I was $15m in debt...now I own a billion dollar portfolio

ten years ago this guy owned zero dollars of real estate and today he's got a portfolio of about a billion and a half dollars and he did that with no outside investors just starting from scratch one property after another flipping flipping flipping compounding until he built a billion dollar portfolio he's also my brother all and i've known the guy for ten years i've been asking him to come on the podcast and he likes to keep a low profile but finally he agreed to come on and tell his story and the story is a little bit crazy he started off as a broker ends up making a few million dollars doing deals as a broker and then gets caught holding the bag when one of his clients i don't wanna say screw him over but leaves him holding the bag and he ends up fifteen million dollars in debt and instead of declaring bankruptcy he decides to try to pay it all back piece by piece by piece he does he pays it all back and he ends up with a billion dollar plus real estate portfolio using a very specific strategy so in this episode i asked him how he did it to tell that story and to explain the strategy in his approach to real estate because it's a little bit different than anybody else so enjoy this episode with my brother love s aka the rhino of real estate i feel like i could rule to where i know i could be what i want to put at all in it like a days off on a less travel never looked back my brother we're here your story is a roller coaster you have crazy highs complete lows where you lose at all and then rebound build back up twenty times bigger than the first time so i wanna go into that story so today you are sitting here you've got a collection of real estate assets that you've built up over the last ten years that's now how big roughly a little about billion and a half in total billion and half so one point five billion today and that's really in kind of just a decade so i wanted to go through the steps of how you got there so what where did the career start you know in the name of the podcast my first million right right how you made your first million yeah i you know for me it started i i went to the law school did an nba did you plan to be a lawyer you thought i was full set and being a lawyer you know i went to law school worked for a very famous lawyer mark ga out of la he we were working the scott peterson case and it was very intriguing you know in criminal incremental law when i met my my now wife or my wife she was very much me against me being lawyer for some reason she was always programmed that you know you're gonna you're gonna you're gonna do certain things to win cases so we'd always talked about know gonna work for lawyer for five years and then i'm getting real estate okay she goes why do you need to why do you need to work for five years why don't you just do it you know me thinking think i'm like oh wow that's a different thought yeah i don't have a answer to that got it you know so i ended up opening a real estate brokers office went back to my hometown where i grew up town modest and opened up this you know real estate brokers license and i had small hundred foot office and a phone start calling people trying to understand the market and really i think my first high came when i sold my first building i called someone and actually i need to grow my office and i called this person and i said hey what if i leased your office will you let me sell your office building said yes if you lease it i'll let shell so if you become a tenant you could be the broker when you got it i i i never had a was that planned or it just happened to be that way no i i know those was planned it was kind kinda of just like you know sometimes you never asking you never know right right and so at that moment i had asked it was an older and i sold sold the building for them quite fast and i made sixty grand and from there i started you know doing real estate brokerage i started understanding and i started meeting different tenants in in retail you know i was working for jack in the box auto own dp different tenants that i would help get them spaces for now tell me because today you're of real estate developer but this essentially you started as a broker i think many brokers want to become developers it rarely gets to the scale that you got to right what were you like as a broker are you just dialing for dollars what were you doing i mean yeah gosh man i would i would be knocking on doors i'd be calling i you know i i learned early on that if you don't ask you don't get right and so it was no real like shame in my game it was kinda like you know it's just like hey i'll ask and so you know oftentimes we'd be going to anywhere whether we go to an indian party whether we go anywhere it's was growing up i'd what do you do how do you do it oh you own your doctor oh you in this office building would you ever sell it right no but i'll lease it great i'll take on the leasing business anything to anything at that point to build up my cv resume up of things that i was able to get done right and so i felt kind of into a a deal with a jack and box operator and you know this person was probably the first person in my life that ever you know i would call i thought was a mentor or even like a father figure okay my dad was a little bit different and i kinda drank the ko aid and so i started doing really well because what would happen is i have this relationship with these jack box guys and i know where they wanna go i didn't have the money to do it myself because i was just starting out so what i would do is i would basically do development in a box i would go and i would find the property i get the tenant and i go to another developer and i'd say hey give me the buy sale lease commission give me all three i'll manage the process for you then as time went on i started to manage their construction process i didn't have the money to do it but i was doing it and that went really well for me until the jack box operator you know basically didn't pay their payroll taxes you know kinda fell and dire straits and you know a week before maybe let's say three days before we're supposed to close a big deal and i was gonna make my first ten million not even my first million just on the commissions from the buy sale lease on or so what had happened was we started buying property with these guys buying it so in essence we would buy it we do all the work and then they would buy it later on using their lines of credit right and so what happened was this this person that we were developing for was the largest jack in the deluxe franchise in sacramento and then what ended up happening was they didn't pay their payroll taxes but you had bought it on spec thinking this guy's he's good for it he'll take it off me yeah and i still remember it's funny i i would sit there at night and you know though there's an old rule you know people said never count your money but i man i would be looking at that sheet every night yeah baby well let's go you know because you're taking a big risk and yeah you know at that time i didn't understand the risk but you know at that it was a big risk i look back now and i said wow that was you know i think i borrowed with like fifteen million dollars how are you able to borrow fifteen million dollars at the time i mean it was all private lending you know i'd i went to private lenders you know when you when you come out of school you get a w two or ten ninety nine i was ten nine was a broker banks didn't under underwriting it right the banks looked at it and said oh you went from this to this wow how we don't understand understand it we don't understand it right and so you know as they don't understand it then all of a sudden you know you're like oh okay well where's my options and so we had you know we had everything kind of lined up and you know literally three days before were supposed to close and we were we were getting ready to close and you know this person's not in their phone person would talk to me daily they would call me the were first person in my life to ever call me son right you i i was i drank the ko aid harder than anybody and then you know this happened where they where they ended up getting in trouble and you know could put the deals kinda got soft right how many did you have it was ten total so you committed to ten you borrow almost fifteen million dollars you're ready to make your first ten million bucks you're looking at the sheet every night three days before the guy gets pop for whatever he was doing outside of what you guys were doing together yeah and now you owe this money and there's no way out because you signed it you're you're you're in the contract base no yeah we bought the property and we we owed the debt of the money yeah we we we spent the money it was there and so you know i still remember you know and and this is where the lowest start right i still remember you know going home to my wife and you know three days i cried you know literally crying grown man just like tears coming out of my on my eyes and my wife says you know look you always like to work out san like go to the gym get out of the house go to the gym and so normally i used to go to the gym at like nine ten o'clock at night and there'd be two three guys in there you work out you know the gym was always an interesting atmosphere because you have no clue who the other guy is right it could be you know homeless he could be a billionaire you know nobody ask you hey what do you doing in gym right hey bro let me can i get a spot and me help you so there was a guy i used to work out with that night nighttime and there there'd be very few of us in the gym and so we would always say hey how are you we talk about life but we had i generally had no clue who he was or what he did and so this random day we walk in i walk in the gym at two o'clock and this sky standing behind the front desk i look at them and i say what are you doing today behind the desk he said oh come into my office you got an office there i so a manager he owned the place he owned the place he was the owner and he's actually said hey i'm trying to sell this place alright so i've built a few companies that have made a few million dollars a year and i've built two companies that have made tens of millions of dollars a year and so i have a little bit of experience launching building creating new things and i actually don't come up with a lot of original ideas instead what i'm really really good at what my skill set is is researching different ideas different gaps in the market in reverse engineering companies and i did invent this by the way we this guy brad jacobs guess we talked him about on the podcast he started like four or five different publicly traded companies where tens of billions of dollars each he actually is the one who i learned how to do this from and so with the team at hubspot we put together all of my research tactics frameworks techniques on spotting different opportunities in the market reverse engineering companies and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks and so if you wanna see my framework you can check it out the link is below in the youtube description i grew up body building at a young age and so i was always you know very fascinated by the fitness business i was a trainer when i was in college and you know for it was like oh my gosh you know and i asked him makes does it make money and i says yeah nets thirty thousand dollars a month like oh quickly i'm starting to think alright i can do my real estate i can buy this gym i can do all is still while you're on the hook for the jack of the boxes i am all the way on the hook this is and and how long of a period did you have to like kind of resolve this we what what was your plan you're gonna start open up jack about what were you gonna do i couldn't open up jack in the boxes because i went to jack box corporate and i recorded a deed restriction on these properties so basically i recorded something before closing again you learn later on in life right never do that but you you know and and so i was kinda stuck with this could only be that it could only be that and that was what that it was a random deed restriction that we had did created and and i couldn't get it off because the guy was still alive yeah so i couldn't quit claim it i couldn't do certain things it was kind of a very unique situation right and so you know so i in essence i bought the gyms to pay for my real estate and then you know the first month in you know i still remember wait so how how'd you buy the gym so the guy says it's betting thirty random a month the guy says i'm netting thirty grand a month i need to get out of this he says you know i i have a big tax bill so i don't wanna get paid up upfront how about you take it on and pay me over time okay oh okay paying installments per alright i i went home i asked my wife you know hey i wanna buy the gym we work out it and she laughed you know no way and then thirty days later sure enough we bought the gym right and needless say she doesn't laugh in anything i tell her we're gonna right now she's you know who bought the gym in thirty days in you know i i go to the bookkeeper and i'm like hey where's my check yeah where's thirty grand where's the money yeah let's go and she says actually you need to write check for twenty two thousand i said what twenty two thousand dollars how right i was gonna make thirty at least give me fifteen you know what's and so she just she showed me did you not diligence the thing at the time i didn't understand how to read a profit a profit and loss there's a difference between cash and cruel and right all these things that you show and you know he had slim it down not to show every manager right he showed it you know and not in a bad way he just showed it the way that he literally at him thought yeah yeah that's what he saw i wasn't what it was actually there so how old are you at this time roughly i am twenty eight this two thousand eight and there was a period of time so the way my wife tells the her so we're brother you're my brother where the way what my wife tells the story is you start dating her sister yep and you're this guy that comes out of nowhere where you are like this hotshot real estate guy young right like i think you're pretty twenty five twenty six you're twenty five twenty six and you were making millions dollars of broker which is not common correct like you must have been a top top performer is that fair i mean don't know what you had to time i was i mean you know and you're buying nice gifts that you're living this great life and when the jack of the box thing happened at some point i maybe i don't know if you've got to this part of the story at some point you're like you have to move back into to your to the parents house yeah who move back into your childhood bedroom is that already happened or am i jumping the no that this is actually so what happened was you know basically you know at long story short we're paying for the real estate i have to go become the general manager of store and we didn't have enough money to pay everybody so my wife ends up becoming the zoom instructor and you know this and and so she's teaching like you know she been teaching thirty forty classes a week maybe more and she was great at it but you know or just at the gym all day long in order to pay for our stuff you know we went from a range rover to ford fusion right and we we we got out of our house to pay for pay again we're paying the bills we were always like let's pay right and so we then ended up at my my childhood high school room and i still remember this the first night and my wife was a little bit upset you know we went from this standard down to this you know naturally you know it was it was a it was a very big culture shock right and what i didn't tell you was that in order for us to buy the gyms and not a lot of people know i had to come up with a little down yeah my wife pawn her wedding ring for us to buy the gyms so she's a writer die when you talk about a rider dialect that girl's been with me through at all and so by the way are these because i know her and but i don't know her back then her idea your idea you're like hey you know only there was a way we could come up with this one how did that conversation get i know it was definitely not her idea but you know she got on board with it fairly fast and she understood that if we fail we failed together and if we if we feast we feast together right and so you know at that point we were feast or famine right we're either gonna be able to try to figure out how to eat or we're starving here and you know and and in life you know it was a it was a big up and a big dump because you know you're your twenty seven we're driving a brandon range rover we're living in an eight hundred thousand dollar house this is amazing you know she's got a nice fancy everything on the outside look great on the inside we have owe owe all these people money right who who do you go to by way when this stuff's going down do you because you didn't you're not a big mentor network guy like you you've always been a lone wolf as long as i've known you really win shit's hit in the fan obviously you telling your wife but how did you try to get out of the pickle because that's a unbelievable amount of money to oh you owed fifteen million dollars i mean and and you know honestly i was crying in the fetal position at home my wife just literally said get out of here shut i have this story i tell my kids the light bulb story right and what it is is i'll plug in a light bulb for my kids a lamp and i'll just turn the bulb a hair and the bulb turns off and i asked my kids i said what what does this mean to you and my kids look at me they're young wrong means that success is just this much forward the difference between a successful light and a broken light is a hair and so i always had that kind of mentality you know i'm almost there i'm might not always been there right but my mentality oh baby i was let's go i mean you know that was and so we we lay down at night and we turned the light off when we're the first night back and we look up and in my age group i'm a little older than you we used to do these stars and like stickers all the the glow in the dark turn off in the the whole world appears and we turn off the light and we hadn't stayed in this room for you know forever we just we had our own place and we both just start laughing out loud and i told her you know i said give me nine months give me nine months i'll figure it out and you know the switch kinda clicked for me then you made a promise i made a promise i gotta stick to it you know it's almost like when people take a a a weight loss challenge right right i've got a reason to do it this is my timeline let's do it but i have no plan yet or you have a plan or not well i you know i i i said i'm gonna grow the gyms right i i i had i'd we started to turn it around the first one and then we're like let's open up a second one and you know we we ended up being able to build a second store it took us a long time it took us a little bit it takes about a year and you know we we just started working harder and and honestly like i just know i would go to the gym if we need to pay a bill i would go to gym and sell memberships myself i'd some nights work till midnight till we close you know we were twenty four hour in the first store so i would just if i needed if i needed to get it we had to go get it and we we live very very you know within our means you know we would i still remember we would share food for probably about five years we wouldn't go anywhere and eat you know two meals right there would be one meal she would eat whatever's is left i would eat and you know and vice versa some nights you know don't get me wrong there was times when you know i first but most of the time it was sharing and trying to get there and so as we started to build the gyms up that's when we started getting back to like okay we're paying everybody good things are happening let's could you not just declare bankruptcy with the jack in the box situations to at least get to zero again i could've have and that may have been the smarter path you know i went to law school so you know my law school professor was always this like you know bankruptcies of immoral no it's not profit you know but but you know these thoughts are putting your head in life that you know you don't know where it came from by the way spoiler here is you end up creating i think at one point the largest gym chain in california right northern california we were one of the largest we were definitely the largest private operator we didn't have partners so we ended up getting to eighty two stores and we were growing the business and we had done some really smart moves along the way i would option properties which we can talk about do certain things in our leases that we just started learning and built a great culture we had almost two thousand employees and it was a fun run cutting your sales cycle in half sounds pretty impossible but that's exactly what sandler training did with hubspot they use breeze hubspot ai tools to tailor every customer interaction without losing their personal touch and the results were incredible click through rates jumped twenty five percent qualified leads quadruple and people spent three times longer on their landing pages go to hubspot dot com to see how breeze can help your business grow so the brick by brick is the first one the guy basically says paving as you go give me a little down payment you pawn the wedding ring you get the down payment yep you turned that gym you thought it was profitable turns out really wasn't cat the cash flow really wasn't there you start to squeeze it by working asshole great a year later you get the second store give me a sense because i've never owned a gym a gym like this you know what do they what do they met like if i go to a if i see a gym around the corner i think these were gold gyms at the time yeah we went to five with gold and then and then you created your own concept then we created our own concept and then so could be a typical like a gold gym what do these things make revenue profit roughly i mean it depends on the gold gym if you're in gold gym la which was kinda like the mecca they're making eight million to ten million a store you know and and the gym revenue or gross revenue i mean jim is a fixed cost business once you've paid your employees and your rent and your lights doesn't really go up right i mean what may vary is if you do personal training it may vary on certain services but generally it's a fixed cost business so you wanna get to a certain number of members and then after that everything is profit and so it's a higher margin business you know most people you know jim at one point with forty percent profit margin now it probably say they're closer to twenty twenty five because labor has increased and membership prices haven't increased as much as maybe they could or should but there's also a lot of competition right there's only so much pie in every corner or every other corner there's jim's being opened up so what did you figure out what did you do differently that light you build this eighty two store chain well we started out as gold gym operators and you know we realized that gold gym was a body builder model you know there was people that were come in the gym they work out for three hours a day heavy protein you know people are fart germs that's sitting there for you know then not be the worst type of customer to yeah they abuse your weights and then you know they they but they use it right and then you look you know you start to look at this model called planet of fitness where they're signing up fifteen thousand people at a low price and when we were in the gym business they were just coming up and so we wouldn't and saw one man this is actually interesting they were serving pizza and bagels things that we just never even like understood like why now we understand this because people will come in eat pizza twice a month or every week and they'll get their nine ninety nine worth right so they were they were they were smarter than most they were already ahead of the game and we then started seeing other brands like we said oh well gold has some good stuff and so we started combining the models to create our own model and we created basically a large box high volume low price model with classes and group training and we basically combine gold gym and orange theory and a planet fitness all in one and in that process we started doing really well did you figure out any great insights along the way like you know my first business was a restaurant business and restaurant business location really really matters one thing we figured out very quickly was chipotle spends i don't know forty million dollars a year figuring out the best locations to be you could just go go to ever go try to get next to every chipotle is actually just like now you spend zero but you get the benefit of all of their locations scouting right we figured out that you could look at the receipts and if you understood how to read the code you would know how many customers this chipotle gets versus this one so i could even compare within that which location is better than the other so like we started getting a little smarter about how to play the game better were there any moments like that for you in the gym business that you you start to figure out maybe how to pick up members faster or you know how to take the average value of a customer from ten dollars a month to upsell them in some interesting way do you any any good business insights from that you know what we did was we create a really unique referral mechanism and so what we did was we we realized people love things for free right i mean a lot of the people i've heard talk on your podcast it's like given what deal that they can't ever say no to right and i i i think that's always a great business tool of keeping the back of your mind and you're starting anything or doing anything so you know we created this me and john who's my it was my coo and and like family to he's been with me a long time and we sat in a room and we're talking back and forth what what would make a member wanna refer someone and john said you know joking give it to for free you know i said yes that's what we're gonna do and so we're like how do we do that and so we're like alright well sean's paying you know let's say this for every person sean refers that joins he could get a dollar office dues and so in that process sean is thirty dollars a month or twenty dollars a month sean has referred twenty twenty dollar month for that twenty dollars and we found that our members like when we did our sales base we said hey sean you our membership is thirty nine nine nine but you can get it for free would you like to know how you get it for free people be like yeah great sure for your friends your family or coworkers anybody you want here's a pass we're gonna write your name on it sean how many passes you want sean i want i want forty because i'm paying forty dollars right great and now when they sign up they come in and give us sean's pass we would we would connect it to their membership sean dues would now go down by dollar it was amazing what we saw where people were so motivated even for a dollar that worked and it was amazing for people for even for like you know because you'd have people that would go down from forty to zero and all of a sudden two people will quit it's so their memberships is now two bugs who's the two people you know and you're like well okay just start shaking people down start calling people but did you how did you get out of the i mean i watched it happen myself so we created this referral concept that was really good and you know that kind of escalated us and then we started to realize like we gotta as we grew the gyms right we we learned what we did right and we learned what we did wrong for example like you know we would build pools in some road gyms well there's nothing wrong with having a pool but the reality is you're gonna have two to three maybe four people in at a time it's gonna take ten thousand square feet right six thousand ten thousand square feet that's a lot of footage for four people right and so we started just realizing what our model was as we went forward and then we just decide okay we're gonna give a great value at a great price and then we're gonna incentivize you to refer people right and it worked so how long did it take you to get out of the hole so the initial mistake was big fast forwarded to two thousand eleven k i now have twelve gyms and i'm with cold jim twelve goals gym two thousand eleven i had bought some property and one property i had i paid four million dollars k i owed seven fifty i've been paying them every month at thirteen percent for three years and so i go to this lender i actually went to high school with this guy's granddaughter and they were good old boys from where i grew up you know and i went to them and i said hey look if i give you fifty thousand dollars and for me fifty thousand at that time was all i ahead right will you rewrite my note and give me another year and change my interest rate because i'm now starting to climb up on the cash right and and my my sales i've twelve gyms they're all doing well and so the guy says sure chop bring us a fifty thousand dollar cashier check tomorrow said okay let me have my lawyer draft up a dog you don't trust us chop you need a lawyer and again no mentor no coach go get the fifty thousand cashier check bring it in put it on their desk two weeks later i get a fore foreclosure notice now and call them what's going on so oh well we think this property worth four million dollars so we're gonna take it from whoa so in the initial time i start calling around and and then i go to gold gym the next week i go and the guy has now passed away but he's the president of gold gym at the time and i go in and there's this big gold convention every year well there's was vegas la san diego it was at the time of in vegas i still remember i went met with them and i said hey look i've opened up twelve stores in three years you know i'd like to open up fifty and he laughed i'm a afraid you can't open up fifty we can't even open up fifty he said but look i'll do you a favor so you can have open up a gym for every time you have one million dollars in the bank so you wanna open up fifty show me fifty million remember fifty thousand for me was so i had this franchise green and so i called this lawyer really trying to save the property right i called but somebody i knew from law school and say hey man i got this property you know can i sue the lender what can i do and we're not really in the lawsuit type of thing at that at that point and so to fall bankruptcy i said no tomorrow i can't do it and then we started looking at the benefits at the time we were paying everybody and you know long story short we ended up file chapter eleven we were able to re brand we paid everybody a hundred cents on the dollar that was secured and we started growing the gyms after that and and in the process we we we reorganized our life we paid all the the all the people with all the fifteen million we owed we paid with interest but that also built me on the next round that we'll talk about right i i i was i was very like some of those lenders are still great friends to today where i can pick up the phone and call and say hey we're from the bay area right like so i called them and hey can i get loan i just called one and they said yeah we'll do it for you in harp you don't need think no we know you stood behind and so you know so we started building the gyms and we started building more gyms and then really we had no real estate at this point we had sold their house we had sold their cars you just got gyms we were just a gym operator and i think by two thousand and fifteen we've gotten up to about thirty three stores and besides some life like i wanna get back into real estate and i didn't have the i didn't have the seed cap real estate was always capital intensive and so i looked through my portfolio and sure enough i remembered i option that second jim in oak deal so i basically use that option to buy the center and then i sold it to someone else based on my new lease sorry to explain how this works so what i if i've never done real estate understand how this option buys out what do you mean so what you what in our lease we put this option let's say you're mister seller right and we say mister seller we have the right to buy this at we'll rent it for now correct but we have the right to buy at a defined price correct okay at at this defined time okay and in order for us to do that we just have to tell you we're buying it and we have sixty days ninety days to close right so we knew there was a buyer who wanted to buy gyms and do other stuff in the market broker approached us and said hey would you settle this they didn't know i didn't own it right but they said would you sell it and i said actually you know and so we had option that it like i think it was like three or four million bucks we sold it at seven million and so you knew risk free in a way because you have the option to buy at a defined price you already know there's a buyer lined up so you're not speculating as much as long as you believe that they would close that they would actually buy the thing yeah and there's no engineer's risk because if that buyer blows out i didn't have the money to buy thing anyway those you know but you mean you did like a double escrow base basic in essence we did a double escrow and we made you know several million dollars and we're like wow and so now that i've invested with you you do this a bunch and it is like the the two sweet swirl and thing this is like which are double s which basically is like we agree to buy a thing but before we even have to take the money out of our pocket we sell it so the same day they asked us for the money we just take the money from this guy we give them their their share weak pocket the profits yeah you bought the thing and sold the thing on the same day without ever having to take the money out of your pocket beautiful and you've done you do this all the time that's great yeah get you know we i'll do a deal with you and you're like by the time we get to buy this we're already gonna have sold ten million seven million dollars worth of the equity you know because we already have buyers lined up yeah and so you did this for the so that's how you did your first deal that's how i i'm my first seed money to buy real estate and then i just started buying and flipping for you know for years and you were doing it the same way gym options or no that was just like i a few gym options that i did a few gym sales then i got enough money to go buy a property and build a gym and then i ended up hooking up with this company call harbor freight tools and so as i started getting into fifteen sixteen we started getting the higher number of gyms we're like sixty five seventy we bought this building in san francisco yeah remember on market street market street yeah one two three four markets i think you actually came there the vanity the address i remember it's thinking you got one two three four market i was yeah no and and there was you know every day we go pick up the needles that were outside it was it was crazy but you know like at that time we had a store there and in a nonprofit a mosque you know approached justin and said we'd like to put our church here and we negotiated a deal and we said well we wouldn't make that money and probably like ten years running a years of running the gym so we sold it and then you know like we're like oh wow made some money here and as i was building my next door somebody from harbor freight tools randomly called me and said we'd like to we'd like to lease that box so go home and tell my wife what do you think you know i wanna build this gym i'm used to building all these gems she's just why don't she just do it right and so we did it and we ended up building a very big relationship there i'm a big relationship guy a lot of the tenants we work with was workers for years and we ended up doing over a hundred for those guys as time went on but but yeah just kinda kind of evolved this time went on and then we got to seventeen and you know my dad was not really the i won't say bad things but he wasn't a loving type a little bit abusive a lot abusive at times but you know he was just a different character so you know my thing was whenever i have kids you know we can't change the past but we can sure as hell changed the future right yesterday gone but tomorrow has not been written yet and so i kinda always have that philosophy but i wanted to be a great dad but during this time from two thousand eight to two thousand and probably sixteen i work seven days a week probably eighty to a hundred hours every week i mean i would get up at five thirty and being the gyms and then i come home by midnight i'd come home every night just wanna see my wife and kids and i'm thinking i'm doing a good job because i'm busting my butt but i'm still you know i'm still trying but my table was wobbly right you know we talked about this i know give the table of metaphor so i always have this belief that there's three your life is like there's three legs to a table right your your your family your job and your faith and your faith doesn't have to be god it could be your faith and fitness it could be your faith in the way you eat it could be the faith the way you treat people a code it's a code you live by it's whatever you believe your faith is in for you to feel like you are foundational sound well if any one of those legs you know let's say my job is strong but my family life is weak what happens the tape it wobble remember my faith may be weak and my job may be strong my table wobble and so for me i was you know i was working a lot i was making money it was a great relationship with my wife but one day i'm driving home from this from santa maria i had a gym in santa maria was probably on the coast it was probably gosh i'd say four hundred miles from my house three four and i would drive in the morning and i would come back the same night i'd i go train i go meet the managers i'd walk my store i wanted to see and touch and feel and anyways my my second son chase your nephew calls me it's crying hysterical mom on the phone my wife gets on the phone honey what's he saying and she's crying says you know he's really misses you and he wants you to come visit he doesn't think you live at home and i'm going home every night on purpose right like i'm driving four hundred mile i'm like i'm gonna be there i think i'm being a good dad you know i'm kissing him every night and i'm i'm watching them i you know and and so the whole day it didn't sit right with me and that's when i decided for myself i said i'd built this great business but i can't do this long term because for me to do it right or the way i wanted to do it i was unable to do it and be a good father and so that kinda changed my path of where i started focusing more on real estate right and the type of real estate you do because real estate the big word brand word it could be anything you do shopping centers mostly you've done other stuff too but now you do retail shopping centers yeah and as a tech guy so we can valley that always felt super random like like retail shopping center is like okay oh you're you're like at archaeologist you do dinosaur things thank i get yeah like yeah what are you talking about dude like but it's this incredible and now i invest i invested a ton of money with you because i'm like blown away by this but so so and just explain kinda like even just the space you the sandbox you play in why you play in that sandbox and like you know what's your model what do you do you know two thousand ten all the news was retail dying you know but what it really did was it insulated retail because what happened after two thousand ten people started building way more multi family storage industrial but they didn't build retail shopping centers now they built these pads a lot more post covid because what happened in covid right you were closed unless you gotta drive through right and so those businesses that had to drive through they crushed you and as time went on you know there's been a lot of retailers that have left it's no doubt but retail has sustained and it's kinda become a supply and demand thing where it's like you know and what we are is we're value add retailers so developer so basically what we do is we find things that we feel we can add value to whether it's new tenants whether it's breaking it up and selling in pieces whether it's construction we always have a game plan to go in and do something you know and i often get asked why didn't the other guy do it right why didn't the guy before you do i don't know you know sometimes it's just there and sometimes people just been in a project too long i give you times i've times there's some times i've been in a project for five six years and i'm like i just wanna be done right right and then there's been projects i've been in for five minutes and i'm like let's go it it just happens in that in this business and so you know we built a lot of good relationships with a lot of tenants and you know the good part is that we can email these tenants or their brokers within you know we buy we're looking at a center we can we can find out generally who wants to be give a sense of what good looks like in real estate what have you been able to do in your track record you know i i typically what i we see is we see people trying to compare or you know match the s and p or kinda be standard you know seven eight percent a year they get some depreciation you know and they're happy they're diversified they're diversified they you know they can do certain things and and we're more we target for our folks now mid twenties to low thirties irr are annually and in order for us to get there we actually have to go do something you went from having zero zero real estate assets to over a billion dollars in real estate assets in ten years how do you do that don't we all wanna know i i mean i think you have to find someone who's already kinda figured out that game and kinda run with them i would say i'd also say that like it's it's compounding you know it's you buy one deal and you sell it you made some money now it's when you do it again and again and again and again and again and so in our business i was able to compound it by doing it again and again and again and again and again for many years and so i would tell anybody who's young like you know you're gonna start with something right and then you you gotta figure out how to make that make money and move on to the next because if you stick to just one there's a lot of people out there have one building they enjoy it but they didn't it to really get to where they could have you you'd also told me one of the deals we did you know i'm learning about this as you and you're like oh we're buying the center and you're like there's a so and so grocery store and one of the reasons we're getting this price is that that grocery store they only have like a year left on their lease but they have an option to extend it like twelve or fifteen years but they you know they're not picking it up because they don't have to yet they one or two years left right now and i was like okay so what's the plan you're like i'm gonna get them to extend it and i was like but why why would they do that how do you know and it was a combination of intelligence you're were like well i know it's a high performing store i know they should want to extend it but they want they don't have to do it proactively but i do know the the person who's like runs their real estate she used to run real estate for this other company and actually one time she left me holding the bag she pulled out of a deal last minute and i ate the loss and i didn't i didn't hold it against her i didn't what you know i treated her well even though we took a big financial loss on that i believe she's gonna treat us well here and then sure enough like you know we buy this thing and suddenly we got a fifteen year lease extension in that property's value you know skyrocket from that so sometimes it's also about taking a loss well not just when somebody wins yeah it's all you know it's easy to high five when things are going great but how do how do you act when things don't go your way defines the character and defines the relationship right hundred percent i mean you know how you act on a loss is almost more important than how you act on a win right well your kids play sports do you teach them this and you when they're when it comes to their baseball they're pitching their you know what they're doing you try i mean they're young they got a lot of emotions so it's it's it's kind of a fine balance because you don't want them to want to lose right but you want them to understand how to lose because in life in order for most entrepreneurs out there most guys have had some sort of failure in their life and then boom it clicks right and they use that as like a catalyst to just skyrocket right not every business person is super successful right out the gate and most guys who have made it really far have i've had to grind their way through right and so you know i i'm for my kids that's that's what i want i wanna see them i wed to do baseball baseball is support a failure right you hit three out of ten you're in the ml v right you're you're hall fame right three that's thirty percent of the time you're touching the ball right we're hitting the ball so i like the sport because mentally and i also believe like you know the sports are a great way for kids to learn to compete you know and and have healthy competition but at the same time you have a lot of people teaching their kids that i've seen they think they're competing with other kids i try to teach my kids that you're competing and i would tell any adult not to look at everyone else right because i can only do what san can do i'm competing with me yeah there's a there's a guy who came on this podcast it's great phrase because he's an investor and he talks by investing in founders what do you look for man what's the what are some of the key things and he goes i wanna know if they're pre fall or post fall he said all great men have a fall i love it if they're already post fall because i know that they know what it takes to come back up i know that they're gonna have a certain level of maturity and humility because they're post fall right and pre fall y'all always have to be wary because somebody who's only ever seen the ups you don't know how they'll handle the downs you don't know if they'll even anticipate that there can be down they might get so full of themselves that they don't actually see that that's a possibility and they don't guard for it and you know watch for the wall and make the turn as you need to do when you're when you're right in the race so i've always remember that then in guys that red line are push the limits they're gonna have some falls yeah until you get to the edge it's kinda like one of those things so you know some of those people have never had a fall maybe they're playing it we're not the playing the game as hard as they maybe could be right what are some other like core i don't know philosophies that you have yeah i mean i think core philosophy i always think of this what would i advise my son to do what's an example where maybe if you had just been thinking from your own perspective yeah you can talk yourself into something but when you think about it like well advise my son to do they answers much more clear do can you think of an example yeah i mean like when when like when a tenant burns you or when people burn you and you say man i wanna call that person and tell them i'm not gonna do any more business with you you know we're gonna use the the the stick right and what do you gain with that right what what would my son what would my son shade didn't gain from that okay they're the person knows you don't like them they're not gonna bring any deals they're not gonna do anything or you could say you know what this one didn't work out let's find another one to win together on right there's it's a long game it's not a short game life is a long game you know that's what that's it's like things go full circle right the people say what going full circle means it means as you're going on longer and longer different opportunities come up it comes all the way around and and so for that it would be an example where i would probably tell him like hey look you know don't kill a relationship build the relationship find another way to wendy with that person don't hold on to the you know that's the problem as most people hold on to memories that are you know the right word i would say the memories that affected them in a negative way so they carry these negative ways instead you can forgive you don't have to forget right right i mean and so it it's so there there's been times in my life that i've even had to use this for my own like i i tell people a lot times like you know i will sometimes have to make a decision and i will think as if my sons or my daughters are the ones having to make that decision and i ask what would i tell them and most times it takes me five seconds and this is something that i had a conundrum about in my head but then for weeks you know ox times i talked to you and we're outside and you say things so common sen you know i'm like well why i've been thinking about this for two weeks sean got this to me like thirty seconds that's right alright listen the two most beautiful words in the english language are email subscribers you need more email subscribers i guarantee it and i don't care how many you have you need more of them i need more of you need more of them we all need more email subscribers because email is an amazing way to build your business to build an audience and to build a direct relationship that's not dependent on the tiktok algorithm the instagram algorithm it's how you get people to engage directly with you so you can get them to trust you to like you click products check them out check out your stuff that's how you build a relationship with people 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hundred thousand people and that's what i use and so for listeners with my first million i should do in a special code so if you're thinking about hey i have a newsletter i should have subscribers i kinda wanna build an audience that way well check it out they'll give you thirty percent off use the code m m thirty go to b hive dot com that's b e e h i i v dot com and use the code m m thirty i'll put the link in the description to make it easy for you start scaling your content today what have you seen just in because you're in retail like what have you seen as the trend what's going on like what what's changing maybe what's dying what's exploding yeah what can you teach teaches because you see a different part of the world than than we do it and you you see more of the leading indicator you know who's expanding you know who's contracting right you know which which locations are thriving or which ones are struggling what have you say i guess what's what's going on so for retail specifically there's been a lot of new things called experiential retail come out you know and and fitness centers we've been there for a long time but now there's pickle ball tram lean parks you know retail is important for any centers to drive traffic so retail used to be like you like you know where that now it's let's say pi mall or a tram park it would have just been go by clothes at the store right that is basically like that's the shift that's happening is like people buying you know maybe more of that stuff stuff's is being bought online but you can't buy the experience online yeah and and and there's there's places that are thriving like ross dress for us or burlington code or tj j maxx my wife loves home goods or tj maxx your wife loves it it's like a treasure behind the trade right and they're they're sourcing things that people can go and they're looking for that trash look at all the junk bought but the deal we got deal amazing here the experience for that so that that also becomes but it also becomes where it it it's it's not stuff you can easily find online right and so online has definitely had some form of effect where you've had some brands that are going away for example as a recent big lots went away joanne went away you know right aid it is in bankruptcy and you say when's the last time i went to a big lots when's the last time i went to a joanne they never adapted into today's market to be able to do both because really all all retailers should have the retail also being their distribution right and so an e commerce person needs distribution so now if you can do both and that's where the smarter retailers that have gotten where they'll ship out of stores yeah they'll do certain things to create where now they have a they don't have to do a hundred fifty thousand square foot distribution because they got a best buy in this part of wisconsin that part can ship everywhere and i think retail is also changed the fact that you've got more you know offices uses now going to retail you know you have lawyers and shopping centers you have insurance people you have doctors they're going where the foot traffic is right right and so and then food has become a big component right and the experience of food is what you know and you can door dash or anything you want but even you know the ghost kitchen concept has been tested door door ghost kitchens they close majority of the reason is because people like the experience they wanna pick what they want and yeah you can order it from your house you can go there near forte but you can get it the kitchen has value and so i think it's the the fundamentals is at the locate and and and when when we see things we also see where retail over ninety percent lease right now a very high occupancy and there's certain parts of retail that are no longer viable you know you you think about the old town like where i grew there's was a small town and there was a jc c on one side right and then lowe's tj j maxx home goods all went to the other side of the freeway everybody went on the other side target everybody's there well that other side of the retail it's hurting because it's not in the right location right so location also another key thing i didn't really understand when people would tell me when i was younger location location location now yeah location location location and and you know and i think in any real estate it's important to understand like when you're trying to make money in in real estate or i would say any business you really make money on the buy if you're thinking you're gonna make money on the sale immediately you're speculating but if you bought something right i buy i could buy a car and i know the car's is worth thirty thousand and i buy it for twenty eight twenty nine whatever that is i did alright right i made money on the buy whereas people buy things on speculation and when that speculation doesn't come to fruition that's when we get her exactly you you've also like you've you've done a much of like electric car charging stations and stuff like that like new new retail uses you know coming up as well right electric cars we do recycle stuff we're doing fireworks everywhere anything that we can bring traffic in you know and we we want you to bring your you know your tesla to the shopping center because you plug in and you're gonna go eat twenty minutes yeah you got you got time to go do something right and so you know but the number of retailers has reduced over the years because a lot of those concepts were either you know the kind of tough part for retailers there's been a lot of private equity that pi them they put heavy debt and then when any change in the market happens or they don't adapt anything can't can't right right and and that's what happened to like joanne or you know even you know big lots big lots had the two billion dollars in debt and but they also never adapt you one of the things i always wanted to do was you do you when you own the gyms you would do these like sales trainings you do like motivational talks you do a lot of these things that you you know maybe you i don't know if you like doing them but like at some point you're probably were happy to it to to be done doing it for a little bit but what would have been the highlights what were that what were your best what your best bits i i'd often talk about kobe bryant right i always love you know kobe ryan's analog where he would say you know i look at it like this i work two hours extra a day every day now you had take that time five days it's ten hours you know a week take that time times four weeks a month there's forty hours take your times twelve it's four hundred eighty hours over my fifteen year career i've almost done eight thousand more hours or ten thousand more hours than anyone else stacked days so i a lot of my motivation was how do you stack days the other thing that i was always very important on in training was when you're there be there what does that mean right well when you're at work be at work when you're at home be home don't be at work thinking about home and at home thinking about work and people don't get that off because you only get so much time so when i when my game faces on let's go and when i'm with my kids let's go when i'm on my own that's what i get to do well let's go right for myself but a lot of people don't understand that like when i talk about the commodity of time right it's limited and now so if you're here thinking about here you're here thinking about hearing and you're doing all the stuff like so that's something i think that every entrepreneur or young person should focus on themselves right and then i also would teach them to how a game plan make a list sometimes say i don't need a list when you write it down majority people are visual learners i'm for me i'm a visual guy i if i write it down i'll remember it you tell me that there's a good chance i forget it right so what's the way you remember what's the way that you're gonna remember what you're doing because you gotta write down your goals and kinda get to the next step about of taking that time and really you put you big on that like kinda writing down a vision or writing down whether it's affirmations or a vision or a goal like were you a big kind of like self motivator in that way did you you have any habits that served you well i never really wrote down affirmations or any of this stuff but i would always ask myself why why am i doing this what is my goal here and for sometimes it was my goal was to make money because i gotta pay bills you know i'd be at the gym and ten thirty at night calling someone randomly saying hey if you come in with your entire family to tonight by eleven o'clock and spend two thousand dollars we'll give you an extra year for free right whatever it was right looks because i needed the two thousand dollars so at that time it was money motivated other times it was because i wanted to actually like for my employees or even my kids i really wanna see them succeed and i wanted them to learn away i mean there was employees that we had come in and never had made more than eight dollars ten dollars an hour at that time and they started making hundred fifty two hundred band a year and it wasn't just sales it was also treating people right it was also understanding you know what what motivates people and you know what i i always told a story like sometimes i would tell when i was young my dad used to always do a thing that was pretty you know when i say abusive of what does that mean my dad would take me you need a few drinks he's was a indian guy come if you sitting at the table doo till probably like twelve or thirteen he would come and grab you by the neck and he'd take you to the restroom he put your head near the toilet and say see that that's what you are and i you know and i i was tell people you know that that could've have affected me in two ways it could've have completely demo me or i coulda used it as i never wanna be there and so everybody's experience is different from the others that's why i always tell people you're not competing with someone else yeah like you're kind of the be be there wherever you are be here now is is so i think even more underrated now because in a world of distraction on tap i'm board i can solve it right away half here i'm tired i can solve it right away i'm annoyed i can do i can i have this pacifier in my hand like i i have little baby i a wonderful old i have a pass right here at any time i could just suck on this and i'm gonna have i'm gonna have my problems soon for a moment and so being able to just beat wherever you are but be there fully and like there's a my sister had this situation where she was in business school in indiana she went to indiana university for for business school so they're in bloom indiana now one of indiana is dot the nicest place didn't wanna be there and the next semester they were gonna go to italy so they had this like next semester were in italy but while they're in bloom they didn't bother going out making friends they didn't bother like checking out the area they didn't you know they were just kind of going through the motions and the reason why it was they thought oh bloom lane italy italy's gonna be amazing can't wait you know how we're gonna be winner we're there we're gonna be oh i'm gonna be speaking italian i'm gonna be gelato and cafes i'm gonna be so it's gonna be so amazing i was like that's great you're not there yet and while you're in bloom you wish you were in what when in italy you're probably gonna wish you were back in the states so you know because you might get them miss certain other things be if you're in bloom be in bloom make this your italy right you can choose to to have that italian because so you gonna have whatever experience you want in the place you're at and i've now seen over time this has become a superpower where like you said like you know you're at work you're thinking about home you're at home you're thinking about work and with your kids what you're half thinking about work you know the half and half out the dim light versus being able to go off and then shine bright when it's time to shine bright but if you're always flickering at this sort of dim level on all things you're just gonna feel unsatisfied in all aspects of your life right and so i think that's a great simple reminder that's in everybody's control don't take any talent to really do that no yeah it just takes a little bit of awareness and so that's the one i'm gonna take with me the most out of this whole thing i think we hit everything i think we had the highs the lows and then the build back do i appreciate you doing this i know you're not you're not a big kinda get out there and and and and go toot your own horn but i appreciate you doing this it's great to be here and and i appreciate it alright that's a wrap i feel like got could rude to wear i know could be what i want to from at all in it like a days off on a go travel never looking back alright my friends i have a new podcast for you guys to check out it's called content is profit and it's hosted by luis and ph ka after years of building content teams and frameworks for companies like red bull and orange theory fitness luis and ph are on a mission to bridge a gap between content and revenue each episode you're gonna hear from top entrepreneurs and creators and you're gonna hear him share their secrets and strategies to turn their content into profit so you can check out content is profit wherever you get your podcast