The Signet Podcast – Keith Wasserman Transcript

In this episode, Eduardo Signet speaks with Denver commercial real estate broker, landlord, and investor Stuart Zall, founder of The Zall Company.

The conversation explores how relationships, tenant selection, networking, mentorship, long-term ownership, and neighborhood-building shape success in commercial real estate. Stuart shares lessons from his career in retail leasing, property ownership, Denver development, international projects, and the practical realities of working with landlords, tenants, brokers, contractors, and emerging brands.

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Podcast transcript

SIGNET: Stuart, thank you for coming. I have so much to ask you. I want to introduce you as the broker and landlord in the Denver market, although you do brokerage and properties everywhere, including a deal in China. You have quite a lot of experience. Do you want to say a little bit about yourself or introduce yourself?

STUART ZALL:

I am Stuart Zall, founder of The Zall Company, which I founded in 2000.
I did not grow up expecting to go into real estate, and I did not come from a multigenerational real estate family.
I studied accounting at the University of Denver, got my CPA, and started at Arthur Andersen, but I lasted only about a year.
I moved into real estate almost by accident after helping Steve Gettleman with accounting on a strip center, then being asked to help lease it by calling people from the phone book.
I learned by u201cdialing for dollars,u201d got results, and eventually moved through Lakeside Mall, Taubman, and outlet-mall projects around the country.
Taubman taught me the art of leasing, merchandising, and building tenant relationships across multiple markets.
In 2000, when my firm was bought, I chose to start my own business instead of moving, and the business grew from hired-gun leasing work into a brokerage company.
Along the way, I started buying properties when opportunities came up, often through partnerships, because I believe successful brokers should have some investment exposure to commercial real estate.
I eventually bought the Larimer building where we are now, partly because I needed space for my own company and could lease the rest to another tenant.
Having a storefront and a sign on the street has changed the business because people now drive by, see the company, and call.

SIGNET: It is so interesting. I love this area. I have been here a few times and have been to the restaurants. I did not realize everything was right on this block, like Barcelona, Federales, and other places. It is a cool part of town. How did you know this was going to become that?

STUART ZALL:

Sometimes you get lucky.
A friend from New York, Stephanie Rubenstein, was representing a concept connected to the founder of Lululemon, and they wanted a gritty part of town for a millennial worker-focused concept.
At that time, Larimer Street was very rough; Denver Central Market was not open, and there was very little there besides Ratio Brewery.
My friend saw something in the area that reminded her of Brooklyn, and I trusted her perspective even though I did not fully see it myself at first.
I made it a quest to find a building in that area, and we got what I believe is one of the best blocks on Larimer Street in RiNo.
When I bought the building, I was nervous enough that I did not tell my wife exactly where it was at first.
The area still has city challenges, but the building has worked out extremely well.
My advice is not to overanalyze real estate; sometimes you have to find it, take the risk, and let time work for you.
Real estate is scary because you are putting a lot at risk, but time can become your best friend if you take the chance.

SIGNET: You hit on so many points I want to talk about. Mentorship is one. First, can you talk about your mentors and the values you learned in your training with Taubman? You have also been a mentor for me in Denver, and I have met many people you have mentored who became incredibly successful. What qualities do you look for in people that lead them to success?

STUART ZALL:

I think it starts with heart.
If you have passion for what you do, then it does not feel like work.
You need drive, passion, and the ability to dream.
I think younger people are missing face-to-face communication because so much is done through texting, Instagram, and efficient digital communication.
When I started, even sending someone a picture of a space took days, and that slower process created dialogue and relationship-building.
Today, information can be sent instantly, but the relationship process can be lost.
Networking begins with meeting people and building relationships.
I try to create platforms, such as breakfasts, where people can meet others who may help advance their careers.
If you want to make deals, you need to put yourself where decision-makers are, such as shopping-center conventions and industry events.
You should not only spend time with people you already know; you should try to meet as many people as possible and then follow through.
Many deals begin with a cup of coffee, a handshake, or simply bumping into someone.

SIGNET: I love the idea of networking outside your own category. Developers often network with developers, and brokers often network with brokers. I have looked at finance events and capital groups because you get exposure to different people and make different links. One thing I have heard you say is that you never know where a deal is going to come from, and it is about being there. Is that one of the ideas?

STUART ZALL:

I learned something from doing business in China: if you are in a room where everyone speaks English, you are less valuable, but if you are the one person who speaks a language no one else speaks, you become extremely valuable.
I apply that metaphor to real estate networking.
If I am in a room full of brokers, everyone already understands leasing, so I am less differentiated.
If I am in a room where no one understands what I do, then I may be able to provide something valuable.
I like working with contractors, architects, finance people, and others connected to real estate but not doing the exact same thing.
I see networking as collaboration, where different people can benefit from different parts of the same opportunity.
I try to pay it forward by connecting general contractors or other professionals with people who may help them, without keeping a strict scorecard.
Those relationships often come back in useful ways, even if not immediately.
Mentoring people is not just telling them what to do; it is encouraging them to go out, network, socialize, talk to people, and learn from events.
As an example, I paid to meet Danny Meyer at an event, got a signed book, introduced myself, and created a connection that later became useful.
You cannot build those kinds of connections if you only sit in the audience; sometimes you need to go to the front and introduce yourself.

SIGNET: You talked about win-win situations. One thing you have said before, and I have seen you do, is that you want your tenants, your clients, and the people you represent to win. You have said that after the lease is signed and the commission is done, that is when you start to work by helping promote them, because if they expand, they are going to call you. What do you do after the lease is signed, since they still have so much to do?

STUART ZALL:

You can go too far and become your clientu2019s outsourced administrative staff, so you should not go looking for trouble.
It is still important to check in and help when there are problems.
I try to guide clients toward good people, such as reliable liquor-license attorneys, contractors, or other professionals.
I prefer to give clients two or three strong referrals rather than just one, so they can do their own homework and choose.
My role is to point them toward people who are tried and true, not to make every decision for them.
Most of the help is needed between signing the lease and opening the store.
After opening, I cannot solve every operational problem, such as labor or marketing, but I can pick up the phone and be available.
Signing a lease can be a multimillion-dollar commitment, so I want the tenant to succeed.
I once helped a restaurant franchisee renegotiate terms and work through problems even though I technically represented the landlord.
A lot of salespeople disappear after they get paid, but we want continuity, repeat business, and clients who know we tried to help.
At the core, I see our work as solving problems.

SIGNET: I love the way your brain thinks. You are very creative. Taking a wider-angle point of view, why commercial versus residential? I love commercial, but I am curious why you chose that path.

STUART ZALL:

Triple-net leases are a major reason.
I had experience with residential early on, including buying condos during a period when banks wanted properties off their books.
At one point, I had about 50 condos with a partner.
Residential was more management-intensive, especially before todayu2019s technology made banking and administration easier.
I do not have the patience for residential.
Commercial is more interesting to me because I am fascinated by businesses, retail, and how those businesses operate.
I moved most of my residential holdings into commercial projects over time.
In commercial, if a store does not work out for an operator with many stores, it is usually not as emotionally catastrophic as something going wrong with someoneu2019s home.
Residential deals involve peopleu2019s shelter and can be more personal and stressful.

SIGNET: In commercial real estate, what trends are you looking out for? We have tariffs, the internet has been affecting retail for a while, and there are other forces in the market.

STUART ZALL:

People have probably been worrying about the future of retail and commerce since ancient times.
Humans will always need commerce in one form or another.
There will be AI, headwinds, and other changes, and the key is to keep pivoting.
If you sit back and do nothing, you are going to be dead.
COVID was a major test for restaurants, and the smart operators quickly moved into patio seating, takeout, and alcohol-to-go where allowed.
Apparel is changing because so much can be bought online, but people still shop when traveling or looking for experiences.
Food still has to be made somewhere, even if DoorDash or another service delivers it.
I think ghost kitchens have mostly been a bust because people still need to see, experience, and trust a restaurant.
Food, entertainment, and apparel will remain, but models may change, stores may get smaller, and department stores need to reinvent themselves.

SIGNET: I am loving these public markets you see everywhere. I drove up and down the coast, and places like San Luis Obispo and Santa Barbara have public markets. Here there is The Hangar and Edgewater. I love those developments because they have synergy together if they are done well. Colorado Mills may have been an example of that 15 or 20 years ago.

STUART ZALL:

Denver is often a poster child for jumping on trends harder than other cities.
We probably overdid the public market and food hall concept.
Some public markets and food halls are winners, but others do not work.
It is not enough to build a food hall and assume people will show up.
You still have to put real thought into the concept, location, tenant mix, and execution.
Denver Central Market and Edgewater are strong examples.
Some others have gone out of business, which shows the model is not automatically successful.
If the concept is done right, it can work very well.

SIGNET: Your company has come such a long way. I think it is incredible that you started as an accountant, which uses a certain type of brain, and then went into such a relationship-heavy business. What qualities did you bring from accounting into your current work?

STUART ZALL:

I can understand financial statements, accounts receivable, and the basic mechanics of a business.
That is valuable because many brokers do not really understand the business side.
I understand operating properties and mortgages.
At the same time, I outsource almost everything that is not one of my strengths.
I use an outsourced bookkeeper and outsourced graphic arts help.
I know I need to work within my strengths.
Running numbers and detailed accounting work are not where I perform best now, even though the background helps.

SIGNET: I have a personal question that I think applies well to the podcast. Hiring people and managing people is really a talent. There is a reason CEOs sometimes manage managers, and managers manage individuals. How do you develop the skills needed to manage people? If you do not do that right, your business suffers and you reach dead ends.

STUART ZALL:

Managing people is a real challenge.
I believe there may be some force or timing that helps you find what you need when you need it.
About a year ago, I hit a wall because sales were down and I was struggling to motivate the team.
Our leasing meetings were not productive, and people, including me, were distracted.
I realized I needed a coach.
I met Steve Benoit from Crafted Consultants through my son and later sat down with him for coffee.
Steve explained a structured process for working with people, and I decided to try it even though it was not cheap.
He has become a meaningful part of the team.
We now have mandatory Monday meetings, with no cell phones, where each agent reviews what they said they would do and whether they got it done.
We also have one-on-one status updates and KPIs.
One KPI is getting one positive Google review per month from each person, which helps the company cast a wider net.
We now track deals by quarter instead of just doing deals without tracking them.
The coaching and structure have been important to our growth.

SIGNET: I asked that because I am managing a construction project in Pebble Beach right now, and you manage subs and contractors. Many people I have interviewed say their success is due to the people they hire. A lot of it is finding the right people with drive, quality, and pride in workmanship. It is hard to find those people because everyone wants to present themselves that way, but not everyone is that person.

STUART ZALL:

A lot of hiring is trial and error.
We now have an onboarding sheet and an interview sheet that lists what we are looking for.
You can also overanalyze hiring.
Right now, we are at capacity and do not have room for more people unless we build up or expand.
I am willing to take a chance on a lot of people.
Many people in the industry probably got their start with me.
In the past, I may not have had the tools to mentor and coach people properly, so I probably lost some talented people.
If you love what you do, it is not work.
I work in some form seven days a week because I am always available and always thinking about how brokers can be more productive.
I do not only think about their productivity in terms of my own income; I want them to succeed.
People are giving me their time and part of their lives, especially when they are young.
Even if someone only stays with me for a year, two years, or three years, I want them to leave with skills that help them succeed elsewhere.
At Arthur Andersen, many good accountants eventually went to work for clients, and the firm saw that as creating a friend at that company.
I see former employees similarly: if they leave and succeed, the relationship may help both of us later.
I do not expect anyone to give me their entire life, but I want their time with us to be productive.

SIGNET: You said you are at capacity. Where do you want to go from here? What is really good now, and what do you want your legacy to be? That is a two-for-one question, but they are different intentions.

STUART ZALL:

I am having a lot of fun and enjoying what is happening.
We are working on projects with the Orlando Magic, which has been very cool.
I have partners outside my company, including Dan Nelson and Neil Berkowitz, who help expand our bandwidth.
I like the arena and sports district space and see it as an area for future growth.
Many arenas are moving back into central business districts, which creates opportunities around live music, sports, restaurants, retail, and event traffic.
Time is precious for people, so projects that combine sports, entertainment, food, and retail can create strong commercial environments.
We do a lot of leasing downtown, in RiNo, and in Cherry Creek, and I want us to continue being a leader in those markets.
Downtown Denver still has a lot of opportunity, despite lingering perceptions from COVID, crime, and 16th Street Mall disruption.
When you lease space and bring in a store or restaurant, you can change a neighborhood for better or worse.
A lease such as Mendocino Farms in Cherry Creek changes the everyday experience of a neighborhood by adding a useful commerce point.
My legacy is not about ego; it is about improving the city or the commercial playground I work in.
Early in my career, I was focused on getting paid, but over time I came to care more about the type of tenant and whether they improve the neighborhood.
A street full of banks may pay rent, but it does not create the same neighborhood energy as coffee shops, restaurants, and places to shop.
The goal is to help create neighborhoods where people feel commerce, culture, and activity.

SIGNET: The tenants really give a neighborhood its feel u2014 the restaurants, bars, and different spots.

STUART ZALL:

The right tenant mix creates a good environment.
When neighborhoods improve through thoughtful retail and restaurant leasing, everyone benefits.

SIGNET: I was listening to another interview you did, and you said 2010 was a hard year after the Great Recession. How did you survive that, and what advice would you give to other people in future recessions?

STUART ZALL:

Praying is real.
If you have your health, you should not let your stock account or money account consume you.
Do not listen to all the background noise.
I do not watch much news because it can become distracting and negative.
In our business, the recession showed up late because commissions often take six months to a year to come in.
2009 was still fine, but in 2010 nothing was coming in.
I tried to get exposure by writing articles and appearing in trade magazines.
A partner and I wrote an article about repositioning malls, and someone from China called asking whether we could do that work there.
Our default answer was yes, even when we had to figure out how to execute afterward.
We needed demographic and psychographic data in China, which was difficult to get, but a colleague connected us with someone who did data work in Asia and had gone to the University of Denver.
We partnered with him, created a merchandising plan, and the client then asked whether we could lease the project.
The project was in Xiu2019an, which was connected to the Terracotta Warriors and the Silk Road.
I used my U.S. relationships with brands to find the right international contacts and started leasing the project.
I worked between China and Denver, using a Wi-Fi phone line with a Denver number so clients did not know I was overseas.
The project was ultimately scrapped because housing became more lucrative for the developer, but we had been paid in advance.
By the time that project ended, the U.S. economy had improved.
That experience helped us survive and led to work in places such as Puerto Rico and Hawaii.

SIGNET: I do residential in Europe, but it is interesting because that is another market. Even here, RiNo and Cherry Creek feel like different markets because the tenants are different. You deal with a lot of high-end, popular, and trendy tenants.

STUART ZALL:

I would not call most of our work true luxury, like Gucci or Hermu00e8s, because Denver is not a very luxury-heavy market.
We work more with upper-moderate and emerging brands.
That includes brands like Lululemon, North Face, Birkenstock, and other better brands.
I also love working with immigrants because many of them are fearless.
Some people create businesses because they may not have the same access to conventional jobs, and they are willing to take chances.
Those chances sometimes turn into great businesses.
I have worked with clients from one store to very large store counts, and it is rewarding to watch a brand grow.
It is interesting and fun to see a person or brand evolve from one location into something much larger.

SIGNET: That is part of their story. I think you did that with H&M, where you had the first one in Colorado.

STUART ZALL:

We did the first H&M in Colorado.
H&M has withstood the stress of downtown.
We also brought Uniqlo to downtown Denver, although it unfortunately closed during COVID.
Forever 21 was another example.
No brand lasts forever, but if you can get 15 years or more out of a brand, that can still be meaningful.

SIGNET: Thinking about the 16th Street Mall, coming from Los Angeles, what is the secret? In LA, it is very hard to turn around cities, maybe because of bureaucracy or something else. Here, you have the Downtown Denver Partnership and developers working with political bodies. What is the secret to turning around a place like that?

STUART ZALL:

Comparing Los Angeles and Denver is difficult because Los Angeles County is massive and harder to move.
Denver is smaller and more nimble.
Denver has a lot of downtown history.
Union Station was critical to Denveru2019s growth and connects directly to the 16th Street Mall.
The redevelopment of Union Station was a beautiful project.
Historically, the railroad helped Denver grow because the rail route came through Denver instead of elsewhere.
Larimer Street and downtown Denver developed around rail traffic, travelers, and the commerce they needed.
Denver has historic assets, including Larimer Square and older buildings, that give it a character beyond steel, brick, and glass.
The city has serious struggles, including high minimum wages and permitting timelines, but there are good people who believe in downtown.
With the 16th Street Mall work completed or nearing completion, I expect to see more positive activity in the next couple of years.

SIGNET: It is a great area. I lived near Union Station and would jog through 16th Street. That area has completely changed, with Whole Foods, the train, and a safer environment.

STUART ZALL:

During COVID, Denver dropped its guard and got hit on multiple levels.
The trend is now improving.
Some older office buildings may be converted to residential if conversion is feasible.
There is still a need for housing, even if apartment rents are currently soft.
I expect the need for apartments to continue as the city grows.

SIGNET: Prices have come up a lot since then too.

STUART ZALL:

Prices have come up, and interest rates are another obstacle.
Every generation has something that gets in the way.
I often hear people say something is too expensive and that they will wait for prices to come down.
In the long run, saving a relatively small amount on price may matter less when amortized over decades.

SIGNET: I once heard that it is not timing the market, it is time in the market. It is the same principle.

STUART ZALL:

Jordan Perlmutter once told me that some real estate projects succeed because of timing.
Even if you do not time it perfectly, real estate is a long game.
It is like golf: people focus on individual shots, but real estate has waves.
There are periods when you can make a lot of money quickly, but overall you need a long-term view.
If you take the long view, you have a better chance of being successful.

SIGNET: It seems like that is also what you do with your investments. Originally, the name of this podcast was u201cThe Long-Term Real Estate Investor,u201d because thinking long term removes some of the pressure around things like IRR calculations. If you have a 100-year business plan, it changes the mentality. I feel that in your investing and leasing, it is always long term, and there are also a lot of transaction costs in trying to flip.

STUART ZALL:

In commercial real estate, long-term thinking is important.
Because I did not come from a real estate family, I had to start by planting seeds myself.
It would have been nice to walk into an existing forest, but I had to begin building it over time.

SIGNET: It is tricky too, because when you are starting out, how are you going to buy something without financing? A lot of times the long-term plan is to get rid of financing so you have more stability and the bumps in the road are not as dramatic. Let me ask you the wrap-up questions. What was the number-one deal that changed your career, taught you the most, or had the most impact on you?

STUART ZALL:

The most important turning point was not really a deal; it was going to work for the Taubman Company.
That job was transformational because it taught me how to lease not just to fill space, but to create neighborhoods.
When I was about 27, I met a friend at a restaurant called Fresh Choice, saw a huge line, and asked about the owner.
I had just taken a job involving two malls, and within about 30 days I made two deals with that restaurant operator.
That happened because I asked a question when the opportunity was right in front of me.
Sometimes you are on the one-yard line and only need to ask the question.
Over my career, I did several deals with that operator, so that became an important relationship and an important early lesson.

SIGNET: What are your three key daily habits that have made you successful? I am always curious what time people wake up, whether they meditate, read a certain newspaper, or spend family time.

STUART ZALL:

I do not read a newspaper.
I get up early, usually around five.
My most productive time is between about five and eight in the morning.
I try to filter out negative noise because there is always a lot of it.
I would tell people not to listen to all the noise that is designed to stop them.
I try to stay positive.
I meditate for about ten minutes almost every day.
I use paper and pencil to write things down, even with all the CRMs and technology available.
I try to be thankful.
I remind myself that there are many opportunities available and that people do not need to stay stuck.
I try to wake up with a smile and a mindset of taking on the world, even if some days are harder by the end.

SIGNET: Final question: what would you say to a young individual who wanted to start in the real estate business? They might not know whether they want to be a broker, investor, or what segment to focus on. How would they find their path?

STUART ZALL:

I would tell them not to be afraid.
If they need to live at their parentsu2019 house or drive Uber while getting started, they should do what they need to do.
They should absorb as much information as possible.
There is so much information available now that they do not even have to subscribe to everything to learn.
They should become an expert at something and become the go-to person in that area.
They should not try to do everything.
They should find one area and try to be the best at it.
They need passion for the business.
If they think of it only as a job, they are in the wrong business.
It is always a good time to get into real estate, and bad times can actually be the best times to start.

SIGNET: Stuart, thank you so much. We could do round two another time. Thank you for joining the podcast, and hopefully we will grab dinner soon.

STUART ZALL:

I hope so.

INTERVIEWER u2014 SPEAKER UNCERTAIN: Bonus question: what are your thoughts about the new Burnham Yard deal and what it is going to do for downtown?

STUART ZALL:

I do not know exactly how it will affect downtown, but I think it will be very positive for Burnham Yard.
Burnham Yard feels like one of the last major pieces of Denver that has not really been developed.
A key question is what happens to the area where the stadium is now if activity shifts.
I think the project will not hurt downtown because people will still come downtown, and the distance may not be dramatically different.
Large investments, such as a multibillion-dollar stadium, create a multiplier effect that benefits many people.
I do worry about displacement, especially for people who currently live nearby and may have cheaper rent.
Growth can be positive, but people still need places to live.
Denver has done some work around affordable housing, but development can still affect neighborhoods.
I think developers and stakeholders need to think carefully about who is affected.
Overall, I think the project is good, but I hope there is thoughtful attention to housing and displacement.

00:00 foreign
00:04

00:04 [Music]
00:18

00:18 uh
00:20

00:20 [Music]
00:39

00:39 well thanks for coming on uh the podcast
00:42

00:42 keith this is keith wasserman
00:44

00:44 of gelt inc
00:46

00:46 i’m very happy to have him and very
00:47

00:47 excited um
00:50

00:50 do you want to tell us a little bit
00:51

00:51 about what you do and how you do it yeah
00:54

00:54 for sure well
00:55

00:55 awesome meeting you finally in person
00:57

00:57 now covet sort of delayed this but uh
00:59

00:59 yeah essentially
01:01

01:01 i’m the founder uh and president of gelt
01:03

01:03 inc delta is an apartment investment and
01:05

01:05 development company
01:07

01:07 i started gelt
01:08

01:08 with my cousin actually so it’s a
01:10

01:10 family-run business but i started with
01:11

01:11 my cousin in december of 2008 and we
01:14

01:14 started buying our first building which
01:16

01:16 was in bakersfield california in the
01:18

01:18 heart of the central valley around two
01:20

01:20 hours north of la we started with
01:22

01:22 literally one
01:23

01:23 you know four plex was bank owned
01:25

01:25 boarded up kind of building and uh we
01:27

01:27 got an fha loan it was actually damian
01:29

01:29 my cousin that bought the first building
01:30

01:30 with an fha loan he only had to put two
01:32

01:32 and a half percent down which he didn’t
01:34

01:34 even have so he had to borrow that from
01:35

01:35 a friend and then he got a cash advance
01:37

01:37 of ten thousand dollars on his credit
01:39

01:39 card to do the rehab for the property
01:41

01:41 and that’s sort of what put us into
01:42

01:42 business um
01:44

01:44 you know what was it 12 plus years ago
01:46

01:46 now that’s that’s
01:48

01:48 that’s great to hear i you know one of
01:51

01:51 my my questions that i was thinking
01:52

01:52 about asking you you’ve always had an
01:54

01:54 entrepreneurial drive you know you had
01:57

01:57 your ebay stores before when you’re in
01:59

01:59 college
01:60

01:60 you have you know you have property
02:02

02:02 management
02:03

02:03 software company i think you have your
02:05

02:05 venture capitalism
02:07

02:07 a venture capitalist company what
02:10

02:10 motivates you to
02:11

02:11 like how do you get the energy what
02:13

02:13 drives you yeah
02:15

02:15 that’s a great question i think
02:18

02:18 just
02:19

02:19 i think building something creating
02:21

02:21 achieving um
02:23

02:23 i’m an impatient person but looking back
02:25

02:25 it’s like wow we’ve accomplished a lot
02:26

02:26 over the last 12 years so you know being
02:28

02:28 impatient is cool like day by day but
02:30

02:30 having a long-term
02:32

02:32 vision and
02:33

02:33 consistently working towards something
02:35

02:35 every single day making small progress
02:37

02:37 small progress every single day you know
02:39

02:39 will compound over time and make big big
02:42

02:42 things happen so i think um internally
02:45

02:45 i’ve you know always
02:47

02:47 you know i grew up in a pretty well-off
02:48

02:48 household but i wasn’t really given
02:50

02:50 anything ever
02:51

02:51 i uh i started my first business yeah i
02:54

02:54 was like 15 years old i would borrow
02:56

02:56 money from my dad but i would always
02:58

02:58 keep a detailed notebook and pay him
03:00

03:00 back as soon as i you know sold the
03:02

03:02 merchandise and and i kept using him
03:04

03:04 sort of as a bank so you know it was
03:06

03:06 great to have you know parents that were
03:08

03:08 supportive and you know enabling me to
03:11

03:11 launch different ventures and you know
03:13

03:13 financially support those but i would
03:14

03:14 always pay them back and um you know
03:17

03:17 with interest and yeah it was um just i
03:20

03:20 don’t know i think it’s
03:22

03:22 intrinsic it’s a little family you know
03:24

03:24 we always talked about business and um
03:26

03:26 building wealth over time and investing
03:29

03:29 and you know i was investing my bar
03:31

03:31 mitzvah money at 13 years old and i just
03:33

03:33 like um
03:35

03:35 just the concept of entrepreneurship
03:36

03:36 starting stuff investing in stuff and
03:39

03:39 seeing it being built over you know long
03:41

03:41 period of time no that’s interesting
03:43

03:43 yeah the the journey i think in the
03:45

03:45 adventure and the challenges and the
03:47

03:47 creating growth you said long term
03:50

03:50 um
03:52

03:52 do you when you buy something like an
03:54

03:54 apartment building do you see yourself
03:56

03:56 buying a long-term holder or i don’t
03:58

03:58 know how long you yeah we um we
04:00

04:00 typically sort of
04:02

04:02 project 10-year kind of um horizon but
04:05

04:05 the idea is we we do that because we
04:08

04:08 want to um
04:09

04:09 you know show the investors that real
04:10

04:10 estate is long-term think long-term this
04:12

04:12 is an illiquid kind of investment
04:14

04:14 which i think is actually good it forces
04:16

04:16 you to hold long term um that being said
04:19

04:19 we’ve sold deals after one two three
04:21

04:21 four five years um but we’re always
04:24

04:24 looking to 1031 exchange we always roll
04:26

04:26 you know via the 1031 we take advantage
04:28

04:28 of that and you know if you do a chart
04:30

04:30 and you show you know your you you sell
04:33

04:33 the building and then you pay your your
04:35

04:35 long term capital gain and recapture you
04:36

04:36 have after tax dollars if you invest
04:39

04:39 that over a long period of time versus
04:41

04:41 having to just not have to pay those
04:43

04:43 taxes and just keep rolling it you’re
04:44

04:44 gonna see huge divergence over a long
04:46

04:46 period of time so we feel like it’s it’s
04:48

04:48 always best to you know exchange if we
04:50

04:50 do sell
04:52

04:52 that being said if something’s doing
04:53

04:53 great and throwing off cash flow and
04:56

04:56 improving and the area is improving and
04:58

04:58 the building you know is in good shape
04:60

04:60 and yeah might as well keep it and you
05:02

05:02 know not kill the golden goose laying
05:03

05:03 the golden eggs and just keep
05:04

05:04 refinancing it over years and keep
05:06

05:06 pulling out cash that way and just
05:08

05:08 eventually have all your money out and
05:09

05:09 keep holding the asset in perpetuity
05:12

05:12 yeah you said something
05:14

05:14 at some point that real estate
05:16

05:16 that time and inflation were real
05:18

05:18 estate’s best friend i thought that was
05:20

05:20 something well put i mean
05:22

05:22 why did you say what’s that mean yeah so
05:24

05:24 one one of my mentors um who’s since
05:26

05:26 passed his name um was jonah goldrich
05:29

05:29 she always said time and inflation were
05:30

05:30 real estate’s best friends and it’s sort
05:32

05:32 of like having a long-term horizon and
05:35

05:35 over time in in with inflation the you
05:37

05:37 know the value to reproduce the property
05:39

05:39 it keeps increasing and even even now
05:42

05:42 you have you know construction materials
05:43

05:43 rising and you’ll have labor costs
05:45

05:45 rising and just
05:47

05:47 you know it’s a great hedge against
05:48

05:48 inflation having real assets you know
05:50

05:50 like real estate um in the portfolio so
05:53

05:53 i think uh if as long as you’re able to
05:55

05:55 withstand any kind of shocks you know
05:57

05:57 there’s always recession
05:59

05:59 you know recessionary time periods
06:01

06:01 you always come come through uh better
06:03

06:03 on the other side as long as you can
06:05

06:05 withstand them not be a force seller
06:06

06:06 kind of thing and then time and
06:08

06:08 inflation will take care of the rest
06:10

06:10 yeah i uh
06:12

06:12 i saw that you what i like about
06:14

06:14 apartment buildings and that’s sort of
06:16

06:16 your your focus
06:18

06:18 is
06:19

06:19 that it sort of adjusts every year and
06:21

06:21 it’s very it keeps with the market so if
06:23

06:23 the market goes up a little bit
06:25

06:25 you know with commercial like we were
06:26

06:26 talking about that other property the
06:28

06:28 air one you know or commercial generally
06:31

06:31 has longer term fixed lease rates so
06:34

06:34 it’s hard to
06:36

06:36 it’s hard to adjust to market if there
06:38

06:38 is a downside or an upside yeah i think
06:40

06:40 it’s better for the tenant to lock in a
06:41

06:41 long-term lease but for the landlord
06:43

06:43 yeah you want to sort of be
06:45

06:45 you know have those and i like annual
06:48

06:48 yeah you could definitely move and be at
06:49

06:49 the market it works both ways though you
06:51

06:51 know if the market goes down then but at
06:54

06:54 the same time if the market’s going down
06:55

06:55 the tenant’s gonna usually want
06:56

06:56 reductions and their businesses aren’t
06:58

06:58 performing as well and if you wanna you
07:00

07:00 know keep
07:01

07:01 the tenant if it’s not the strongest of
07:03

07:03 tenant with high credit and whatever you
07:04

07:04 got to work with your tenants also in
07:06

07:06 general in in retail office whatever so
07:09

07:09 i think uh i i like real estate that has
07:12

07:12 a lot of tenants you don’t have to rely
07:13

07:13 on any tenant you know to hurt the rent
07:15

07:15 roll like like an office or shopping
07:17

07:17 center having hundreds of units in a
07:19

07:19 building and you always have people
07:20

07:20 coming in moving out and it’s okay
07:22

07:22 you’ll have constantly consistently
07:24

07:24 pretty high high occupancy and you know
07:26

07:26 if the unit sits too long just lower the
07:28

07:28 rent a little someone will come in right
07:30

07:30 um
07:31

07:31 that’s that’s the way
07:33

07:33 it’s more consistent the cash flows
07:34

07:34 right it’s not as
07:36

07:36 when the times are good it’s really good
07:38

07:38 for commercial and but it’s lumpy the
07:40

07:40 the cash flow and you have big capital
07:42

07:42 expenditures whenever a tenant leaves
07:44

07:44 and
07:44

07:44 oh yeah and they could probably use
07:47

07:47 yeah vacancy yeah so uh you said i
07:50

07:50 wanted to ask you i didn’t i’d send this
07:52

07:52 in the questions that i sent yeah
07:54

07:54 natasha your mentor i wanted to ask you
07:57

07:57 about them what did they like what did
07:59

07:59 how did they really help you out
08:01

08:01 would they yeah i’ve had a bunch of
08:03

08:03 mentors i mean my first mentor is my
08:05

08:05 father essentially so without him we
08:08

08:08 wouldn’t have been able to grow so fast
08:10

08:10 right he helped us uh his firm did all
08:13

08:13 of our legal work for us he helped us
08:15

08:15 with all the major big decision-making
08:18

08:18 decisions he helped us qualify for
08:20

08:20 larger loans he helped us bring in a lot
08:22

08:22 of the original investors that were
08:24

08:24 long-term clients of his
08:25

08:25 um or family friends so he was you know
08:28

08:28 the first mentor second mentor um was
08:31

08:31 another gentleman named adrian goldstein
08:33

08:33 who um was with us five or six years and
08:35

08:35 then uh partnered with with another
08:37

08:37 gentleman to start another firm but
08:39

08:39 his um
08:41

08:41 he was
08:42

08:42 buying and managing apartment buildings
08:44

08:44 with his father-in-law and had the
08:45

08:45 experience whereas we we really didn’t
08:47

08:47 have the experience so he he was with us
08:48

08:48 in the beginning and really helped guide
08:50

08:50 us through the whole process of of uh
08:53

08:53 you know acquiring the deal doing all
08:55

08:55 the due diligence you know
08:57

08:57 improving the property financing the
08:59

08:59 whole thing he walked us through that
09:01

09:01 and we learned a lot um from him and
09:03

09:03 then the other mentors along the way
09:06

09:06 have been the likes of jonah goldrich
09:07

09:07 who i mentioned um the time inflation
09:10

09:10 guy also taught us you know it’s it’s he
09:12

09:12 had another saying it’s it’s better to
09:15

09:15 he’d rather regret not buying a property
09:17

09:17 than buying a property that he would
09:18

09:18 later on regret so i thought that was a
09:20

09:20 really poignant piece um and then sam
09:23

09:23 freshman is another
09:25

09:25 friend and mentor who’s helped us
09:26

09:26 tremendously
09:28

09:28 i met him probably in the beginning of
09:30

09:30 the career and
09:31

09:31 um
09:32

09:32 yeah his book the principles of real
09:34

09:34 estate syndication were one of the first
09:35

09:35 books i had ever read in real estate i
09:38

09:38 highly recommend that but yeah sam’s
09:40

09:40 been great over the years he’s helped us
09:42

09:42 if we were short on capital closing a
09:44

09:44 deal he would give us bridge financing
09:46

09:46 um you know without a usually someone
09:49

09:49 would want to first trust deed kind of
09:50

09:50 thing he he would do it you know
09:52

09:52 basically on a handshake and help us
09:54

09:54 close the deal and then we would keep
09:55

09:55 raising money and then paying paying him
09:56

09:56 back a fair with a fair rate of return
09:58

09:58 but he’s helped us multiple times with
09:60

09:60 that and signing on some loans that we
10:02

10:02 thought thought maybe we couldn’t
10:04

10:04 qualify for some of the larger loans so
10:06

10:06 um and now sam’s like he thinks he
10:08

10:08 learns more from us than we learned from
10:10

10:10 him which i’m like no you you’re you
10:12

10:12 know you got 60 years of experience
10:14

10:14 we’re 10 years in or whatever so um i
10:16

10:16 enjoy learning from from the old timers
10:18

10:18 i’ve been through a lot of cycles and
10:21

10:21 seen it all but they enjoy
10:22

10:22 us because we bring a lot of youth and
10:24

10:24 energy and new ideas um
10:26

10:26 they’re sort of stuck in their way
10:28

10:28 sometimes so we help them see things
10:29

10:29 maybe a little differently
10:31

10:31 but those those have been the biggest
10:33

10:33 mentors over the years for me no that’s
10:35

10:35 incredible i think that yeah the
10:37

10:37 combination i think it’s fantastic when
10:39

10:39 you have the wisdom and you have the uh
10:41

10:41 sort of the
10:43

10:43 a different perspective i think it’s
10:44

10:44 always enlightening yeah when you say
10:47

10:47 you have uh you have investors
10:50

10:50 how is that different than
10:51

10:51 like if it was your own capital
10:54

10:54 yeah i’d say the biggest that’s a whole
10:56

10:56 business in itself i mean you know yeah
10:58

10:58 i think with investors we take less risk
11:01

11:01 if it was my own capital i i’d be more
11:02

11:02 aggressive and not as worried about you
11:05

11:05 know going down or lose but like with
11:07

11:07 our investors our principal is like we
11:09

11:09 never want to lose any investor
11:10

11:10 principle um we and we haven’t and i’d
11:14

11:14 say we are just very conservative in
11:17

11:17 everything we do we usually buy
11:19

11:19 buildings with long-term fixed-rate
11:20

11:20 loans we generally take low leverage um
11:23

11:23 we always raise extra capital upfront
11:25

11:25 for for reserves
11:28

11:28 so we don’t have to ever go and do a
11:30

11:30 capital call when times get tough which
11:32

11:32 they they did you know during covet in
11:34

11:34 the beginning we had some troubles with
11:36

11:36 some properties with collections and
11:37

11:37 stuff and you know we had a few
11:39

11:39 properties we had never had a negative
11:41

11:41 quarter until covet hit and on two or
11:43

11:43 three properties we had uh where the
11:45

11:45 expenses outweighed the revenue and we
11:47

11:47 had to just dip into the um reserves
11:49

11:49 which was fine we didn’t have to you
11:51

11:51 know do any capital calls we had plenty
11:52

11:52 of plentiful reserves um so i’d say with
11:55

11:55 investors being ultra ultra conservative
11:58

11:58 because we’re trying to like preserve
11:59

11:59 our investors wealth grow it safely over
12:01

12:01 time we’re not looking to score the
12:03

12:03 highest returns possible um you know i’d
12:06

12:06 rather
12:07

12:07 take higher risk myself a little bit
12:09

12:09 maybe if if it wasn’t investor capital
12:12

12:12 but for the investors it’s like don’t
12:14

12:14 lose the money
12:15

12:15 and um you know
12:17

12:17 be a good fiduciary for them over over a
12:19

12:19 long period of time and i’ve worked with
12:21

12:21 my investors and then their children
12:22

12:22 sometimes grandchildren by now
12:25

12:25 yeah so that’s what motivates that’s in
12:26

12:26 a way what motivates you to i mean i’m
12:28

12:28 just thinking that’s what you know
12:30

12:30 that’s the way how i feel you know when
12:31

12:31 you work with somebody you’re taking
12:33

12:33 care of them that’s your expertise you
12:34

12:34 know what you’re doing you have the deal
12:36

12:36 flow
12:36

12:36 you are you’re giving them a safety you
12:40

12:40 know financial security to a certain
12:42

12:42 degree that yeah that they couldn’t get
12:44

12:44 otherwise so yeah most financial
12:47

12:47 advisors they you know they’re sort of
12:49

12:49 conflicted they have to you know sell
12:51

12:51 their own products and that’s why i
12:52

12:52 always recommend if our investors want
12:54

12:54 financial advisors go with like a
12:55

12:55 registered investment advisor ra that’s
12:57

12:57 that’s you know more independent and we
12:60

12:60 have some rias that you know invest
13:02

13:02 their clients capital into our deals for
13:04

13:04 example um and they’ll look at
13:07

13:07 alternatives more the most financial
13:09

13:09 advisors don’t
13:10

13:10 invest in private placement kind of
13:12

13:12 deals like real estate like we’re doing
13:13

13:13 and stuff so
13:15

13:15 um i’d say
13:16

13:16 you know real estate should be part of
13:18

13:18 anyone’s portfolio that that has a
13:21

13:21 significant you know net worth and
13:24

13:24 is trying to preserve wealth and well
13:25

13:25 that’s what i was going to ask you do
13:27

13:27 you think that i mean
13:29

13:29 i think i know the answer but do you
13:30

13:30 think that
13:32

13:32 dentists doctors
13:34

13:34 that don’t know real estate should be in
13:35

13:35 real estate that have a certain net
13:37

13:37 worth
13:38

13:38 i mean they’re welcome to always do
13:39

13:39 their own deals and stuff but i always
13:41

13:41 tell our investors you know you’re going
13:43

13:43 to make the most
13:44

13:44 capital money
13:46

13:46 doing your own thing being your own boss
13:48

13:48 running your own business
13:50

13:50 you know and then let us be your
13:51

13:51 outsourced real estate arm but because
13:53

13:53 if you’re a dentist and you start trying
13:55

13:55 to buy your own buildings and develop i
13:57

13:57 mean it takes a lot of time away from
13:59

13:59 your core business which is your dental
14:00

14:00 practice or your whatever you’re doing
14:02

14:02 right so i always tell our investors
14:05

14:05 look at us as your outsource real estate
14:06

14:06 arm for your family you know and we have
14:09

14:09 around a thousand individuals now that
14:11

14:11 are all accredited investors um
14:13

14:13 so they
14:14

14:14 have
14:15

14:15 all kinds of networks from lower to way
14:18

14:18 high and as long as someone’s accredited
14:20

14:20 meaning they earn i think over 250 000 a
14:23

14:23 year or have a net worth of 1 million or
14:25

14:25 more excluding their their personal
14:27

14:27 residence then they’re welcome to invest
14:29

14:29 with us and there’s a lot of people out
14:30

14:30 there that have those qualifications and
14:32

14:32 they just don’t know where to start with
14:33

14:33 real estate and look you you know to dip
14:36

14:36 your towing you could always buy reit
14:38

14:38 stock but there’s publicly traded reits
14:39

14:39 there’s private reits but to own direct
14:43

14:43 real estate which has all the tax
14:44

14:44 benefits and you gotta have a lot of
14:47

14:47 money generally to buy a building you
14:49

14:49 know in la if you want to buy a call it
14:51

14:51 a 10 unit building a small little
14:52

14:52 apartment building you know depends what
14:54

14:54 part of l.a but that could cost anywhere
14:56

14:56 from three to five million dollars and
14:57

14:57 you gotta put one to two million dollars
14:59

14:59 down that’s a significant amount of
15:01

15:01 capital but if you put a you know
15:04

15:04 quarter million into four to eight of
15:06

15:06 our deals and spread it into multiple
15:08

15:08 deals you’re not gonna have any
15:09

15:09 management you don’t have to do anything
15:11

15:11 just literally sign the paperwork send
15:13

15:13 us the funds and we do all the work on
15:15

15:15 these properties we source the deals we
15:16

15:16 oversee them
15:18

15:18 you know eventual disposition exchange
15:20

15:20 like
15:21

15:21 you know and and it’s it’s pretty
15:23

15:23 minimal in terms of fees and then you
15:25

15:25 and then they’re giving up a piece of
15:26

15:26 the upside and that’s how we get cap
15:28

15:28 paid and it’s a win-win you know we if
15:30

15:30 if the investors do well we do well
15:32

15:32 and our goal is just to you know help
15:35

15:35 our investors uh invest in real estate i
15:38

15:38 love the term win-win because that’s
15:40

15:40 really what business i think is about
15:41

15:41 you know because uh
15:43

15:43 you know if you’re making a lot of money
15:45

15:45 for an investor and you’re sharing in
15:46

15:46 the profits i think that that is a
15:48

15:48 win-win because you got to get paid for
15:49

15:49 your work for your deal you know if
15:51

15:51 you’re bringing value to the table that
15:53

15:53 makes sense which makes you know one
15:56

15:56 thing i was i i get your emails on the
15:58

15:58 uh
15:59

15:59 relief foundation the resident relief
16:01

16:01 foundation yeah what made you start that
16:03

16:03 because i thought that was really cool
16:05

16:05 that you did that
16:06

16:06 yeah um to help people yeah so we give a
16:09

16:09 lot to a lot of different charities but
16:11

16:11 nothing was um directly in our industry
16:13

16:13 and essentially we wouldn’t have a
16:15

16:15 business if we didn’t have you know
16:17

16:17 renters and a lot of renters are
16:20

16:20 responsible renters and they’ve paid
16:21

16:21 their rent historically on time and
16:23

16:23 they’ve been you know good renters but
16:25

16:25 have fallen on you know some kind of
16:26

16:26 financial hardship so we started started
16:29

16:29 seeing that happening in a lot of our
16:30

16:30 properties and we’re like if it’s
16:31

16:31 happening in our properties it’s
16:32

16:32 happening on other people’s properties
16:33

16:33 so how do we combat that so we created
16:35

16:35 the resident relief foundation um we
16:38

16:38 have a great board of directors we’re
16:40

16:40 growing it actively and what we do is we
16:42

16:42 step in and provide rental assistance uh
16:45

16:45 a one-time rental assistance for people
16:47

16:47 that are at risk of being evicted due to
16:49

16:49 a financial crisis and we’ve helped
16:50

16:50 hundreds of people now um the average
16:53

16:53 grant last time i checked was like 1.6
16:56

16:56 months worth of rent so some are not
16:59

16:59 even a full month rent it’s like partial
17:00

17:00 rent up to maybe four or five months of
17:02

17:02 rent and generally everyone gets back on
17:04

17:04 their feet um they uh you know have a
17:07

17:07 job loss or a medical emergency or a gap
17:10

17:10 in you know unemployment benefit payment
17:12

17:12 like there’s all different stories and
17:14

17:14 we’ve helped
17:15

17:15 tons of people nationwide we work with a
17:18

17:18 lot of large property management firms
17:20

17:20 that help identify residents of theirs
17:22

17:22 that you know um maybe won’t qualify for
17:25

17:25 for like certain aid and
17:27

17:27 but um we’re there to help them and it’s
17:30

17:30 a win-win because another win win
17:31

17:31 because the landlord gets to keep a
17:33

17:33 resident not have to spend money on
17:35

17:35 eviction costs and uh downtime on the
17:37

17:37 unit and turn costs for the unit so it’s
17:39

17:39 a big win for them big win for the
17:41

17:41 resident obviously
17:43

17:43 they don’t have to have an eviction on
17:44

17:44 their record which is makes it very hard
17:46

17:46 to find housing because that’s like the
17:47

17:47 first thing people check for as a
17:49

17:49 landlord and it’s uh you know
17:51

17:51 homelessness prevention there is around
17:53

17:53 a third of our residents that we’ve
17:54

17:54 helped have had no other places to go
17:56

17:56 and and we’re gonna be on the streets or
17:58

17:58 living out of their car or whatnot so
18:00

18:00 um i think housing stability is like
18:03

18:03 first and foremost for people and if
18:05

18:05 they have that then it it’s easier to
18:07

18:07 not
18:08

18:08 go down a bad place you know with
18:11

18:11 you know drug usage and homelessness and
18:14

18:14 so
18:15

18:15 that’s why we started resident relief
18:16

18:16 and we’re trying to just make it a
18:18

18:18 big thing you know just like everything
18:20

18:20 we do we try to make it big so we’re
18:22

18:22 recruiting you know people that are
18:24

18:24 actively trying to help
18:25

18:25 grow it and you know raise capital and
18:28

18:28 make it more people more aware of it and
18:30

18:30 you know it’s um a lot a lot of money
18:33

18:33 spent on
18:34

18:34 you know helping uh like people once
18:36

18:36 they’re on the street but our thing is
18:38

18:38 like let’s help them stay off the street
18:40

18:40 yeah that’s interesting i saw that i
18:42

18:42 thought that was really cool because you
18:43

18:43 know you don’t see that many landlords
18:45

18:45 thinking that way yeah um but yeah a lot
18:48

18:48 of people have been in trouble and they
18:50

18:50 justifiably do need something you know
18:52

18:52 to keep them yeah keep them afloat and
18:54

18:54 if you have the power to do it i think
18:56

18:56 that’s great
18:57

18:57 i i
18:58

18:58 believe
18:59

18:59 there was a time where you were looking
19:01

19:01 into self storage and industrial
19:02

19:02 properties or yeah alternative you know
19:05

19:05 not just apartment buildings are you
19:07

19:07 still doing that yeah we bought um
19:10

19:10 starting maybe four years ago we bought
19:13

19:13 a seven mobile home parks and one rv
19:16

19:16 park um we’ve subsequently divested of
19:19

19:19 all those
19:20

19:20 we bought
19:22

19:22 nine self-storage facilities and we
19:24

19:24 currently own all those and we’re
19:25

19:25 actively buying more
19:27

19:27 um the self the our the mobile home
19:29

19:29 parks
19:30

19:30 did great for the investors for the most
19:32

19:32 part but they were it was tough to scale
19:34

19:34 they were smaller in size
19:37

19:37 it’s good for mom and pop kind of
19:39

19:39 operation it’s
19:41

19:41 or if you’re in the management business
19:43

19:43 none of them uh
19:44

19:44 most of these mobile home parks are
19:46

19:46 professionally managed on in-house and
19:48

19:48 there’s no good third parties really to
19:50

19:50 hire like in proper you know apartments
19:52

19:52 so we were stuck managing these we
19:53

19:53 weren’t the best managers we usually
19:55

19:55 outsource and hire third-party property
19:57

19:57 management companies for everything um
19:59

19:59 and they were uh
20:00

20:00 you know sort of
20:02

20:02 out in the
20:03

20:03 parts of the world that we weren’t
20:05

20:05 actively investing in like in the
20:06

20:06 northeast and southeast and so they were
20:08

20:08 more spread out and
20:10

20:10 the investors did great but it was just
20:12

20:12 more of a
20:13

20:13 not for our business model it didn’t
20:16

20:16 work
20:17

20:17 okay
20:19

20:19 speaking of location
20:21

20:21 i i believe you stick to you know saints
20:24

20:24 uh salt lake city i saw you buy some
20:26

20:26 stuff there in colorado i saw you have a
20:28

20:28 new deal in long beach yeah that you’re
20:30

20:30 currently raising money for i think i
20:32

20:32 don’t know it looks like a beautiful
20:33

20:33 brick building yeah
20:36

20:36 which i don’t i think you usually stick
20:37

20:37 to like 60s to 80s build or 70s
20:39

20:39 historically but we’re okay actively
20:41

20:41 trying to sell a lot of the older
20:42

20:42 buildings and exchange it to newer and
20:44

20:44 that’s okay because a lot of these older
20:45

20:45 buildings start really falling apart
20:47

20:47 quickly as they age and they were
20:49

20:49 already old to begin with and a lot of
20:51

20:51 the major systems start failing they
20:53

20:53 cost a lot of money to keep up and so
20:55

20:55 that’s sort of been a strategy
20:56

20:56 especially since the cap rates are close
20:58

20:58 like this between the 60s 70s built
21:01

21:01 versus 90s or 2000 yeah
21:03

21:03 they’re all pretty low right now so i
21:05

21:05 i’d rather buy something a little newer
21:07

21:07 and
21:08

21:08 be able to hold it longer than an older
21:09

21:09 building so what do you look for in city
21:11

21:11 location-wise like why do you go to the
21:14

21:14 places you go yeah we’re um
21:16

21:16 you know we were in bakersfield first
21:18

21:18 because of the oil and agriculture
21:20

21:20 we felt those industries would add a lot
21:22

21:22 of jobs coming out of the 09 recession
21:25

21:25 and then we moved into phoenix in 2010
21:27

21:27 because
21:28

21:28 there was blood in the street and you
21:30

21:30 know
21:31

21:31 prices went down like tremendously but
21:33

21:33 phoenix is the fifth largest city united
21:35

21:35 states and we felt like eventually
21:37

21:37 people would move back there and
21:39

21:39 things would turn better um
21:41

21:41 which it did it took a few years but
21:43

21:43 eventually and now phoenix is leading
21:45

21:45 the nation in terms of rent growth um
21:48

21:48 and then we moved into uh denver and
21:50

21:50 salt lake city for different reasons
21:51

21:51 denver we saw a lot of like millennials
21:53

21:53 moving in and huge population growth
21:55

21:55 young people a lot of job growth we were
21:57

21:57 so we started buying there five six
21:58

21:58 years ago salt lake city we liked the
22:00

22:00 story there very pro-business um you had
22:03

22:03 some geographic barriers to entry you
22:05

22:05 had a very educated workforce uh it was
22:08

22:08 the youngest state in the nation
22:09

22:09 and yeah we started buying there five
22:11

22:11 six years ago
22:12

22:12 um reno we got lucky with pro pre-tesla
22:16

22:16 we bought in reno that market’s been
22:17

22:17 booming
22:18

22:18 um we bought in seattle portland
22:21

22:21 um just we look for stories cities that
22:24

22:24 we feel have longevity and
22:27

22:27 you know a lot of people moving to job
22:29

22:29 growth
22:30

22:30 population growth
22:31

22:31 and
22:32

22:32 you know it seems like most of our
22:34

22:34 building has been in southern california
22:36

22:36 where there’s more higher barriers to
22:38

22:38 entry
22:39

22:39 it’s actually we feel like we could
22:41

22:41 generate better yield uh building versus
22:43

22:43 buying existing here in our backyard we
22:46

22:46 have bought some but mostly new
22:48

22:48 construction here locally um but yeah i
22:50

22:50 like to graphically diversify i don’t
22:52

22:52 want to own just in one area in case you
22:54

22:54 know the big earthquake comes or
22:56

22:56 any other natural disaster or some major
22:59

22:59 industry gets transformed and
23:02

23:02 dies out or major employer leaves or
23:04

23:04 there’s a lot of different reasons to
23:06

23:06 diversify geographically for our
23:08

23:08 investors yeah no it’s interesting i’m
23:10

23:10 going to utah
23:12

23:12 this weekend i’m excited to see the city
23:14

23:14 i’ve only driven through the 70 and the
23:16

23:16 15 so yeah it’s booming that’s what i
23:19

23:19 hear i hear it’s absolutely beautiful
23:20

23:20 there we don’t really we go for the deal
23:22

23:22 you know if there’s a good apartment
23:24

23:24 deal we go for that i mean it just
23:26

23:26 depends what deals you come like we come
23:27

23:27 across um
23:29

23:29 this one was just a land deal my dad
23:30

23:30 wanted to build his office he called it
23:32

23:32 the ugly duckling so because it was it
23:34

23:34 wasn’t to make money it was just a good
23:35

23:35 location he thought it wouldn’t be bad
23:37

23:37 so
23:38

23:38 but it turned out to be a great
23:40

23:40 opportunity but usually
23:43

23:43 usually commercial the air won the
23:44

23:44 fidelity here on 12th and wilshire
23:48

23:48 we have 300 acres in hawaii 330 that
23:50

23:50 we’ve subdivided and titled and we’ve
23:52

23:52 sold those during covert that’s been
23:54

23:54 really good okay and then we have the
23:56

23:56 texas property yeah that property i love
23:58

23:58 that property you’ve under a long time
23:60

23:60 and you’re looking to develop it right
24:01

24:01 i’d like to develop it but that that’s
24:04

24:04 prime for development they’ve just put
24:05

24:05 so much money into that block that what
24:07

24:07 our apartments are are those mainly
24:09

24:09 local
24:09

24:09 we bought
24:11

24:11 we bought three apartments in beverly
24:13

24:13 hills
24:14

24:14 and
24:15

24:15 when they passed rent control
24:17

24:17 and they didn’t want to do yeah
24:19

24:19 properties with rent control it’s tough
24:21

24:21 what what size uh properties are these
24:23

24:23 one there were two were triplexes
24:25

24:25 another one was like a six or seven unit
24:27

24:27 and we did really well with those you
24:29

24:29 know we i think the irr was 23
24:32

24:32 on on one of them i mean they they did
24:34

24:34 well but uh
24:37

24:37 but yeah i mean once you fix them you
24:38

24:38 know there’s not a lot of upside after
24:40

24:40 that and we then we 1031 into a property
24:43

24:43 that i’m doing in carmel by the sea so
24:46

24:46 it sounds like you’re buying in like a
24:47

24:47 plus kind of areas it’s usually a yeah
24:50

24:50 yeah
24:50

24:50 it’s interesting and but but deals in
24:53

24:53 those areas something you could add
24:54

24:54 value to you see opportunity there and
24:56

24:56 stuff yeah yeah and it’s safe i mean
24:58

24:58 it’s it’s a different um
25:00

25:00 it’s a little bit
25:02

25:02 slower i think that
25:04

25:04 i think it’s also just a
25:06

25:06 opportunity
25:07

25:07 my dad started the company and maybe
25:09

25:09 because he was an immigrant he just
25:11

25:11 wanted to protect more than anything
25:13

25:13 else and he was looking for deals in
25:15

25:15 in good location what was the first one
25:16

25:16 they that he bought
25:18

25:18 whoo that’s a good question
25:20

25:20 one of the first ones one of the first
25:22

25:22 ones on beverly glen it was an apartment
25:24

25:24 building it operated as an apartment
25:26

25:26 building but it had a condo map on it so
25:28

25:28 they were individual units it’s similar
25:30

25:30 to what you do because
25:32

25:32 because it was an older building it had
25:35

25:35 um
25:35

25:35 the the unit sizes were like 2200 square
25:38

25:38 feet for two bedrooms
25:40

25:40 so like you know that he was getting
25:42

25:42 market rent for a two-bedroom but not
25:44

25:44 for an extra-large two-bedroom so he
25:47

25:47 raised rents
25:48

25:48 pretty much right after he got it and
25:50

25:50 then he sold it to somebody who you know
25:52

25:52 ended up selling it as individual condo
25:54

25:54 converter yeah so interesting so it
25:56

25:56 turned out to be good and in apartments
25:59

25:59 was what he developed a few on third and
26:01

26:01 doheny there’s four that he developed
26:03

26:03 there what size of those projects
26:06

26:06 uh
26:07

26:07 they were probably like 75 unit type of
26:09

26:09 buildings they’re bigger yeah do you
26:11

26:11 guys have them sell or no we sold them
26:13

26:13 yeah
26:14

26:14 we sold them i think the japanese were
26:16

26:16 paying a lot of money in the early yeah
26:18

26:18 in the nine early 90s
26:20

26:20 time inflation those would be worth a
26:21

26:21 lot oh yeah yeah for sure
26:23

26:23 see that’s another thing how do you get
26:25

26:25 how do you get your deals because it’s
26:27

26:27 hard to find big deals like that and
26:29

26:29 that there’s not a lot of brokers and
26:31

26:31 yeah you’ve got to sort of be in the
26:33

26:33 it’s it’s um
26:35

26:35 properties of size there’s limited
26:37

26:37 amount of brokers which is good and bad
26:39

26:39 so like
26:40

26:40 you know it’s good because there’s a
26:41

26:41 limited amount you could really build
26:43

26:43 relationships it’s all about the
26:44

26:44 relationship so you build relationships
26:46

26:46 with the brokers and other owners
26:48

26:48 there’s not that many owners that own
26:50

26:50 these 200 unit and up apartment
26:51

26:51 communities like the ones we’re buying
26:52

26:52 so pretty tight-knit kind of industry
26:55

26:55 you know it’s um so you could develop
26:56

26:56 relationships and you just it’s all
26:59

26:59 about your reputation you know if if
27:00

27:00 they like you want to do business with
27:02

27:02 you maybe you’ll get the last look to be
27:04

27:04 able to you know stick in the offer if
27:06

27:06 you want to take it or not um maybe
27:08

27:08 you’re not even the highest offer but
27:09

27:09 you have a good reputation of closing
27:12

27:12 you come in with strong hard money you
27:13

27:13 know you’re you’re sometimes picked as
27:15

27:15 number two or even number three bidder
27:17

27:17 so it’s like all about relationships and
27:18

27:18 reputation for these larger kind of
27:20

27:20 deals
27:21

27:21 the the smaller stuff is more like
27:23

27:23 needles in the haystack you have a
27:24

27:24 broker doesn’t understand the value of
27:26

27:26 the thing or it’s mis-marketed or right
27:28

27:28 you know that’s that’s a different
27:29

27:29 animal but you generally if someone owns
27:31

27:31 a 200 unit asset 50 million deal they’re
27:34

27:34 gonna list it with a top broker in the
27:35

27:35 area and you know each market
27:37

27:37 you know has a small handful for the
27:39

27:39 most part okay is every city it seems
27:42

27:42 like there’s a different
27:44

27:44 number of property owners in every city
27:45

27:45 like la seems to be very diversified
27:47

27:47 where there’s a lot of owners and a lot
27:49

27:49 of properties san diego seems to be like
27:51

27:51 four owners
27:53

27:53 you know a bunch of properties type of
27:54

27:54 thing yeah i think um it depends like
27:57

27:57 the size of the buildings yeah la in
27:58

27:58 general has a lot of smaller apartment
27:59

27:59 buildings tons of
28:01

28:01 you know families that have owned these
28:03

28:03 a long time kind of thing um
28:05

28:05 other markets like a phoenix that we
28:07

28:07 started in have
28:08

28:08 these much bigger apartment communities
28:11

28:11 um that are you know newer and bigger
28:13

28:13 and there’s
28:14

28:14 not as many owners that own these larger
28:17

28:17 apartment communities um
28:19

28:19 even in la it’s it’s pretty cost
28:21

28:21 prohibitive for some family to buy a 200
28:23

28:23 unit building in la and that yeah that
28:25

28:25 alone is going to be 50 60 million
28:27

28:27 dollars plus so yeah there’s families
28:29

28:29 that do it but um you don’t have as many
28:31

28:31 obviously as the people that own one to
28:33

28:33 ten units right buildings i’d say what
28:35

28:35 would you say to somebody that wanted to
28:37

28:37 start buying
28:39

28:39 that i mean being in la it’s hard to
28:41

28:41 just imagine buying because like you
28:43

28:43 know the triplex that i was telling you
28:44

28:44 about
28:46

28:46 you know the cheapest
28:47

28:47 triplex was two million dollars yeah um
28:50

28:50 so
28:51

28:51 what would you say to somebody that
28:52

28:52 wanted to start investing because then
28:54

28:54 various entries seemed extremely high
28:57

28:57 start you know in an area you know
28:59

28:59 that’s close to home it makes it easier
29:01

29:01 that you think it’s just improving and
29:03

29:03 come find a a story on a building you
29:06

29:06 know mismanaged the out of town owner
29:08

29:08 the you know rents below market and you
29:10

29:10 got to start somewhere start and your
29:12

29:12 backyard starts small i mean
29:14

29:14 yeah i mean a triplex in beverly hills
29:17

29:17 is going to cost 2 million but a triplex
29:18

29:18 in uh you know the north valley is going
29:21

29:21 to be a lot less right so let’s start
29:23

29:23 start um
29:25

29:25 you don’t have to start those high-end
29:27

29:27 kind of areas and stuff there’s there’s
29:28

29:28 money to be made in
29:30

29:30 all areas okay
29:32

29:32 what uh
29:33

29:33 do you have any war stories or anything
29:35

29:35 that really like made you
29:38

29:38 evolve a lot more than
29:41

29:41 i mean experience is obviously
29:42

29:42 invaluable but
29:44

29:44 yeah i think um
29:47

29:47 more
29:48

29:48 i’m sad we sold a lot of buildings kind
29:50

29:50 of thing like
29:52

29:52 i heard an expression like one guy’s
29:54

29:54 like you sell you lose
29:56

29:56 essentially you’d never want to sell and
29:57

29:57 yeah all these buildings we bought in
29:58

29:58 phoenix
29:60

29:60 for fifty thousand unit forty thousand
30:02

30:02 units sixty thousand units or hundred
30:03

30:03 fifty to two hundred thousand yen and we
30:05

30:05 sold them all three four years ago and
30:06

30:06 it’s like they’ve gone up like bonkers
30:08

30:08 since then so i’d say
30:10

30:10 you know um
30:12

30:12 that those are the biggest costliest
30:14

30:14 mistakes are the ones where we’ve sold
30:16

30:16 and um
30:18

30:18 we sold though to create a track record
30:20

30:20 return capital to investors in the early
30:22

30:22 days we didn’t even exchange we brought
30:23

30:23 we sent back the money so they could
30:25

30:25 feel it touch it see it and now you know
30:27

30:27 the last few years we’re able to
30:29

30:29 consistently find properties to exchange
30:30

30:30 into we do it that way but
30:32

30:32 we built a track record we put a few
30:34

30:34 bucks in our pocket because that was you
30:36

30:36 know as an early syndicator you know we
30:38

30:38 were making decent okay money but we
30:41

30:41 needed to have a few bucks in savings
30:43

30:43 and we made it on the back end when you
30:45

30:45 go sell the building but nowadays we’re
30:47

30:47 you know we could hold longer term
30:48

30:48 because we have
30:50

30:50 significant cash flow splits with the
30:51

30:51 investors and you know long term we
30:54

30:54 wanted to be aligned with them to hold
30:55

30:55 long term and eventually just keep
30:57

30:57 refinancing and pulling out money and
30:59

30:59 it’s a long term game especially for the
31:01

31:01 um the syndicator sponsor long long-term
31:04

31:04 game you know there’s something i that i
31:06

31:06 heard somewhere in a podcast i listened
31:08

31:08 to a few of the ones that you’ve done
31:10

31:10 because it’s fun to listen to you you
31:12

31:12 know and you have a lot of energy and
31:14

31:14 you have a lot going on
31:15

31:15 that
31:16

31:16 you know to hear you speak
31:19

31:19 you said
31:20

31:20 there was a point in your career where
31:21

31:21 you hired at somebody or you partnered
31:23

31:23 with somebody that was going to be your
31:25

31:25 your fundraising counterpart i think as
31:28

31:28 an older guy maybe i well we so okay
31:31

31:31 fundraising
31:32

31:32 we have a lot of people at the company
31:34

31:34 that are active in you know our um
31:37

31:37 my dad for example he’s an attorney but
31:39

31:39 he’s always you know helping us raise
31:40

31:40 capital and we have another gentleman
31:42

31:42 who um goes back and forth from china
31:45

31:45 and we have a lot of mainland chinese
31:46

31:46 investors that we’ve raised capital from
31:48

31:48 and other people on our team also um
31:52

31:52 help raise money just from their
31:53

31:53 networks and
31:54

31:54 if that even though that’s not their
31:55

31:55 primary um job it’s sort of as a
31:58

31:58 syndication business
31:59

31:59 you know that’s the lifeblood of our
32:01

32:01 business being able to raise capital for
32:02

32:02 these deals because we’re not
32:04

32:04 you know real we don’t have any one
32:05

32:05 large institution that could just write
32:06

32:06 the check we’re clubbing it together um
32:09

32:09 we have we’re clubbing a lot of money
32:10

32:10 together you know 20 30 million for some
32:13

32:13 of these larger deals that we’re buying
32:14

32:14 um of equity but definitely still having
32:17

32:17 a lot of individuals coming to the deal
32:19

32:19 so it definitely spends i take a lot of
32:21

32:21 my time just meeting with people and
32:22

32:22 introducing what we’re doing and
32:24

32:24 building those relationships and
32:27

32:27 sort of outsource all the other things
32:28

32:28 to people that are better than me now at
32:30

32:30 you know dealing with
32:32

32:32 construction management and asset
32:33

32:33 management and the accounting and yeah
32:35

32:35 20 like 20 people in the company that do
32:37

32:37 all these things that makes sense i mean
32:39

32:39 you have i think over
32:41

32:41 over 700
32:43

32:43 investors i mean that’s a lot of uh
32:45

32:45 bookkeeping yeah we have five people in
32:46

32:46 accounting that’s the biggest department
32:48

32:48 uh we have almost a thousand investors
32:50

32:50 now and wow
32:51

32:51 you know a lot of projects around you
32:53

32:53 know 5700 apartment units and
32:55

32:55 nine self storage facilities and it’s
32:57

32:57 it’s definitely a growing portfolio for
32:59

32:59 sure
32:60

32:60 so the last three questions i always
33:02

33:02 like to ask just
33:04

33:04 um
33:06

33:06 what are three
33:07

33:07 daily habits that you
33:09

33:09 do
33:11

33:11 that you have
33:12

33:12 daily habits um
33:14

33:14 i’d say every morning
33:16

33:16 kiss my children say good morning to him
33:19

33:19 kiss my wife before i go to bed and in
33:21

33:21 the morning i’d say i’m always on
33:25

33:25 twitter and the first thing in the
33:26

33:26 morning to understand what the news is
33:28

33:28 for the day in uh stuff i like tech real
33:31

33:31 estate
33:32

33:32 um
33:33

33:33 and then uh another habit i’d say try
33:36

33:36 i try to work out every day it doesn’t
33:37

33:37 happen though so it’s usually like three
33:38

33:38 days a week kind of thing um do some
33:40

33:40 kind of exercise i’d like to run
33:42

33:42 i like to do the peloton starting to do
33:45

33:45 some more workout um sort of strength
33:47

33:47 training and stuff
33:49

33:49 um
33:50

33:50 other habits i’d say um
33:56

33:56 go i go through my i have like a
33:57

33:57 checklist a to-do list kind of thing
33:59

33:59 where
33:59

33:59 you know i put the biggest things at the
34:01

34:01 top and don’t let them creep down to the
34:02

34:02 bottom like try to
34:04

34:04 take care of the stuff you want to let
34:05

34:05 slide you got to take care of kind of
34:06

34:06 thing yeah
34:08

34:08 and just keep
34:10

34:10 pushing forward and making meetings
34:11

34:11 meeting potential investors meeting
34:13

34:13 other owners of you know apartments make
34:15

34:15 sure
34:16

34:16 keep the calendar full with
34:18

34:18 things that get us towards our goal of
34:20

34:20 just
34:21

34:21 helping our investors build wealth and
34:23

34:23 if they do and then we do in the process
34:26

34:26 you know yeah keeping your eye on the
34:27

34:27 ball yeah exactly because there’s a lot
34:30

34:30 i don’t know i mean
34:31

34:31 there’s so much to focus on social media
34:34

34:34 i don’t know
34:35

34:35 it’s easy to get distracted which i’ve
34:36

34:36 fallen to and everyone does but i’m very
34:39

34:39 i’m highly uh that’s how hard is head
34:41

34:41 lesson
34:42

34:42 yeah it is there’s a lot of balls to
34:44

34:44 juggle it’s nice to have people to go to
34:46

34:46 i mean i was going to ask you about
34:48

34:48 your assistant natasha like when you
34:50

34:50 decided to get her it probably made your
34:51

34:51 life so much easier yeah i mean we um
34:55

34:55 yeah we should have done this years ago
34:57

34:57 to have like a she’s like executive
34:59

34:59 assistant slash personal assistant and
35:01

35:01 yeah it makes our life a lot easier
35:03

35:03 um and
35:05

35:05 you know i always say
35:07

35:07 i want to free up my time
35:10

35:10 to be able to do stuff that
35:12

35:12 materially helps the company which is
35:14

35:14 you know fundraising and marketing and
35:16

35:16 investor relations and like strategic
35:19

35:19 vision and let other people do
35:21

35:21 stuff that’ll take away time from for me
35:23

35:23 where i move the needle most and
35:26

35:26 um
35:27

35:27 i think having you know
35:29

35:29 and my calendar has just gotten busier
35:31

35:31 and busier over the years as we’ve
35:32

35:32 continued to grow so it’s nice to have
35:33

35:33 someone manage the calendar and she
35:35

35:35 manages all like the email blasts and
35:37

35:37 all the travel
35:39

35:39 for all the executives and personal
35:41

35:41 stuff for you know
35:43

35:43 family and it’s it’s nice to have
35:45

35:45 someone like that um
35:47

35:47 definitely worth it’s its weight in gold
35:49

35:49 yeah
35:50

35:50 what would you say to uh
35:52

35:52 to people the last question what would
35:54

35:54 you say to individuals that want to get
35:56

35:56 started to
35:58

35:58 have some real estate or invest in real
35:60

35:60 estate yeah i’d say um
36:02

36:02 you know identify good people
36:05

36:05 that are have long track records of you
36:08

36:08 know doing well from their investors
36:10

36:10 asking the hard hitting questions you
36:12

36:12 know ask them about their worst deal not
36:13

36:13 just their best deal you know ask for
36:15

36:15 investor referrals
36:18

36:18 you know essentially um
36:20

36:20 partner with with good like-minded
36:21

36:21 long-term
36:22

36:22 sponsors
36:24

36:24 if you’re gonna invest with other groups
36:25

36:25 and invest in stuff you believe in like
36:27

36:27 i love apartment building self storage
36:29

36:29 that’s what we’re doing and but if
36:31

36:31 you’re interested in industrial you know
36:32

36:32 there’s a handful of groups that i can
36:34

36:34 recommend for that or if you’re
36:35

36:35 interested in hotel i mean whatever it
36:37

36:37 is like
36:38

36:38 you know invest with quality sponsors
36:41

36:41 and for the long term i’d say um
36:44

36:44 and look there’s nothing wrong with
36:45

36:45 owning your own real estate as well i i
36:47

36:47 you know it’s just a different route and
36:49

36:49 it takes
36:50

36:50 away maybe potentially your time from
36:52

36:52 whatever your main business or career is
36:54

36:54 and that’s where i always recommend
36:55

36:55 people focus on
36:57

36:57 unless you want to make real estate your
36:58

36:58 full-time career which is awesome
37:01

37:01 but it definitely and it could be but
37:04

37:04 it’s um generally just an investment for
37:06

37:06 people
37:08

37:08 okay well thanks for coming on the show
37:10

37:10 it’s a pleasure to have you yeah nice
37:12

37:12 spending time with you yeah man
37:16

37:16 [Music]
37:26

37:26 you

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