cost ofbuilding man cave?
So all of ours are steel bills,all steel buildings, but, like
one of our largest ones rightnow are 28 by 60 feet deep.
Okay so, 28 feet wide, 60 feetdeep.
I'll show you some picturesafterwards, but we're building
those for $89 a foot.
We're so on the ground.

Speaker 2 (28:14):
Yeah, you're not building.
Not building here, because it'son the ground.

Speaker 1 (28:17):
This isn't I.
We have most of ourdevelopments right now in
Arizona.
So Lake Havasu, arizona, we'relooking at stuff in Lake of
Ozarks, we have stuff going upin Austin, texas, and then we're
looking at stuff that's gonnabe outside Nashville not
Cherokee Lake but Old Hickory sowe're looking at building there
as well.

Speaker 2 (28:32):
So what's the cost to build a man Like a world-class
man cave?

Speaker 1 (28:34):
right now Our cost is $89 a foot.
Now that's.
Everything is going to be alittle different depends on how
luxury we want to go,considering who are in users or
envires are going to be rightnow with with acquisition
planning, design, entitlements,the whole thing.
I'm at $89 a foot but I'mselling these for 175 a foot.
So for my investors, they loveit and we're doing it in cash.
We don't do any debt leverage.

(28:56):
So I'm building them in phases.
So I'll use this as an example.
Right now I am in phase I'msliding into phase four, but I'm
in phase three of a projectright now in Lake Havasu 225,000
square feet.
First phase we sold out at 175a foot.
We thought we were going tosell them at 145 a foot, 36
units gone before we even ourcertificate of occupancy.
So that just kind of gave youan idea in demand.

(29:17):
But we also went up a lothigher in our cost Right sales
price.
So there was actually six and ahalf million dollars more in
profit than we expected.
So that was great to be thatwas a total.
So total capital stack on that.
Our total cost to build onthat's 28 million.
But I only raised nine millionand that nine million is only
going into acquisition.

Speaker 2 (29:35):
Rest for pre sales and stuff.

Speaker 1 (29:36):
Yeah, and once I sell each unit just like home
builders, you sell each phaseyou rotate that capital into the
next phase.
Same concept, but we're notdoing it with debt and the
reason why we're able to make itso profitable is not only the
demand for the asset andLocation.
You have so many people comingout of California and it's a
huge retirement community andyou have a lot of, you know,
it's kind of a Palm Springs,palm Desert kind of area, right,

(29:58):
just kind of a couple hoursfrom there, so you have a lot of
snowbirds that want to go thereand get away from the cold, so
it really is a year aroundlocation for right just to go
out razors, go Whatever you wantto do, but so, but yeah you
know, so explain.

Speaker 2 (30:13):
To find a man cave, Okay, so think I'm intrigued,
you know yeah.

Speaker 1 (30:17):
So I mean I have guys that are building like golf
simulators in there.
Guys have high-end old cars.
Guys, you have like high-endluxury cars right now.

Speaker 2 (30:25):
Yeah, I mean.

Speaker 1 (30:26):
I have a guy right now that's building sleds and
putting high-end cars on thewall.
You know I'm talking aboutwhere you actually like they
show up.
Yeah yeah, yeah, that's guyswho like to tinker and, you know
, build stuff.
They'll have a whole shop inthere with lifts.

Speaker 2 (30:38):
I mean it's like a sign no women allowed outside,
like you know.
Basically right.

Speaker 1 (30:42):
Yeah, mezzanine, jeff , guys, they're actually putting
like cigar lounges in there,and I mean literally the list
goes on.
And think about a box that youjust want to make your own and
just man cave it.
Tvs everywhere.

Speaker 2 (30:54):
Whatever you want to do, a lot of guys you're using
them as a Throughout my lifeI've had all these things in
different point, like I had I'vetried, like I had the golf
simulator, I had all the TV.
I've had little elements of mancaves throughout, like
different to my house isthroughout the years, but I
never really had a dedicated mancave, you know so you'll like

(31:15):
this.
So on my phase one, I telleverybody the story room where
you'd like a rubber on the wallso you could bounce off the
walls.
You know I brought my boat.

Speaker 1 (31:22):
I was gonna bring some creditors with me.

Speaker 2 (31:23):
Okay, so if you have any, we'll do some right now.

Speaker 1 (31:26):
You can't find those anymore right, exactly God.

Speaker 2 (31:30):
Yeah right, all right , I'll be like 20 for seven
years, but I do one right now.
Yeah, I.

Speaker 1 (31:35):
Think the first time we met.
You're like I have been soclean for so long and I'm gonna
stay right here.
Yeah that's cool.
I do a quite little, all right.
So think of it this way.
So I have guys right now thatare that are actually buying
them Side by side and tearingdown the middle wall because
they have their friends and sothey want to open up and have
one big shop I had in my firstphase.

(31:55):
I looked at all my buyers on myfirst phase, like as far as
like on my purchase contracts,and I'd say probably 40% of them
were women and some of them arefriends of mine.
Yeah, a hot, older husband wife.
I called one of them and I saidhey, I said why did you buy
this huge man cave?
In essence, it's really just abig storage unit right for boats
and RVs and people store allkinds of stuff in there and she
goes.

(32:15):
Well, ryan, you know, weretired and my husband and I
haven't, like, lived in the samehouse all the time together,
for he's driving me fuckingcrazy, I'm driving me fucking
nuts yeah so I need to get himout of the house and get my
garage back.
These women are literallyshoving, shoveling their
husband's.
And so that's gonna lead me intothis.

(32:35):
So what's what's kind of coolis that?
Not only do people kind of gothere and take her, it's a
community and you know you havea garage up, that's kind of your
invite for everybody else.
It's in the community 225 unitsof guys that have million
dollar coaches and RVs.
I mean some of these, I meansome of them.
I got one guy does off-roadlike Baja truck racing.
He's like one of the top guys.
He's selling these things for amillion bucks.

(32:56):
He's building these things inthere.
Yeah, guys, they build high-endmarine motors that are doing
offshore racing.
You know stuff that you see outhere all the time.
I mean, you have some prettycool Owners, so these guys are
all motor heads or what have you, and they all kind of open up
the garages and invite eachother in and Spend some time
together, and I think that'sreally healthy too, because I'm
big into men's mental health,that's like my thing.
So I love that community feel.

(33:18):
But I want to ask you something, sure, so I'm gonna go, I'm
gonna go into my financestructure and I want it because
you're so good at this.
I want to see what yourthoughts are.
But what we did was and beforeI go into that, so these units,
my, my broker comes to me andsays hey, about 60% of our
inquiries, we're looking forfinancing because you can't
finance these.
Well, now we do.
We found it, figured out how todo it, but you couldn't finance

(33:40):
them because you don't haveresidential tied to it either.

Speaker 2 (33:42):
So it's a, in essence is an industrial building just
put it on your, on your property, though, right.

Speaker 1 (33:46):
Yeah, so you own, you own the unit.

Speaker 2 (33:48):
I guess you'd finance it with a home equity loan or
something.
That's where people do it.

Speaker 1 (33:51):
So a lot of people are getting a home equity line
and then just using that out oftheir home and buying them,
because some of these units Only300 grand right so depends on
what you want to put into them.
An air-conditioning would haveyou, but yeah, so they're not.
So they're not very expensive,so most people can find the cash
to buy these.
But what happened was is a lotof people were also Inquiring if
they can live in them and we'relike, no, we can't.
So one of the biggest movementsright now are barn dominiums.

(34:13):
Have you seen like the designthat people are like love moving
into a barn?
They're kind of like the barndesign.
Have you seen those?
Yeah it's a big movement rightnow across the country.
You know you can literally goonline and find like some sort
of barn to many of them that youcan order, go plop it down on
some Lot somewhere across thecountry and people can live in
these things.
And these, some of them are3500 square feet and they're

(34:33):
built like homes so you can'tlive in the man cave because
there's no electricity?

Speaker 2 (34:37):
What, no, no, it's fully a full plumbing, full
electricity.

Speaker 1 (34:40):
I guys that are putting boss or what is it.

Speaker 2 (34:42):
It's just, it's the way it is no, that's not so.
There's no co correct.

Speaker 1 (34:45):
Well, you have a certificate of occupancy but
it's just zoned industrial soyou can't.
So it's all about entitlements.
Right, you can re-entitlesomething, change the zoning.
The ones that we were doing isit was just zoned that way and I
was just playing on.
So.
So what I did is I learned fromsome of my buyers.
My buyers are saying, hey, ryan,I want financing, which means
if I have an ability to finance60% of our inquiries, or can you
finance, sure, and a lot ofpeople Are asking if you can

(35:07):
live at them.
So, obviously, going intobuilding my next ones, I'm gonna
try to hit that mark.
That's an important now datapoint.
So I'm like, well, let me seeif I can do that.
So I'm buying the 18 acresright next to the project I'm
building right now and I'mbasically designing the exact
same floor plan as my, mystorage units, now as far as my
man caves, but right above themI'm actually building apartments

(35:29):
and we're converting them intotownhomes, but designed as barn
dominiums.
So, in essence, you have yourman cave.
That's 28 by 60.
In some cases will be 30 by 85,so they're big, you know.
Some of these are, you know,almost 3000 square feet.
And then you have, you know, a1500 or 2000 square foot house
on top of it and there arecondos, so you can actually

(35:49):
finance them and you could livein them.
But you can buy these thingsfor 550 grand or $600,000.
So you have guys that are goinghey, I want to just be able to
come, because this is like kindof the snow one floor this is
just it's two floors, so youhave your big garage underneath,
and it's just like a town.
think of like a three-storytownhome or a two-story townhome
Right, you have your livingquarters upstairs and you have

(36:10):
your garage underneath, right,so we'll have an elevator, we'll
have it all.
I mean, it's a full house, soit's all stick built on top but
steel down below, which isactually more desirable for
building and then we're gonna,in essence, wrap it all in steel
and it'll design like a barn.
To me, I'm high-pitched roofs,modern finishings you would
never even think about it so orhow nice these things can turn

(36:33):
out.
So we're actually building 150units of those is our next slug,
so we're really looking forwardto that.
But what do you think aboutthat?
Do you think that's somethingthat'd be interesting?

Speaker 2 (36:41):
Well, I mean, let's listen, you know if you're
seeing demand for it.
I mean, right, that there's atrend towards it.
I think, listen, I thinkfinancing if you can get
financing, that's the key it'sgonna be.
Let's say, okay, you said youhad 60% of your inquies wanted
financing, right, correct.
So how many inquiries did youget altogether?
I?

Speaker 1 (36:58):
mean we've had probably a couple thousand.

Speaker 2 (37:00):
Yeah, I mean somebody .
It's a huge number of peopleright, so yeah.
I mean it should, it should doreally really well.

Speaker 1 (37:06):
So if we convert them in townhomes living space and
you can build them in the rightway where you can get insurance
right Like a regular homeowner'spolicy, then you can finance
these through an FHAconventional mortgage.
What have you?

Speaker 2 (37:18):
So how many?
So okay, so still have tovisualize it right.
So how big is the actual one atthe house?
How many bedroom?

Speaker 1 (37:25):
so you have.
We have three different floorplans, design.
We may go into a fourth, butyou have some that are like one
bedroom, one and a half bath, sosmaller, like studios, all the
way up to three bedrooms, threeand a half, okay.
So they're a little bit largerunits, but the largest one we
have right now, set up for 1680square feet house the house.
Okay, and then?

Speaker 2 (37:41):
just the residential, and then below that you'd have
the garage.

Speaker 1 (37:44):
You have a whole garage.
It's another, let's say by a 28by 60 is 1680 square feet, so
you can have 1680 square feetbelow and you have another 1680
square feet above.
But what I'm doing is I'mbuilding a can of lever patio
cover so you have outdoor livingspace too.

Speaker 2 (37:59):
So how is this different from like just a
basement?

Speaker 1 (38:02):
First of all, the cost.
Go down subterranean.
It depends on soil and how muchyou have to put in footings and
concrete and all that it'sgonna add up.

Speaker 2 (38:09):
Right.

Speaker 1 (38:10):
So, but out here, out where I'm building, right now,
well, you can't go about it.

Speaker 2 (38:12):
There's no basements here in Florida, no, in certain
areas.

Speaker 1 (38:15):
It's just not common, or?

Speaker 2 (38:17):
normal, but mostly it's because of the cost.
And you grew up, I grew up,everyone had a basement.

Speaker 1 (38:19):
Yeah, no, out there, you don't so cause you know it
rains what?
Three inches a year, maybe thenext out there you know it's
just kind of it's not thatenvironment, but yeah, so it's
pretty neat to see that I loveit that thing's great, Right
yeah.
So what we're?
I want a man cave I mean, andmost people want a man cave.
They definitely put a golfsimulator in there, so imagine
if you had a man cave that like,for example you know I have a

(38:40):
lot of friends and they havefamily and they all kind of go
out there.
It's a family orientedenvironment, so a lot of my
friends are going.
Man, I can buy this for halfthe price.
Cause out there for you to buya new house, a decent house.
You're in a million and a half$2 million out there.
It's not cheap.

Speaker 2 (38:51):
Like Havasu area.
Like Havasu area right.
Where exactly is that?

Speaker 1 (38:55):
So you're about two hours.
You're about two hours fromVegas and about two and a half
hours from Phoenix.

Speaker 2 (39:00):
Okay.

Speaker 1 (39:01):
And you're about, I'd say, in two hours, in from like
Coachella, palm Desert, hop offfrom LA, from LA, you're a good
five hours.
Most of it has to do withtraffic, but you go up the.
You basically take the 91 to the15, come on, you get to the 91
or five or 10, it all kind ofparallels, right.
It goes east-west and then youhit the 15 and go up through the
home pass Like you're going toVegas, and then you just peel
off from Vegas on the 40 and yougo out.

(39:22):
You go more east, got it?
Yeah, so it's about two, abouttwo hours from Vegas, but yeah
so, but it's a big lake lifetown, so it's Everyone's got a
boat.
So when the pandemic hit, youcould imagine how many people
were getting out of Californiawith their families to do the
recreational thing.
And it exploded.
And not only has it alreadybeen exploding, because the
data's there.

(39:42):
So, for example, baby boomersso RVs and boats aren't just
single generational meaning.
You know, a lot of baby boomersare the ones that we used to
think back in the day, thatwe're all buying RVs and boats.
It's not that way anymore.
You have people that are livingin vans now, that are
millennials or Gen X or Gen Z'sor what have you, but so you

(40:03):
have multi-generational now thatare buying boats and RVs and so
you're seeing a huge uptick inacquisitions there.
Then the pandemic which drovethat asset, and then you have
people that are going.
Well, I want to get out ofCalifornia.

Speaker 2 (40:16):
Who were you doing the pandemic?

Speaker 1 (40:17):
I was in California.

Speaker 2 (40:18):
Where.

Speaker 1 (40:19):
In San Diego area Temecula.

Speaker 2 (40:21):
Yeah, it was fucking it was San Diego's baddest LA.
I was in LA.
La was worse.

Speaker 1 (40:25):
San Diego wasn't as bad.
We were actually in RiversideCounty.
We're about an hour north ofdowntown San Diego, so we're
kind of like LA's here, SanDiego's here, we're kind of
inland.
We were in Riverside County andthey didn't shut.
Well, a lot of people shut down, but they weren't forcing
shutdowns.

Speaker 2 (40:40):
So anybody?

Speaker 1 (40:41):
wanted to shut down, shut down, no problem.
But they weren't forcing theshutdowns like they were in LA
or San Diego.
There was still stuff going on.
It was really controversial,but you know, we were able to
still go to the gym and kind ofhave a little bit of a life, but
it still wasn't normal.
So we ended up going.
You know, we ended up kind ofgoing out to Havasu every
weekend or stay there for acouple of weeks at a time you
know, and what was it like there?

Speaker 2 (41:00):
It was just totally-.

Speaker 1 (41:01):
Oh man it's great, everybody.
There wasn't a mask in sight.
There wasn't one mask in sight.
I'm telling you, it was almostlike if you go and wear a mask-.

Speaker 2 (41:06):
It's like Florida.
It's like Florida.
Yeah, just like Florida.

Speaker 1 (41:09):
And that was where I kind of opened my eyes because I
was nervous.
I mean, I was where I have afamily.
You know, I was getting nervouson how the PR that was going
out and all this stuff that washappening.
And I got to a point where I'mlike let's first of all from a
business perspective.
We're all thinking 2008 again.
So in fact, I was actuallyabout to break around an office.
I shut that down Cause I had abig 10,000 square foot office.

(41:31):
One story total like Googlehangout.
I had TVs everywhere.
Super cool, we were racing itwas cool.
And.
But we had to shut that downand at one time we actually had
a curfew, and so I'm going well,we don't want to have a $20,000
, you know, just for the leasefor this place.
If everyone has to work fromhome, I can start shaving this
down.
So I started, I started makingdecisions quick when the

(41:54):
pandemic hit, because I'm likeI'm thinking, oh, wait again.
And I, you know, I don't have alot of leverage, I'm definitely
in a different spot, but Ididn't want to have so much burn
.
You didn't know how bad it wasgoing to go.
You'd never seen anything likethis.
So I'm thinking worst casescenario, act now.
But what happened was is thisasset class exploded?
Because now what you're seeingis people don't have one toy,
they have multiple toys RVs,razors, dirt bikes, couple boats

(42:16):
, jet skis, cars.
It's just exploded.

Speaker 2 (42:20):
You know, I have two books.
You print money, asset classand fixed assets go up in price.

Speaker 1 (42:25):
I mean like yeah, and that whole SB, that was that
business loan or whatever thatwent on PPP.

Speaker 2 (42:31):
I got a lot of money, like over a million, some
dollars.
Did they ever?

Speaker 1 (42:34):
come back to you and ask you to pay it back?
No, yeah Well, they asked us topay it back because we were a
financial institution.

Speaker 2 (42:38):
No, because I was.
I literally, you know mybusiness was fucking touring and
public events Totally different.
I got, you know, my businesswas literally shut down.
Lucky that I pivoted to onlinestuff for a while.
I saw that I mean I hated doingit but I had to because I used
to know what I.
Literally my business went fromlike booming in one day.
All my clients every eventcanceled like in the same time.

(43:00):
The first one was like bullshit.
I mean what do you mean youcanceling the event and stop it.
Now we got to put I'm like andthen within like that day, you
start rolling in one by one.
I had a lot of employees, butyeah, so for me it really.
I mean I got, I think, amillion and a half dollars and
plus again the retention money.

Speaker 1 (43:17):
And so I got all that .
So it was great I got that frommy employees.

Speaker 2 (43:19):
That was nice, but the PPP.

Speaker 1 (43:21):
They asked us to pay it back.
Wow yeah, so what was nice is Iwas warned that this could
happen, so I didn't take a lot.

Speaker 2 (43:27):
Yeah.

Speaker 1 (43:28):
So I was like, okay, we're not going to take a lot,
just in case you had to pay itback.
And sure enough, they came backto us and said Interesting.
You guys were a financialinstitution.
How much did you take?
I only took 90,000.

Speaker 2 (43:36):
Oh wow, I was very safe.
They actually came back to you.

Speaker 1 (43:38):
Yeah, my burn rates close to just.
I mean I'm a little over150,000 a month and just
salaries.

Speaker 2 (43:43):
Yeah, so when I got to, that yeah.

Speaker 1 (43:45):
So I was like you know what, like we're doing?
Okay, we have some fluff, likeagain.
I just kind of was moreconservative, but there was
things that were shifting thatwe can kind of see the market go
to.
So I'm thinking secondarymarkets, apartments.
I'm thinking, like you know,people need to put a roof over
their head.
I'm thinking of affordability.
Now Right, and that really kindof shot gunned us into what
we're doing now.
But then at the same time I'vebeen going out to like at my

(44:09):
father retired and lives there,and I've been going out there my
entire life and I don't knowanything else as far as my
father.
So I've been going out thereforever.
So as soon as I saw the demandfor units out there and as I had
a boat you know many boats Ithere was a four year waiting
list for storages.
It's insane.

Speaker 2 (44:25):
I know, but not everything.
I came there I tried to buy ajet ski.
I couldn't buy a jet ski.
You have nowhere to store it.
Well, no, they couldn't buythem.
No, jet skis, it was sold.
Everything was like, reallyweird.
Like you know, you couldn't buya car, the chip shorts, all
this crazy supply chain issues.
Supply chain issues, you know,I never seen it happen before
and it's, I mean it, somewhatsorted itself out now, but still

(44:46):
it's.
Things are still not quite theway they were before.

Speaker 1 (44:49):
And you know I mean, but what the problem was is?
It happened so fast and I thinka lot of people didn't have
time or they just saw again itwas free money.
Interest rates on cars are zero.
You know, go buy this, go buythis, but they're paying a
premium for that car, and thenyou couldn't find any more cars,
so you're paying anotherpremium.

Speaker 2 (45:05):
Yeah.

Speaker 1 (45:05):
You know, I have people that were just max,
leveraging everything, and theygo to trade in a car.
And right now, a couple yearslater, and they're upside down,
and now they increase theirlease for the next one, and I'm
like yeah.
So what I did was is I actuallywent in and bought a house right
in July of 2020.
I was watching people fear dump.
I positioned myself.
I was able to strike deals onassets because everybody was
fear dumping right before itstarted.

(45:25):
Kind of, the real estate marketstarted picking up and
everything was doing well.
Right before that I got in andstarted striking deals.

Speaker 2 (45:30):
Yeah, that's great.

Speaker 1 (45:31):
So I told my wife, I said hey, if things go bad, we
want to grab our cash, grabeverything, we can pay off
everything and just sit tightand just run.
You know, I could work at DelTaco if I had to you know, and
we'll be fine.
I care about putting food onthe table for my kids.

Speaker 2 (45:43):
Yeah.

Speaker 1 (45:43):
So I was literally thinking to that level, like,
whatever I got to do, I'm goingto take care of my family.
So I just we started pivotingand in fact I was able to keep
all my employees too, becauseeveryone's like we're in this
together, I love you, we'redoing it, let's go.
So it was nice as that.
As the things kind of leveledout, real estate started, you
know, picked up.
I opened up a couple otherdepartments, started generating
more multiple revenue streamsfor the company, which was great

(46:06):
, and we just blew up, you knowbut it was controlled growth.

Speaker 2 (46:09):
Yeah.

Speaker 1 (46:09):
You know I brought on , I moved over to founder and
chairman, brought on a CEO fromWall Street, former hedge fund
guy but really loves real estate.
Wanted to kind of dive intothat asset class.
Knows how to.
You know scale companies.
Bought another guy in from.
He was another shop managing360 billion at LA.
You know bought him as my opsguy.
You know just just kind oflooking at how can we scale the

(46:31):
company and just build moreinfrastructure and more revenue
streams for survival in a sensebut not only for us, for
investors that's key Right.

Speaker 2 (46:39):
So for you, you came out much stronger, much stronger
.

Speaker 1 (46:42):
Well, but it but it also streamlined us.
I think what happened isbecause we were so diverse.
We were like office we.
I don't know if you ever heardof Europa Village winery down
there in Temecula.

Speaker 2 (46:52):
It's a hundred and eighty five million dollar
winery.

Speaker 1 (46:54):
It's a European themed winery, and so they have
French, Italian, Spanish anyways, we came in and basically
provided all LP capital for allthe equity for the development
of that project Really, and andthat project was the only one
that was really kind of hitduring the pandemic because it
was restaurants.

Speaker 2 (47:09):
Yeah.

Speaker 1 (47:09):
You know and so, but they figured out how to create
other revenue streams, order out, but their alcohol sales went
through the roof.
Well, that's what happened in08.
Two so when I was underwritingthis loan or underwriting this
partnership, I went into it andsaid, well, alcohol sales went
through through the roof.
They're already they're alreadygenerating 2.2 million a year
in profit.
Right, I looked at do you havethe capacity to really push a

(47:30):
lot more weight?
They absolutely did so.
When the pandemic hit, theiralcohol sales went through the
roof.
They went from.
It took them seven years to getlike 4,000 memberships as far
as wine club memberships.
Literally within a year and ahalf, two years after the
pandemic, they skyrocketed like12,000.
Wow, so that generated a lotmore revenue.
So it's those little like Thingsinside each asset that we pay

(47:51):
attention to.
Go well, things get bad.
This should generate morecapital.
So it's the diversificationaspect, for sure.
But you know, it did streamlineus and, and that streamline was
we found a niche.
We're building storage units,which aren't that difficult, but
people love these things.
It's it's kind of right up my,my age group, what I do, my boat
, you know, all that fun stuff.
It kind of fits my culture.

(48:12):
So these are I'm, I'm building,put you know, building Toy
storages amongst friends.
In essence, I enjoy this rightand I'm helping a lot of women
get their their husbands out ofthe house price, saving a lot of
marriages or a little, you know.
You know, potential attemptedmurder charges, yeah but with
the pandemic, all the nightmarestories we heard, right, so, but

(48:33):
yeah, so it's been it, but it's, it's been a good run.
So this next project, you knowwe're gonna be building about
350,000 square feet.
That'll be in regards to notonly boat and RV storage but
also the residential componentto it.
We're gonna have a cool gym.
Have you ever heard of lifetimefitness?
Yeah, are you familiar with howthey're structured?
I know well, I won't go too farin my lifetime fitness.
Yeah, I think originally where,and I think they also have a big

(48:54):
place out in Denver.
I for some reason I thoughtthey were headquartered at
Denver at one point, or maybethey start, I don't know
something like that.
Anyway.
So what I love about them is,by trade, they were actually
multi-family developers, so theybuild multi-family.
But if you look, if you everlook at, think about you know,
I'm lifetime fitness, if you canpicture, like the summerland in
Vegas, for example, like, or ifyou look at all those
apartments run.
A lot of times They'll either bethe ones that build those

(49:16):
apartments around them and thenthey build the lifetime fitness
as the amenity package for theapartments.
So think about it.
You go to an apartment projectright now.
Do you really want to go to thegym, like a real gym in that
apartment?
Probably not.
Yeah right, because it's justnot, doesn't have all the stuff
there.
They're just trying it's it'sjust an amenity to get tenants
in there, but no one ever reallyuses.
It's not good enough, you know.
So what they were smart wasthat they're like look, we'll

(49:37):
buy land and we'll do a privateequity play, we'll separate this
gym and we'll go buildapartments and we'll maximize
the space that we can buildunits and then give a discount
for those Tenants to go to thelifetime fitness, because
lifetime fitness has everythingright and that's what they did.
So and then now they have aproven track record to say, okay
, well, if I have a thousandunits around this apartment, I

(49:58):
can guarantee in essence,through our data and all these
other projects we built, that wecan put in, you know, we'll
have, you know, 40% of membersright out the gate.
So it's like you know cash flow.
So if you're going to get debtlow or get debt financing for
the construction of the gym?
Yeah you have guaranteed incomebecause you have a proven track
record.
So that's how these guys wereoperating.
Well, we're doing for the mostpart of the similar thing we're

(50:21):
building in essence, we'rebuilding the community right.
So you have 150 units oftownhomes barn caves is what
we're calling them, right, mancaves but we're we're slivering
off a parcel and putting the gymthere, and the reason I'm doing
that is because if I put thegym in there Now, mind you, this
is I care about trying tocreate an affordability
component for my buyers, myowners.

(50:42):
If I have like out there andhave a suit, people drink and
party and get I mean, smashedout.
In the heat it's 120 degreeslike Vegas.
Out by the pool these guys arejust getting lit right.
So the the insurance that it'sgoing to take for me to get is
for you know, the HOA's for thatpool and to maintain that pool
is so high that my HOA costs gothrough the roof per unit.

(51:03):
So what I did was I said well,I need to figure out a way to
bring my HOA costs down.
Nobody wants to pay 350,000 or350 bucks a month for an HOA.
For example, my HOA's are 300bucks a month.
Right, but I live in a two anda half million dollar house, you
know in Riverside County, right?
So if, how am I going to havesomebody live in a 550,000
dollar house with $350 HOA?

(51:24):
It just doesn't make sense andeverybody hates HOA's out there.
So I got to figure something out.
So if I carve out that gym, Itake the budget that I was going
to use to build the gym out andput all the TI's in there and
just build the Shell bigger andbring in a big gym, and they
just lease it from me.
Then I just remove and theymaintain everything, the pool,
the cost, everything.
So I just removed that, thatcost from my unit owners as from

(51:48):
the HOA's, and then thatcreates cash flow.
So that's what we're doing aswell.
So ultimately what happens is Imay, but my cost to develop the
whole project's the same, but myHOA costs come down
significantly.
We generate more cash flowbecause we have a large national
tenant, in essence Right, andnow we're providing that in
essence savings back to ourhomeowners.

(52:09):
Right now I can even increasethe sales price if I wanted to,
you know.
So they're ultimately there'smore profit and my investors are
pumped about that whole entirestructure.
So we're, we're, we're, we'replanning on popping these down
kind of throughout the country.
Yeah, but again it's we'retracking Spending habits of baby
boomers.
They want RVs, they love theirboats, they love their cars,
they want to enjoy their lives.

(52:29):
They don't really care whereyou know where, where the market
goes if they're not thinkingabout the Lake Tahoe area.
Love Tahoe.
I've actually wanted to look atbuying and building up there.
Definitely different.
So, like it, have a sue.
It's more.
You have, like, a lot ofhigh-end guys.
So all the LA guys, a lot ofbuilders that you and I both
know from LA.
They had gone there buildingand have a sue.
So you have a lot of high.
You have the workforce and haveus is such a problem because

(52:52):
all you have is high net worthguys going out there for
recreational.
We're building huge homes sothey're just not.
They don't have enoughparkments, they don't have
enough affordability.
So obviously going down thatroad for me allows you to Kind
of target the city and get somesupport from the state into the
city for building affordabilityand affordable homes but like
that's different because a lotof the money that's going into

(53:12):
those.
If you look at what people arestoring in there, overall
they're really high in toys,super high in toys.
You know one guy, you know he'sgot a million dollar coach in
there.
I've one guy has a two milliondollar skater in there, you know
and and a razor and a car andyou know there's adults.
But when you go to Tahoe yougot to remember who your
demographic is.
You could still build these butit's gonna be a little bit

(53:33):
different.
These guys may not be puttingtwo million dollars.
You can't put it.
You can't put a two milliondollar 40 footer on the lake out
and stand right so.
I have to design that product.
Yeah, yeah, to who my end usersare gonna be.
But I can bring down the cost.
I don't need to go.
It's extravagant.
You probably don't need to dotemperature control, except for
maybe heating.
You don't need to go sohardcore on air conditioning
like the desert you do, yeahthat brings down your cost.

(53:55):
So I can create it, just makingsure that I'm tracking what
people's spinning habits are outthere, right.
And then obviously, migrationdown to tourism.
You know what the what's the,the city generating in tourism
and I can identify what kind ofasset, how deep into that asset
I can build it.
So, again, what kind ofamenities am I gonna provide?

(54:16):
You know my end user, but yeah,so Tahoe is actually a place
we've considered.
I love it up there.

Speaker 2 (54:20):
I live there for a while.
Yeah, that's beautiful.

Speaker 1 (54:23):
What side?

Speaker 2 (54:25):
on the Nevada side.

Speaker 1 (54:26):
Right yeah you know all of Tahoe, is nice really.

Speaker 2 (54:29):
Yeah, I the altitude kind of bought me a little bit
for some reason was very dry,incredibly dry, but it was
beautiful.
I mean we had a house right onthe lake it was.
The view is just incredible, soloved it.

Speaker 1 (54:41):
Perfect.
Well, thank you very much forhaving me.

Speaker 2 (54:44):
I really appreciate it.
I really really good to see it.

Speaker 1 (54:48):
We have you tomorrow.

Speaker 2 (54:49):
Absolutely.

Speaker 1 (54:49):
You know how many people I have coming that are
just excited to see you.
I'm dead serious.

Speaker 2 (54:53):
These people are pop and these are my network.

Speaker 1 (54:54):
These are guys are coming from a lot of people
coming from California to see it.
Yeah well, I'm a good time yeah, so I really appreciate it my
pleasure Great talking to you.

Speaker 2 (55:00):
Thank you, buddy you.