Podcasts about james it

In this episode of the Building Texas Business Podcast, I spoke with James Dieter, Chairman and CEO of Principle Health Systems. James shared his journey from orthopedic and interventional pain specialist to healthcare entrepreneur. Motivated by inefficiencies he witnessed firsthand, he created a more efficient healthcare model focused on mobile diagnostic services. Principle Health Systems has now conducted over 3.2 million mobile lab tests in 2024, demonstrating the success of his patient-centered approach. James opened up about leadership challenges and the importance of self-awareness when managing strengths and weaknesses as a CEO. By redefining Principle Health's mission, vision, and core values, his team created a unified direction that improved employee satisfaction and strengthened company identity. His insights on strategic partnerships showed how the right team can transform an organization. We explored their innovative "daily DON" program, an AI tool that helps Directors of Nursing prioritize patient care in long-term facilities. This technology enhances clinical decision-making while serving as a distinctive marketing asset for the company. James also discussed the Texas healthcare landscape, including Medicare conditions and reimbursement rates. Throughout our conversation, James shared practical advice on informed risk-taking and learning from setbacks. His experience navigating the healthcare industry offers valuable lessons for leaders and entrepreneurs looking to make an impact in this complex field. SHOW HIGHLIGHTS I explore James Dieter's journey from an orthopedic and interventional pain specialist to a leader in healthcare entrepreneurship, emphasizing his efforts to address inefficiencies in the healthcare system through mobile diagnostic services. We discuss the transformation of Principle Health Systems, highlighting its achievement of conducting over 3.2 million mobile lab tests in 2024, with a focus on patient-centric care. James shares insights on balancing strengths and weaknesses as a CEO, stressing the importance of self-awareness and strategic partnerships in building a thriving organizational culture. We delve into the development of a strong company culture at Principle Health Systems, driven by redefining mission, vision, and core values, which has enhanced employee satisfaction and strengthened company identity. The episode covers the innovative "daily DON" program, an AI-driven tool that aids Directors of Nursing in prioritizing patient care, which has been recognized for its impact on clinical decision-making and marketing. We examine the challenges and opportunities in the Texas healthcare landscape, including favorable Medicare conditions and low reimbursement rates, alongside the growing role of AI in insurance claims processing. James reflects on leadership and problem-solving, emphasizing the need for quick decision-making, informed risk-taking, and learning from setbacks to drive business growth and sustainability. LINKSShow Notes Previous Episodes About BoyarMiller About Principle Health Systems GUESTS James DieterAbout James TRANSCRIPT (AI transcript provided as supporting material and may contain errors) Chris: James, welcome to Building Texas Business. Thanks for taking the time to come on the show. James: Glad to be here. Thanks so much for having me. Chris: Yeah. So let's start at the beginning. Just tell us a little bit about your company and what it does and what it's known for. James: Yeah, so Principle Health Systems has evolved over the years. When we started out we really had multiple directions. We were going in just as a healthcare services company. So a little background on me. I started out in orthopedics and interventional pain. I was really just dedicated to practice inpatient, outpatient and surgery. So going through that for my first decade of work, I saw a lot of inefficiencies in the healthcare, outpatient and surgery. So going through that for my first decade of work saw a lot of inefficiencies in the healthcare services sector, specifically in the Southeast region of Houston where I worked. So I wanted to build a better system right. Our lab results took too long to get back. Our pharmaceuticals weren't in stock at the pharmacies we'd send our patients to. Mri results took too long and started to, through my entrepreneurship journey, go out and started to build little sectors of where I could have influence really over my own practice to have a better outcome and through that over time started over 20 businesses in the first 10 years Just had numerous pharmacies, laboratories, diagnostic facilities, did three surgery centers. I was involved in one large hospital system and then got to a point where I said, hey, let's wrap this thing together, let's put it together. I want to have really just one source solution where we could come in and work with physicians and provide a host of different services. That went fairly well. The service level was outstanding. The most difficult aspect for us was really the payers actually having reimbursements without being contracted with certain individuals. From there, we really, about six, seven years ago, found a niche and that was called long-term care. So we define long-term care as skilled nursing facilities, assisted living facilities and home health facilities and we provide laboratory and diagnostic services to those guys. So, in-house, you call it your house if you live in a skilled nursing facility or assisted living facility, or at home, but we provide mobile diagnostic services. So we go out and we offer labs, x-rays, ultrasounds, echocardiograms and ekgs in the home. So you bring it to the patient. Bring it to the patient, that's right. That's right. And last year, 2024, we performed over 3.2 million lab tests mobile. So, with a large amount of those being for stat tests, right? So tens of thousands of stat tests per month where somebody needs something in four to six hours and we get us turned around for them. Chris: Okay, so it sounds like the inspiration for you was maybe frustration born out of frustration, for sure, and a gap in our healthcare delivery service, so he's shedding more light on that. I mean, you've mentioned this entrepreneurial journey. I mean most physicians and doctors don't have that. So what was it for you that you kind of took frustration and turned it into action? James: Yeah, I mean just a matter of you know, I'd have a patient that was really suffering right, specifically on the interventional pain side. This is not uncommon. You have a patient who's in a very bad position and you're already jumping through hoops with insurance companies. So it might take three to four weeks to get something approved. And then you're in, then you set them up for surgery. Well, you, the assumption is okay, we're going to have the lab work back, we're going to have the MRI back in time, and then it just wasn't happening. So you're pushing off surgery, you're pushing off procedures and just over time it's just a great deal of frustration. At the end of the day, the mission was always to help the patient, and if it's all about the patient, we've got to do something different here. And that was the biggest frustration for us was just the delays and turnaround times on the imaging and laboratory specifically, but then also getting medications, you know, sending patients out and having sometimes three, four, five phone calls come back up. The pharmacy didn't have my medication, the pharmacy didn't have my medication, the pharmacy didn't have my medication. So that's when we started opening up our own pharmacies back then as well. Chris: So just there, right, you said we. Who did you partner with? How did you go about finding a business partner? If that's the case, going about setting up a business, because you don't just turn on a switch right. There's planning, there's financing. Entrepreneurs in any industry, in all industries, go through that when they're starting a business. Let's talk a little bit about that journey in the beginning, of how you got it going and some of the lessons learned in that process. James: Lots of lessons learned in that process. You know, speaking of that, we call it chewing glass, right, okay, I? heard that one. So much of it's just a grind right and just figuring it out. But as far as partnering goes, I've had numerous partners in different individual business units over the years. When I formed Principle Health Systems in March of 2016, I had to get really specific on who am I going to allow on the bus, who do I really want to partner with on the bus? So I pulled away from certain partners, left goes, let go of certain businesses and then brought some together. So, in total, I believe we started out with there were three of us on day one that we brought in, you know. But I had different skill sets, right. I mean, I was trying to always try to be very honest with myself about where are my weaknesses right. I'm I would say I'm highly visionary. I like to think big. I like to have that 50,000 foot view of where we're going, set goals, set mission, set vision. Big culture guy. I love to talk about culture and instill culture throughout the organization. Chris: We'll get to that in a minute. James: Cool yeah, but just frankly, I would say weaknesses are on details, right. So I've just always been someone who likes to move forward and not analyze every aspect of it. So partnering with some people that were strong in an analytics and detail side of the business was really important for me, and I still have some just phenomenal business partners today in that regard. Chris: That's great. You touched on two things that I think are very common, some of which when we're advising clients. The first is choosing your partners right and being clear about expectations, documenting what the deal is on the front end and making sure you know that where everyone's going and what the roles are. The second is understanding, especially when you're the leader, your weaknesses in hiring around that, because you can't do it all and you're not going to be good at everything, and so I think everyone that I've met that's been successful has that self-awareness Right. How did you go about getting comfortable letting go of some of those job responsibilities and whether it was a good hire or a partner that you chose. James: That's a tough one. I mean, some of it was truly difficult to let go of. And then other pieces. You know you tend to be good at what I would say you tend to enjoy what you're good at. Sure, yeah, and that's one of the so to really convince yourself like, let's go spend more time at what we're good at, more time at what we enjoy, I would say I didn't focus so much on letting go as focused I wasn't spending so much time focused on what I'm not good at as what I was good at right. So it was just a matter of, by virtue, of spending more time on what I enjoy, doing less and less of what I don't enjoy. And that was easier for me to let go. It was almost to to to let it slip to let it slip away rather than to give it away and know that because you weren't giving it attention. Chris: someone needed to Right. James: Right. And then you know, obviously just helping to build folks up I mean, we have right now an unbelievable director of human resources who was in project management at one point and just understanding the value of different people in the organization that you already have built trust and rapport and you believe in them. and then to find, hey, I really think they'd be good at this and then move them into these roles to fill gaps was so important and just finding, really analyzing the people that are around you to understand what are they great at and what might else they do from where they are today, that could be a greater opportunity and bring greater value to the company and organization. Chris: Yeah, so you touched on culture, let's go ahead and go there. Anybody you talk to at a CEO, entrepreneur, business owner, leader will say, right, culture's king. We believe it a hundred percent. We talk about that constantly around here. It's just part of our DNA. We believe it 100%. We talk about that constantly around here. It's just part of our DNA. So everyone goes about it differently. Let's talk about how you have gone about building the culture at Principal Health. How would you describe it first? And then, how have you gone about building it and nurturing it? James: Yeah, so great question. I mean, starting out, I couldn't tell you when we started the organization what was our mission, what were our core values. I couldn't even tell you what they were. There was something we came up with. I think two of us came up with one day, in a couple hours, some marketing stuff yeah marketing stuff. We hung it on the wall, just like you would expect right from most organizations to do most organizations do. And we had a phenomenal, you know, I would say the top 20 people in the organization just had a great relationship together and I would say that we thought culture was very strong. Four years in we polled the entire company and it was pretty, pretty terrible. I mean, it was like a 60% satisfaction, maybe even in the fifties, and we were kind of horrified like wow, we thought we had this great culture and everybody loved this company and it was. You know what it was. Well, I decided a couple of months later I did an offsite. So we did a two day offsite and kind of big hotel room, you know, or I guess I said conference room, with these big windows overlooking clear lake, and you know it know, the whole idea was like let's think big, and we brought in just management. So I think there was 46 managers at that time in the organization and we all came in the room we said, hey, we're here for two days to figure out three things Our mission, our vision and our core values. And we're going to sit together and this isn't going to be the C-suite telling everybody what we're about as a company. We as a people, as a community, are going to discuss what is this company? Who are we Not? What are we? Who are we? Chris: And what do you want to? James: be Exactly, and we did come up with a BHAG. We ended up throwing in a BHAG as well there. But where do we want to go? Classic Jim Collins. So we did get through that two-day period and we came out with a really strong mission, vision, core values. Our mission is to improve patient outcomes and experiences. Relatively simple, very difficult to do in healthcare. We decided our core values would be URPHS Principle Health System the acronym I should say is URPHS. Understand the mission, respect everyone. Patients are our purpose, happy to help and step up. So and we talk about simple, right, exactly, I would believe at this point, 90% of any you know we're approaching, I think, right, right, 500 employees today. I would think 90% of those folks could tell you that and not just tell you what they are, but give you examples of how they've done those things. We live culture. We no longer talk about it. We did that in the beginning. Now we live it. It's brought up in every management meeting. It's brought up in all the leadership training sessions, all the offsites and it's kind of what I call the North Star. So we look at culture as the direction. If you're not sure about a decision that you're going to make in any regard. I want you to think about the North Star. Is it in alignment with, are you walking towards, the culture, are you walking towards the mission of this company? And that helps to drive behaviors so important. Chris: I mean, that is the true key to the kingdom. I think the word I would use is it sounds like your culture has become institutionalized. Right, it starts out where it is you as the culture cop or maybe the C-suite, and getting it deeper in the organization. But once you've done that and everyone knows it and everyone lives it and everyone can hold each other accountable to it, then you've got a true directional tool To your point. I think the more you can tie behaviors to those values that's when they become real the more you can tie behaviors to those values. That's when they become real. And so when you're praising people because whatever they did connects with these two of our six or whatever number is of our values, it becomes real to them and they know how to repeat it A hundred percent. James: Yeah, I'm fairly unapologetic about the culture, so I would say it's even unusual Some of the things I'll say when I'm in management meetings or even when I do a quarterly coffee and conversation. So I meet with the entire company. It's usually takes six or seven sessions, but I go company wide, we bring the big groups and I'll sit down with the entire company for an hour every quarter and what I'll typically say when it comes to culture is that it's up to you to you know we can't police it from management. It's up to the people to police the culture. So one of our core values is respect everyone. So if there's someone who's not respecting everyone, I expect that the people of the company will kick that person out, go after them, make sure they don't work here, and I'll literally look out and I regularly look out across when I'm talking to the whole team. Chris: And I tell them. James: If you really can't say that you're here for the patient, if you can't say that you're really here to serve our mission, I was like I really don't want you here. I was like I prefer you to quit. I was like we will replace you and I would prefer to go without somebody for a short period of time. I'm unapologetic about it. We truly believe it. That's what we're about above all things. The rest of it, because at the end of the day, in our business, if we do a really great job treating patients, everything else will follow. Yeah, the doctors want to work with us, the facilities want to spend time with us, the payers will respect us. It's really about the patients. So we put patients first. Everything else comes next and if you can't get behind that, we don't want you. Chris: Yeah, I think that's a great point. Some of the words we use here, right. We're passionate about our mission and our values, which means they resonate in our heart and our gut. Right, we just it's in our fiber. If they don't resonate with you, it's really okay, because it means it's not the right organization for you, right there's a different organization out there that you're going to be happier with, you'll connect with and we'll go find someone that connects with us. Happier with you will connect with and we'll go find someone that connects with us, because they're going to be the better performer, the self-policer, the self-motivator. They're going to be the ones that connect with for us, similar to patient care, client service, right and mutual respect amongst everyone. So I agree with you it's okay to tell people if you don't connect with this. Actually, I use it in interviews when I'm interviewing someone. Here's who we are, we're very clear about it. And if you don't connect, it doesn't make you a bad person 100% doesn't. It just means it's in the right organization for you and there's a gazillion other organizations. Advert Hello friends, this is Chris Hanslick, your Building Texas business host. You're a Building Texas business host. Did you know that Boyer Miller, the producer of this podcast, is a business law firm that works with entrepreneurs, corporations and business leaders? Our team of attorneys serve as strategic partners to businesses by providing legal guidance to organizations of all sizes. Get to know the firm at boyermillercom and thanks for listening to the show. James: There's another team, there's another team that'll work just well for you. Yeah, totally. Chris: No, let's switch a little bit because I want to get back into kind of the business I'm always interested to ask about, like innovations and technologies I mean no-transcript. James: Yeah, I mean, you know, obviously, with the increased levels of compute, you know, now you have the large language models, you have artificial intelligence and that has already made an impact for us. So I would say that we are the next 18 months are going to be very interesting, but we are already using automation from AI that is changing the way we do things and I can give you one example in particular. Well, two really good examples. One in the back office, we have a team of I believe it's three ladies total. Still we had three ladies that would handle all of our facility invoicing right and it's very complex. We have the decipher between patient to patient each day who's part A, who's part B and how we do the billing, and some of it gets billed to facilities. Some of it's billed to without getting too much in the weeds. Some of it gets billed into the insurance company and we've been able to quadruple our volume with still having the same amount of people and not have to scale payroll because of implementing automation techniques through AI that help to decipher where those go. These get scanned in and it all gets brought up. Still have a little bit of a you know, a people component to it. But, just you know, we would be sitting here with and one division. It's just a great example, because that one division would probably be 10, 11 people, yeah, and the cost increase Exactly. Chris: That's an amazing statistic. James: So that is kind of a back office area that we're really focused on going. Where else can we, where else can we look at the bringing in this technology to help as we continue to scale, so that we don't have to just keep hiring bodies? which is you know, from a real estate perspective even difficult. So we're, you know, we're, we've been tapped out on space for two years and we're it's been very challenging. Where do you just put you know, where do you keep putting people Right? So, but on the I guess I'd say on the actual business, well, that's the back office on the front of the house. We've got a program. We call it the daily DON. So, right, so it's a DON is a director of nursing. A lot of the facilities we work within, you know, skilled nursing facilities, assisted living facilities, they have someone who really oversees the house. They're the clinical expert in there that makes sure that all the patients are taken care of. That's called the DON. So we have a form that's. Thousands of these go out every morning to all of our facilities and it's an AI program that picks out the most important things that happened the prior day. So here's, you know, bobby Sue had a stat test performed at X time and here's the result. Here's a critical result or whatever is most important. They kind of have a clinical mind and says, hey, this is where we think you should pay attention to your patients today. These people are trending in the wrong direction. These people if they're doing just fine, they're at the bottom of the page. The things that are most important are highlighted at the top of the page, but it's really helping us provide better healthcare diagnostics for our providers so that they can treat the patients better. So it's right, in line with our mission, but it's really just automation and again, it would take an army of people to do this. Chris: Yeah, that's really cool stuff. I have to believe that is also, if not already, will become a huge marketing tool. Oh, it's a big marketing tool. Right, people are worried about the family mergers they're putting in there, where they're really going to get care, because, you already know this, your industry doesn't have a great reputation as a whole. No for sure. James: And so the more you can say no, this is what we do to make sure we're taking care of your loved one, yeah, so there's a huge journal publication called McKnight's and it is the, you know, the premier publication for the long-term care space and you know, all over the country, the daily DON. We actually won a bronze medal this year against thousands of applicants for innovation. So it was actually yeah, we were awarded. Chris: I guess that was 2024, but last year yeah, close enough, yeah, so let's talk a little bit just about, you know, being in Texas, being a business, primarily in Texas. What are some of the advantages that you have experienced being here, not just in Houston, but taking advantage being in Texas? For us is related to the Medicare Advantage plan, right so? James: or, excuse me, the MAC right so? Different Medicare has Medicare administrative plans and they actually carry out Medicare's will in an area. Texas has a MAC that is somewhat more favorable than the rest of the country. Now there's a few states that share that, but just in general, for us, from a standpoint of clarity they're a little bit more clear. There's a lot of bureaucracy that goes on in just getting paid, so this might be surprising to people outside of health care, but today I believe we are paid on 61% of the business we do and we're actually probably one of the really high end. We've run studies on this and we're we are, better reimbursed than most companies out there in our space, and so we still, you know, roughly four out of 10 patients that we treat, we get paid $0. Chris: It's just fascinating to me that it's that poor it is very poor. James: However, we are in one of the more favorable areas, so I can only imagine if you don't have a lot of clarity and guidance on how to bill, it just becomes more and more challenging for you. Chris: Yeah, this may be one of those, but I'm just interested as you kind of look out going forward, what are some of the challenges or headwinds you see maybe coming at your industry? Some of the challenges or headwinds you see maybe coming at your industry, lots of changes going on in Washington right now will have an effect, I'm sure, on your business but maybe also affect what goes on at the state level. James: So one thing you're kind of worried about as you kind of look out, I would say just one of the concerns, and I mean I think again, everybody likes to point the finger to the big bad guys and I really look at them more as a partner than they're not a, you know, an adversary to us or more of a partner. But the insurance companies have become more active in utilizing ai to to identify discrepancies within chart notes to deny claims. So that's something where, you know, recently went to, one of the conferences I attended was for health care payers and they have booths set up, you know, trying to sell to the health insurance companies of how to use artificial intelligence to identify the to not pay. They're already not paying much and you know they're now. In reality, the reason they are not paying is because the notes are lacking in something. So, rather than paying a person to go and evaluate each note, which is very expensive, you think about the health insurance companies if they have to hire thousands of people to evaluate the charts, or they can use AI programs to evaluate the charts it's going to save them money and hopefully that money gets passed on to the consumer. So I actually don't think it's a long-term a bad thing, but I do expect in the meantime it's going to just decrease even further, decrease the amount of claims that get paid. Chris: Right, it sounds like it would be incumbent upon companies like you to kind of push back a little more in the short term. James: to be able to take advantage of those efficiencies later. Absolutely yeah, and I look at it from our perspective. We're in a really good spot. We're pretty developed to where we can handle those kinds of headwinds. Chris: So let's switch again a little bit. Just talk about leadership. How would you describe your leadership style? How do you think it's evolved over the past, you know, 12 to 15 years since you've kind of been moving forward with this company? James: Yeah, I mean. So starting out with a group, I think, start with five people and 500 folks. So leadership looks very differently as business scales. And, to start right, I mean I used to take out the trash and do the accounting. I mean I've worked every job in the company personally and in the beginning, worked with a lot of people who were for lack of a better, better word incompetent at what they did, and today, having been able to develop people and hire and bring in and partner with incredible people that are, frankly, better than I am, a lot of things it allows me to go and do what I'm really good at and, from a leadership perspective, I've probably, if I've, believed in you from the beginning. I've always given you. I'm not a micromanager. I don't believe you can't really grow a large company if you're watching over everything going on. So you have to truly, just, I would say, collaborate with those around you and I guess, if I had to define it who I am, I try to be a great collaborator, right. I try to really help, provide as many resources for the people around me as possible so that they can be successful. Chris: That's good. Let's talk about problem solving right. Especially where you are today and probably have been in your role, probably more of what you do is facing issues, and how are we going to work through this and solve an issue, solve a problem? What have you found to be the most effective way to kind of get the information you need to make those informed decisions that you believe would be in the best interest of the company? James: Yeah, I mean. So again, that's something that over time, has become, I would say, much more of a process, right? So now we have data analytics and we have incredible CFO that's been coming in and able to provide information. There. We have all these additional resources, from accountants to lawyers, to folks. We sit down. I like to surround myself with the right group. We try to sit in a room with the right people at the right time and analyze all the information, but very quickly. I do not like the old analysis paralysis. That's not us at all. I move very quick, I like to make decisions very fast and I don't look in the rear view mirror very often. I'm always looking out the front window and just moving forward. So when there's challenges that are hitting us, it's just a relatively. Let's get as much information as we can today, let's analyze it and let's go. Chris: Yeah, I love that because I agree, I think, the idea that stagnation will kill the company right, and so I think you try to get as much information as you can, knowing it's never going to be perfect. But I think the key then is, I agree with the mindset of kind of move quick. To me, the next piece of that is to evaluate the decision as it's implemented, because then you're continuing to learn and gather information. If you're doing that so that you can adjust right, Because the plan goes out the window as soon as you start to act right, so some people will act and then ignore, and I think that's a mistake. I think if you act, continue to analyze and then align behind what you've learned, it may not be a pivot, it may just be a tweak, but you've got to keep moving. James: I totally agree and you really touched on a great point that I like to speak about. Often and it plays a little bit in the culture. I tell people, guys, we've got to make mistakes here. If we're not making mistakes, we're trying nothing new. So I hesitate to say I encourage mistakes, but to some extent I think I did in my last meeting ask for mistakes directly. So the idea here is that it's okay to make mistakes, it's not okay to make the same mistake over and over again. But if we're not trying, we're not growing. If we're not growing, we're dying. So we've got to continue to move forward. And the culture is that if you are focused and I mentioned that North Star earlier but if you're heading towards the North Star and you make a mistake, you're okay, there's no problem If you're doing something new and you're trying something for the good of the company and the good of the patient, that's okay. Let's learn from it. Let's learn from it, let's change course and let's keep moving. Chris: Yeah, that's right. Comfort and complacency aren't good, and I think that that freedom to take risk as long as it's an informed risk, as long as it aligns with our mission and values, is the type of risk you want to encourage your people to be doing and learn from it 100%. So that's good. People always learn from setbacks. So let's talk about a failure or setback you've experienced, and I know there's probably two or three examples from yesterday. James: No, but yeah, I mean, where do we start here? Chris: But what was it you know, and how did you learn from it, and how did it make you better? How did it improve you or the company, whatever the example may be? James: Yeah. I think geez, you know, this is only a tough question because I have so many. Chris: Yeah, I think geez, this is only a tough question because I have so many. You're not alone in it. A lot of guests say the same thing and I can identify with that. James: Yeah, so. I think for one this just comes to mind somewhat early on in our business we had just one massive customer. We had a great deal of revenue concentration in one customer who ultimately had a bankruptcy and put us in a really bad financial position when we lost out on. You know they were way behind on paying their bills and you know such and such. You've heard the story. Chris: Oh sure. So not only did you not get paid. If you were that beholden to them, you didn't have a lot of other things coming in Correct. James: Correct, correct. And just to learn from that example of not letting yourself get too far out over your skis for one, but also just to diversify, not just the customer base. We were actually diversified in our revenue and how we were paid, but it was all one customer. So you've got to diversify your revenue base and your customer base and not have too much concentration. That was a really early on lesson that just comes to mind. That, I feel like, was still one of the most painful. I think I laid off 40 or 50 people that day and it was just a tremendous. That one scarred me pretty bad. Chris: Layoffs are never easy. Those are ones you'll remember. James: Yeah, that one still haunts me, so again I've. Which mistake would you like to talk about? Chris: we could do a whole show. Yeah, you really could, but yeah so kind of you know, bringing this more to a close, any advice you would share with our listeners, entrepreneurs and business owners out there that you know, if there's one thing you're if you're thinking about, if you've just started the journey or you're thinking about it, here's one or two things that you would kind of want to pass along. James: Yeah, I mean I just, you know, from an entrepreneurial standpoint, I had a one of my, one of my father's good friends when I was a young kid, you know, probably high school. He told me at one point he said, hey, your business really isn't going to fail unless it runs out of time or money. And just kind of keep that in the back of your head, because I can think of at least six or seven times that we were done, you know, and I had to sit there and go well, hold on, you know, we haven't completely, we're not completely done because we haven't run out of time or money. And that was how, you know, I spoke about chewing glass earlier. I think you know one of my buddies, he's a new entrepreneur. I always I tell him ready, shoot, aim. You know, at some point you can analyze all the data. And if you do analyze all the data, you're probably never going to start Right, because the odds are of starting a new business are challenging. Chris: For sure, as everyone says, it's not for the faint of heart. James: It For sure, as everyone says, it's not for the faint of heart. It's not for the faint of heart. And everyone will run into a lot of problems and challenges. And that's why because if it was easy, everybody would do this Correct, and so just I would. Just it might sound a little silly, but just don't give up. I mean, if it's something you believe in, if it's really a great cause, if your heart's in it, just keep your head down and push on, because you will be successful. Chris: That's great, and perseverance and grit is what it takes if you're going to be a true entrepreneur 100%. But the ready shoot aim is kind of like you were saying earlier, in decision making, at some point you got to make a decision, absolutely you got to go. James: Yeah, I see that as just a big mistake that folks are making over and over again is sitting around just waiting and by the time they actually make the decision, the opportunities passed. Chris: yeah well, let's, we're going to close with some more fun stuff. Talk a little bit more about texas, any favorite vacation spots within the state. James: Things you like to do in your spare time you know we have a little piece of land up in west texas so we're out in the lakey area okay it's kind of kind of over there by Garner State Park for those that know the river and just absolutely love. We go out there probably every month. You know I have two boys and a little girl so I spend a lot of time out there. The family makes it out there every now and then, but I definitely try to grab a boy and go out there every month. How fun is that? We just go and shoot guns and hang out and, you know, take the kids and their friends over to the Garner State Park, dance and do all that kind of stuff. Chris: God's country over there. James: It is God's country. It's fantastic. That was my favorite place. Chris: It's just beautiful out there, yeah, so any like books or anything that you've read lately that you might pass on to a listener as something to go spend some time reading or learning from. Reading or learning from. James: Jeez, you know I'm actually doing 10 books with my kids right now, so there's nothing new and exciting, but they're all you know. I've got them reading Seven Habits of Highly Effective People, so that was the book they read last week. They're reading a book a week, so this week they're on the Five Dysfunctions of a Team Peter Lencioni. Chris: Yeah. James: So those are kind of what's going on. That's what's on my mind at the minute. I like it At the moment, yeah. Chris: And teaching them young. James: I love that, yeah, I mean well, they're 15, 13, not too young. Chris: Right. James: But kind of when I was reading those books and trying to. So a bunch of oldies but goodies. Yeah, we're going through right now. Chris: We're doing Rich Dad, poor Dad world from that perspective. Last question do you prefer tex-mex or barbecue? James: barbecue, all right, yeah I guess you can't go out to lakey and and not have barbecue in that area or on the road trip to and from no, I mean I it's. Chris: That's a tough question I always save it for last and everyone says the same thing. It's a trick question what's yours? People turn that on me and I think I it's a tough one that they. You know, once it's turned on me and I think it's a tough one Once it's turned on me, I realize how unfair it is. Yeah, I think my answer has always been I love barbecue, but my go-to is probably Tex-Mex more than barbecue. James: So if I was going to say Tex-Mex with a margarita, that might go above barbecue For sure, but if it's just food, it's barbecue Okay. Chris: Yeah, because it's hard to have Tex-Mex without a margarita. James: Yeah. Chris: And then, of course, you have places now, especially here in Houston, I'm sure, other places where they're combining, you know, like the brisket into the Tex-Mex. James: so brisket, burritos or tacos, and that, to me, is probably the penultimate, it's fantastic. Chris: Yeah, there really is. It's challenging when it comes to healthcare. So, James, this has been great man. I really appreciate you coming on and sharing your story. It's pretty fascinating, and congratulations for all the success and what I know will be successful in the future. James: Awesome, thanks so much for having me, Chris: you bet. And there we have it another great episode. Don't forget to check out the show notes at boyermillercom forward slash podcast and you can find out more about all the ways our firm can help you at boyermillercom. That's it for this episode. Have a great week and we'll talk to you next time. Special Guest: James Dieter.

In this episode, James Marriott and I discuss who we think are the best twenty English poets. This is not the best poets who wrote in English, but the best British poets (though James snuck Sylvia Plath onto his list…). We did it like that to make it easier, not least so we could base a lot of our discussion on extracts in The Oxford Book of English Verse (Ricks edition). Most of what we read out is from there. We read Wordsworth, Keats, Hardy, Milton, and Pope. We both love Pope! (He should be regarded as one of the very best English poets, like Milton.) There are also readings of Herrick, Bronte, Cowper, and MacNiece. I plan to record the whole of ‘The Eve of St. Agnes' at some point soon.Here are our lists and below is the transcript (which may have more errors than usual, sorry!)HOGod Tier* Shakespeare“if not first, in the very first line”* Chaucer* Spenser* Milton* Wordsworth* Eliot—argue for Pope here, not usually includedSecond Tier* Donne* Herbert* Keats* Dryden* Gawain poet* Tom O'Bedlam poetThird Tier* Yeats* Tennyson* Hopkins* Coleridge* Auden* Shelley* MarvellJMShakespeareTier* ShakespeareTier 1* Chaucer* Milton* WordsworthTier 2* Donne* Eliot* Keats* Tennyson* Spencer* Marvell* PopeTier 3* Yeats* Hopkins* Blake* Coleridge* Auden* Shelley* Thomas Hardy* Larkin* PlathHenry: Today I'm talking to James Marriott, Times columnist, and more importantly, the writer of the Substack Cultural Capital. And we are going to argue about who are the best poets in the English language. James, welcome.James: Thanks very much for having me. I feel I should preface my appearance so that I don't bring your podcast and disrepute saying that I'm maybe here less as an expert of poetry and more as somebody who's willing to have strong and potentially species opinions. I'm more of a lover of poetry than I would claim to be any kind of academic expert, just in case anybody thinks that I'm trying to produce any definitive answer to the question that we're tackling.Henry: Yeah, no, I mean that's the same for me. We're not professors, we're just very opinionated boys. So we have lists.James: We do.Henry: And we're going to debate our lists, but what we do agree is that if we're having a top 20 English poets, Shakespeare is automatically in the God Tier and there's nothing to discuss.James: Yeah, he's in a category of his own. I think the way of, because I guess the plan we've gone for is to rather than to rank them 1, 2, 3, 4, 5, 6, 7 into sort of, what is it, three or four broad categories that we're competing over.Henry: Yes, yes. TiersJames: I think is a more kind of reasonable way to approach it rather than trying to argue exactly why it should be one place above Shelly or I don't know, whatever.Henry: It's also just an excuse to talk about poets.James: Yes.Henry: Good. So then we have a sort of top tier, if not the first, in the very first line as it were, and you've got different people. To me, you've got Chaucer, Milton, and Wordsworth. I would also add Spenser and T.S. Eliot. So what's your problem with Spenser?James: Well, my problem is ignorance in that it's a while since I've read the Fairy Queen, which I did at university. Partly is just that looking back through it now and from what I remember of university, I mean it is not so much that I have anything against Spenser. It's quite how much I have in favour of Milton and Wordsworth and Chaucer, and I'm totally willing to be argued against on this, but I just can't think that Spenser is in quite the same league as lovely as many passages of the Fairy Queen are.Henry: So my case for Spenser is firstly, if you go through something like the Oxford Book of English Verse or some other comparable anthology, he's getting a similar page count to Shakespeare and Milton, he is important in that way. Second, it's not just the fairy queen, there's the Shepherd's Calendar, the sonnets, the wedding poems, and they're all highly accomplished. The Shepherd's Calendar particularly is really, really brilliant work. I think I enjoyed that more as an undergraduate, actually, much as I love the Fairy Queen. And the third thing is that the Fairy Queen is a very, very great epic. I mean, it's a tremendous accomplishment. There were lots of other epics knocking around in the 16th century that nobody wants to read now or I mean, obviously specialists want to read, but if we could persuade a few more people, a few more ordinary readers to pick up the fairy queen, they would love it.James: Yes, and I was rereading before he came on air, the Bower of Bliss episode, which I think is from the second book, which is just a beautifully lush passage, passage of writing. It was really, I mean, you can see why Keats was so much influenced by it. The point about Spenser's breadth is an interesting one because Milton is in my top category below Shakespeare, but I think I'm placing him there pretty much only on the basis of Paradise Lost. I think if we didn't have Paradise Lost, Milton may not even be in this competition at all for me, very little. I know. I don't know if this is a heresy, I've got much less time for Milton's minor works. There's Samuel Johnson pretty much summed up my feelings on Lycidas when he said there was nothing new. Whatever images it can supply are long ago, exhausted, and I do feel there's a certain sort of dryness to Milton's minor stuff. I mean, I can find things like Il Penseroso and L'Allegro pretty enough, but I mean, I think really the central achievement is Paradise Lost, whereas Spenser might be in contention, as you say, from if you didn't have the Fairy Queen, you've got Shepherd's Calendar, and all this other sort of other stuff, but Paradise Lost is just so massive for me.Henry: But if someone just tomorrow came out and said, oh, we found a whole book of minor poetry by Virgil and it's all pretty average, you wouldn't say, oh, well Virgil's less of a great poet.James: No, absolutely, and that's why I've stuck Milton right at the top. It's just sort of interesting how unbelievably good Paradise Lost is and how, in my opinion, how much less inspiring the stuff that comes after it is Samson Agonistes and Paradise Regained I really much pleasure out of at all and how, I mean the early I think slightly dry Milton is unbelievably accomplished, but Samuel Johnson seems to say in that quote is a very accomplished use of ancient slightly worn out tropes, and he's of putting together these old ideas in a brilliant manner and he has this sort of, I mean I guess he's one of your late bloomers. I can't quite remember how old he is when he publishes Paradise Lost.Henry: Oh, he is. Oh, writing it in his fifties. Yeah.James: Yeah, this just extraordinary thing that's totally unlike anything else in English literature and of all the poems that we're going to talk about, I think is the one that has probably given me most pleasure in my life and the one that I probably return to most often if not to read all the way through then to just go over my favourite bits and pieces of it.Henry: A lot of people will think Milton is heavy and full of weird references to the ancient world and learned and biblical and not very readable for want of a better word. Can you talk us out of that? To be one of the great poets, they do have to have some readability, right?James: Yeah, I think so, and it's certainly how I felt. I mean I think it's not a trivial objection to have to Milton. It's certainly how I found him. He was my special author paper at university and I totally didn't get on with him. There was something about his massive brilliance that I felt. I remember feeling like trying to write about Paradise Lost was trying to kind of scratch a huge block of marble with your nails. There's no way to get a handle on it. I just couldn't work out what to get ahold of, and it's only I think later in adulthood maybe reading him under a little less pressure that I've come to really love him. I mean, the thing I would always say to people to look out for in Milton, but it's his most immediate pleasure and the thing that still is what sends shivers done my spine about him is the kind of cosmic scale of Paradise Lost, and it's almost got this sort of sci-fi massiveness to it. One of my very favourite passages, which I may inflict on you, we did agree that we could inflict poetry on one another.Henry: Please, pleaseJames: It's a detail from the first book of Paradise Lost. Milton's talking about Satan's architect in hell Mulciber, and this is a little explanation of who or part of his explanation of who Mulciber is, and he says, Nor was his name unheard or unadoredIn ancient Greece; and in Ausonian landMen called him Mulciber; and how he fellFrom Heaven they fabled, thrown by angry JoveSheer o'er the crystal battlements: from mornTo noon he fell, from noon to dewy eve,A summer's day, and with the setting sunDropt from the zenith, like a falling star,On Lemnos, th' Aegaean isle. Thus they relate,ErringI just think it's the sort of total massiveness of that universe that “from the zenith to like a falling star”. I just can't think of any other poet in English or that I've ever read in any language, frankly, even in translation, who has that sort of scale about it, and I think that's what can most give immediate pleasure. The other thing I love about that passage is this is part of the kind of grandeur of Milton is that you get this extraordinary passage about an angel falling from heaven down to th' Aegean Isle who's then going to go to hell and the little parenthetic remark at the end, the perm just rolls on, thus they relate erring and paradise lost is such this massive grand thing that it can contain this enormous cosmic tragedy as a kind of little parenthetical thing. I also think the crystal battlements are lovely, so wonderful kind of sci-fi detail.Henry: Yes, I think that's right, and I think it's under appreciated that Milton was a hugely important influence on Charles Darwin who was a bit like you always rereading it when he was young, especially on the beagle voyage. He took it with him and quotes it in his letters sometimes, and it is not insignificant the way that paradise loss affects him in terms of when he writes his own epic thinking at this level, thinking at this scale, thinking at the level of the whole universe, how does the whole thing fit together? What's the order behind the little movements of everything? So Milton's reach I think is actually quite far into the culture even beyond the poets.James: That's fascinating. Do you have a particular favourite bit of Paradise Lost?Henry: I do, but I don't have it with me because I disorganised and couldn't find my copy.James: That's fair.Henry: What I want to do is to read one of the sonnets because I do think he's a very, very good sonnet writer, even if I'm going to let the Lycidas thing go, because I'm not going to publicly argue against Samuel Johnson.When I consider how my light is spent,Ere half my days, in this dark world and wide,And that one Talent which is death to hideLodged with me useless, though my Soul more bentTo serve therewith my Maker, and presentMy true account, lest he returning chide;“Doth God exact day-labour, light denied?”I fondly ask. But patience, to preventThat murmur, soon replies, “God doth not needEither man's work or his own gifts; who bestBear his mild yoke, they serve him best. His stateIs Kingly. Thousands at his bidding speedAnd post o'er Land and Ocean without rest:They also serve who only stand and wait.”I think that's great.James: Yeah. Okay. It is good.Henry: Yeah. I think the minor poems are very uneven, but there are lots of gems.James: Yeah, I mean he is a genius. It would be very weird if all the minor poems were s**t, which is not really what I'm trying… I guess I have a sort of slightly austere category too. I just do Chaucer, Milton, Wordsworth, but we are agreed on Wordsworth, aren't we? That he belongs here.Henry: So my feeling is that the story of English poetry is something like Chaucer Spenser, Shakespeare, Milton, Wordsworth, T.S. Eliot create a kind of spine. These are the great innovators. They're writing the major works, they're the most influential. All the cliches are true. Chaucer invented iambic pentameter. Shakespeare didn't single handedly invent modern English, but he did more than all the rest of them put together. Milton is the English Homer. Wordsworth is the English Homer, but of the speech of the ordinary man. All these old things, these are all true and these are all colossal achievements and I don't really feel that we should be picking between them. I think Spenser wrote an epic that stands alongside the works of Shakespeare and Milton in words with T.S. Eliot whose poetry, frankly I do not love in the way that I love some of the other great English writers cannot be denied his position as one of the great inventors.James: Yeah, I completely agree. It's funny, I think, I mean I really do love T.S. Eliot. Someone else had spent a lot of time rereading. I'm not quite sure why he hasn't gone into quite my top category, but I think I had this—Henry: Is it because he didn't like Milton and you're not having it?James: Maybe that's part of it. I think my thought something went more along the lines of if I cut, I don't quite feel like I'm going to put John Donne in the same league as Milton, but then it seems weird to put Eliot above Donne and then I don't know that, I mean there's not a very particularly fleshed out thought, but on Wordsworth, why is Wordsworth there for you? What do you think, what do you think are the perms that make the argument for Wordsworth having his place at the very top?Henry: Well, I think the Lyrical Ballads, Poems in Two Volumes and the Prelude are all of it, aren't they? I'm not a lover of the rest, and I think the preface to the Lyrical Ballads is one of the great works of literary criticism, which is another coin in his jar if you like, but in a funny way, he's much more revolutionary than T.S. Eliot. We think of modernism as the great revolution and the great sort of bringing of all the newness, but modernism relies on Wordsworth so much, relies on the idea that tradition can be subsumed into ordinary voice, ordinary speech, the passage in the Wasteland where he has all of them talking in the bar. Closing time please, closing time please. You can't have that without Wordsworth and—James: I think I completely agree with what you're saying.Henry: Yeah, so I think that's for me is the basis of it that he might be the great innovator of English poetry.James: Yeah, I think you're right because I've got, I mean again, waiting someone out of my depth here, but I can't think of anybody else who had sort of specifically and perhaps even ideologically set out to write a kind of high poetry that sounded like ordinary speech, I guess. I mean, Wordsworth again is somebody who I didn't particularly like at university and I think it's precisely about plainness that can make him initially off-putting. There's a Matthew Arnold quote where he says of Wordsworth something like He has no style. Henry: Such a Matthew Arnold thing to say.James: I mean think it's the beginning of an appreciation, but there's a real blankness to words with I think again can almost mislead you into thinking there's nothing there when you first encounter him. But yeah, I think for me, Tintern Abbey is maybe the best poem in the English language.Henry: Tintern Abbey is great. The Intimations of Immortality Ode is superb. Again, I don't have it with me, but the Poems in Two Volumes. There are so many wonderful things in there. I had a real, when I was an undergraduate, I had read some Wordsworth, but I hadn't really read a lot and I thought of I as you do as the daffodils poet, and so I read Lyrical Ballads and Poems in Two Volumes, and I had one of these electrical conversion moments like, oh, the daffodils, that is nothing. The worst possible thing for Wordsworth is that he's remembered as this daffodils poet. When you read the Intimations of Immortality, do you just think of all the things he could have been remembered for? It's diminishing.James: It's so easy to get into him wrong because the other slightly wrong way in is through, I mean maybe this is a prejudice that isn't widely shared, but the stuff that I've never particularly managed to really enjoy is all the slightly worthy stuff about beggars and deformed people and maimed soldiers. Wandering around on roads in the lake district has always been less appealing to me, and that was maybe why I didn't totally get on with 'em at first, and I mean, there's some bad words with poetry. I was looking up the infamous lines from the form that were mocked even at the time where you know the lines that go, You see a little muddy pond Of water never dry. I've measured it from side to side, 'Tis three feet long and two feet wide, and the sort of plainness condescend into banality at Wordsworth's worst moments, which come more frequently later in his career.Henry: Yes, yes. I'm going to read a little bit of the Intimations ode because I want to share some of this so-called plainness at its best. This is the third section. They're all very short Now, while the birds thus sing a joyous song,And while the young lambs boundAs to the tabor's sound,To me alone there came a thought of grief:A timely utterance gave that thought relief,And I again am strong:The cataracts blow their trumpets from the steep;No more shall grief of mine the season wrong;I hear the Echoes through the mountains throng,The Winds come to me from the fields of sleep,And all the earth is gay;Land and seaGive themselves up to jollity,And with the heart of MayDoth every Beast keep holiday;—Thou Child of Joy,Shout round me, let me hear thy shouts, thou happy Shepherd-boy.And I think it's unthinkable that someone would write like this today. It would be cringe, but we're going to have a new sincerity. It's coming. It's in some ways it's already here and I think Wordsworth will maybe get a different sort of attention when that happens because that's a really high level of writing to be able to do that without it descending into what you just read. In the late Wordsworth there's a lot of that really bad stuff.James: Yeah, I mean the fact that he wrote some of that bad stuff I guess is a sign of quite how carefully the early stuff is treading that knife edge of tripping into banality. Can I read you my favourite bit of Tintern Abbey?Henry: Oh yes. That is one of the great poems.James: Yeah, I just think one of mean I, the most profound poem ever, probably for me. So this is him looking out over the landscape of Tinton Abbey. I mean these are unbelievably famous lines, so I'm sure everybody listening will know them, but they are so good And I have feltA presence that disturbs me with the joyOf elevated thoughts; a sense sublimeOf something far more deeply interfused,Whose dwelling is the light of setting suns,And the round ocean and the living air,And the blue sky, and in the mind of man:A motion and a spirit, that impelsAll thinking things, all objects of all thought,And rolls through all things. Therefore am I stillA lover of the meadows and the woodsAnd mountains; and of all that we beholdFrom this green earth; of all the mighty worldOf eye, and ear,—both what they half create,And what perceive; well pleased to recogniseIn nature and the language of the senseThe anchor of my purest thoughts, the nurse,The guide, the guardian of my heart, and soulOf all my moral being.I mean in a poem, it's just that is mind blowingly good to me?Henry: Yeah. I'm going to look up another section from the Prelude, which used to be in the Oxford Book, but it isn't in the Ricks edition and I don't really know whyJames: He doesn't have much of the Prelude does he?Henry: I don't think he has any…James: Yeah.Henry: So this is from an early section when the young Wordsworth is a young boy and he's going off, I think he's sneaking out at night to row on the lake as you do when you with Wordsworth, and the initial description is of a mountain. She was an elfin pinnace; lustilyI dipped my oars into the silent lake,And, as I rose upon the stroke, my boatWent heaving through the water like a swan;When, from behind that craggy steep till thenThe horizon's bound, a huge peak, black and huge,As if with voluntary power instinct,Upreared its head. I struck and struck again,And growing still in stature the grim shapeTowered up between me and the stars, and still,For so it seemed, with purpose of its ownAnd measured motion like a living thing,Strode after me. With trembling oars I turned,And through the silent water stole my wayBack to the covert of the willow tree;It's so much like that in Wordsworth. It's just,James: Yeah, I mean, yeah, the Prelude is full of things like that. I think that is probably one of the best moments, possibly the best moments of the prelude. But yeah, I mean it's just total genius isn't it?Henry: I think he's very, very important and yeah, much more important than T.S. Eliot who is, I put him in the same category, but I can see why you didn't.James: You do have a little note saying Pope, question mark or something I think, don't you, in the document.Henry: So the six I gave as the spine of English literature and everything, that's an uncontroversial view. I think Pope should be one of those people. I think we should see Pope as being on a level with Milton and Wordsworth, and I think he's got a very mixed reputation, but I think he was just as inventive, just as important. I think you are a Pope fan, just as clever, just as moving, and it baffles me that he's not more commonly regarded as part of this great spine running through the history of English literature and between Milton and Wordsworth. If you don't have Pope, I think it's a missing link if you like.James: I mean, I wouldn't maybe go as far as you, I love Pope. Pope was really the first perch I ever loved. I remember finding a little volume of Pope in a box of books. My school library was chucking out, and that was the first book of poetry I read and took seriously. I guess he sort of suffers by the fact that we are seeing all of this through the lens of the romantics. All our taste about Shakespeare and Milton and Spenser has been formed by the romantics and hope's way of writing the Satires. This sort of society poetry I think is just totally doesn't conform to our idea of what poetry should be doing or what poetry is. Is there absolutely or virtually nobody reads Dryden nowadays. It's just not what we think poetry is for that whole Augustine 18th century idea that poetry is for writing epistles to people to explain philosophical concepts to them or to diss your enemies and rivals or to write a kind of Duncia explaining why everyone you know is a moron. That's just really, I guess Byron is the last major, is the only of figure who is in that tradition who would be a popular figure nowadays with things like English bards and scotch reviewers. But that whole idea of poetry I think was really alien to us. And I mean I'm probably formed by that prejudice because I really do love Pope, but I don't love him as much as the other people we've discussed.Henry: I think part of his problem is that he's clever and rational and we want our poems always to be about moods, which may be, I think why George Herbert, who we've both got reasonably high is also quite underrated. He's very clever. He's always think George Herbert's always thinking, and when someone like Shakespeare or Milton is thinking, they do it in such a way that you might not notice and that you might just carry on with the story. And if you do see that they're thinking you can enjoy that as well. Whereas Pope is just explicitly always thinking and maybe lecturing, hectoring, being very grand with you and as you say, calling you an idiot. But there are so many excellent bits of Pope and I just think technically he can sustain a thought or an argument over half a dozen or a dozen lines and keep the rhyme scheme moving and it's never forced, and he never has to do that thing where he puts the words in a stupid order just to make the rhyme work. He's got such an elegance and a balance of composition, which again, as you say, we live under romantic ideals, not classical ones. But that doesn't mean we should be blind to the level of his accomplishment, which is really, really very high. I mean, Samuel Johnson basically thought that Alexander Pope had finished English poetry. We have the end of history. He had the end of English poetry. Pope, he's brought us to the mightiest of the heroic couplers and he's done it. It's all over.James: The other thing about Pope that I think makes us underrate him is that he's very charming. And I think charm is a quality we're not big on is that sort of, but I think some of Pope's charm is so moving. One of my favourite poems of his is, do you know the Epistle to Miss Blount on going into the country? The poem to the young girl who's been having a fashionable season in London then is sent to the boring countryside to stay with an aunt. And it's this, it's not like a romantic love poem, it's not distraught or hectic. It's just a sort of wonderful act of sympathy with this potentially slightly airheaded young girl who's been sent to the countryside, which you'd rather go to operas and plays and flirt with people. And there's a real sort of delicate in it that isn't overblown and isn't dramatic, but is extremely charming. And I think that's again, another quality that perhaps we're prone not to totally appreciate in the 21st century. It's almost the kind of highest form of politeness and sympathyHenry: And the prevailing quality in Pope is wit: “True wit is nature to advantage dressed/ What often was thought, but ne'er so well expressed”. And I think wit can be quite alienating for an audience because it is a kind of superior form of literary art. This is why people don't read as much Swift as he deserves because he's so witty and so scornful that a lot of people will read him and think, well, I don't like you.James: And that point about what oft was thought and ne'er so well expressed again, is a very classical idea. The poet who puts not quite conventional wisdom, but something that's been thought before in the best possible words, really suffers with the romantic idea of originality. The poet has to say something utterly new. Whereas for Pope, the sort of ideas that he express, some of the philosophical ideas are not as profound in original perhaps as words with, but he's very elegant proponent of them.Henry: And we love b******g people in our culture, and I feel like the Dunciad should be more popular because it is just, I can't remember who said this, but someone said it's probably the most under appreciated great poem in English, and that's got to be true. It's full of absolute zingers. There's one moment where he's described the whole crowd of them or all these poets who he considers to be deeply inferior, and it turns out he was right because no one reads them anymore. And you need footnotes to know who they are. I mean, no one cares. And he says, “equal your merits, equal is your din”. This kind of abuse is a really high art, and we ought to love that. We love that on Twitter. And I think things like the Rape of the Lock also could be more popular.James: I love the Rape of the Lock . I mean, I think anybody is not reading Pope and is looking for a way in, I think the Rape of the Lock is the way in, isn't it? Because it's just such a charming, lovely, funny poem.Henry: It is. And probably it suffers because the whole idea of mock heroic now is lost to us. But it's a bit like it's the literary equivalent of people writing a sort of mini epic about someone like Elon Musk or some other very prominent figure in the culture and using lots of heroic imagery from the great epics of Homer and Virgil and from the Bible and all these things, but putting them into a very diminished state. So instead of being grand, it becomes comic. It's like turning a God into a cartoon. And Pope is easily the best writer that we have for that kind of thing. Dryden, but he's the genius on it.James: Yeah, no, he totally is. I guess it's another reason he's under appreciated is that our culture is just much less worshipful of epic than the 18th century culture was. The 18th century was obsessed with trying to write epics and trying to imitate epics. I mean, I think to a lot of Pope's contemporaries, the achievement they might've been expecting people to talk about in 300 years time would be his translations of the Iliad and the Odyssey and the other stuff might've seen more minor in comparison, whereas it's the mock epic that we're remembering him for, which again is perhaps another symptom of our sort of post romantic perspective.Henry: I think this is why Spenser suffers as well, because everything in Spenser is magical. The knights are fairies, not the little fairies that live in buttercups, but big human sized fairies or even bigger than that. And there are magical women and saucers and the whole thing is a sort of hodgepodge of romance and fairy tale and legend and all this stuff. And it's often said, oh, he was old fashioned in his own time. But those things still had a lot of currency in the 16th century. And a lot of those things are in Shakespeare, for example.But to us, that's like a fantasy novel. Now, I love fantasy and I read fantasy, and I think some of it's a very high accomplishment, but to a lot of people, fantasy just means kind of trash. Why am I going to read something with fairies and a wizard? And I think a lot of people just see Spenser and they're like, what is this? This is so weird. They don't realise how Protestant they're being, but they're like, this is so weird.James: And Pope has a little, I mean, the Rape of the Lock even has a little of the same because the rape of the lock has this attendant army of good spirits called selfs and evil spirits called gnomes. I mean, I find that just totally funny and charming. I really love it.Henry: I'm going to read, there's an extract from the Rape of the Lock in the Oxford Book, and I'm going to read a few lines to give people an idea of how he can be at once mocking something but also quite charming about it. It's quite a difficult line to draw. The Rape of the Lock is all about a scandalous incident where a young man took a lock of a lady's hair. Rape doesn't mean what we think it means. It means an offence. And so because he stole a lock of her hair, it'd become obviously this huge problem and everyone's in a flurry. And to sort of calm everyone down, Pope took it so seriously that he made it into a tremendous joke. So here he is describing the sort of dressing table if you like.And now, unveil'd, the Toilet stands display'd,Each silver Vase in mystic order laid.First, rob'd in white, the Nymph intent adores,With head uncover'd, the Cosmetic pow'rs.A heav'nly image in the glass appears,To that she bends, to that her eyes she rears;Th' inferior Priestess, at her altar's side,Trembling begins the sacred rites of Pride.What a way to describe someone putting on their makeup. It's fantastic.James: It's funny. I can continue that because the little passage of Pope I picked to read begins exactly where yours ended. It only gets better as it goes on, I think. So after trembling begins the sacred rites of pride, Unnumber'd treasures ope at once, and hereThe various off'rings of the world appear;From each she nicely culls with curious toil,And decks the Goddess with the glitt'ring spoil.This casket India's glowing gems unlocks,And all Arabia breathes from yonder box.The Tortoise here and Elephant unite,Transformed to combs, the speckled, and the white.Here files of pins extend their shining rows,Puffs, Powders, Patches, Bibles, Billet-doux.It's just so lovely. I love a thing about the tortoise and the elephant unite because you've got a tortoise shell and an ivory comb. And the stuff about India's glowing gems and Arabia breathing from yonder box, I mean that's a, realistic is not quite the word, but that's a reference to Milton because Milton is continually having all the stones of Arabia and India's pearls and things all screwed through paradise lost. Yeah, it's just so lovely, isn't it?Henry: And for someone who's so classical and composed and elegant, there's something very Dickensian about things like the toilet, the tortoise and the elephant here unite, transform to combs. There's something a little bit surreal and the puffs, powders, patches, bibles, it has that sort of slightly hectic, frantic,James: That's sort of Victorian materialism, wealth of material objects,Henry: But also that famous thing that was said of Dickens, that the people are furniture and the furniture's like people. He can bring to life all the little bits and bobs of the ordinary day and turn it into something not quite ridiculous, not quite charming.James: And there is a kind of charm in the fact that it wasn't the sort of thing that poets would necessarily expect to pay attention to the 18th century. I don't think the sort of powders and ointments on a woman's dressing table. And there's something very sort of charming in his condescension to notice or what might've once seemed his condescension to notice those things, to find a new thing to take seriously, which is what poetry or not quite to take seriously, but to pay attention to, which I guess is one of the things that great perch should always be doing.Henry: When Swift, who was Pope's great friend, wrote about this, he wrote a poem called A Beautiful Young Lady Going to Bed, which is not as good, and I would love to claim Swift on our list, but I really can't.James: It's quite a horrible perm as well, that one, isn't it?Henry: It is. But it shows you how other people would treat the idea of the woman in front of her toilet, her mirror. And Swift uses an opportunity, as he said, to “lash the vice” because he hated all this adornment and what he would think of as the fakery of a woman painting herself. And so he talks about Corina pride of Drury Lane, which is obviously an ironic reference to her being a Lady of the Night, coming back and there's no drunken rake with her. Returning at the midnight hour;Four stories climbing to her bow'r;Then, seated on a three-legged chair,Takes off her artificial hair:Now, picking out a crystal eye,She wipes it clean, and lays it by.Her eye-brows from a mouse's hide,Stuck on with art on either side,Pulls off with care, and first displays 'em,Then in a play-book smoothly lays 'em.Now dexterously her plumpers draws,That serve to fill her hollow jaws.And it goes on like this. I mean, line after this is sort of raw doll quality to it, Pope, I think in contrast, it only illuminates him more to see where others are taking this kind of crude, very, very funny and witty, but very crude approach. He's able to really have the classical art of balance.James: Yes. And it's precisely his charm that he can mock it and sympathise and love it at the same time, which I think is just a more sort of complex suite of poetic emotions to have about that thing.Henry: So we want more people to read Pope and to love Pope.James: Yes. Even if I'm not letting him into my top.Henry: You are locking him out of the garden. Now, for the second tier, I want to argue for two anonymous poets. One of the things we did when we were talking about this was we asked chatGPT to see if it could give us a good answer. And if you use o1 or o1 Pro, it gives you a pretty good answer as to who the best poets in English are. But it has to be told that it's forgotten about the anonymous poets. And then it says, oh, that was stupid. There are quite a lot of good anonymous poets in English, but I suspect a lot of us, a lot of non artificial intelligence when thinking about this question overlook the anonymous poets. But I would think the Gawain poet and the Tom O' Bedlam poet deserve to be in here. I don't know what you think about that.James: I'm not competent to provide an opinion. I'm purely here to be educated on the subject of these anonymous poets. Henry: The Gawain poet, he's a mediaeval, assume it's a he, a mediaeval writer, obviously may well not be a man, a mediaeval writer. And he wrote Sir Gawain and The Green Knight, which is, if you haven't read it, you should really read it in translation first, I think because it's written at the same time as Chaucer. But Chaucer was written in a kind of London dialect, which is what became the English we speak. And so you can read quite a lot of Chaucer and the words look pretty similar and sometimes you need the footnotes, but when you read Gawain and The Green Knight, it's in a Northwestern dialect, which very much did not become modern day English. And so it's a bit more baffling, but it is a poem of tremendous imaginative power and weirdness. It's a very compelling story. We have a children's version here written by Selena Hastings who's a very accomplished biographer. And every now and then my son remembers it and he just reads it again and again and again. It's one of the best tales of King Arthur in his knights. And there's a wonderful book by John Burrow. It's a very short book, but that is such a loving piece of criticism that explicates the way in which that poem promotes virtue and all the nightly goodness that you would expect, but also is a very strange and unreal piece of work. And I think it has all the qualities of great poetry, but because it's written in this weird dialect, I remember as an undergraduate thinking, why is this so bloody difficult to read? But it is just marvellous. And I see people on Twitter, the few people who've read it, they read it again and they just say, God, it's so good. And I think there was a film of it a couple of years ago, but we will gloss lightly over that and not encourage you to do the film instead of the book.James: Yeah, you're now triggering a memory that I was at least set to read and perhaps did at least read part of Gawain and the Green Knight at University, but has not stuck to any brain cells at all.Henry: Well, you must try it again and tell me what you think. I mean, I find it easily to be one of the best poems in English.James: Yeah, no, I should. I had a little Chaucer kick recently actually, so maybe I'm prepared to rediscover mediaeval per after years of neglect since my degree,Henry: And it's quite short, which I always think is worth knowing. And then the Tom Bedlam is an anonymous poem from I think the 17th century, and it's one of the mad songs, so it's a bit like the Fool from King Lear. And again, it is a very mysterious, very strange and weird piece of work. Try and find it in and read the first few lines. And I think because it's anonymous, it's got slightly less of a reputation because it can't get picked up with some big name, but it is full of tremendous power. And again, I think it would be sad if it wasn't more well known.From the hag and hungry goblinThat into rags would rend ye,The spirit that stands by the naked manIn the Book of Moons defend ye,That of your five sound sensesYou never be forsaken,Nor wander from your selves with TomAbroad to beg your bacon,While I do sing, Any food, any feeding,Feeding, drink, or clothing;Come dame or maid, be not afraid,Poor Tom will injure nothing.Anyway, so you get the sense of it and it's got many stanzas and it's full of this kind of energy and it's again, very accomplished. It can carry the thought across these long lines and these long stanzas.James: When was it written? I'm aware of only if there's a name in the back of my mind.Henry: Oh, it's from the 17th century. So it's not from such a different time as King Lear, but it's written in the voice of a madman. And again, you think of that as the sort of thing a romantic poet would do. And it's strange to find it almost strange to find it displaced. There were these other mad songs. But I think because it's anonymous, it gets less well known, it gets less attention. It's not part of a bigger body of work, but it's absolutely, I think it's wonderful.James: I shall read it.Henry: So who have you got? Who else? Who are you putting in instead of these two?James: Hang on. So we're down to tier two now.Henry: Tier two.James: Yeah. So my tier two is: Donne, Elliot, Keats, Tennyson. I've put Spenser in tier two, Marvell and Pope, who we've already discussed. I mean, I think Eliot, we've talked about, I mean Donne just speaks for himself and there's probably a case that some people would make to bump him up a tier. Henry: Anybody can read that case in Katherine Rudell's book. We don't need to…James: Yes, exactly. If anybody's punching perhaps in tier two, it's Tennyson who I wasn't totally sure belonged there. Putting Tenon in the same tier as Donne and Spenser and Keets. I wonder if that's a little ambitious. I think that might raise eyebrows because there is a school of thought, which I'm not totally unsympathetic to this. What's the Auden quote about Tennyson? I really like it. I expressed very harshly, but I sort of get what he means. Auden said that Tennyson “had the finest ear perhaps of any English poet who was also undoubtedly the stupidest. There was little that he didn't know. There was little else that he did.” Which is far too harsh. But I mentioned to you earlier that I think was earlier this year, a friend and I had a project where we were going to memorise a perva week was a plan. We ended up basically getting, I think three quarters of the way through.And if there's a criticism of Tennyson that you could make, it's that the word music and the sheer lushness of phrases sometimes becomes its own momentum. And you can end up with these extremely lovely but sometimes slightly empty beautiful phrases, which is what I ended up feeling about Tithonus. And I sort of slightly felt I was memorising this unbelievably beautiful but ever so slightly hollow thing. And that was slightly why the project fell apart, I should say. Of course, they absolutely love Tennyson. He's one of my all time favourite poets, which is why my personal favouritism has bumped him up into that category. But I can see there's a case, and I think to a lot of people, he's just the kind of Victorian establishment gloom man, which is totally unfair, but there's not no case against Tennyson.Henry: Yeah, the common thing is that he has no ideas. I don't know if that's true or not. I'm also, I'm not sure how desperately important it is. It should be possible to be a great poet without ideas being at the centre of your work. If you accept the idea that the essence of poetry is invention, i.e. to say old things in a fantastically new way, then I think he qualifies very well as a great poet.James: Yes..Henry: Well, very well. I think Auden said what he said because he was anxious that it was true of himself.James: Yeah, I mean there's a strong argument that Auden had far too many ideas and the sorts of mad schemes and fantastical theories about history that Auden spent his spare time chasing after is certainly a kind of argument that poets maybe shouldn't have as many ideas, although it's just reading. Seamus Perry's got a very good little book on Tennyson, and the opening chapter is all about arguments about people who have tended to dislike Tennyson. And there are all kinds of embarrassing anecdotes about the elderly Tennyson trying to sort of go around dinner parties saying profound and sage-like things and totally putting his foot in it and saying things are completely banal. I should have made a note that this was sort of slightly, again, intensifying my alarm about is there occasionally a tinsely hollowness about Tennyson. I'm now being way too harsh about one of my favourite poets—Henry: I think it depends what you mean by ideas. He is more than just a poet of moods. He gives great expression, deep and strongly felt expression to a whole way of being and a whole way of conceiving of things. And it really was a huge part of why people became interested in the middle ages in the 19th century. I think there's Walter Scott and there's Tennyson who are really leading that work, and that became a dominant cultural force and it became something that meant a lot to people. And whether or not, I don't know whether it's the sort of idea that we're talking about, but I think that sort of thing, I think that qualifies as having ideas and think again, I think he's one of the best writers about the Arthurian legend. Now that work doesn't get into the Oxford Book of English Verse, maybe that's fair. But I think it was very important and I love it. I love it. And I find Tennyson easy to memorise, which is another point in his favour.James: Yeah.Henry: I'm going to read a little bit of Ulysses, which everyone knows the last five or six lines of that poem because it gets put into James Bond films and other such things. I'm going to read it from a little bit from earlier on. I am become a name;For always roaming with a hungry heartMuch have I seen and known; cities of menAnd manners, climates, councils, governments,Myself not least, but honour'd of them all;And drunk delight of battle with my peers,Far on the ringing plains of windy Troy.I am a part of all that I have met;Yet all experience is an arch wherethro'Gleams that untravell'd world, whose margin fadesFor ever and for ever when I move.I think that's amazing. And he can do that. He can do lots and lots and lots of that.James: Yeah, he really can. It's stunning. “Far on the ringing planes of windy Troy” is such an unbelievably evocative phrase.Henry: And that's what I mean. He's got this ability to bring back a sort of a whole mood of history. It's not just personal mood poetry. He can take you into these places and that is in the space of a line. In the space of a line. I think Matthew Arnold said of the last bit of what I just read is that he had this ability in Ulysses to make the lines seem very long and slow and to give them this kind of epic quality that far goes far beyond the actual length of that poem. Ulysses feels like this huge poem that's capturing so much of Homer and it's a few dozen lines.James: Yeah, no, I completely agree. Can I read a little bit of slightly more domestic Tennyson, from In Memoriam, I think his best poem and one of my all time favourite poems and it's got, there are many sort of famous lines on grief and things, but there's little sort of passage of natural description I think quite near the beginning that I've always really loved and I've always just thought was a stunning piece of poetry in terms of its sound and the way that the sound has patented and an unbelievably attentive description natural world, which is kind of the reason that even though I think Keats is a better poet, I do prefer reading Tennyson to Keats, so this is from the beginning of In Memoriam. Calm is the morn without a sound,Calm as to suit a calmer grief,And only thro' the faded leafThe chesnut pattering to the ground:Calm and deep peace on this high wold,And on these dews that drench the furze,And all the silvery gossamersThat twinkle into green and gold:Calm and still light on yon great plainThat sweeps with all its autumn bowers,And crowded farms and lessening towers,To mingle with the bounding main:And I just think that's an amazing piece of writing that takes you from that very close up image that it begins with of the “chestnut patterning to the ground” through the faded leaves of the tree, which is again, a really attentive little bit of natural description. I think anyone can picture the way that a chestnut might fall through the leaves of a chestnut tree, and it's just an amazing thing to notice. And I think the chestnut pattern to the ground does all the kind of wonderful, slightly onomatopoeic, Tennyson stuff so well, but by the end, you're kind of looking out over the English countryside, you've seen dew on the firs, and then you're just looking out across the plane to the sea, and it's this sort of, I just think it's one of those bits of poetry that anybody who stood in a slightly wet and romantic day in the English countryside knows exactly the feeling that he's evoking. And I mean there's no bit of—all of In Memoriam is pretty much that good. That's not a particularly celebrated passage I don't think. It's just wonderful everywhere.Henry: Yes. In Memoriam a bit like the Dunciad—under appreciated relative to its huge merits.James: Yeah, I think it sounds, I mean guess by the end of his life, Tennyson had that reputation as the establishment sage of Victorian England, queen of Victoria's favourite poet, which is a pretty off-putting reputation for to have. And I think In Memoriam is supposed to be this slightly cobwebby, musty masterpiece of Victorian grief. But there was just so much, I mean, gorgeous, beautiful sensuous poetry in it.Henry: Yeah, lots of very intense feelings. No, I agree. I have Tennyson my third tier because I had to have the Gawain poet, but I agree that he's very, very great.James: Yeah, I think the case for third tier is I'm very open to that case for the reasons that I said.Henry: Keats, we both have Keats much higher than Shelly. I think Byron's not on anyone's list because who cares about Byron. Overrated, badly behaved. Terrible jokes. Terrible jokes.James: I think people often think Byron's a better pert without having read an awful lot of the poetry of Byron. But I think anybody who's tried to wade through long swathes of Don Juan or—Henry: My God,James: Childe Harold, has amazing, amazing, beautiful moments. But yeah, there's an awful lot of stuff that you don't enjoy. I think.Henry: So to make the case for Keats, I want to talk about The Eve of St. Agnes, which I don't know about you, but I love The Eve of St. Agnes. I go back to it all the time. I find it absolutely electric.James: I'm going to say that Keats is a poet, which is kind of weird for somebody is sent to us and obviously beautiful as Keats. I sort of feel like I admire more than I love. I get why he's brilliant. It's very hard not to see why he's brilliant, but he's someone I would very rarely sit down and read for fun and somebody got an awful lot of feeling or excitement out of, but that's clearly a me problem, not a Keats problem.Henry: When I was a teenager, I knew so much Keats by heart. I knew the whole of the Ode to a Nightingale. I mean, I was absolutely steeped in it morning, noon and night. I couldn't get over it. And now I don't know if I could get back to that point. He was a very young poet and he writes in a very young way. But I'm going to read—The Eve of St. Agnes is great. It's a narrative poem, which I think is a good way to get into this stuff because the story is fantastic. And he had read Spenser, he was part of this kind of the beginning of this mediaeval revival. And he's very interested in going back to those old images, those old stories. And this is the bit, I think everything we're reading is from the Oxford Book of English Verse, so that if people at home want to read along they can.This is when the heroine of the poem is Madeline is making her escape basically. And I think this is very, very exciting. Her falt'ring hand upon the balustrade,Old Angela was feeling for the stair,When Madeline, St. Agnes' charmed maid,Rose, like a mission'd spirit, unaware:With silver taper's light, and pious care,She turn'd, and down the aged gossip ledTo a safe level matting. Now prepare,Young Porphyro, for gazing on that bed;She comes, she comes again, like ring-dove fray'd and fled.Out went the taper as she hurried in;Its little smoke, in pallid moonshine, died:She clos'd the door, she panted, all akinTo spirits of the air, and visions wide:No uttered syllable, or, woe betide!But to her heart, her heart was voluble,Paining with eloquence her balmy side;As though a tongueless nightingale should swellHer throat in vain, and die, heart-stifled, in her dell.A casement high and triple-arch'd there was,All garlanded with carven imag'riesOf fruits, and flowers, and bunches of knot-grass,And diamonded with panes of quaint device,Innumerable of stains and splendid dyes,As are the tiger-moth's deep-damask'd wings;And in the midst, 'mong thousand heraldries,And twilight saints, and dim emblazonings,A shielded scutcheon blush'd with blood of queens and kings.I mean, so much atmosphere, so much tension, so many wonderful images just coming one after the other. The rapidity of it, the tumbling nature of it. And people often quote the Ode to autumn, which has a lot of that.James: I have to say, I found that totally enchanting. And perhaps my problem is that I need you to read it all to me. You can make an audio book that I can listen to.Henry: I honestly, I actually might read the whole of the E and put it out as audio on Substack becauseJames: I would actually listen to that.Henry: I love it so much. And I feel like it gets, when we talk about Keats, we talk about, On First Looking into Chapman's Homer and Bright Star and La Belle Dame Sans Merci, and these are great, great poems and they're poems that we do at school Ode to a Nightingale because I think The Great Gatsby has a big debt to Ode to a Nightingale, doesn't it? And obviously everyone quotes the Ode to Autumn. I mean, as far as I can tell, the 1st of October every year is the whole world sharing the first stands of the Ode to Autumn.James: Yeah. He may be one of the people who suffers from over familiarity perhaps. And I think also because it sounds so much what poetry is supposed to sound like, because so much of our idea of poetry derives from Keats. Maybe that's something I've slightly need to get past a little bit.Henry: But if you can get into the complete works, there are many, the bit I just read is I think quite representative.James: I loved it. I thought it was completely beautiful and I would never have thought to ever, I probably can't have read that poem for years. I wouldn't have thought to read it. Since university, I don't thinkHenry: He's one of those people. All of my copies of him are sort of frayed and the spines are breaking, but the book is wearing out. I should just commit it to memory and be done. But somehow I love going back to it. So Keats is very high in my estimation, and we've both put him higher than Shelly and Coleridge.James: Yeah.Henry: Tell me why. Because those would typically, I think, be considered the superior poets.James: Do you think Shelly? I think Keats would be considered the superior poetHenry: To Shelly?James: Certainly, yes. I think to Shelly and Coleridge, that's where current fashion would place them. I mean, I have to say Coleridge is one of my all time favourite poets. In terms of people who had just every so often think, I'd love to read a poem, I'd love to read Frost at Midnight. I'd love to read the Aeolian Harp. I'd love to read This Lime Tree Bower, My Prison. I'd love to read Kubla Khan. Outside Milton, Coleridge is probably the person that I read most, but I think, I guess there's a case that Coleridge's output is pretty slight. What his reputation rest on is The Rime of the Ancient Mariner, Kubla Khan, the conversation poems, which a lot of people think are kind of plagiarised Wordsworth, at least in their style and tone, and then maybe not much else. Does anybody particularly read Cristabel and get much out of it nowadays? Dejection an Ode people like: it's never done an awful lot for me, so I sort of, in my personal Pantheon Coleridge is at the top and he's such an immensely sympathetic personality as well and such a curious person. But I think he's a little slight, and there's probably nothing in Coleridge that can match that gorgeous passage of Keats that you read. I think.Henry: Yeah, that's probably true. He's got more ideas, I guess. I don't think it matters that he's slight. Robert Frost said something about his ambition had been to lodge five or six poems in the English language, and if he'd done that, he would've achieved greatness. And obviously Frost very much did do that and is probably the most quotable and well-known poet. But I think Coleridge easily meets those criteria with the poems you described. And if all we had was the Rime of the Ancient Mariner, I would think it to be like Tom O' Bedlam, like the Elegy in a Country Churchyard, one of those great, great, great poems that on its own terms, deserves to be on this list.James: Yeah, and I guess another point in his favour is a great poet is they're all pretty unalike. I think if given Rime of the Ancient Mariner, a conversation poem and Kubla Khan and said, guess whether these are three separate poets or the same guy, you would say, oh, there's a totally different poems. They're three different people. One's a kind of creepy gothic horror ballad. Another one is a philosophical reflection. Another is the sort of Mad Opium dream. I mean, Kubla Khan is just without a doubt, one of the top handful of purposes in English language, I think.Henry: Oh yeah, yeah. And it has that quality of the Elegy in a Country Churchyard that so many of the lines are so quotable in the sense that they could be, in the case of the Elegy in a Country Churchyard, a lot of novels did get their titles from it. I think it was James Lees Milne. Every volume of his diaries, which there are obviously quite a few, had its title from Kubla Khan. Ancient as the Hills and so on. It's one of those poems. It just provides us with so much wonderful language in the space of what a page.James: Sort of goes all over the place. Romantic chasms, Abyssinian made with dulcimer, icy pleasure dome with caves of ice. It just such a—it's so mysterious. I mean, there's nothing else remotely like it at all in English literature that I can think of, and its kind strangeness and virtuosity. I really love that poem.Henry: Now, should we say a word for Shelly? Because everyone knows Ozymandias, which is one of those internet poems that goes around a lot, but I don't know how well known the rest of his body of work is beyond that. I fell in love with him when I read a very short lyric called “To—” Music, when soft voices die,Vibrates in the memory—Odours, when sweet violets sicken,Live within the sense they quicken.Rose leaves, when the rose is dead,Are heaped for the belovèd's bed;And so thy thoughts, when thou art gone,Love itself shall slumber on.I found that to be one of those poems that was once read and immediately memorised. But he has this very, again, broad body of work. He can write about philosophical ideas, he can write about moods, he can write narrative. He wrote Julian and Maddalo, which is a dialogue poem about visiting a madman and taking sympathy with him and asking the question, who's really mad here? Very Swiftian question. He can write about the sublime in Mont Blanc. I mean, he has got huge intellectual power along with the beauty. He's what people want Tennyson to be, I guess.James: Yeah. Or what people think Byron might be. I think Shelly is great. I don't quite get that Byron is so much more famous. Shelly has just a dramatic and, well, maybe not quite just as, but an incredibly dramatic and exciting life to go along with it,Henry: I think some of the short lyrics from Byron have got much more purchase in day-to-day life, like She Walks in Beauty.James: Yeah. I think you have to maybe get Shelly a little more length, don't you? I mean, even there's something like Ode to the West Wind is you have to take the whole thing to love it, perhaps.Henry: Yes. And again, I think he's a bit like George Herbert. He's always thinking you really have to pay attention and think with him. Whereas Byron has got lots of lines you can copy out and give to a girl that you like on the bus or something.James: Yes. No, that's true.Henry: I don't mean that in quite as rude a way as it sounds. I do think that's a good thing. But Shelly's, I think, much more of a thinker, and I agree with you Childe Harold and so forth. It's all crashing bore. I might to try it again, but awful.James: I don't want move past Coledridge without inflicting little Coledridge on you. Can I?Henry: Oh, yes. No, sorry. We didn't read Coledridge, right?James: Are just, I mean, what to read from Coledridge? I mean, I could read the whole of Kubla Khan, but that would be maybe a bit boring. I mean, again, these are pretty famous and obvious lines from Frost at Midnight, which is Coledridge sitting up late at night in his cottage with his baby in its cradle, and he sort of addressing it and thinking about it. And I just think these lines are so, well, everything we've said about Coledridge, philosophical, thoughtful, beautiful, in a sort of totally knockout, undeniable way. So it goes, he's talking to his young son, I think. My babe so beautiful! it thrills my heartWith tender gladness, thus to look at thee,And think that thou shalt learn far other lore,And in far other scenes! For I was rearedIn the great city, pent 'mid cloisters dim,And saw nought lovely but the sky and stars.But thou, my babe! shalt wander like a breezeBy lakes and sandy shores, beneath the cragsOf ancient mountain, and beneath the clouds,Which image in their bulk both lakes and shoresAnd mountain crags: so shalt thou see and hearThe lovely shapes and sounds intelligibleOf that eternal language, which thy GodUtters, who from eternity doth teachHimself in all, and all things in himself.Which is just—what aren't those lines of poetry doing? And with such kind of confidence, the way you get from talking to your baby and its cradle about what kind of upbringing you hope it will have to those flashes of, I mean quite Wordsworthian beauty, and then the sort of philosophical tone at the end. It's just such a stunning, lovely poem. Yeah, I love it.Henry: Now we both got Yeats and Hopkins. And Hopkins I think is really, really a tremendous poet, but neither of us has put Browning, which a lot of other people maybe would. Can we have a go at Browning for a minute? Can we leave him in shreds? James: Oh God. I mean, you're going to be a better advocate of Browning than I am. I've never—Henry: Don't advocate for him. No, no, no.James: We we're sticking him out.Henry: We're sticking him.James: I wonder if I even feel qualified to do that. I mean, I read quite a bit of Browning at university, found it hard to get on with sometimes. I think I found a little affected and pretentious about him and a little kind of needlessly difficult in a sort of off-puttingly Victorian way. But then I was reading, I reviewed a couple of years ago, John Carey has an excellent introduction to English poetry. I think it's called A Little History of Poetry in which he described Browning's incredibly long poem, The Ring in the Book as one of the all time wonders of verbal art. This thing is, I think it's like 700 or 800 pages long poem in the Penguin edition, which has always given me pause for thought and made me think that I've dismissed Browning out of hand because if John Carey's telling me that, then I must be wrong.But I think I have had very little pleasure out of Browning, and I mean by the end of the 19th century, there was a bit of a sort of Victorian cult of Browning, which I think was influential. And people liked him because he was a living celebrity who'd been anointed as a great poet, and people liked to go and worship at his feet and stuff. I do kind of wonder whether he's lasted, I don't think many people read him for pleasure, and I wonder if that maybe tells its own story. What's your case against Browning?Henry: No, much the same. I think he's very accomplished and very, he probably, he deserves a place on the list, but I can't enjoy him and I don't really know why. But to me, he's very clever and very good, but as you say, a bit dull.James: Yeah, I totally agree. I'm willing. It must be our failing, I'm sure. Yeah, no, I'm sure. I'm willing to believe they're all, if this podcast is listened to by scholars of Victorian poetry, they're cringing and holding their head in their hands at this—Henry: They've turned off already. Well, if you read The Ring and the Book, you can come back on and tell us about it.James: Oh God, yeah. I mean, in about 20 years time.Henry: I think we both have Auden, but you said something you said, “does Auden have an edge of fraudulence?”James: Yeah, I mean, again, I feel like I'm being really rude about a lot of poets that I really love. I don't really know why doesn't think, realising that people consider to be a little bit weak makes you appreciate their best stuff even more I guess. I mean, it's hard to make that argument without reading a bit of Auden. I wonder what bit gets it across. I haven't gotten any ready. What would you say about Auden?Henry: I love Auden. I think he was the best poet of the 20th century maybe. I mean, I have to sort of begrudgingly accept T.S. Eliot beside, I think he can do everything from, he can do songs, light lyrics, comic verse, he can do occasional poetry, obituaries. He was a political poet. He wrote in every form, I think almost literally that might be true. Every type of stanza, different lines. He was just structurally remarkable. I suspect he'll end up a bit like Pope once the culture has tur

In this episode of the Just Schools Podcast, Jon Eckert interviews James Blomfield from the International Forums of Inclusion Practitioners (IFIP). They discuss his work in inclusive education, the importance of Universal Design for Learning (UDL), and the global challenges and opportunities in creating truly inclusive schools. Blomfield shares insights from his visits to Texas schools, highlighting student engagement in career and technical education programs. The conversation also explores the role of artificial intelligence in education, the shift from inclusion to belonging, and the power of networks like IFIP in connecting educators worldwide. The Just Schools Podcast is brought to you by the Baylor Center for School Leadership. Be encouraged. Mentioned: The Curriculum: Gallimaufry to Coherence by Mary Myatt How Change Happens by Duncan Green The Name of the Rose by Umberto Eco Connect with us: Baylor MA in School Leadership EdD in K-12 Educational Leadership Jon Eckert LinkedIn X: @eckertjon Center for School Leadership at Baylor University: @baylorcsl   Jon Eckert: All right, so we are blessed to have James in our podcast studio. He flew all the way from the United Kingdom to Waco, Texas, to be on this podcast. So James, tell us a little bit about what you've been doing here in central Texas these last couple of days. James: Yeah, I've been spoiled. I've just had the best cheese and ham roll, ever. I can tell you a lot about Texan food now. And brisket. But the quality of the experiences, the visiting the schools, meeting you at Baylor has been a terrific privilege. I'm very grateful. Yeah, today, this morning, in fact, we visited three schools in Waco Independent School District. We were shown around by the loveliest people, Adam, Caroline, and Christie. I think Adam and Caroline are on from your doctoral program. Jon Eckert: Yes. James: But they're like institutional coaches. I gather. We would call them improvement offices where I come from, but they had such a light touch. They knew everyone. They were so friendly with people, and I gather that they are also about compliance, but with the coaching aspects. So they were great. And the three schools we went to, we were Midway yesterday, which was amazing. And then this morning, Bells Hill Elementary, Cesar Chavez, and then GWAMA, Greater Waco Advanced Manufacturing Academy earlier. And yeah, what impressed me was speaking honestly as an English person, it is shocking to see police in a school. Very quickly, I was unaware of them. But we have our own issues in the UK with knives and all sorts. But the staff were, despite that, throughout just so calm, friendly, loving, and attentive to the students. Asking them, talking to them in front of us. And some wonderful experienced people, trauma informed. There was someone who was training to be a social worker this morning who just came out of her office and gave us a short speech without any preparation, speaking from the heart, talking about what she was doing, how much the children matter. If you've got people like that, then you are going to be doing the right stuff. So yeah, I was impressed. But also from the type of education, obviously Texas is massive. The school footprint, I've never been into such big schools, even the elementary and yesterday with Midway, that was the biggest school I've ever been in. It took us a long time to walk around. And all of the stuff, like this morning at GWAMA, we saw robotics, drones, they have the construction academy, welding, forklift truck driving. Yesterday we saw them building an airplane. When I was doing metalwork at school, it was for like a baked potato holder. They were building an airplane. And I would love that as a student. I would be inspired by that even if I was building a small part of the airplane. Rebuilding tractors yesterday. So that's practical. That's 21st century teaching, but visible, practical, hands-on. Jon Eckert: And then the engagement that you see that's possible there through starting a cafe restaurant through the airplanes. Just to be clear to the audience, the students are not doing this on their own. It's a two-seat airplane that would be like a Cessna, and they have engineers coming in to help build. I still am not going to be the first person that volunteers to fly in that, but it was impressive to see. And I do feel like in central Texas, there are a number of schools doing a lot to try to meet the needs of the community by educating kids in ways that engage them, use the skills that they've been given, help them become more of who they're created to be in a way that benefits the community. And even the principal yesterday, Allison Smith, was sharing about the new factory that's coming in that's got a gigantic footprint, and it's going to be a huge benefit to the tax base. Before they came, they met with the high school to see if there were ways that they could integrate some of the needs they have with what the high school's developing in their students. Because at Midway, about half the students go on to a post-secondary education. And so there have to be opportunities for kids to step into things that allow them to be gainfully employed and meaningfully use the skills that they have. And many of the kids were doing things that I couldn't even fathom doing. And they're just leaning into it and gaining expertise, which is for 16, 17, 18 year olds is truly remarkable. James: Isn't that also a bit like a UDL mindset? If the manufacturer comes in and has that intelligence to ask about what would you need? What would be helpful? And then you're designing the education from the ground up. Jon Eckert: That's it. And I'm glad you brought up Universal Design for Learning, because that's something that we haven't really gotten into. Why you're here and what you do in the United Kingdom, because we actually, Eric Ellison, met you a while ago. But you were the reason why we were at a UNESCO conference in Paris where we got to work with educators from six continents that were all interested in UDL and what it means to educate each kid around the world. And there's 250 million kids that don't have access to a school. And then we're in these amazing schools where the biggest schools you've been in that are offering all these different opportunities. And so we're getting to see it, but what does it really look like from your perspective, from your organization as it relates to UDL? James: Yeah. So interesting, I am a teacher, head teacher, classroom teacher from some 25 years. And for me, it's all about practical teaching and talking to parents, making things work. But at a very practical level. And one thing that drew me to my organization, which is the IFIP, International Forums of Inclusion Practitioners, was that when I met Daniel, who's a fabulous person to work for, it's much more practitioner based. It's all about pedagogies. I felt at home straight away. But also, how do we train teachers? How do we bring them on into inclusive practice? And the IFIP is all about the voice of teachers. Daniel would say inclusionistas, all manner and range of people, teachers, specialists, therapists, but parents as well, who are committed to a more equitable and enriching education. So the majority of what we do is training. We have things like our GITI program, which is a global inclusive teaching initiative. But we do events. And that's something that Daniel, one of his strengths, he speaks all over the world. He's written many books. We were so, so grateful to have the event at UNESCO in Paris. So we were co-hosting. Daniel had been talking about that for two years beforehand. And we didn't believe him. He made it a reality. He dreamt about it, and it happened. And the same more recently in Brazil. We went to the G-20 ministerial meeting. He was talking about that. So he sees things and it falls to me to follow behind him and try and make some of the practicalities work. But yeah, the inclusion piece covers so many flavors. And I think what you mentioned just now, we talk about inclusion. Well, if the 250 million aren't in school, well, that's a level of inclusion that puts lots of other schools into a completely different context. Where does the inclusion start? And even in some of the schools I visited, I've been very lucky to visit schools around the world who would say they're inclusive and they may have a sensory room, or they may have, but they aren't necessarily inclusive. But for me, one of my favorite schools I've visited was in Rome, [foreign language 00:08:28], Our Lady of Good Counsel. It was run by Silesia nuns. And they said in the words of their founder, Don Bosco, "Young people need not only to be loved, but they need to know that they're loved." And it's very reassuring as a practitioner, a teacher, former head teacher, to come here to Texas and you see that. You see that palpably going on. And I feel at home. The elementary school this morning, because I was a primary school teacher, it was just like, I know this. I understand this. I could probably take a lesson. But they had some great ideas. And teachers, I'm a teacher, you love stealing good ideas. Jon Eckert: Well, and I think this is the beautiful thing about the jobs that we get to do. We get to see all the amazing things that are happening in schools. So much of what's in the news and what gets publicized are the things that aren't working. And the tragedy that there are 250 million kids who don't have access to schools, that is tragic. But in schools, there are amazing things happening all over the world. And getting to see them is this encouraging, oh, it gives you hope. And I wish more people could see that. I do think there are challenges though, because when we think about inclusion, we've moved as a country toward inclusive education, the least restrictive environment for students, and bringing students into a place where they can flourish. But we really, as Erik Carter, who runs our Baylor Center for Developmental Disability, you met with him yesterday. He talks about moving from inclusion to belonging. And I think we even need to think about belonging to mattering. So you keep hearing more and more about what does it means to matter and seeing your gifts being used with others. And that's what we saw yesterday. It wasn't individual students. It was teams of students doing this and each member of the team had a different role, whether it was robotics or it was the plane or the cafe. And the educators needed to step in. So the principal was talking about, I need an educator who's willing to step up and do this so that this can happen. And that's the thing that I think people that haven't been in schools for a while don't see what it means to really help kids belong. They have a sense of what inclusion was, maybe when they were in school, where there was a class down the way that was a Sensory room, which is a nice room for just, here's where we're going to put a kid who's out of control that we can't manage in so many places. It's like, no, there's so many schools that are doing so much more than that. So what are some other hopeful things you've seen through IFIP? James: Well, I think, yeah, you see a lot and on social media, and you must have found this, there's so much many aphorisms about inclusion and metaphors about what inclusion is. It's a mosaic. It's a banquet with many tastes. It's symphony orchestra with many sounds. Inclusion is a garden. That's quite a good one actually, the metaphor. And that's something that Sir Ken Robinson from the UK has talked a lot about. And there's lots of analogies with growing and flourishing, which that's a word you've taught me in my visit here. But I do feel sometimes that it is all good to talk about that. I don't disagree. But there's some recently inclusion makes every day feel special. Yeah, it does. Inclusion is the antidote to the division in the world. It is. But will that help the early career teacher struggle with their class? Will that give them the practical steps that they need? So I think all of those things are true, and we must love the students. But I would say that's just comes a standard with being a decent human being. I would expect that from you, from anyone. You treat people with a respect. But for me, I feel more inclined to say, what are the practical professional steps? What's the pedagogy? What are the teaching principles that will help me to, as we were saying yesterday, maybe to hesitate before ask another question in class and listen. And listen. That's inclusion, isn't it? Wait for someone to answer and maybe then not say anything. It's actually stepping back. So for me, I'm very impressed by... I mean, I was brought up on quality first teaching, we would call it in the UK, which is about high quality, inclusive teaching for every child. So you mustn't differentiate in a way that you've got the low table. No one wants to be on the low table. You want to have high challenge on every table. And we used to say, you want your best teacher on the lowest table. It's not like you just put a teaching assistant or some volunteer on the lowest table. It's got to be focus lesson design, involvement, interaction, metacognition. So responsibility for your own teaching, for your own learning. Sorry. And I love the dialogic approach. Someone said yesterday, Socratic circle that I've picked up. But it's like you would encourage a child to talk about what they understand because very quickly then you assess what they actually know. Sometimes you'd be surprised by what they know. But for the same reason, UDL appeals to me, to my sensibility, because it offers very practical steps. And crucially at the design stage, it's not like I'm going to apply this assistive technology to a lesson I created a year ago and will do the best we can, and that child will now be able to do more than they could. But if I design the lesson, and one of our colleagues, Helena Wallberg from Sweden, who was a co-author on the Global Inclusive Teaching Initiative, she talks about lesson design. It's a far sexier way than lesson planning. So teachers are professionals, they're artists. They need to use their profession. Jon Eckert: So when you start thinking about design, I use Paideia seminars because Socratic seminars are great, but Socrates taught one-on-one. We don't usually get the luxury of doing that. So how do you bring in the gifts of each student, not so that you're doing something kind or helpful for that individual, but so that the whole group benefits from the collective wisdom in the classroom? And so the inclusive education is not to benefit one single individual, it's to benefit all of us because of what you draw out. And that's where design, I think, is more helpful than planning. And so when we think about this in this state that we're in right now, we've never been in a better time to educate. We have more tools than we've ever had. We know more about how people learn than we have in the history of the world. James: Yeah. Jon Eckert: And yet sometimes that can make things feel overwhelming. So that beginning teacher that you mentioned. The only thing that beginning teacher knows is no one in the room learns exactly the way she does. That's all you know. And so then how do you use tools... And we've talked a little bit about this artificial intelligence. Amazing tool for adapting reading levels, for adapting basic feedback, for giving an educator a helpful boost on lesson design because it can synthesize from large language models. It can do work that would've taken us hours in five seconds. But it can't replace the human being. And so how do you see tools like artificial intelligence feeding into UDL so that it becomes more human, not less? James: So where I am, there's a shortage of specialist teachers, for example, and therapists. And Daniel's been doing a lot of work in India and parts of Asia where there isn't the expertise. So I think maybe AI can help in those places. But even he would say that will not replace a specialist. You can never replace a specialist who has the intuitive and curiosity to see what an AI system can't. But it may empower parents who have no kind of training as a teacher might have for neurodiverse situations of how do I deal with my child when they're like this? And similar for teachers and who are looking for... They've tried everything. What do I try now? So we've been working on one on an AI system that's based on all of the research that Daniel's done. It's not released yet. We've got a working title of 360 Assessment, which doesn't really mean anything, but it was meant to be assessing the whole child. And he's, through his work in many schools over many years, many thousands of hours, he's put all of this stuff into the data for the AI system coupled with his books. So when you ask a question, it will do a quick spin round and come back with some suggestions. And it's quite fun to use, I think, as a tool to empower parents to signpost them. And for teachers, it's a useful tool. I don't think it's the panacea, but I think you have to use these technologies sensibly. But my daughter, who's a nursery nurse, and she tried to break it by saying, oh... We tried it, the computer. My child is two years old, but can't pronounce S. should I be worried? And it came back with the correct answer, said no, there's nothing to worry about. Up to four years old, some children won't be able to pronounce the sound S properly. And then it gave her the advice that she would give, because a manager of a nursery nurse, the advice you'd give to her staff. Now all of her team have just started that. None of them have any experience. So that, I could see, could be useful for training numbers, the ratio of good advice to people. That's the way I see it working in the short term. Jon Eckert: No, and I think that's great because it enhances the human's ability to meet the need of the human right in front of them. Because I will always believe that teaching is one of the most human things that we do. James: It is. Jon Eckert: And so any way that we can enhance that with any tool, whether it's a pencil or an artificial intelligence tool that allows you to give feedback and synthesize things and help with design. I also believe we just need to give credit where credit's due. I don't love it when we don't give credit for tools that we use. So if you're using UDL, they're a great people cast. We're about to have a call with them later today. They do great work. And so the same thing. If you have a digital tool, share that so that we know here's what we did and here's how we can spread that collective expertise to others. And so what role does IFIP play in bringing networks of people together to do that? Because in your convenings, that's one of the main things you do. So can you talk a little bit about that? James: Yeah. Well, in the title if you like, in our forums, one of the things that Daniel is very keen on is sustainable growth. So we want to introduce people to each other. And it's surprising with head teachers and principals who struggle. I've just come back from Brazil from a UNESCO GEM, which is a global education meeting, where the focus was on the quality of the leadership. And we need to give, empower our leaders. They're often working on their own. One of the roles of the IFIP is to join them together. So we're launching in January at the BET Show, which is the biggest technology show in the world, apparently, in London Excel Center, our Global School Principals Forum. So we have a forum for them. We have a forum for specialists, forum for pastoral leads. And we've also got regional forums of South America, North America, Asia, just to try to bring people together. Because when you share the experience, and I've been really grateful this morning for the opportunity to walk through and see some American schools that you share the ideas, you see the similarities. That's the power and that's so important. Jon Eckert: No, and that's been our experience. Whether we're just in the states or internationally, there's so much good work going on. We just need to have ways of connecting human beings who are doing it, so it doesn't feel like it's another thing to do, but it's a better way to do what we're already doing. And so I feel like that's what UDL does. I feel like that's what IFIP is about. And that the most meaningful part of our time in Paris at UNESCO was not in the panels, it was in the conversations that happened over lunch, in the hallways. The panel may have sparked a conversation, but it's hey, what are you doing here? And what are you doing there? And I walked away with multiple connections of people that we'll continue to talk to because, again, there's so much good work going on. Yeah, go ahead. James: My memory of the... Because it was a very stale affair, wasn't it? And the bureaucratic approach, UNESCO, because you feel like you're a United Nations and lots of people talking were sat down for hours and hours, was when you lifted your hand and actually ask a few questions. That's inclusion, isn't it? Eric was saying that people who were leaving the room walked back in to listen because that was interesting and someone was asking them how they feel and bringing it back into reality. That's so important. But I also think inclusion, there is an interesting power dynamic with inclusion. A guy called Michael Young who's a professor of education at UCL, talks about the right for all children and young people to be taught powerful knowledge. What knowledge are we giving them? How are we empowering them? So I think inclusion is all about discovering your power within, if you like. That's so important so that they begin to see. And some of the teachers are saying this morning, kids know what they see, what they've experienced. And if you introduce new ways of dealing with anger or with pain, they don't have to fight. They don't have to resort to what they've necessarily seen. Then give them new strategies. That's empowering those children. Jon Eckert: Well, and Adam and Caroline who were taking you around, they're behavioral interventionists. And they are always busy because there are kids that are struggling with how to manage the feelings that they have. And if they don't have people giving them those strategies, how do they grow? And again, that's very human teaching, and Adam and Caroline are great models of that. James: They were wonderful. So good, and it was the light touch that impressed me. Because I've worked with, as I say, school improvement offices. And the trick is not to push people down. It's to make them think twice about what they've done or how they could ask a question better. And their observations of the displays on the walls and just the language teachers and teaching assistants use has a profound effect. I do believe that inclusion is about the students look at the way their teachers behave. It's nothing to do with this pedagogy or the post. It's about how did they respond to me? How did they respond to the other person in the class? What's important to them? How do they talk? That's the inclusion that you teach. Empowering them to make the similar choices when they're older. Jon Eckert: That's well said. So our lightning round, I usually ask four or five questions that have relatively short answers. So first one, what's the worst advice you've ever received as an educator? James: Oh, as an educator? Worst advice. Jon Eckert: Oh, it could be as a human being if you want. James: Well, when I was young, my dad had many qualities and taught me many good things. But one of the worst things he said to me was, "Don't use your money, use theirs." So he would borrow money. And that got me off to a terrible start in life. And I learned through my own experience that it was better to use... Well, I was always using my own money. Jon Eckert: Yes. Yes, okay. James: But I could use it better. But bless him because he's no longer with us. But that was one piece. Jon Eckert: No, that's a tough start. James: Yeah. Jon Eckert: Thank you for that. What's the best advice you've received? James: The best advice, I think, was to go back to university. Jon Eckert: Okay. James: I dropped out of school to get engaged, because that's what you do when you're 19. And I was going to get married, but it didn't happen. And then I went to do a summer job, which lasted for 10 years. Jon Eckert: That's a long summer. James: But my blessed teacher, Michael Brampton, who gave me a love for painting, history of art, he kept on pestering me go back to university. I went back as a mature student and loved it. I think people should start degrees when they're near in the thirties because you appreciate it so much more. Jon Eckert: Yes. James: So that advice he gave me led to such a change in my life. Jon Eckert: Yes. Well, and then you went on to get a degree in art history, philosophy, then a master's in computer science. So you went all in. James: Yes. And that took me into education. And the time I went in, there weren't many teachers that were doing anything with computers. Jon Eckert: So as you get to see all this around the world, what's the biggest challenge that you see schools facing that you work with? James: I think it's manpower. Jon Eckert: Okay. James: I think there's a real manpower issue and belief that school can make a difference. I think one of the things that we believe in IFIP is that positive change is possible. And sometimes it's shocking going to schools. And if you do make people see that the positive change is possible, it transforms them. So advocacy, shared vision. And one of your colleagues was saying this morning, just changing the mantra can make a profound difference. Jon Eckert: Yeah. So what makes you the most optimistic as you get to see all the schools all around the world? James: Yeah. Well, I've just come back from Stockholm in Sweden, and I was really, really impressed by the school there. It was one of the best schools in Stockholm. It was a school that had in their entrance hall, you'd expect it to be very austere and you don't want to see any bad stuff in your entrance hall. But they had a table tennis table set up and they had a piece of found art or hanging above. And it was the whole sense of the school's about children started there, about young people. But in Sweden, it's all about sustainability. Everyone is expected to clear up after themselves, be mindful of other people, respectful. Even in the hotel where I stayed, I had to sort my rubbish in my room. It's that approach that starts from not just in school, across the board. Jon Eckert: Yeah. James: So that impressed me. Jon Eckert: Yeah, that's a beautiful example. One of my favorite schools outside of Nashville, Tennessee, they don't have custodians that clean up the building. They have 20 minutes at the end of the day where the students do all of the cleaning, including the bathrooms. Which you start to take care of stuff better when you're the one who has to clean it up. And the peer pressure to take care of it shifts a little bit. So it's a great word. All right, one other thing. Oh, best book that you've read last. James: Can I give you two books? Jon Eckert: Absolutely. James: I mean, I've got into fiction in a big way recently. So I use Audible, the app. Jon Eckert: Oh, yes. James: And I've been working through all kinds of classics that I never read properly. Just reread The Hobbit and Tom Sawyer. But I've gone through... The Name of the Rose stuck with me recently. I so enjoyed reading it. And I've just got into Robert Harris. He's written Conclave, which has just come out as a feature film. And a series of books called Imperium about Cicero and Oratory and how the Roman Empire was lost. But they aren't the books. Jon Eckert: I love that. Go ahead. James: But the two books, one is by an English specialist called Mary Myatt. And one of the really practical books that she wrote was The Curriculum: Gallimaufry to coherence. Gallimaufry is a word, I'm not sure if it's Gaelic, but it means a mess. So going from a mess to coherence. And that book is all about how it's important that children struggle. That learning only happens. We try to protect kids all the time that way. No, they should struggle. You imagine if everything's easy. And then she says this, if everything's easy, it's hard to learn. There's nothing to hold onto. There's no scratch marks. You need some of that. So Mary Myatt, that's a brilliant book. The other book is by Duncan Green called How Change Happens. And that's all about this idea of power. And he talks about power within, that's your self-confidence power with when you've got solidarity with people. Power to change things and then power over people. But it strikes me that as he shows in his book, where you've got instances where you've got the 'I Can' campaign in South Asia, all about women who were being violently treated by men, reclaiming their self-worth. It's like invisible power. Where does it come from? The change. You can't see any difference, but inside they've changed dramatically to stand up collectively against something. And that's what we need to do with students. Build that self-power inside. Jon Eckert: Great recommendations. And we talk a lot about struggling well and where that fuel comes from. And so, love that book by Mary Myatt. I'll have to get the spelling of that from you when we get off. My also favorite thing about that is I asked for one book recommendation and I wrote down at least seven. So, well done James. All right, well hey. We really appreciate you coming over. We look forward to potentially doing a convening where we get to bring great people together who want to work on serving each kid well in this way that benefits all of us. So hopefully that will happen sometime in the coming year. But really grateful for your partnership and a chance to go visit schools and have you on the podcast. James: Thank you so much. I really appreciate it. Thank you.  

The following is a conversation with Erin Kenney, the CEO of Nutrition Rewired. Erin is a registered dietitian with a Master's in nutritional science. She's done an amazing job in building a business that helps people take control of their lives through modulating their diet, improving their gut health and ultimately looking after the gut microbiome. Today's conversation was far-reaching. We talked about fibre, We talked about gums, we talked about artificial sweeteners, carbohydrates, fats, proteins, and supplements. This was pretty much an A to Z of what to do to look after your gut health, what works and what doesn't.  I wanted to take this opportunity to thank all of the listeners and supporters of the podcast for everything you've done to help us build the name, and the brand, and to get the message out there around microbiome being critically important and gut health being important for wider body health. Timestamps: 00:00:00 Introduction 00:01:19 How Erin became interested in gut health 00:04:32 Biggest impacts on Erin's health 00:06:09 Stress and gut health 00:09:22 Does caffeine give us energy? 00:14:46 Bone broth instead of coffee 00:16:06 Coffee and our liver 00:16:48 Taking control of gut health 00:18:42 The role of a good breakfast 00:21:55 Lean muscle mass and women 00:23:07 Importance of protein 00:26:32 Role of supplements 00:29:35 Creating an optimal regime 00:32:33 Ketogenic diets 00:38:34 SIBO 00:46:24 Microbiome testing 00:49:00 Vitamin D 00:51:51 Green powder supplements 00:55:19 Heavy metals 01:01:38 Artificial sweeteners 01:05:58 Gum instead of gluten 01:10:18 Palm oil 01:12:20 Nutrition Rewired   Full Transcript: [00:00:00] JAMES: The following is a conversation with Erin Kenny, the CEO of Nutrition Rewired. Erin is a registered dietitian with a master's in nutritional science. She's done an amazing job in building a business up that helps people take control of their lives through modulating their diet, improving their gut health and ultimately looking after the gut microbiome. [00:00:24] JAMES: Today's conversation was far reaching. We talked about fiber, We talked about gums, we talked about artificial sweeteners, carbohydrates, fats, proteins, supplements. This was pretty much a A to Z of what to do to look after your gut health, what works and what doesn't. I really appreciated how simply Erin put lots of complicated topics for the listener. [00:00:49] JAMES: She podcast so that might explain why she was such a good guest. This is an amazing episode for anyone who's wanting to enter into this field, but we also digged into some [00:01:00] technical aspects, and I learned a lot over the course of the conversation. This is Inside Matters. My name is Dr. James McIlroy. I hope you enjoy it. [00:01:16] JAMES: So how did you get interested then in gut health? [00:01:19] ERIN: It was a very selfish Journey for me, I, from a very young age, struggled with digestive issues. They had to take me off of being breastfed when I was a baby and got on to formula fed. And, you know, I was struggling with a ton of digestive issues. And basically they just slapped me with a diagnosis of lactose intolerance. [00:01:42] ERIN: And basically what most of my childhood, struggling with horrible pain, horrible bowel movement. I will honestly say that a majority of my childhood was spent in the bathroom because Of how bad things were with my gut and [00:02:00] I really didn't have much help, you know, it was kind of just, you know, let's watch out for dairy and let's watch out for, you know, triggers and things like that, but it was kind of just, you know, take elodium and, and hope for the best. [00:02:13] ERIN: So, fast forward, you know, as I started to get older, I was a full time athlete, I was, you know, in high school, and really wanted to start taking care of myself. I struggled with mental health issues, I lost my father to his battle with mental health struggles, and it started to connect with me that on the days when my stomach was at its worst, my mental health was also at its worst. [00:02:42] ERIN: And so I was starting to make these connections and, you know, learn and, Spent a lot of time on Google, which, you know, we all know is not a reputable source of information. But nonetheless, I was, I was interested in, in seeking alternative ways to help [00:03:00] support my body. And when I went to college, I didn't really know what I wanted to major in. [00:03:05] ERIN: And I thought, you know, nutrition sounds like something that I could use some support with, considering everything that I'm going through and. You know, the things that I've read online and from there on out, it was just about healing myself. I learned, you know, after being on a decade of medications from birth control to fix the hormone imbalance, from PPI's to address the chronic acid reflux, you know, it was just being thrown medication after medication because doctors were just treating symptoms. [00:03:40] ERIN: So I, I've dedicated all my time to researching about, you know, the gut microbiome and nutrition. And then I was in school for nutrition. And I started following people in the field who were talking about these things, talking about the gut microbiome, talking about how nutrition impacts mental health. I [00:04:00] just lit up, you know, it was, it was like, for the first time in my life, someone was speaking to me and, you know, I felt validated too, for so many years, it's like, oh, it's just all in your head, you just gotta, you know, stop eating dairy, and I have now, Basically built a business on helping individuals get to the root cause of their digestive issues and imbalances because of everything that I went through. [00:04:25] ERIN: So I'm incredibly passionate about what I do and I'm just really excited to chat with you today. [00:04:32] JAMES: So what were some of the key things then as you went along your own journey that made the biggest impact to your own health? [00:04:39] ERIN: I will highlight a very important one that I think a lot of people don't consider and that's stress. [00:04:45] ERIN: It's Uh, you know, there was a lot of stress in my life and I was kind of putting that on the back burner as something that, yeah, you know, I'm stressed, I'm, you know, working out intensely and doing all this stuff, but that [00:05:00] can't, you know, that's not going to make a huge difference. So I really had to prioritize stress as one of them. [00:05:06] ERIN: Diet, as we all know, you know, is incredibly important. My diet was Not supportive of what I needed for my body. I played around with a plant based diet, and I have no shame for anybody who is, who loves their plant based diet, but for me it was not the right fit. I needed a plant forward diet, but I also needed protein. [00:05:30] ERIN: I needed to really hone in on, like, focusing on diversity of what I was eating. I was eating a lot of the same things over and over again. I think a lot of us can get into a rut pretty easily with that. And then I learned, you know, how much diversity our gut needs in terms of the microbiome. So stress, diet was huge. [00:05:50] ERIN: And then I had to address imbalances. I had small intestinal bacterial overgrowth because I was On proton pump inhibitors long term, I had yeast [00:06:00] overgrowth. Uh, so a lot of these things I learned from stool testing and I was able to Going [00:06:09] JAMES: back to the stress then. So how do people identify if their stress levels are too high? [00:06:15] JAMES: And you mentioned exercise, maybe exercise is a double edged sword. If you do too much, it might be actually a big stress on your body. So what are your tools and tips then for stress management? I guess a little bit is good for you, right? But too much is detrimental. [00:06:31] ERIN: Sure. Yeah, we call that eustress, right? [00:06:33] ERIN: It's that, that, that period where you're kind of in that Goldilocks sweet spot where stress is, is beneficial. It helps us grow. It's good for inflammation. But in terms of my own journey, I, I would love to say that I had this like, you know, lovely revelation of your stress and you need to pull back. It was. [00:06:53] ERIN: One of those moments, I say this to clients all the time, it's if you listen to your body when it whispers, you don't have to hear [00:07:00] it when it screams. And I was at the screaming point where I was running seven to ten miles a day and You know, I got to a point where I couldn't barely even walk because I was just like so obsessed with how exercise made me feel, how good it was for my mental health. [00:07:16] ERIN: So I was basically forced in to loving yoga. It wasn't love at first. It was a, it was, it was not love at first. It was a rocky relationship to begin with, but I thought this is the only thing I can do. Yoga is the only thing that I physically can do that's going to support my mental health and I just fell in love with it. [00:07:37] ERIN: And to this day has always been an incredible stress management technique for me because not only do I get to move my body, but I'm doing it in a way that's not inflammatory. I'm doing it in a way where I'm, I'm like feeling everything of what's going on in my muscles and how tight I am and breath, right? [00:07:57] ERIN: I'm breathing. So a lot of times [00:08:00] people will say, I'm just not good at meditation. And I'll say, well, have you tried yoga? Have you tried walking or yoga? Like those are also forms of meditation because you have to focus on your breath. If you're in a down dog position and you're sweating and you're tired, the only way you're going to get through that pose is that you're going to breathe. [00:08:20] ERIN: So meditation has been, meditation and yoga have been incredible assets to my healing journey, but also just the way that I Manage my stress now and also just the awareness of what is my threshold for stress and what are some of the signs that come up for me when I know I've hit my breaking point and become more irritable towards the people that I love. [00:08:45] ERIN: My sleep starts to suffer. My digestion starts to go off a little bit. So these are kind of my. Red flags of, Hey, Aaron, let's check in with yourself. You might be doing a little too much. So are those [00:08:59] JAMES: [00:09:00] the sort of whispers then before the screams, the irritability, the sleep? Yeah. [00:09:05] ERIN: And for females to even males, people think, yeah, changes in hormones, like you'd notice changes in your menstrual cycle or your libido, like those types of things can, can also take a hit when you're dealing with chronic stress. [00:09:22] JAMES: Cause I guess a lot of people think, Oh, well. You know, I'm a little bit tired today. I'll just drink more coffee or I'm a little bit sore today. I'm just gonna train more But what you're saying is maybe you need to just slow down to perform [00:09:34] ERIN: better. Exactly. And I also love to talk to clients about how caffeine actually works. [00:09:41] ERIN: Caffeine doesn't give us energy. It actually blocks these adenosine receptors in our brain. And these adenosine receptors are like those little whispers of us hearing the signal that we're tired. And once that caffeine wears off, those [00:10:00] adenosine receptors don't go away. They're still there to then tell our brain, hey, we're really tired. [00:10:07] ERIN: So I always Tell people that, that you're not giving yourself more energy by loading up on caffeine, you're decreasing your perception of how tired you are, which is allowing you to push through something, whether it's a workout or a long, you know, night at work. And over time, especially your body is going to shut down. [00:10:33] JAMES: As an avid coffee drinker, I'm sort of running through my head, am I drinking? I'm not listening to the whispers, but have you got recommendations then for your clients around coffee and caffeine, like some rules or suggestions in terms of when to drink, how much to drink? Cause that could be really interesting for the listeners on Inside Matters. [00:10:52] ERIN: My number one tip is that, and I say this to clients, you have to eat a full breakfast before you have your [00:11:00] cup of coffee. And when we do this experiment, sometimes my clients will say, after I had, [00:11:10] ERIN: they'll say, I didn't, I didn't even want my cup of coffee after I had my breakfast. And it's because we're not using artificial fuel, right? We're eating. Some nice eggs with, you know, some sweet potatoes and avocado and, you know, we're energized and now we don't have this craving for a stimulant. And I'm not shaming caffeine completely, especially coffee. [00:11:36] ERIN: There's numerous health benefits in addition to the microbiome, but it's, it's evaluating that relationship with it. And so. So I always say, no coffee until you've had a, a, a full breakfast. Coffee does not count as breakfast. I tell them no caffeine after noon. Uh, the researcher, Michael, is it, oh, Matthew Walker. [00:11:58] ERIN: He talks about [00:12:00] metabolism of caffeine and, you know, the half life and how long that caffeine can stay in your system. And You could be laying in bed at night if you had your cup of coffee at 3 p. m., and you're still metabolizing it in the middle of the night, impacting your quality of sleep, and then the cycle just starts again, right? [00:12:18] ERIN: You wake up, you're exhausted, you're groggy, and that's because That's You know, that the later in the day that can impact your sleep. [00:12:27] JAMES: So someone maybe like me who wakes up in the morning and finds a way over to the coffee. I know myself. It just, it's like part of the routine and I kind of love it to be honest, but so someone's addicted to that morning routine and they come to you and they become a client. [00:12:45] JAMES: How do you get them to break that cycle and get into the routine of. I don't know, maybe cold shower and then they come in, they've had their breakfast, then they have their coffee. Is it a slow process or do you just say, right, that's it, cold turkey. [00:12:58] ERIN: I'm never, [00:13:00] I'm never militant with my clients ever because I'm also human and the I also understand that, you know, when we make changes, that they don't need to happen overnight and it certainly doesn't usually feel good to our nervous system or mental health wise when someone says, just cut it out. [00:13:17] ERIN: And now, don't get me wrong, I've got clients that are all or nothing and they just, when I tell them generally what I've just told you, they'll say, forget it, I'm cutting it out. I want to do this, I want to do it perfectly, that's type of person. Right. So when we, when we start, you know, I, I get to know what their relationship is like. [00:13:36] ERIN: I had a client one time and she had this, you know, whole setup in her house. The whole side of the wall was dedicated to coffee. So for the client like that, we're going to say, okay, you know, let's. Maybe switch to a decaf or switch to, you know, less of a serving and put more, you know, almond milk in it to just cut down on the, on the portion. [00:13:56] ERIN: And then we, we work our way towards, uh, maybe after [00:14:00] breakfast, but there's lots of alternative things that you can do to still have that routine. So I'll, I'll just give my example. I drink a bone broth, hot chocolate in the morning and that bone broth, hot chocolate. It doesn't, you know, contain loads of caffeine. [00:14:16] ERIN: It's still got the gut health benefits. It's still bitter because of the cacao. And so I drink that it's got 20 grams of protein and it's warm and it's, it still gives me that so people can find, you know, there's all these like, you know, medicinal mushroom type of blends and things like that. So if you can find something that you like. [00:14:36] ERIN: That isn't that, you know, bursts of caffeine and acidity to your stomach on an empty stomach, then that might help the transition be a little bit easier. Thank [00:14:46] JAMES: you so much for that example. Mark, who's one of the hosts here at the podcast studio has bone broth and cayenne pepper. Okay. There you go. In the morning. [00:14:56] JAMES: Yep. And bizarrely, I was speaking to him on Tuesday because we're [00:15:00] planning for the week and we're talking about you. Um, and I said, cause he was drinking in the same type of Yeti coffee mug as me. And I was like, Oh, nice mug. Like you're one of the good guys. Um, is that a coffee? He explained that no, it was just his bone broth and it's part of his routine to get, you know, great nutrition and in the morning and it's still warm. [00:15:18] JAMES: And as you say, it sort of feels like a coffee, but it's not really a coffee. So. Um, I'm going to go for it. I'm going to start my day with some bone broth. [00:15:27] ERIN: I expect a report back. I'd love to hear from you. [00:15:31] JAMES: I'll give you a report. I can't promise to stop the coffee. That's not the goal. I might go from two shots to one shot. [00:15:39] JAMES: I think two shots to one shot. That's success. You know, you mentioned the health benefits of coffee. It's really interesting. I've had several people come on. So one of them was Professor Debbie Shawcross, who's like a leading authority on, on liver health, basically saying drink more coffee because for some reason it's protective [00:16:00] against, um, cirrhosis and, uh, non alcoholic fatty changes. [00:16:05] JAMES: So there's, there's something in there, isn't there? [00:16:06] ERIN: This, I think there's so many, there's so many asks. Aspects of it. I think, you know, you and I are big into gut health, right? So we're probably gonna always look at it from a gut health lens. And, you know, my scientific brain goes to, well, you know, coffee helps people have a bowel movement, right? [00:16:22] ERIN: It stimulates the liver and digestion. And if we're having regular bowel movements and, and stimulating that process, that's great for the liver, right? We don't want, that's good. You know, sluggish digestion. So just one of the many, I mean, there's, there's antioxidants in there, there's. The polyphenols that feed beneficial bacteria and you know, the liver and the gut are most certainly connected. [00:16:48] JAMES: So could you maybe walk the listeners through some of the other things you try and help your clients with? So you mentioned stress, diet, maybe we can unpack diet a little bit more because that must be huge. We hear. In terms [00:17:00] of. You know, taking control of your health and your microbiome and your gut. [00:17:04] ERIN: Sure. Yeah. As a dietician, you know, people expect that we just focus on food and we, we often do. There's not usually one client that comes in that there's not something diet related that we're talking about and everyone's starting at different ends of the spectrum, right? Some people have no knowledge that. [00:17:23] ERIN: You know, they're not even getting nearly enough protein. They're not eating any vegetables, you know, that, that kind of standard American diet where a lot of processed foods, you know, a lot of refined grains that aren't providing any fiber or nutrition. So there's so many different ends of the spectrum of things that we work on. [00:17:41] ERIN: And then you have, you know, clients who have overgrowth or SIBO, like SIBO, for example, small intestinal bacterial overgrowth, and they're eating super clean. You know, air quote clean, where they're not touching your processed food. They're loading up on fiber because they've been told, [00:18:00] fiber, fiber, fiber, if you want better gut health, eat more fiber. [00:18:04] ERIN: And that's making them feel worse. So there's that end of the spectrum where we have to. obviously address the underlying root cause, but we need to simplify their diet, make it easy for them to break things down a little bit, give their gut some rest. And then there's the other spectrum where, you know, I have a woman come to me and she's eating one egg for breakfast. [00:18:25] ERIN: And I'm saying, where's your protein? She said, well, I haven't had an egg for breakfast. I said, well, one egg is six grams of protein. We need 25 or 30 grams of protein to start our day. Right? So there's, there's all these missing links. [00:18:42] JAMES: We've talked about breakfast quite a lot then because as you know, within the sort of wellness health sphere, there's this debate around intermittent fasting and it sounds like you're very much in favor of, you should have a really great nutritious breakfast with macronutrients to set you up [00:19:00] for the day. [00:19:01] JAMES: Is that the case? So you're big, big on breakfast for you and your clients. [00:19:06] ERIN: So for me, yes, I, I've always tried to adopt that my philosophy on my own nutrition and what I think makes me feel best is not going to determine what I think is best for a client. And I think that's really important. I think a lot of, you know, health professionals, it's, you know, they find something that works for them or works for some of their clients and then everyone should do it. [00:19:28] ERIN: Now. Do I often, would I recommend intermittent fasting to people? No, it wouldn't be my first recommendation for the majority of people that I work with. I have worked with clients and most of those clients end up being males who do really well with intermittent fasting. Maybe it's males or oftentimes it's women who are post menopause and they have specific goals, maybe related to body composition and hormone balance. [00:19:55] ERIN: And they found that these practices of intermittent fasting in whatever [00:20:00] fashion make them feel really good. A lot of these are CEOs of companies that like, they love the focus aspect of it during the day. And, you know, so I'm just going to come in and I'm going to work with them and say, Well, if this works for you and you're not, Uh, binge eating at night and feeling like you're deprived during the day and you're getting good nutrition and you're fast, you're feeding window, then I'll work with you. [00:20:23] ERIN: We'll work with where you're at. But the majority of my clients, you know, especially those that are female and they're still cycling, this can really disrupt their hormones. It can disrupt their ability to work out during the day. And so we have to really personalize that if it's going to be part of the protocol and, and the research that I've seen, my biggest concern is the body composition. [00:20:46] ERIN: I've seen the loss of muscle mass be a potential and I think that's a huge issue for a lot of people, right? We all need nice lean muscle mass and if fasting, you know, if we continue to see research that [00:21:00] fasting negatively impacts our lean muscle tissue, I don't love [00:21:04] JAMES: that. Yeah. I mean, intuitively it makes sense, right? [00:21:08] JAMES: You stop consuming calories, you've got no protein intake, therefore there's no amino acids moving around. So it kind of makes sense that your body is going to look for energy. Yeah. And I guess muscle is, is, is a target is probably less desirable than, than fat and certainly your glycogen stores kind of make sense that it forms part of that source of energy that we need. [00:21:32] JAMES: Our bodies are incredible. I'm just on the muscle mass thing. Oh yeah, absolutely. And on the muscle mass thing then, you know, I guess maybe some women listeners might think. It doesn't really apply to me. You know, that's for men that lift and train and work out, but that's not the case, is it? It's, it's just as important, maybe even more important. [00:21:54] JAMES: I, [00:21:55] ERIN: I'm a, I'm not a buff woman. Okay. I, I [00:22:00] get, you know, up to 130 grams of protein per day. And I'm not, you know, what, what people, a lot of women would think I would turn into by eating as much protein as I do. But I will tell you. Some things about me is that I'm very strong, very strong in the gym. I have a good lean body mass My hormones are balanced. [00:22:20] ERIN: I don't have cravings for sugar throughout the day. Those are the things that protein does for us. And so I think we need to understand that from a, you know, biochemical aspect, protein is essential. It is protective. It increases our metabolism. It's the only macronutrient that has a higher thermic effect of food like that. [00:22:41] ERIN: That's incredible. So we, you know, just old school recommendations that always seem to sneak their way into further generation. [00:22:50] JAMES: So, um, how does someone know, I mean, if they're not got the benefit of working with an expert dietitian like you, how do they know if they're on the right track for protein? And in [00:23:00] addition to like the actual macronutrient gram per day recommendations, how important is the source of protein for people? [00:23:07] ERIN: Hmm, that's a great question. So we have two different types of protein. We have a complete protein, which is basically a protein that combines all of the essential amino acids, which amino acids are the little building blocks of what protein is. And essential, meaning our body needs them to survive and to produce the daily functions and live optimally. [00:23:30] ERIN: So that's, that's an essential amino acid. That's a, that's a complete protein. Those Food sources are things like meat, fish, eggs. These are animal proteins. And then you have the incomplete side where we have incomplete, and these are going to be plant based foods. There are a few plant based foods that are complete proteins, but the majority, things like beans and lentils, these are not complete proteins. [00:23:55] ERIN: So they're just missing a few of those amino acids that we need for [00:24:00] essential daily living. Now, this doesn't mean that non complete proteins are not beneficial, but the requirement of how much you would need per day slightly goes up because the digestibility, how able we are to digest these proteins, is not as efficient, you know, if you were to eat eggs or a piece of fish, for example. [00:24:24] ERIN: So my approach is try to get some really good quality complete proteins in your diet and also get some incomplete protein sources in your diet, like lentils and beans and nuts and seeds, if that's something that works with, you know, your individualized physiology. But this idea that everything has to be a complete protein, I think is also, you know, too far left because, you know, bone broth isn't a complete protein, but it's still an excellent source of protein. [00:24:53] ERIN: And I'm still going to have, you know, salmon for dinner, and I'm going to hit my Total, you know, amino acid needs for [00:25:00] the day, if you will, [00:25:01] JAMES: and the total amino acid needs for the day. How does one calculate what they may or may not need? [00:25:07] ERIN: That's a great question. So the amino acids themselves, you could use something like I think chronometer might do this on a very, you know, specific level. [00:25:17] ERIN: I don't know if it goes that into detail, but we look at the total grams of protein as a dietitian, you know, so we're looking for Usually around 1.2, up to two kilograms, sorry, grams per kilogram per day of protein for each person. So the minimum, like the USDA requirements for protein, we're talking 0.8 grams per kilogram per day for a person. [00:25:43] ERIN: Uh, however you need to convert that, but it's what 0. 8 is not a recommendation I use for any of my clients. We're always going above that, especially when my clients are more active or they're looking to optimize their body composition. We're looking closer to like, uh, up to one [00:26:00] to two grams per kilogram. [00:26:03] ERIN: So that's your, that's your goal is to really figure out like what is that number for you based on your body weight and then how can you spread that throughout the day. You know, you don't have to completely spread it evenly, but I usually just tell people to make it easier. Get 25 to 30 grams at each meal and then adjust, you know, add to that to meet your needs and then add snacks where appropriate. [00:26:27] ERIN: But that's a good baseline if they're kind of starting from ground zero. [00:26:32] JAMES: That's an amazing summary of protein. Thank you so much. How do supplements fit into that? And I'm asking you in the context of this minimally processed versus like ultra processed food debate we have all the time. So some people say, Oh yeah, whey protein supplement contains the essential amino acids. [00:26:50] JAMES: Go for it. But other people say, Whoa, it's so processed you shouldn't have it. So what are your thoughts then, um, on supplements and How do [00:27:00] they fit in? [00:27:01] ERIN: I think supplements can be great. I think they have a time and a place and you know, a lot of the time is convenience is, is a big reason, you know, for somebody that has a protein goal of 180 grams per day. [00:27:15] ERIN: You know, meeting that might be really challenging if they're not throwing in some whey protein into a smoothie or a shake. Whey protein is excellent. Yes, it's processed, but so is your oatmeal and your brown rice and your ground meat. Like everything is processed. And if you choose grass fed, you know, protein powder, a whey protein powder with minimal ingredients that maybe just has whey, maybe some, you know, sweetener and something to Add some salt or whatnot. [00:27:43] ERIN: But if you have like a three ingredient protein powder, it's high quality grass fed, and you add that to your smoothie, you're doing wonderful things for your body. So I think it, it really comes into when you see these, you know, those, you know, body building companies always start these protein [00:28:00] powders and it's , you know, strawberry cheesecake or cookie dough. [00:28:03] ERIN: Yeah. And. I used to eat these. I'm not, I'm not saying I've never tried them. They do taste good. They do. They taste just like they say they do, or at least when you're, you know, eating healthy, they do. And, you know, that's when we get into the long list of ingredients. We see, you know, binders and gums and artificial sweeteners. [00:28:24] ERIN: And we see, you know, things that can really not make us feel good, especially from a gut health perspective. So a good quality You know, one that's been maybe tested for heavy metals, things like lead that can be common in plant based protein powders, arsenic. If we get a good quality protein powder, minimal ingredients, uh, high quality testing, ask for the certificate of analysis from the company. [00:28:51] ERIN: Then, you know, you're, you're, you're gonna help yourself out if you're struggling to get your protein intake. Thank you for [00:28:57] JAMES: that. I've, I've got so many things written down to ask, you know, I'm [00:29:00] actually not even sure where to start. Fibers, gum, sweeteners, heavy, heavy metals, other macronutrients. Before I jump into sort of more supplements and sweeteners and the heavy metals, I'd kind of like to. [00:29:16] JAMES: Round off the diet piece with you more generally. So maybe talk a little bit about fiber, um, fruit and veg, talk about carbs and fats. Yes. You know, when you're working with all your clients and for yourself as well, how do you build like an optimal diet? Big question. [00:29:35] ERIN: Yes. No, it's, it's a great one. How do you create like an optimal regime? [00:29:38] ERIN: Absolutely. So we start with again, base, like we kind of find this base for people to start. And that's where the three meals per day comes in. You know, if someone's not used to eating breakfast, we're going to try to get them to start eating breakfast, lunch, and dinner, or we can call it meal one, meal two, meal three, whatever your schedule is like. [00:29:56] ERIN: And at that meal, we're aiming to get again, that 25 to 30 grams of [00:30:00] protein. We want to hit. half a plate of vegetables that are colorful, usually like darker leafy greens tend to be an area that a lot of people struggle. So we try to look for those dark pigments. And then the other portion of that, usually I say like a fist of carbohydrates minimum at your meal. [00:30:18] ERIN: And we try to choose carbohydrates every meal and we try to choose carbohydrates that are more complex. So things like. higher fiber carbs. So if you're looking at a label, you're going to see fiber there. But if you're just in the produce section and you're looking at carbohydrate sources, potatoes have fiber, both sweet and white potatoes. [00:30:37] ERIN: Uh, things like quinoa, plantains, bananas. These are all sources of carbohydrates that are very nutrient dense. If a client's more active, those carbohydrates Intakes might go up. We might be consuming more carbohydrates per day. Um, and then fat is, is incorporated into those meals. We, we try to focus on healthy fats, particularly omega [00:31:00] 3 fats. [00:31:00] ERIN: So things like wild caught salmon, we're looking at things like mackerel, sardines, herring. These are omega 3 rich fats that we have to get two to three servings per week. So we've got three meals per day, protein, vegetable, carbohydrate, healthy fats included. And then, then we kind of go from there. We say, okay, are you working out? [00:31:22] ERIN: Okay, well, we need a pre workout, post workout routine. And how can we adjust there? Um, you know, you're training for a marathon. Okay, your carbohydrate needs go up significantly. We're going to have to adjust that. But once we have that base, you know, and, and You don't have to focus so much on the grams of fiber, although we are aiming for about 25 to 35 grams per day, if you're choosing complex carbs, if you're choosing half your plate of vegetables, then you're likely going to hit your fiber needs for the most part. [00:31:53] JAMES: It's going to happen, right? It's going to happen just by default, you know, because it's quite difficult to [00:32:00] find the fiber on the foods and to figure out. [00:32:04] ERIN: Yeah. And if you're focusing on it, we're [00:32:08] JAMES: sorry, there's a bit of a, a bit of a, a like you. Please continue, please. [00:32:13] ERIN: No, no. I was just going to say, so if you're focusing on getting the majority of your foods from less processed foods, then you're again, likely to hit those fiber goals because you're going to be choosing those types of fruits and vegetables and things like that that just naturally come with, you know, the, the benefit of the fiber. [00:32:33] JAMES: Absolutely. I'm going to just push you a little bit, um, on. Ketogenic diets and people even go more extreme and they have these um, carnivore diets. They're great. And you've been quite clear in your recommendation around you should have some carbohydrate with each meal. So, could we just unpack that a little bit and what some of the, you know, why is that part of your recommendation versus, you know, just eat meat and [00:33:00] veg, for example? [00:33:01] ERIN: Mm hmm. So, the, the main focus there is blood sugar balance and this is something that people think this is a discussion just reserved for people who have, say, diabetes. You know, oh, well, you know, they gotta watch their blood sugar and, you know, gotta make sure they don't eat too many carbohydrates. But the reality is, is we all should care about blood sugar. [00:33:22] ERIN: Blood sugar impacts our cardiovascular system. It impacts our mental health, it impacts our hormones, it impacts our muscle growth and maintenance. So having stable blood sugar throughout the day is absolutely key to optimal performance, energy, all those things that we're talking about. And so being able to get a steady adequate amount consistent throughout the day is going to allow that blood sugar to just kind of have this nice little up and down throughout the day. [00:33:52] ERIN: And we're going to stay within this nice range that the body likes to stay in for optimal health. When you go get your blood work done and you get your [00:34:00] hemoglobin A1C tested, that's your report card of how well you've been managing That blood sugar over the past three months, how well you've been staying within that range. [00:34:10] ERIN: And when you don't eat carbs for breakfast, and you don't eat carbs for lunch, and then you have a carb dinner, you're more likely to see a larger spike in those blood glucose levels. Again, this isn't the case for everybody. If somebody has been on a low carb diet, and they've maintained that, and their blood sugar is great, and they're feeling awesome, I'm so happy for them, and I would support them in that way. [00:34:34] ERIN: But for the majority of us, We have these habits where our carbs are not distributed properly. We're not eating the right amount. We're either eating too much in one sitting, not enough at one sitting, and we're wondering why we're craving sugar all the time, and why we're tired all the time. And if we just got high quality carbohydrates at every meal in adequate amounts, not overdoing it, not underdoing it, [00:35:00] we might find a really healthy balance. [00:35:02] ERIN: And not to mention, the trouble with those low carb diets is the number one symptom is constipation. Because These carbohydrates feed our beneficial bacteria. I probably see 10 to 15 stool tests per week, and any time I see someone come in with a carnivore, keto, low carb diet, they have very low beneficial bacteria. [00:35:30] ERIN: And it is pretty much causation, right? We can pretty much assume that the correlation there is because they're not So, my theory, you know, the, the keto diet, it's originally designed for, for medical purposes, and it's incredible for, you know, patients who are diagnosed with a, a type of epilepsy, and it has, been proven to And, uh, yeah, I mean, I don't [00:36:00] think that the majority of the United States needs to be on a carnivore or ketogenic diet, especially long term. [00:36:08] ERIN: We don't really know the long term effects of eating, you know, a ketogenic carnivore diet. it's, You know, I suspect that a lot of people that have found that they feel so good on those diets could be because they have an underlying gut imbalance, and now they're not feeding it with any fiber, any carbs, and that's kind of maintained their symptoms, so they feel really good. [00:36:36] ERIN: And that's, that's just a theory, it's just my thought, you know, that a lot of people find those diets because they're looking for relief and to feel good, and Ultimately, we all want to feel good, right? But if we're not addressing a root cause, then that, that's a, that's a problem, especially if it, it forces you to be on that restrictive of the diet. [00:36:57] ERIN: I [00:36:57] JAMES: mean, the way I like to describe the carnivore diets [00:37:00] to some people is you're essentially starving your microbiome. Yeah. It's not getting anything that it needs, really. I mean, there's, there's some microbes that can metabolize amino acids, um, and, and maybe some more complex chains and proteins, but it's, as you mentioned, it's really the fibers. [00:37:23] JAMES: It's the complex carbohydrates that they really, truly need. [00:37:27] ERIN: Yeah, there's, there's a few specific bacteria that the few specific bacteria, the Fecalobacterium Presnitzii. Uh, the aphromancia, these are two keystone, I'm sure you're familiar with them, they're two keystone bacteria in our gut. And one of the things that they thrive on is polyphenol rich foods. [00:37:47] ERIN: Polyphenol rich foods are going to be things like our berries, our, you know, pomegranates and grapes and those, those dark pigmented. fruits and, uh, leafy green vegetables, which wouldn't essentially be [00:38:00] allowed on some of those diets. And those are keys on species for protecting our gut lining for protecting us against things like inflammatory bowel disease. [00:38:10] ERIN: So I just, I don't know how you could convince me that a diet void of all these amazing foods and mentally for myself, I could never, you know, that's just. No, it's not for me. [00:38:26] JAMES: I've got a note to ask you about your diet and your routine in this totality, but just like to explore this, this fiber concept a little bit more. [00:38:34] JAMES: So one of the things that you said at the start, which I think was absolutely fascinating and you just touched on that again with people getting relief. I think maybe you're talking about the SIBO and how things are just going a bit crazy and counterintuitively, whilst perhaps in someone who doesn't have SIBO and who's functioning correctly otherwise, fibre is brilliant. [00:38:57] JAMES: For them, who've got too many bugs in the [00:39:00] upper GI tract, maybe fibre's not so good. So maybe you can walk the listener through that and Also, how you help these people get them to a state where maybe they can tolerate [00:39:08] ERIN: fiber again. Yes. And, and this would go for, you know, certain condition as patients who have inflammatory bowel diseases. [00:39:16] ERIN: Well, you know, if they're dealing with a lot of chronic inflammation, again, fiber is hard to break down. And that's part of what makes it good for healthy individuals, is that it's hard to break down. We don't digest a good majority of it, therefore it feeds our beneficial bacteria. But for those who are struggling, those who really find that, you know, they start to eat. [00:39:37] ERIN: a salad and it completely destroys them or, you know, the thought of any sort of vegetable on their plate is a nightmare. Then we're basically going to go forward and do some sort of testing. So the gold standard for the the SIBO is going to be a breath test. We're going to be testing for three types of gases, methane, hydrogen, and hydrogen sulfide. [00:39:58] ERIN: And then we're [00:40:00] also probably going to do a GI map to look at overgrowths in the colon, the lower part of the digestive tract as well. And If that person has a lot of overgrowth, then typically the course of action is going to be some sort of antimicrobial. And that could be either you could go to your conventional medicine doctor and you could choose to go that route, or you could choose to take the more natural route and use things like berberine, allicin, grapefruit seed extract, neem. [00:40:32] ERIN: These are all natural antimicrobials that have been shown to be very effective at, killing off harmful bacteria, both in the small intestine and the large intestine. And it's not just as simple as killing them off, right? We want to figure out what else is going on. You know, are they super stressed all the time? [00:40:50] ERIN: Do they have low stomach acid? Are they on a proton pump inhibitor, which is again, further reducing their stomach acid. We also want to look at the whole picture so [00:41:00] that this doesn't happen again. Cause the number one thing with SIBO is that people have reoccurrence because they just go in. They say, let's kill this off, but they don't address the fact that they have motility issues, thyroid issues, you know, stress that is just like, unbearable, and then they wonder why it comes back. [00:41:21] ERIN: So that's the, that's the big thing with addressing the gut is that we don't, we don't hone in on one specific thing. It's not as simple as like, oh, vitamin D is low, we, we increase it or. You know, it's, it's okay. So how did we get here? This is your gut is like a forest, right? You go into a forest and you just pull one thing out. [00:41:39] ERIN: You still have the whole forest there. [00:41:42] JAMES: So how do you then in your practice help your patients with SIBO? Do you recommend the berberine, the grapefruit extract, that kind of thing? And have you had good success with people? [00:41:52] ERIN: Yes. Yes. So I, those are the herbs that I like to use. Those are a few of the evidence based herbs that have been very [00:42:00] effective with my patients. [00:42:01] ERIN: And I've seen a lot of my clients get better with just a few rounds of these. Some, they do one round and we've addressed everything else and they're totally better. Some of my clients have had to go through two or three rounds of it to really fully get rid of it. But we'll retest it. We'll continually see those levels go down and down and down. [00:42:21] ERIN: And it's just, it's amazing to, to see people feel better. You start to see. Their iron labs start to go up because they start absorbing their nutrients, their vitamin D levels start to go up, you know, it's, it's a fascinating, you know, uh, progression of how people can be impacted by, by SIBO and for so long, you know, the, the, the statistics show that about 70 people who are, who are diagnosed with IBS actually have SIBO and they'll go their whole lives not knowing that because they're just going to say, well, I've got IBS. [00:42:56] ERIN: It's gotta, you know, be careful, follow a little FODMAP diet, and they don't ever [00:43:00] think to look further. And most doctors, some of them don't even, you know, we were talking about belief systems. Some of them don't believe that SIBO is a thing when it's clinically documented. So [00:43:12] JAMES: still to this day, to this day, for sure, it's still not widely accepted amongst the medical community. [00:43:20] JAMES: And some of the things you're talking about in terms of. Using these, you know, natural means rather than the classical antimicrobials. Also, we're just not there yet, I don't think. What's your [00:43:32] ERIN: experience? Yeah. And there's a lot of great doctors out there, especially gastroenterologists. And uh, I can't give you a long list of them, of great doctors that I know, but I can give you, um, you know, some experiences from clients who their doctors are, are really open to, they have a good understanding. [00:43:52] ERIN: You know, they, they see this in their practice every day. Uh, a lot of the doctors that say they don't believe in it, you know, they're, they're a [00:44:00] little outdated, right? They haven't been keeping up on the research. They have not been seeing patients and, and truly hearing them for what their symptoms are. [00:44:08] ERIN: And I think that, that there actually is, uh, a large amount of. Uh, physicians out there who are, are truly taking it seriously and treating and they're very, you know, there's a lot of doctors who are very quick to treat for, for SIGO with antibiotics and they do recognize how important it is. But, you know, it's just unfortunate that there are some out there that are leaving patients, you know, feeling very defeated. [00:44:35] JAMES: And with regards to the herbs that you recommend, is there like, this is the entrepreneur in me now, just my mind's going, is there like, you know, one supplement that has all the key elements in terms of all the herbs that have been beneficial or do you ask your patients while just. Maybe try a bit of the, the grape for effect, maybe try a bit of the berberine and see what happens. [00:44:56] ERIN: Yes, that's a great question. There, there are [00:45:00] formulations of herbs out there that are designed or supplements out there that are designed specifically for SIBO. So they'll usually have a combination of. You know, some of those more broad spectrum antimicrobials, I typically use them in a more isolated fashion because I love using tinctures. [00:45:18] ERIN: I like to try to reduce the amount of pills that a client will take. So oftentimes, you know, it will be like. Three times a day, you're doing your drops of oregano, your drops of neem, and then we'll do a berberine in a pill form. And, you know, we do that for a course of four to six weeks, and then we reassess symptoms. [00:45:35] ERIN: But there are, there are formulations out there. There's ones that are even more broad spectrum that, you know, are gonna have additional things like wormwood in them, and Uh, you know, things that can address yeast and candida, you know, knowing that those things can sometimes coexist, but the benefit of my practice is that I'm able to test with coins and I'm able to see, like, okay, how can we really hone in on this and instead of doing [00:46:00] this broad, you know, formulation, we do something much more specific to what you need. [00:46:05] JAMES: Yeah, my brain was just ding, ding, ding, ding, ding. And also, I was wondering That's just how it works in my brain. The, the tests that you do, I'm also fascinated. So I'm, I'm very familiar with the hydrogen sulfide, hydrogen methane, because Um, and terabiotics is actually going to be doing a clinical trial, uh, in the IBS area. [00:46:24] JAMES: So I've been reading all about IBSC IBSD, post infectious SIBO and so on. Um, but I wondered because what you're talking about, it's fascinating, it's, it's a combination of the breath test. It's a combination of the stool test. So do you have providers that you go to and that you trust to give you the right kind of data, or do patients come to you having done a microbiome test? [00:46:46] JAMES: Like at home. Mm hmm. [00:46:48] ERIN: Yes. So the majority of, of what I will have clients do with their providers is have their standard colonoscopy, endoscopy, get their blood work done. If they [00:47:00] can get, you know, the things that I like to see, like the ferritin, iron, B12, vitamin D. Uh, so I'll usually have them do that just because it's covered by insurance, right? [00:47:09] ERIN: We try to save clients as much money as possible knowing that these types of cases can be, you know, more intensive and, and costly. And so the stuff that we will do together, luckily as a dietician, we have, uh, different resources where I have an ordering physician on my team who can order the labs for me. [00:47:30] ERIN: And I've been trained to evaluate and interpret these labs over the past 10 years. And so I get these results, we sit down, we go over them together, and you know, we either work with their physician or just on our own, depending on how willing their, their other providers are. We try to work as a team to help this client get better in whatever way that looks like for them. [00:47:54] JAMES: Got it. Thank you. I just wondered if there was like a. Best in class microbiome testing service [00:48:00] that you just thought was unbelievably good. That gave you so many insights. Yeah, [00:48:04] ERIN: I, yes, much more simple. I will answer that more simply here. So the, I love the GI map. I've been using the GI map by diagnostic solutions for several years. [00:48:16] ERIN: I also love, uh, Jenova. That's another really great one. Um, sometimes that might be a better fit for a client based on kind of their symptomatology. But those are really the two main ones. And then, you know, the breath test, I use the TrioSmart because they do all three of the, the, the breath gases versus, you know, if you go get it done in your conventional doctor, they're likely just going to test for the hydrogen and the methane and they might miss the hydrogen sulfide. [00:48:46] ERIN: No affiliations with the brands. Thank you. [00:48:51] JAMES: Thank you for that. Um, you got quite excited when you talked about vitamin D, iron, and ferritin. Can you just like maybe unpack that a little bit? Why is that so important? [00:49:00] [00:49:00] ERIN: These are basic, you know, labs that should be run for all of us. And I laugh about it because it's so frustrating how it's like pulling teeth with providers that you want to know what your vitamin D levels are. [00:49:14] ERIN: Especially when we're in New England over here. So we're not getting UVB rays from the sun to produce vitamin D on our skin for a very large portion of the year. And also just scientifically knowing that 90 percent of Americans are deficient in vitamin D. Vitamin D impacts our hormones, our mental health, our risk for inflammatory bowel disease, everything. [00:49:35] ERIN: It quite literally impacts everything. Uh, so vitamin D, I always have clients advocate for that. And if it's not done over here in the U. S. as a standard blood panel. Iron is another one. Iron typically is tested, but ferritin, the storage form of iron, is not always tested. And this can tell us a lot about inflammation in the body. [00:49:56] ERIN: This can tell us a lot about our body's ability to absorb [00:50:00] iron. So that one is another one. Especially, I work with a lot of athletes, especially endurance athletes, and they tend to be very low in ferritin. And so, you know, if a provider saw, oh, in 2017, your iron looked good, they're not going to test it again. [00:50:15] ERIN: And, you know, hello, it's 2024. Things can change pretty quickly. So, I like ferritin. I also like B12. Both B12, ferritin, vitamin D can tell us that there maybe is malabsorption going on related to SIBO. So, these are things that are common deficiencies that I see in my practice. You know, we should just be knowing regularly what our values are. [00:50:39] JAMES: Got it. Are there any other blood tests that you recommend for the sort of general person? Um, and I'm assuming you recommend vitamin D supplementation. [00:50:49] ERIN: Yep. If you are deficient in vitamin D to a point where, you know, you're getting into the twenties and lower. You're not going to be able to eat food and get your values back [00:51:00] up. [00:51:00] ERIN: You're going to need to supplement unless you're living in a place where it's very sunny And it's very clear that you've been hibernating and lathering the sunscreen and then you can change that habit But the majority of people in order to get their vitamin D levels back up will need to supplement So that's really important for people to know and you always want to take vitamin D 3 plus K 2 K 2 It prevents us from absorbing too much calcium into our, um, the vascular system, which can increase your risk for cardiovascular disease. [00:51:32] ERIN: So vitamin D3 plus K2, always have that combination together and just make sure that you're advocating for it. If you have a deficiency in vitamin D, you're going to need to supplement. There's very few food sources of vitamin D. And those really aren't likely to move the needle if you have a deficiency. [00:51:51] JAMES: And on the subject of supplements, do you recommend anything else? Like, for example, a greens powder, which are all the rage at the moment. [00:51:59] ERIN: Yeah, [00:52:00] I, I don't recommend those supplements. You know, there, there's, um. There's some out there, you know, there's ones that I've taken that I feel really good on, you know, the, the athletic greens was a big, it, it blew up and I, you know, they sent me a sample and I thought, oh, you know, this is like another greens powder and I'll be honest, I felt really good. [00:52:20] ERIN: You know, I'm not going to lie to people. I felt really good when I took it. And that could be due to the fact that it's basically like a multivitamin. And it's got adaptogens like ashwagandha, which I love ashwagandha. And, you know, it was great. I was taking it for a little while. And then, you know, consumer labs came out. [00:52:38] ERIN: They, they independently tested all of these greens powders. And they found higher levels of lead in a lot of them, which something that just naturally occurs in the soil. You know, plants are growing, they absorb these heavy metals from the soil. And lead is not good for us. As someone might imagine, that getting lead in, in [00:53:00] higher doses regularly, ideally we want no lead. [00:53:03] ERIN: But we're always going to be exposed to some level of heavy metals. But when you take something and you concentrate it down, that means you're going to get a larger dose in a small serving. And so, you know, certain brands that I mentioned, like You know were above the limit that I would consider safe to consume on a regular basis for optimal health And so I wow, you know stopped using that and I you know, I I really caution My clients to be using these powders You know, even if they are passing heavy metal testing, you know, they're, they're not a replacement for food. [00:53:36] ERIN: You know, if someone's really struggling, they might offer some assistance. There are certain fruit and vegetable capsules out there that have passed heavy metal testing, you know, don't have any fillers in them. Um, the brand like Juice Plus, for example, over here in the U S you know, they, they seem to kind of pass with flying colors. [00:53:55] ERIN: So I would say. You know, I think of someone like my grandmother who, you know, [00:54:00] she maybe eats, like, two meals a day, if even that, and she doesn't touch fruits or vegetables. She might be a good candidate for someone to take these fruit and veggie capsules, just to get something in her body, but For the majority of us, you know, we don't need 17 different, you know, powders and vitamins in one sitting. [00:54:20] ERIN: First of all, it's really tough for our body to absorb that all in one. So you've got that aspect of it, where are you really getting all the nutrients out of it? Number two is the heavy metals. And number three is there's typically lots of additives to them, artificial sweeteners and flavors and, and things like that. [00:54:37] ERIN: So I, I don't, you know, I don't recommend them, but I'm sure there are times and places for, for those and in people's lives, but the majority of us should be just focusing on high quality foods from our diet. Aaron, this [00:54:50] JAMES: has been such a, an educational journey for me, uh, in addition to the listener, cause I also. [00:54:55] JAMES: take AG1 once or twice a day and have done for quite a long time. [00:55:00] Also a powder called Vibey Greens. And I had no idea about the heavy metal piece. Just no idea. And to be honest with you, I actually don't know that much about heavy metals and how they can impact on health. So could we talk about that for a little bit? [00:55:19] JAMES: Like How do we know if we're have, you know, if we've got too many heavy metals, what's the health and impacts of heavy metals? And then if there's too many and it's having an health impact, what do we do? [00:55:35] ERIN: So heavy metals. Each different type of heavy metal, from lead to arsenic to cadmium, those are two very those are three very common heavy metals that we typically see in supplements, powders, even chocolate. [00:55:49] ERIN: We see high levels of lead, unfortunately. Big chocolate fan over here, so, trust me, I'm not Nooooo! You're like, you're taking away my coffee and now my [00:56:00] chocolate. No, but what's going [00:56:01] JAMES: on here? But again, my AG1 and coffee, now my [00:56:04] ERIN: chocolate. So again, like I will use AG1 if I know I'm going out and I'm going to have a really long run. [00:56:10] ERIN: You know that that's that's the kind of thing I'm trying to really educate clients on is like I'm not taking it every day But I'm not never using it because I like the way it makes me feel I'm also consuming chocolate regularly But I'm choosing brands that are at least not the highest in lead and I'm moderating my intake But I probably eat chocolate at least three to four times a week. [00:56:31] ERIN: Like I'm not gonna lie. It's just You know, you can't avoid all of these things, but you know, there are some that are avoidable that are just, you know, we're getting too much and that could be impacting certain people. So you know, heavy metals can impact all of our organs. A lot of them can accumulate in our body and it's really hard to get rid of. [00:56:49] ERIN: Some are actually impossible to get rid of. So the kidneys can be affected. The gut can be affected. The liver, right? We can have this buildup of these heavy metals. And then on top of [00:57:00] that, if you have an unhealthy gut, then you're more likely to have these accumulate because if you have that intestinal permeability where things can move from your gut into your blood because you have leaky gut, you're in a, you're in a worse shape to be consuming these heavy metal, you know, containing products. [00:57:17] ERIN: But generally speaking, they have, they have widespread impact on our health from our brain health to our, our organ function. And over time, this can be very serious for people and it's, it's hard to say, you know, okay, look for these symptoms, it's, it's, you know, the, the, this happens slowly. So this could be you show up with dementia or Alzheimer's when you're, you know, 50 years old and you don't realize how much of something you've been consuming. [00:57:43] ERIN: But there's testing that you can do. There's hair mineral analysis testing that can look at heavy metals, which can be really helpful. Um, you know, mercury is another one that will accumulate in the body. And even just reducing your high mercury fish can really help your body, um, [00:58:00] work more efficiently. [00:58:01] ERIN: And then, you know, you can kind of go back to working in moderation versus. Eating high mercury tuna for lunch every day, for example, so this is a very big stressor for me is like we need to think about moderation. We don't need to fear monger people into being afraid of consuming chocolate or, you know, things like that. [00:58:18] ERIN: It's education, making better choices. And then if you are someone who has really poor detox, methylation issues, like MTHFR mutation, poor gut health. We might need some extra support with heavy metals, so we might use certain, like, green algaes to help just pull heavy metals out of your system. Um, we might use things like NACL cysteine, which, you know, helps upregulate glutathione levels in the body. [00:58:43] ERIN: You know, these are things that, essentially what we're doing is we're working on chelating, um, things like charcoal and, and algae, green algae vegetables. And then we're working to support the liver and, and, and all those other Um, up regulation processes that naturally happen in the body and then we [00:59:00] support the gut and we support sweating and we make sure our bowels are moving and, you know, we make sure nutrient deficiencies are addressed and that helps us just ensure that we're, you know, well oiled machines that can handle, you know, the daily toxins that we're always going to get no matter what, right? [00:59:16] ERIN: We're always going to get these things, but how can we educate ourselves, make better choices and reduce our total heavy metal load? [00:59:27] JAMES: What are some of the signs and symptoms that someone might have if they're sort of high and heavy [00:59:31] ERIN: metals? So kidney, you know, kidney issues can be a big one. Um, having, you know, kidney. [00:59:37] ERIN: So if you're doing blood testing or things like that, if you're, you know, consuming a lot of brown rice, very high in arsenic, um, that's something that over time, especially with smaller kids, you know, they're even more sensitive to these levels of arsenic, for example. Um, but, but kidney issues, liver issues, brain, um, if you're noticing, like I said, you know, early signs of Alzheimer's, dementia, [01:00:00] Parkinson's disease, uh, there's even, this is not my expertise, but, um, you know, a lot of dieticians who focus on the autism spectrum disorder, ADHD, um, a lot of discussion around how they have a harder time with detoxification and, and Some heavy metal accumulation. [01:00:17] ERIN: And so, you know, refer to them for more information on that. But I've learned from other dieticians about how that can be, um, you know, a way that these types of things can show up, um, gut issues, you know, you know, heavy metals can really disrupt the gut, the gut microbiome. So. Again, there's not really like obvious symptoms for a lot of people that you would say, Oh, that's, that's gotta be heavy models. [01:00:40] ERIN: Sometimes it's, you know, your body just kind of slowly not functioning optimally and not realizing that your total toxic burden is just too high. [01:00:50] JAMES: Gosh, it just made me wonder, I mean, imagine how many people with autoimmune disease, for example, may actually just be too high in, in these heavy metals. [01:01:00] It's again, I think it's one of these things where the traditional classical medical community probably aren't that interested. [01:01:08] ERIN: Yeah, unfortunately not. And you know, it's, it's, it's a, it's a very broken system overall. And, you know, I wish I had, I wish I had the solution. I wish that I could say that I could see things getting better in the future. But I think when you involve finances, when you put money into the, the picture, you know, it, the, yeah. [01:01:30] ERIN: The priority of healthcare, uh, preventative care really just. Yeah, [01:01:38] JAMES: I'm with you. So I'm going to bring us back now to some of the things I've wanted to discuss with you. Um, artificial sweeteners is top of the list. So as a dietitian and expert in gut health, what are your thoughts and recommendations relating to artificial sweeteners? [01:01:55] JAMES: Because I think this is one of the ones that comes up the most when you speak to people. Yeah. You [01:02:00] know? [01:02:00] ERIN: So what are your thoughts? Yeah. So I've, you know, I'

In light of the rising tide of anti-Jewish attacks and demonstrations around the world, Patrick shares this morning's Wall Street Journal editorial regarding antisemitism and issues his own stirring denunciation of Jew hatred, and urges Christians to stand up for unjustly persecuted groups like the Jews.  Tina - Should I disinvite a distant relative who claims to be a medium to our Easter Celebration? Kelly - How can Bishops lift the obligation during Covid and then reinstate it as a mortal sin if you miss it later? (06:05) The Global War on the Jews: Anti-Semitism surges, even in the West, which shows why Israel exists. (20:05) Macaria – Is it sinful to wear Jesus and pope costumes? James - It seems like the devil is trying to divide us making us upset at each other. Margaret - If I take my rosary to adoration, can I ask Jesus to Bless my rosary and not have to ask a priest to bless it? Anna - Why in the Mass is it forbidden to consecrate only one species? Amy - I work as a nurse and need to work a lot of weekends. How can I fulfill my Sunday obligation? Ann - I went to a Mass where there were relics on the Alter. Is that okay for Mass? Joan - I have been praying for the Armenian Church which is being persecuted by Hamas in a different area. That is a good example of them going to Catholics. Rose - Is it okay to buy lottery tickets from vending machines? Geri - Can Angels ready our minds?

Sean recently finished the book, A Course in Miracles Made Easy: Mastering the Journey from Fear to Love. And this is the center of today's episode.We deep dive into the idea of living in fear versus living in the state of love. How does someone live without fear? How do you live in a state of love despite judgment? Is love just the absence of fear? Let's uncover these questions one by one.Key Takeaways:Enlightenment is constantly choosing to live in a state of love and not in a state of fear.You are enough as yourself in this moment. Beware of your fears.Episode Quotes:On living without fearSean: It's a constant practice. Every time I get frustrated, it's an opportunity to evaluate and interrupt myself. I still don't know how to be in a state of love, but what I've been practicing is how to not be in a state of fear.James: It seems almost like once you get down to the fear and realize that it's something you don't have to worry about, that is actually when the state change into love. Or is there another step there? Eliminating fear is one thing; is living in love just by identifying what your fear is, is that all that is?

Remember, we welcome comments, questions and suggested topics at thewonderpodcastQs@gmail.com   S3E39 TRANSCRIPT:----more----   Mark: Welcome back to the Wonder Science-based Paganism. I'm your host, Mark, Yucca: and I'm the other one. Yucca. Mark: and today we have a very special episode. We're interviewing James Morgenstern, who is on the Atheopagan Society Council. And so, along with Yucca and myself and a bunch of other people. And so it's just an opportunity to get to know him and ask his ideas about where he sees the community going and how he came to be a part of this community and all that good kind of stuff. So, welcome James. James: Thanks for having me. Yucca: We're really happy to have you, so Well, why don't we get started with. you know how, how you found or came to agonism. James: So, it's kind of a, a, a long journey that started back in like the late eighties like 87, 88, somewhere around in there. And I, I was, I, I was an, an avid reader back then. And I remember coming across like a group of, at a garage sale, this collection of encyclopedias called Man Myth and Magic. And it was like everything supernatural in the cult from A to Z And I got made fun of a bit in grade school and called Encyclopedia Brown and stuff like that because I like, I, because I read encyclopedias. And so I came across these, bought 'em for like a quarter a book with my allowance and read them all. And that really sort of piqued my interest in, in the cult and whatnot. And there were there were articles in there about like, Paganism and, and Witchcraft and Wicca and, and what have you. And so I started seeking out books all of this under, you know, the cover of secrecy because I, you know, grew up in the Midwest, in central Illinois. And all of that stuff was a big no-no. So I. With, I had gone to you know, I grew up in a tiny little town, so we had gone some friends of mine and I had gone with one of their parents into this town, and there was this store in the mall that I went into, I think it was like, it might have been a b Dalton book Sellers, you know, one of those book sellers that's not around anymore. And I found a copy of Raymond Buckland's, Complete book of witchcraft. And I went through that whole thing. It was like a series of lessons. Anybody familiar with, you know, witchcraft from back in that area is familiar with the big blue book. But it went through the whole self initiation ritual thing that they had at the end of that. And that was sort of my start on that path. I started reading a lot of Scott Cunningham. He had, you know, a lot of good material for like solitary practitioners and and whatnot. And later on in my, you know, in my adult life I got involved with a this was shortly after I was married, I got involved with a group in Springfield, Illinois called the Edge Perception Collective. And we put on seasonal public rituals, you know, for the, for the community there in central Illinois. And from there I got involved with the Diana's Grove Mystery School and which was, those folks were fantastic. There's just some really good, you know, kind nice people. And the. It was interesting. They had like a 200 acre property in the Ozarks and, you know, it was beautiful. Had this, it had been a cattle ranch at one point, and so like the edges of it were forested and there was this big meadow in the center with like a seven circuit labyrinth mode into it. That was huge. And they had all these cabins that had built, had been built on the property by the Amish. And you know, they did week long intensives and, and weekend you know, seminars and things like that on all sorts of different topics. I took several like drumming classes there with lane Redmond and, and whatnot. And the you know, the whole time though, like, looking back, I, I realized that. With, in terms of like the belief in like DA and things like that. I was really sort of going through the motions on it. Like, I don't know that I ever actually really believed that, that there were these beings out there. I think a lot of it was me looking for an alternative to what I was in the middle of and sort of, you know, inundated by, and that was, you know, conservative Christianity you know, Midwestern Bible country, you know, kind of kind of folks. And so I, I, I sort of, I moved to St. Louis in like 2000 and really sort of drifted away from all of that and had this big. Spot in my life, you know? A lot of the stuff that I had done previously, even, you know, even being part of the, of this group and that that community all on my own, you know, was all solo stuff. Mark: Mm. James: And a lot of that, you know, took place primarily in, in, in my head. You know, it's the whole like, you know, you develop like a mind palace or whatever they call it these days where you've got this sort of sacred space in your own skull. And that some of that was coping mechanisms and things like that for, you know, mental health issues and, and whatnot. But but I had this big hole and, and, and that lasted a long time. And I moved to California in like 2013 or 2014. At the beginning of 2014. And I remember like, I don't remember the exact year it was, but I was online and on Facebook, and I don't remember if it was like a suggested group or if I was searching for, you know, some sort of online group to join. I've got a lot of, I've got friends out here, you know, on the west coast that are all part of this sort of like spooky dark, you know, like, you know, witchy, woodsy, you know, forest people type community musicians and artists and whatnot. And so, lots of pagan stuff being posted by them and, and you know, that whole aesthetic. So it may have been a recommended group but I found the Athe O Paganism one and I clicked on it and looked at the about page. Read the description and everything, and that seemed like that's, like, that was really kind of where I was at. Like, I wanted, I wanted all the pagan stuff, but I didn't want all of the praying to God's goddesses or offerings to forest, you know, fairies and, and, and things along those lines. so I joined the group and was just sort of a, a lurker for a while. And then I don't remember exactly how I met you, Mark. I think I, it was, you had posted something about where you lived or something along those lines, and I was like, Holy crap. Like, that's, that's, that's, you know, 20 minutes away, 30 minutes away or whatever. and I don't remember if I sent you a message or if it was in a comment or something. Like I don't, the details of all that are Mark: I think he sent me a message as I recall, and we decided to meet for coffee. James: Yeah. But that was fantastic. And then I read your book and like your whole story of how you came to all this. A lot of that resonated with me cuz I'd been involved with similar groups, you know, in the past, the whole church of all worlds. And you know, I wasn't involved with them at all, but I, I was well aware of them and, and things going on with them. And then, you know, I wanted to I wanted to take a more active role in the community because. I don't know. I feel like, I feel like everybody should want to take a more active role. You know, you gotta participate in community, you know, on some level. At least that's how I feel, you know, for myself. And so I, when a call went out for moderators on the group, you know, I, I stepped up to that and and then was a moderator on and off for a couple of years, I think.  Yucca: A few. Yeah. James: yeah, recently, recently, you know, stepped down from that again. And then when the Atheopagan Society started coming together, you know, and, you know, we decided to put together an actual, like, council of people, you know, I, I. Felt the need to be a part of that, you know, on the, on the ground floor. Mark: Mm-hmm. James: don't know cuz I, it's, it's really given me a lot in terms of like, helping sort of fill that hole that I had in my life for so long with not having any sort of like, ritual, you know, or spiritual life, you know, it was, I dunno, it was like, I struggle with I struggle with a fair amount of mental health issues, you know, depression, things like that. And when having that, having a spiritual life and even in my own head now using words like that is, there's a little bit of dissonance because I don't believe in like a spirit world, but I, when I tend to use the word spirit or spiritual, I'm, it's more in the sense of essential. Mark: Mm-hmm. James: spirit being the essence of a thing. You know, and so a spiritual life for me is an essential life. It's a thing that, you know, it's something that's Yucca: mm. James: Um, and the, the, a paganism group online and just the, you know, approaching spirituality from that standpoint has, has helped me out a lot. And so I, I wanted to, to, to try to give back on some level as much as I'm able anyway. Mark: Well, that's great. Thank you for that. Yeah, it's, it's been great for me because you, you are local to get to know you and, you know, become friends. And now of course we have the Northern California Affinity group the Live Oak Circle, and we've been having in-person meetings with a little group of folks. And to me that's just been wonderful. I've, I've really enjoyed sharing rituals with, with a group like that.  James: In person is definitely, at least for me personally, is far more rewarding than, you know, online. So if there's a certain, there's a certain distance that I feel, you know, with online interactions and they, they just doesn't feel as personal and meaningful to me. Other people get a lot out of it, you know, I know that we have like the the mixers and things like that, you know, on Saturdays and like on Thursdays or whatever online. And I know that there are a lot of people who get a lot out of those, and that's fantastic. You know, I think you should get, you should get that community interaction however you can get it. But yeah. Yucca: well, I really love that we've been able to start building both of those kinds of, of interactions right now as, as we're, we're growing and able to do in person gatherings. Both like we did earlier this spring with the retreat and then with local groups and then the mixers and the text communication, which is what mostly the Facebook discord is. Mark: Mm-hmm. Yucca: So it's, it's lovely to see that diversity and people being able to kind of plug in, in the way that fits in in their life and, and their particular needs. James: Yeah. Yucca: and it seems like James, you've, you've been a big part of a lot of that kind of looking out for and caring for and participating in that online component. James: Yeah. Like, I feel, I feel very, and one of the reasons I wanted to be like help be a moderator and stuff for the, for the Facebook group was that I feel like I tend to get protective of, you know, the groups that I'm, that I'm part of. It's all, it's like chosen family kind of, kind of situation. And I felt like being a moderator helped, like, put me in a role where I could be more effective at doing that. Yucca: Mm-hmm. James: because there's a lot of folks that aren't able to sort of stand up for themselves and you only have so much, aside from just blocking people online you've only got so much that you can do in a group if you aren't a moderator. You know, you don't have the ability to, you know, to shield other people from, you know, abuses and things along those lines. And not that we've had a huge problem with. Folks like that in the, our fa I feel like out of all of the Facebook groups that I've, that I've been a part of and all of just the social media groups in general that I've been a part of, the Atheopagan group is definitely by far the most friendly and problem free group that I've, that I, especially with, you know, now we've got well over 4,000 members. Like, it, it, it shocks me on some level that there wasn't, that there wasn't a lot more moderation issues than there, than there was. We just don't get the trolls. I think a lot of that is, is due in part to like our screening process for people, you know, and and just the, you know, vigilance and the community themselves, like, you know, that even aren't moderators stepping up to, you know, Sort of take charge cuz it's, it's, I feel like it's all of our responsibilities to make sure that we've got a nice, you know, safe, accommodating, friendly community, you know, to be a part of. You know, and every, every group is gonna have issues, but I feel like our group is, is always working on those, you know, when something comes up, when someone brings something to our attention, something was problematic or something that we, that needs to be addressed that we're, that we, we work on it. I feel like that effort is an honest one and that, you know, and that's important. But but yeah, it's by far the, the best group I've been a part of. And I, and I think that speaks a lot for the people that are involved. Mark: I agree. Yeah, I mean, I've, I continue to be amazed by the quality of the community that's come together online, around aop, Paganism, and As you say, with more than 4,000 members, you would imagine that there would be more conflict. And it's not like there's group think because we have really interesting conversations about lots of different things and people have varying perspectives on a variety of different things. But there's a civility and a a fundamental assumption of good intention on the part of one another that I think is really rare for Facebook. I mean, I don't even go to my main Facebook feed anymore. I just hang out in the atheopagan. James: yeah, yeah. And it was, it was really great for me at the retreat to get to meet some of those folks in person. you know, cuz you see a name, you see a name and like an icon on online and I don't know, for me that's Yucca: A real animal person  James: Yeah,  Yucca: really right there in front of you. James: cuz like online there's a, like, I feel like there is sort of a certain degree of anonymity that's necessary because it can just be a dangerous place. So I don't fault people for not putting pictures of themselves up as like their Facebook photo or whatever. You know, I didn't do it for the longest time. Uh uh, now I don't really care. So it's whatever. But but it's nice being able to put a face to, you know, conversations that I've had with folks and, and things along those. Mark: So, I have kind of a two part question, I guess, for you, James. The first one is so what do you see your role as being on the Ethiopia Pagan Society Council? What, what do you see as, you know, what are your responsibilities there? What is, what do you see yourself as doing for the community there? And then the second part of the question is what about the future? What, what sorts of things do you see the society being able to do to foster this community or support it or train it or, you know, whatever. What, what's your vision there? James: I think in terms of my, my role, like, I feel like I, I try to represent the, the greater community as a whole. Mark: Mm. James: Take into consideration, like when we're making decisions and things like that, the needs of, of, of the community as it's been sort of represented to me by my interactions with people on Facebook, you know, in the Facebook group. And, and to a far, far lesser degree, the, the discord sort of, cuz I, I, I started the, that Discord server I don't, a couple years ago or whatever. And Discord is not my, it's not my thing. It's, you know, it's some people that's totally their jam and that's, and they prefer that over everything else and that's totally fine. It's just, it was never really my thing, but there was a call for it online and so I just, I had used it previously for like some gaming. And so I was like, well, you know, I'll start a server and we'll see how that happens and how that works. And now it, you know, it's got a, I think a couple hundred people on it. Mark: I think about 500 Yucca: Yeah, James: is it really? Mark: Yeah. Yucca: It's got some great stuff. Yeah. Mark: Yeah. James: I, yeah, like I said, it's, it is wasn't really my thing. I am not a tech savvy person, so, you know, there were got all these people that jumped on it, that were doing Discord stuff all the time and asking me as a, you know, as like the admin there, you know, Oh, can we do this? Can we do that? And it's like, I have no idea how to do those things. So and I don't have a whole lot of time to learn how to do those things. So like, I, that's a, yeah, that's a whole nother change. But in terms of like my role and what I, you know, what I seem like my responsibilities being like, I, I don't know. I. I think everybody, I think every group and, and it hasn't been a thing that I, that has been something that I feel like I've needed to worry about because our, our group and our organization has, it's worked a lot differently than a lot of other groups that I, that I'm aware of in the Pagan community and not so many that I've been a direct part of in, in terms of like decision making groups and whatnot. But I don't know. There was sort of this idea in my head at one point of like, being kind of a watchdog and making sure that things didn't start going down like a hierarchical you know, sort of problematic path. Often happens with those sort of council type groups in various PE communities. Like I said, I'd been a member of a group in the past. The, the edge of perception, which, you know, all we did was really put on public rituals. That's all we did. We weren't like a, we weren't sort of guiding a community necessarily. So all of our meetings dealt with what are we gonna do for the next, you know, for the solstice or whatever, and you know, who's gonna do what roles. And you know, how is, you know, how much did we spend on supplies for the last one? How much money do we have in the account for supplies for the next one? And you know, and that sort of thing, we were, we were a not for profit five. I think we had, you know, our 5 0 1 3 c, you know, thing or whatever. So we had to, you know, keep track of receipts and all that good stuff for taxes and but There weren't, so, there weren't really any issues in terms of like power struggles or anything along those lines, you know, people wanting to take control of things necessarily. At least none that I was aware of, but I definitely know that there are groups that are like that. You get like an individual who is, and that's one of the things like I, I feel I really sort of commend you for Mark, because you, that's, you have not being sort of the founder of, of this whole thing. You have made, I feel like you've made great strides to not put yourself in a position of. Power and or a position of authority or anything along those lines. You know, you've been pretty good about when people try to appeal to you as an authority on something and say, Well, Mark says this, or whatever. You're very much, I feel like you've done a pretty good job of, of the whole, like, you know, I'm just like, I'm just another member of the community like you, you know, just because my name's on a book or whatnot, that doesn't mean that, like what I say is, is law sort of thing. And I know that's been an issue. So there was an, at one point in my head there was this idea of like, kind of being a watchdog for the community if that sort of thing started to happen, to try to be a bull work against that. But that's, but it's never come up. So, that quickly faded into the background as something unnecessary. So I, so mainly I think I, I feel like I'm just there as support. Like I, like I said before, I, you know, I struggle with a lot of mental health issues and what have you. So my, my ability to do things is, is relatively limited. But I do, I, I, you know, I want to do whatever I'm capable of, you know, and take a more active role other than just seeing posts online and hearing about things and, you know, listening to the podcast and whatnot. And as far as going forward, I'd like to see a lot more opportunities like that provided for the entirety of the community. You know, it's a big community and I think a lot of those opportunities should be like on a, on local levels. You know, like you mentioned before, we've got our local live Oak Circle. Here in Northern California, which, you know, we've had like, what, like almost a dozen people Mark: Yeah. James: I think involved, you know, that have that at least, you know, I've seen, you know, active, we've got our own little discord server Mark: Mm. James: and whatnot to help coordinate stuff. And then you know, we've had Facebook members who have posted things about their local meetups, you know, one in Chicago that looked like had a fantastic turnout. And I like seeing it. It makes me happy to see things like that happening because I, community is something that's really important to me. And I think it's, I think a lot of the reason it's really important to me is, is because of how little direct access I have to it. You know, I'm, I'm sort of isolated out in the redwoods, you know, and So, and community interactions are, are, have become far more important to me. They're more meaningful to me because I have them, you know, so rarely. So that's an important step going forward, I think, is helping to foster those local communities Mark: Mmh. James: to build a greater, you know, broader, you know, general community. The, I thought that the Sun Tree retreat was a, was a fantastic success in terms of like turnout and whatnot. So I'd really love to see more events like that going forward. Like maybe regional regional ones and then, you know, a like a main sort of national one or whatever here in the States. And it would be fantastic to see. Because we've got members of the Facebook group from all over the world, you know? And we've got affinity groups for larger affinity groups, for like regional affinity groups for some of those areas. But it'd be great to see them putting together, you know, events and it, and I think a lot of people think if the, if like, Oh, we, if we're gonna do that, we're gonna need all of these things and we're gonna need this awesome space, and we're gonna need, you know, speakers or we're gonna need, It's like, you don't really, you just get together, get together and have a meal, you know, and make it a ritual, you know, be, be mindful of the various parts of the meal that you're, you know, as, as they're, as they're served or consumed or whatever. Or get together and, you know, if you're into drumming and stuff, you have a drum circle or sing some songs together or, you know, just do some, do something. As a community and it'll grow from that. You don't have to have like a fancy convention space or, you know, retreat center to go to or something along those lines. But I think building those communities is important because we, we do better together. You know, we, we move forward better, faster, more stronger together than we do, you know, as individuals. And some people, you know, social interaction is not a thing for them and they don't do well in groups and that's fine. You can totally do it by yourself. But, you know, I feel like as a, as a community though, moving forward, like these smaller local localized groups are really. I think that the next best step forward. Mark: Hmm. I think that's really well said about community and humanity as a social animal. You know, we, we get e even those of us that are very introverted will usually get something out of social interaction. They may not be able to take very much of it. But there's a, there's a sort of a, an energizing or a charge that comes with interacting with other people who see you and are authentic and open and kind and, you know, fostering that kind of a climate is, it's super important to me and it seems. That's what people are gravitating to in, in the online communities is like, wow, these people are nice and they're thoughtful and they're interesting and they, and they're rational and and they are open to the idea of secularizing the world in, you know, in ways that are moving and impactful. So, yeah. Yeah. That's very cool. I didn't realize that you had joined the council with the idea of being sort of a watchdog on, you know, on the power dynamics, but I'm, I'm glad to hear that you haven't felt that was necessary. James: Yeah. I mean that was sort of, it wasn't like a main reason, you know, the main reason was like, I, I wanted to be a part of it. I, you know, I wanted to be a part of, I wanted to give back, you know, cuz I had gotten quite a bit out of, you know, the online community and, and whatnot. And wanted to give back beyond just being a moderator on the Facebook group. And the, the whole like watchdog thing was sort of a secondary, a secondary thing, you know, one of those creeping things in the back of my head. And it was like, Oh, I've, like, I've seen groups like this come together before with really good intentions and then a cult of personality forms around one person. And and then it all falls apart. And I didn't wanna see that happen. You know, like I said, I, I feel, I feel kind of protective of our community. , which can have its own drawbacks because I, I, there are times when I'm feeling probably too protective and might see threats where there aren't any. And that's, you know, that's, that's my own shoot to deal with. The yeah, I think other things that we could do, like I, I, I think I probably mentioned previously about you know, we've got members of the community who probably are a little isolated and not as able and like some sort of like, outreach program or something along those lines, you know, to bring resources to those people. You know, I think this, this podcast has obviously been a great. Because you know, like you had mentioned to me previously about like the number of new members coming to the Facebook group because they heard the podcast which is fantastic, you know, but that's one of those things that like is of, it's available to everybody all over the world, you know, You know, you don't have to be on a specific social media platform or whatnot. This podcast is available on, you know, numerous different podcast platforms and everybody's got, and I think network, maybe possibly networking more with other similar like-minded groups. Yucca: Mm-hmm. James: You know, I think that might be a good step in the right direction. Cuz you know, In the end to get sort of philosophical, we're all in this together. Yucca: Yeah. James: that's not just like the a o paganism group online. And that's not just, you know, our, our local circles. It's, you know, everybody we're, and you know, we might not all completely agree on things all the time, but we, none of us get out of this alive. So we should all work together to make, to make the experiences as, as as pleasant as possible. Yucca: Hmm. Mark: Yeah. James: and that, you know, and that in that involves a lot of work. And not, not necessarily like physical footwork type stuff, but like personal work, you know, for each of us. Things like Like dealing with issues of racism and ableism and things along those lines. You know, that's, that's stuff that has to be worked on, on a personal level. And you know, we all have a lot of, I think a lot of us the vast majority of us have a lot of internalized, you know, issues with those things. Things that have become normalized for us because it's just, they're, they just are things that have never been an issue. You know, it's a thing we've talked about in the Facebook group. Paganism in general for the, for a long time was a primarily white thing, Yucca: Mm-hmm. James: And and so I think a lot of people of color and whatnot really felt it was inaccessible to them, Mark: Yeah. Or that they were unwelcome. James: or that they were unwelcome. Exactly. Because there's still this huge trend, and that's why I'm I really. One of the things that I really like about Atheopagan and that that drew me to it, is that it's not based in a culture, a preexisting culture. It's not based around a preexisting set of traditions. You know, it encourages, you know, a DIY approach. You know, create your own rituals, create your own traditions, you know, start new ones. Don't, you know, like we, it's not the goal to recreate some lost civilization or culture, or to live in, you know, a a, a pretend past that never really existed. Cuz that's what most of these groups, you know, I feel like to some degree do. And it's not about escapism either, Yucca: Mm-hmm. James: Which is a thing that I found. I've gotten a lot of flack in the past for, for bringing the issue up in groups that I've been a part of that I feel like a lot of people were, you know, they'll be a part of a group that espouses like, you know, justice or something along those lines. I'm not gonna name any groups in particular. But they'll espouse values like justice. But then when issues of justice are brought up, people, you know, start going on the whole, like, why do you gotta make this political? It's like, uh, how is it not, How is that not like everything is political. If it involves people, it's political. So, You know, every aspect of our lives is affected by politics. You know, nobody lives in a. Yucca: Mm-hmm. James: from the rest of the world. So literally every aspect of our life is, has been affected or is constantly affected by politics. Whether it be the laws that we're living under or the regulations we have to abide by when doing things to our homes or you know, our yards, you know, down to like HOA organizations with how tall your grass can be and crap like that. Um, it's all politics, you know, And so, and I understand like people who get tired of hearing about hearing all the arguing Yucca: Mm-hmm. James: what have you, and I think that's primarily, it seems to be primarily an American issue, you know, a US issue. But you know, everybody knows what's going on in this country, you know, right now and has been for a while. So, you know, the whole world knows the sort of situation we're living in. So I think it's understandable that people are burnt out. . And, but most of those people who are like, Why do you gotta make it political, are the ones who aren't really all that negatively affected by politics. Mark: Right. They're  James: tired of hearing people argue about it because it interrupts their peace and quiet and they come into these groups because they're trying to escape rather than, you know. But for me, like I said, a spiritual life is an essential life and as an essential part of life, it's politics is unavoidable Mark: Mm. James: cuz that's an essential part of life. You can't exist in the world without, with other people, without politics. So, you know, that's I think working on those issues on an individual level is important. And working on those issues as a community, you know, supporting each other. You know, I, I feel like our community has been really good in like the comment sections and stuff on Facebook of offering up resources when issues come up and someone says, Well, I don't know how to do that, or I don't, you know, or where do I go to find that information? There's usually always someone who's got a list of links or books to read or, you know, or, or YouTubers to follow, or, you know, something along those lines that are, you know, resources. And then it's incumbent upon us to take personal responsibility then at that point, and read those things, you know, or, you know, or, or, or look up those papers or, or what have you. And you know, it so yeah, I the whole escapism thing, that's Mark: Yeah, we've, we've talked about that here before. I mean, it's, it's tricky because you can use sort of fantastic language and, and framing to. Make your life a lot as a tool to make your life a lot more enchanted. Right. James: Oh yeah. Mark: But you need to keep in mind, you know, it's that ability to recognize the difference between metaphor and reality. You know  James: And I, I'm a, I'm a big fan of like, the myth poetic, you know, as, as a tool, you know, for, like you said, re enchanting, you know, your life. But there's a, it be, it starts to become escapism when that becomes the, your preferred realm to exist in. Cuz it's not a real place. And you live in the real world and there's no getting around that. Mark: sure. When you start blaming fairies for things, James: Or Mark: It's a problem. James: right, or you know, like a thing you had mentioned, and I think you had mentioned it in, in your book, you know, with people like excusing behaviors, because you know, it's the will of the gods or, or whatnot. And the spiritual bypassing that takes place, you know, where people are like, Oh, well the reason this bad thing is happening in your life is because, you know, maybe you've angered some spirits or something along those lines. And, which is really just a fancy way of victim blaming at that point.  Yucca: It's a way of not taking responsibility, James: yeah, exactly. And so that's, that was going back to like the first question. You know, that's, that's another thing that sort of drew me to Athe o Paganism, was that, that that wasn't a part of all this. There was no, there was no road. For that sort of approach to things, you know, personal responsibility and and, you know, taking steps in our own sort of growth and development, you know, are are built in. And that's that's very appealing to me and I think needed, you know, in. Mark: Yeah. One thing that I've really appreciated about many people in the Pagan community, I certainly wouldn't say all of them, but many people in the Pagan community, is that there is this kind of dedication to personal growth, you know, to, to doing the work to become the best people they can and. I just see that as essential. You know, it's like if, if the goal is excellence in how we interact with one another in the world that we create in our engagement with the rest of the natural world in all of that, then it, you know, it starts with the wrestling that's happening in your head and, you know, figuring that stuff out and getting as clear and as kind and as balanced as we can. And so it, so that was one of the things that drew me back towards Paganism. And after I got sick of it, you know, there were those people that were living in a fantasy world and were, you know, causing harm out of that. But then there were these other people who were just amazing. Humble, fantastic, incredible people. And I wanted those people . I, you know, I, I wanted to go back and get them. So that's, that's been part of what this has been about. James: yeah. I've had, and like, you know, I, I skipped over in my story about how I got to aio Paganism. I skipped over a lot of the stuff that I got involved in, looking for ways of like making meaning in the world. That were more solo like, I got into Chaos Magic, and I got into the, you know, I was involved in the Lima for, for a while, Mark: Mm-hmm. James: you know, joined some initiatory orders and, and what have you. And know, it was all, you know, brain hacking, trying to figure out how to make myself that better person, you know, that you just mentioned. And doing it on your own by yourself is often very difficult. And so I, I think having a community that's all also working towards that. And like you said, not everybody involved in those groups was good. But there were definitely some jewels, you know, that stood out. But for some of them, like the, the, the, the Leic community there was a lot of just. I, I pretty much left all of, I left the Lima because of a lot of the just really horrible, toxic stuff. And I've always been a proponent of the idea that whatever it is that you're championing, whatever cause that you're standing behind, whatever beliefs that you are espousing, look around at the other people who are going, Yes, that's what that I'm on, pa on. I'm right there with you. I'm on the same page as you are. You believe what I believe and I absolutely support you. And if those people are neo-Nazis, and if those people are, you know, just you know, white nationalists and racists and terrible people, then you need to, you need to rethink these ideas that you're championing. Cause if they're saying, Oh, no, no, I totally agree with you, I don't think that's a good thing. and, So, you know, I, I, I've had these conversations to get political. I've had these conversations with folks who, you know, espouse like conservative values and whatnot, and they're like, Yeah, but you know, I don't agree with those guys, but yeah, but they agree with you. Like you don't agree with those guys cuz you don't, because they're on, you're just sort of cherry picking, you know, the things of their ideology that they, that you don't agree with. And I don't know that you're actually looking at, at what they believe and what you believe with an unbiased, you know, viewpoint. And I think that your ideas and their ideas line up far more than you're willing to admit to. And because on some level you do agree with them because if they're agreeing with you, how is that not the same thing? You know, if you say XYZ and they're like, Yes, xyz, and then you say, Oh yeah, but I don't agree with their xyz, but it's it's the same xyz. Then, you know, I think that needs some reflection and some rethinking. And so, yeah, I don't know where I was going with that. I've got my mid-afternoon coffee, caffeine hitting my, hitting my head and it's sending me on spirals. Yeah. What were we saying? Yucca: We had been talking about the gyms in the community, and you'd said that you'd kind of skipped over some of the, the, James: yeah, Yucca: the various groups that you'd been involved in and stopped being involved in. James: yeah. Cuz I think when, when, for me it was like a matter of percentages, you know, if there's like three or four people in the community that are absolutely wonder. People and the, the overwhelming majority of the community is not, then that's, then you, you can't, you can't it, I personally can't stay in a community like that. I can't stay involved with a group like that. Like I, it, it's always terrible to have to sort of leave a group because you know you're gonna miss those people probably, especially if you developed any sort of personal relationship with them. And you can always stay, you know, connected with those people outside of that group. But being part of the group itself is just not an option any longer. Again, I think, I feel like you gotta look around at the people who are, who are standing behind you and chanting along with you and see what sort of flags they're waving and, you know, if those are flags that strike you as you know, bad things, then maybe you should think about. You know why it is that they're chanting along with you. And I, and it's mostly been like, you know, events that have taken place here in the US over the last, like six years or so that have really sort of brought that sort of idea to a head for me. You know, or also if you don't, the people who are on your side are championing ideas that actively seek to harm or impede the lives of people you care about, then maybe you should rethink those ideas also, because if you really care about those people, why would you want to promote the things that are going to hurt them, you know? And I feel like in our, to bring it back to, you know, our community, I feel like we are, I feel like we're, we can always do better, but I feel like we're doing a pretty good job. And that is, and that's not to sort of say, you know, to let us off the hook in any way, shape or form. The work is, the work is constant and ongoing and not quick. You know, there is no fast like flip a switch and suddenly you're not racist, you know, or you flip a switch and suddenly you're not ableist anymore. You know, those are, they're patterns of behavior that come about from living in a system that promotes all of those things and oftentimes rewards those things. So, you know, working out of those situations, those methods of thought and whatnot is a. It's a lot of deep work, but I feel like as a community we can support each other in that work. And that's what part of what I was saying about when conversations like that have come up on the Facebook group, you know, people offering up resources, you know, books, you know, books to read and things along those lines. I know we've got, there's like a book club like an atheopagan book club and I think that they've read some, some pretty good books, you know, in, in that regard on some of those issues. I definitely, I'm not a part of it cuz reading books for me is a, it's a whole thing that's gets too complicated to get into right now. But but I definitely encourage them to read more of those books that help work on those issues. You know, everybody likes to read, you know, the fun books. Things like gathering loss is a popular one. Or what's the other, the Mark: reading Sweet Grass. James: Yeah. Braiding, sweetgrass. Those books, those books come up a lot in conversations. and those are great. Yeah. Yeah, they're great. I, I'd like to, you know, I'd like to see more opportunities for for unlearning the sort of problematic tendencies that, that, you know, the overwhelming majority of us tend to have. Mark: Mm. James: cuz that makes the community more accessible to the folks, you know, like I mentioned before, that felt it, you know, this sort of spirituality inaccessible before, Mark: Mm-hmm. James: Yeah. And, and build your own tradit. You know, around that sort of thing cuz that can help reinforce all of that and Mark: You know, I, I need to put in a word about that. I, I wrote a blog post probably four or five months ago now. In which I agree for myself, I, I want to create new culture. But I can see how for people of color, they might want to draw culture from their ancestors forward. Um, and so, you know, when I talk about, when I talk about Ethiopia, Paganism being a modern thing that just got started in the early two thousands, and it's not rooted in any culture that really comes out of the fact that I just designed it for me and I'm this white guy you know, this sort of Mongol American white guy. And I think. I've, I've since done more thinking about that, and I think that it's really important for us to acknowledge that there's a place for drawing indigenous traditions, drawing traditions of African ancestry, you know, drawing those, those pieces forward into the ritual practices of people that come out of those, those ethnicities. James: I, I absolutely agree. I think on, on a personal level, I think, you know, for your own like personal ritual and spiritual life, I think drawing on, on, on your heritage is, is absolutely, although I don't like using that word, heritage I think drawing on that is Backgrounds. is, is, is important and can be really sort of empowering and enriching and whatnot. I think it, where the issue comes in is when the overwhelming majority of a group comes from a particular background Mark: Yeah. James: and they try to make those aspects of their background, the primary focus of the community's background. So like, you know, taking a recent holiday for example. So that's an Irish thing, you know, that's a Gaelic culture cultural thing. Yucca: Mm. Mark: Mm-hmm. James: so everybody's like, everybody talks about sow and it's like, I mean, it's not, it's not like a solar festival, you know, it's not one of the cross quarter you know, holidays that is tied to an astronomical. Or anything along those lines, like the solstice and equinoxes. So it is a very sort of culturally specific thing, and not everybody celebrates that. And so when everybody's almost sort of insisted be called that because Halloween is too much of a, I mean, it's, it's even got its own cultural sort of baggage, you know, in terms of like all Hall's Day being, you know, kind of a, a, a more Christian centric holiday and the whole, the whole co-opting of, of, you know, pagan holidays by Christianity idea and those sorts of things. But I think a lot of people, when, when the community, when the greater community refers to it as a specific cultural thing like sa, those people who did not come, did not grow up in that background. Feel isol, you know, separated and they feel like they're not able to take, they feel excluded. So I feel like as a greater, you know, sort of global community or whatever, coming up with new non culturally specific things is great. And then incorporate in your own personal rituals and whatnot, and even your own local group rituals, incorporate aspects of the, of, of your own background into that. And then your group can each, each person can bring their own cultural background into the mix. And you have this, you know, lovely bouquet of, of mixed flowers, you know, that everybody can enjoy. The but yeah, I think that when people lean into those sort of traditional ideas of the holidays, You know, of our, like, you know, that can be one of the things that isolates people who have traditionally been sort of excluded from these sort of circles, and it makes us less inclusive. You know, I personally celebrate sound because That's my background. You know, I'm 93% Scottish and Irish and with a smidge of, you know, other, you know, I'm a, I'm a American mut, you know, with a blend of, of European backgrounds. And but I wasn't raised in any of those cultures, you know, that's a, so that's a thing. One of my. I don't wanna say pet peeves cuz that's not what it is. One of my issues that I struggle with a lot of times is I don't believe that for the most part Americans have in general, white America doesn't have a recognizable, consistent culture or cultural background to draw from. Which I think is one of the reasons why so many folks look to, like Ancient Ireland and Ancient Scotland or ancient Germany and you know, or Scandinavia, they look to Asat true, you know, because of their roots and their heritage and they, or they look to, you know, like the Celtic sort of stuff because of their, you know, their ancestry. It's like, that's great, but you likely weren't raised with any of those traditions, assuming those traditions are real at all. And so, In a way that's sort of a, it's a hot button topic and I'll probably get flack for it and people will talk about me. But I feel like in a way that's sort of still a matter of cultural appropriation cuz you weren't raised in that culture and there are people who legitimately went through terrible things because of their connection to that culture. They were prohibited from practicing just like here in the United States with the, with, you know, indigenous peoples being legally prohibited from pr, from practicing, you know, you know, uh, their, their ancestral traditions and what whatnot to step up. Having not gone through any of that and just adopt those things and say, Well that's, you know, that's my, that's, you know, my heritage. It's like you're, I. I guess blood wise down the road, always, you've got that connection to people who participated in that. But you, you never did. You're, you know, that's not part of your, your culture for the overwhelming, not for everybody. Obviously there are exceptions. People who are like first generation Americans and whatnot. They may have relatives who who carried some of some older traditions and stuff forward. But this idea of participating in these like ancient traditions, like, I mean, it's, Yucca: I think it doesn't necessarily just have to be first generation either. I mean, there, you know, there's a, James: but those traditions have to have been carried forward. Like, I feel like you need to have been raised in the culture to, to really, because otherwise you're, you are participating in a thing without, without any sort of, you know, you're participating in a thing that other people were punished for without. The threat of punishment, you know, and without having gone through those  Yucca: I, think it's really very specific to different ones. I mean that some, some times when those ancestors were forced to stop, Doing tho having those traditions. You know, my, my father's first language, he was not allowed to speak that outside of the home. And his, you know, his, his mother wasn't allowed to speak it. So I wasn't, I didn't get that language from him. Right. But, but there's still a connection that I have to that culture, right? Or, you know, and, and so for instance, my, my child is relearning the language even though there's a generational gap between, you know, what she was, how she's been raised, the culture that she was raised in, and, and wanting to like to rebrace, right, to reclaim and rekindle some of that. James: And I think as long as, as, as those things are being passed down with the knowledge of, of the struggle that people went through regarding those things, like how the, how the, you know, and that's, you know, the reason that you're doing it. But I think a lot of that is disregarded when people just sort of pick up a book on Celtic paganism or something along those lines, and they think that they're participating in these like ancient Celtic rituals and whatnot, which is Yucca: My personal pet peeve around that is when it gets all lumped into one culture, it's like, wait, but, but we're a lot of different cultures, you know? James: I've been involved in Drewry and things like that, and there's this idea of like this Dr. Reconstructionism and whatnot, which I think is. The fact of the matter is, is we don't know what any of the, there was nothing written down and we don't know what was practiced. So these like ancient rights or ancient rituals, they're not ancient. They're all new modern inventions. And there's that zero evidence that, you know, and there's a lot of hearsay and people are like, Well, no, this was passed down. Word of mouth. It's like, yeah. And we've all played telephone, we've all played that game. And there's a good chance that the way that you're doing things is absolutely nothing like what people did then. You know, and you've got the influence of Christianity and things like that. And to think that, to think that, like, I don't know. I think the assumption that, like the monks that wrote down a lot of this stuff, when they were encountering these new cultures, you know, as they were, were coming into the areas that they weren. Repainting and reinterpreting and just straight up lying about things. I think I, I don't think that's an honest approach to, to what that is. So,  Mark: Well, and, and James, this also goes to the lionization of the ancient, right? I mean, there's that whole idea that because something is old, that it's got a deep validity to it. And that's, that's one that I just. Honestly, I don't go with, I mean, to me, cultures are valid just because they're valid and it doesn't matter whether they started recently or, and then, then there are cultures that aren't so valid, like Joseph Smith's arrangement that has now taken off and has many followers all over the world that you know, the values of, which I find really problematic. But just because something is new doesn't make it invalid. And just because something is old doesn't make it valid. But particularly for people where there's been genocidal effort to extinguish the culture, I think it is really important to be able to say to someone who's, you know, grandfather and father were, you know, grandparents and, and parents were not allowed to speak their native language, that they are still entitled to relearn that language and restart those cultural traditions again. James: Sure, I think. But I think that a lot, and I think a lot of it is for me personally, that's it. It's all continued upon intent. Mark: Mm-hmm. James: if you're, if I think if you're going to do that, then you need to be learning about the struggles that they went through. You need to be informing yourself about the reasons why this is an issue, you know? It's like, you know, the, it's, for me, it's like the, the whole like, you know, When it comes to, like in, in indigenous folks, you get the person who does their 23andme DNA test and they get the thing that says, Oh, you're 0.05% Native American. And they're like, Oh, cool. Well, I'm just gonna start practicing Cherokee, you know, traditions or, or whatnot cuz you know, well I'm part, you know, I'm part Native American and what, and, and not learning why that's a, why that's a problem. Mark: Yeah. James: It's like if you're, I, you know, because in all likelihood, you, you, you really, the only connection you have is a genetic, is a genetic connection to those, you know, to those folks because you've not, you know, I don't know. It's a, it's a, it's a complicated. It's definitely not cut and dry. There are definitely, you know, exceptions to the rule and, and, and all of that good stuff. There's, I come from a, you know, a line of people who are very, very far removed from any of that. I, the, the research that I've done on my own family, you know, I got as far back as like the 15 hundreds to some, you know, Sept of SCOs who, you know, the, the, the McCulloughs or, or whatnot. And they were like a, they didn't have their own tartan, which was a, which was a pretty modern invention. They didn't have their own, you know, sort of clan, steel and motto or insignia or anything. There were like a vassal clan of some other larger clan, but. I wasn't raised with any of that. My grandparents weren't raised with any of that. My great grandparents weren't raised with any of that. You know, if anything, there's more Appalachian you know, traditions and culture, which is a mishmash of, of, you know, a number of things. Because the farther you get from the source, the more diluted those things sort of become, the more integrated with other, you know, cultures and, and, and traditions and whatnot. Those things become and they become their own thing, you know? So like, I feel like for me, like I've, I've, I've tried to educate myself on the struggles of those people from my background who were barred from like my Irish ancestors who were barred from speaking Irish, you know, by the English in my. I try to educate myself about that. And I try not to just take it for granted that I'm just allowed because my, you know, my grandmother's last name was Bailey, you know, and I think that there's the overwhelming majority of people that I have encountered in the Pagan community. That's really the sort of approach. There's this romanticized like idea of like ancient Celtic Ireland, you know, that people pursue. And and it goes, it goes back to the whole escapism thing for me. And you know, I think a lot of people are what draws a lot of people to modern paganism. And the new age movement is a dissatisfaction with the way the world is right now and a lack of sort of, Lack of meaningful internal life you know, to to help give them a sense of comfort and whatnot in, you know, the, the sort of times that we're having. And I think that there's that appeal to, it's the reason we read, you know, that's the reason we read fantasy books and things like that, you know, So for a brief time we can live in a world that is not this one. Mark: Yeah, but this one is so amazing. Yucca: Yeah. James: it really is. You open your eyes and you look at the world around you and you see like really look and see the various processes taking place on the. Smaller levels, you can just keep going. You know, like, Oh, well why does that happen? And there's a whole process involved and it's like, and then you can take a piece of that process and say, Well, why does that happen? And there's this whole other process involved, and it's this like fractal rabbit hole that, you know, winds up down in some quantum, you know, wormhole thing Mark: Some probabilistic. Weird. James: Yeah. Mark: Yeah, James: until we're just speculating, because we really don't know, because we are physically incapable of seeing any more detail from that for now. And you can do the same to the greater scale, you know, because the immensity of this universe and reality in general, as you know, is astounding and incredibly humbling. For me to contemplate. I've spent many a night lying on my back as a kid. I had, I built a skateboard ramp for myself, and there would be times when I would lay down on the deck of that skateboard ramp and living in rural America, there wasn't a lot of street lights and things like that to obscure my view of the sky. And spent a lot of time laying, just looking up at the stars in the moon and whatnot, and always feeling that sensation of sort of being held to the earth. Mark: Hmm. James: Like at any moment I could fall off of it Yucca: Hmm mm. James: into the, you know, the sky, you know, up into the, that vastness, because what is up Mark: Mm-hmm. James: that's arbitrary you know, it's in relation to where, you know, to where the ground is. That's up. Mark: Yeah. James: But in the, in the schema things, there is no up. There's no down. It just, we have to put these sort of descriptions on things to help us make sense because of how limited we are in, in our, in our perception. But I think going back to yet another thing that drew me to a, the o paganism is that whole idea of like, that's, I'm, I'm part of all of that. That's, that, that craziness, that just overwhelming levels of complexity. And like we talked you know, yesterday, mark, about the human brain and how, how little we really know about how it operates. This chunk of fat and water and whatnot that sits inside, you know, this bone on the top of our head or our bodies. Excuse me. Throat thing happening. The, the overwhelming, like, I don't know the awe that sets in Yucca: Mm-hmm. Mark: Mm-hmm. James: the, you just, there are times when it just takes my breath away. And it's the appreciation of that and knowing that every other person who's part of the, you know, not just part of our community, but every other person in the entire world is also part of that. Mark: Mm-hmm. James: And if there's anything that connects us, that's, it's that, you know, we're all part of this sort of greater mechanism. I don't know that like, I guess you could call it an organism if you wanted. Yucca: Mm-hmm. James: You know, I guess it all depends on per. , but we're all tiny, tiny, tiny little pieces of this huge thing that operates in a relatively specific manner. Mark: Mm. James: even though it seems like, you know, at times all of the stuff is so random and whatnot. That's sort of the point, is that that's how it works, is that there's no sort of predetermined path. No one has laid it all out, you know, and mapped everything out. Like what's the point of that? You know? Excuse me, my throat. So Yucca: Yeah. Well, I'll, Yeah. James: having me on.  Yucca: Yeah. So thank you James. This has been, This has been amazing. Mark: It has, it's the, I mean, we've wandered into all these really essential subject matters about, about our path and about our community, and it's just been a really great conversation. Thank you. James: Yeah, thank you for, for tolerating my, my ramblings.  Yucca: Well, thank you for sharing them with us. We really appreciate it. Oh, James: my pleasure. Mark: And we'll see you all next week. Everybody. Have a great week.    .

Starrcast Radio Ep. 022 matthew james Episode Description & Track List Genres - Tech House & House The 22nd episode of Starrcast Radio is jam packed with brand new house and tech house tunes from some of today's best up and coming artists along side some well established industry giants! All tracks featured are picked from the Starrcast Radio Spotify playlist. Be sure to follow @matthewjforreal on all socials to never miss an episode! 01. AR (UK) - Regulate (Original Mix) 02. Josh Butler - Human (Extended Mix) 03. MC Flipside, Sinner & James - It's Going Down (Original Mix) 04. Chris Lorenzo, COBRAH - Mami (Extended Mix) 05. Jaded, Joshwa - Kerching (feat. Eliza Legzdina) (Original Mix) 06. GAWP, The Melody Men, Elijah & Grundy - Deeper Love (Extended Mix) 07. Fab Massimo - Once Again (Extended Mix) 08. David Morales - Needin' U (Jonas Blue Extended Remix) 09. Vox & Go - Bass Pump (Extended Mix) 10. EMEXL - On The Dance Floor (Original Mix) 11. High Soundsystem - Morning Routine (Original Mix) 12. Eddy Malano, Mat.Theo - A Bailar (Extended Mix) 13. Hugel, Westend, Cumbiafrica - Aguila feat. Cumbiafrica (Original Mix)

Welcome back to Dialed In! Come party with us in August at Larimer Lounge in Denver or Day Trip in LA: bit.ly/maxlowtour Get social with us: instagram.com/whoismaxlow facebook.com/whoismaxlow twitter.com/whoismaxlow soundcloud.com/whoismaxlow TRACKLIST: 1. BEDRAN. - Gonna Leave You [Great Stuff Recordings] 2. MC Flipside, Sinner & James - It's Going Down [Hot Fuss] 3. Brad Wood (UK) - Roll Out [​​Myth of NYX] 4. MACROLEV ft. Chantelle (Serial Diva) - Got To Move On [Stashed] 5. J. Worra - Loveless [Higher Ground] 6. Chris Lorenzo, COBRAH - Mami [Late Checkout] 7. LF SYSTEM - Afraid To Feel (CID Remix) [Warner Records] 8. Boston Bun - Don't Stop [Insomniac Records] 9. Cloverdale & SQWAD - Round N Round [VIBRANCY] 10. Max Low - Girls Around The World [IN/ROTATION] 11. Audioleptika, HouseKeepers - Like This [Great Stuff Recordings] 12. Dave Summit - Know You Better [Terminal Underground] 13. Robert Flott - Why Do I Like It [Force of Habit] 14. Baby Weight - We Werq It [Farris Wheel] 15. Poolhaus, Beni Hana - Dip It Low [Club Sweat] 16. Dead Space - Getcha Freaky [Obsessions Records] 17. Tyler Coey - Underground [Uprise Music] 18. Disclosure - You & Me (Westend x Local Singles Edit) 19. Tommy Trash, Go Freek, Lucy Lucy - Darkness Into Light feat. Lucy Lucy [Club Sweat]

Interview with Tech Leader James Barrood and CEO of Scopio. Original description from James: It was great to chat with Christina Hawatmeh, cofounder and CEO of Scopio; clip highlights what entrepreneurs should consider when pivoting their business model. * Links to full video and podcast in comments We'll discussed a number of things including: 1. Christina's entrepreneurial journey 2. Scopio's growth and pivots 3. State of #NFT marketplaces 4. Paying artists in crypto and NFTs 5. Launch of first global photo book of 2020 #pandemic https://lnkd.in/g4t4gBWY Christina, as CEO of Scopio, overseas vision and growth. Scopio is a community-based platform and marketplace where anyone can share images and stories from around the world. With the goal of elevating human stories told by people from underrepresented communities and regions, the vision of Scopio is to distribute the world's images so they can make their place in history. Scopio has over 25k businesses who use millions of images and hire more than 14k artists from 150 countries in photography, art, illustration and more. Christina is the founder of the first female founded NFT marketplace, and first photography focused NFT marketplace. She was named Top Entrepreneurs to Follow by NY Finance. She has her BA in International Affairs from the Elliott School at GW and MA In International Affairs from Columbia University. She has been featured in CNN, Entrepreneur Media, and Scopio on Forbes30u30. Original video here: https://www.youtube.com/watch?v=xfHK5LY3XkI&feature=youtu.be Original podcast here: https://podcasts.apple.com/us/podcast/77-entrepreneur-chat-christina-hawatmeh-a-few-things-25-min/id1526155088?i=1000568005785 #tech --- Send in a voice message: https://anchor.fm/scopio/message Support this podcast: https://anchor.fm/scopio/support

James Bryan Smith is a professor at Friends University in Wichita, Kansa and author, including his new book, The Good and Beautiful You. Today, James tells us how he found Christ, his amazing set of mentors, and the season when he forgot his first love. He also shares how God thinks about us and why it's different that you may have been told. James' story reminds us that no matter where you are on the journey, you're loved by God deeply. Listen to James' story in your favorite podcast app now! Stories James shared: His work at Friends University as a teacher Growing up in a Methodist church in Denver Giving his life to Christ before he went to college Being mentored by spiritual formation luminaries Having Rich Mullings in his attic for two years Learning the spiritual disciplines from Richard Foster Going to seminary and being ordained in the United Methodist Church Why he wrote this book How he realized that his soul had needs that weren't being taken care of Why memorization of Scripture is valuable to him Great quotes from James: It goes a lot better if I think I'm quite marvelous. Every need my soul has, Jesus provides. I want to be at the point where I love God even if God doesn't provide all my spiritual feelings. God is crazy about you and loves you more than you can imagine. Resources we mentioned: James' website Things Above Podcast ApprenticeInstitute.org The Good and Beautiful You: Discovering the Person Jesus Created You to Be by James Bryan Smith Related episodes: Laura Barringer and Scot McKnight and Becoming an Agent of Tov Amy Jackson and Trusting God with the Questions Brian Zahnd and the Beauty of Christ The post James Bryan Smith and Loved Beyond Imagination appeared first on Eric Nevins.

Lying next to the River Avon just inside the Cotswolds, Avoncliff Wood is no ordinary wood. The site hosts one of the biggest trials in the UK to find biodegradable alternatives to plastic tree guards. As if that wasn't enough, it's also a living laboratory, revealing how ash dieback will really affect nature. Site manager Joe gives us a special behind the scenes tour to learn more. We also meet volunteer wardens Kay and James, and catch up with TV presenter Alice Beer who lives nearby. Don't forget to rate us and subscribe! Learn more about the Woodland Trust at woodlandtrust.org.uk Transcript Voiceover: You are listening to Woodland Walks, a podcast for the Woodland Trust presented by Adam Shaw. We protect and plant trees for people to enjoy, to fight climate change and to help wildlife thrive. Adam: Well, I've changed trains at Bath Spa for what appears to be a very small train which is taking me to Avoncliffe. Now, in fact, the train conductor has told me the platform is so short when I get there only one door is going to open. He came through asking “Is anybody getting off?” and I'm the only one, the only one. Well, I have to tell you, the station here is straight out of a 1930s style Agatha Christie film, that's what it screams to me. Beautiful signs, beautiful flowers, the River Avon just almost next door to the station, a great looking pub and down at the end of the platform one single man who I'm assuming is Joe Middleton with the Woodland Trust, site manager here and the guy who's going to show me around. Joe: So, welcome to Avoncliffe Wood in the Avon Valley just in between Bath and Bradford-on-Avon. We just crossed over the famous Avoncliffe Aqueduct and just followed the River Avon until we hit even Avoncliffe Wood which carpets the side of the valley across this area of the Cotswolds AONB, Area of Outstanding Natural Beauty, right at the southern end of the Cotswold AONB. Adam: There's very little woodlands right here, so what's going on in this first field? Joe: So, we're just at the edge of our woodland creation. So we bought 20 hectares, about 40 football pitches, of ancient woodland – untouched for generations – and to buffer that, to try and expand carbon storage and fight climate change and the ecological decline we're seeing we actually bought another 10 hectares, another 20 football pitches, worth of agricultural fields essentially and meadows which were very intensively grazed and we've planted that up with over 5,000 trees to try and get the next generation of trees in here. Adam: Wow, okay so shall we go through, have a look? Thank you. Joe: So just next to us as you can hear the birds singing away, there are blackbirds, robins and blackcaps in there. There's one acre, here, just on the right-hand side, which was actually planted up 25 years ago by a neighbour. So, the very small one acre square now 25 years later is teeming with you know 30-40 foot birch trees, willows, hazels and hawthorns, full of cherry blossom and hawthorn blossom, and birds nesting, tweeting, and insects buzzing all around us! It's quite rare these days! So hopefully we think everything we planted up here, all 5,000 trees would look like that in 25 years. A proper young woodland. Adam: And you've clearly, I mean, they're not uniformly planted so there's a big patch in the middle which you've got nothing and they seem to be done in clumps, so why have you done it like that? Joe: Do you want to know what that patch in the middle is? That's a sledging lane. Right well so we carried out community consultation when we first bought the woodland. We asked all the locals, we said look there's this really lovely kind of big expanse of fields all around the wood, we want to buy it, we want it to, you know, fight climate change, we want to try and do our bit for wildlife. And they said whatever you do leave us a sledging lane because when it snows here this hill is perfect for tobogganing down. Adam: laughs you see I thought it was going to be for some really technical reason! You need to do that for a very specific reason, I didn't realise it was gonna be sledges. Joe: There are also wide rides, you know, big areas that people can walk through. We've created a really good path network in here as well in some areas and natural regeneration so there are areas unplanted and there are areas purely for tobogganing fun in the middle of snowy winters. Adam: And why not? It's very important. Now, the thing that we can see in this immediate field is a lot of tree guards and well I'm also standing by a little sign which says biodegradable tree shelter. I always call them tree guards, but this was called tree shelter. Now that is not by coincidence. The tree guards are a huge issue, aren't they? Joe: Yeah, I mean with governments pledging to plant millions if not globally billions of trees to fight climate, you know hold onto carbon, stop floods, we have to be able to do it without using oil-based plastics. For the last 35 years people have just, every tree that's gone in you know, not every one, but most trees that've gone in have been planted with a giant plastic tree guard which doesn't biodegrade, it litters, it causes microplastics, and people… Adam: And are they reusable those plastic guards? Joe: They are to a certain degree, they're not easy to recycle, there are some better recycling schemes now just starting. But actually, probably one in three are reusable. But a lot of places are too far to go and get them, people don't bother they get left and derelict and are expensive to go and collect every single one, especially when you're planting hundreds of thousands. So the biodegradable alternative is the absolute key. Find something that naturally, you know, biodegrades away back into the soil, doesn't harm anything, it doesn't use oil. Adam: Right, I'm just going to go up to… So, this is a biodegradable one? Joe: Exactly. Adam: It looks sort of yellowish and quite canvas-like but it's very it's very firm, it doesn't feel, I mean that feels a sturdy old thing this. Joe: Yeah so, we've got 5,000 trees we put in. We are using some old recycled plastic ones, so we've been given a few, but actually we've got 16 different types of biodegradable alternatives to plastic here. So, they range from cardboard, you know, made from paper or mulch to biodegradable plastics, which the jury is out on at the moment, to actually resins and oils from things like cashew nut shells and pine resin. We've got a train coming past us! Train noise Two and a half years ago, when we planted the 5,000 trees in all these biodegradable guards, we launched something called Big Climate Fightback, a big Woodland Trust campaign to bring people out to help plant trees and do their bit. And actually, we ended up with over 250 people arriving one Saturday – spades in hand – on the trains in all the train stations. And the people in Bath, and Bristol and Bradford-on-Avon must have thought “what on earth is going on?”, with over 250 people arriving with spades on the platforms. And they came in here, they planted trees en masse – school kids, families, local groups. Everyone came here to try and plant trees and with that we, you know, told people about the problem of plastics and we've basically now got one of the biggest sites in the UK for trialling an alternative to plastic – to try and protect these trees so they get to five, seven years to get to a good height where they're no longer susceptible to browsing by deer, by rabbits, by voles, which is the main reason the shelters and guards are here to protect them. Adam: And correct me if I'm wrong but there is a sort of school of thought saying well don't use any guards. I mean it's now sort of established practice that you've got to use a guard otherwise the tree won't survive, but there is this sort of vague thought we never used to use guards in the distant past, so why have we suddenly got obsessed with them? Joe: I mean deer numbers are higher than they've ever been, it's a huge amount of browsing by deer with no natural predators, so it's complicated, that is the simplest answer, but putting up a giant 6-foot fence is probably you know the other solution which is in a lot of cases, depending on size, it can be much more economic, more practical. Very small areas – probably not massive areas, but medium sized – deer fencing is probably the answer, but then you've still got rabbits and voles you've got to fence out. So, doing nothing, over-planting, natural regeneration – we've got an area if you look up to the edge of the woodland we've left the buffer zone of about 20-30 metres around lots of this woodland, all around it, with nothing, we've just fenced it off and we're just going to allow the woodland to expand – every one of those berries and those nuts and seeds that drops into the ground will hopefully just have a, you know, wild natural generation. Like Knepp with a huge rewilding – that hope of what happens there doesn't happen as easily here but can take a long time. Hopefully that will establish woodland itself, but it may take 50 years. At the moment we've got a climate emergency on us and amongst us, so we have to do something now so planting trees is a very good quick solution. Adam: A huge issue because if we are planting for ecological reasons what we don't want to do is every tree comes with its own polluting plastic. I mean that's not the future. So, the answer to that question may well lie in the thousands of experiments you're carrying out in this field we're standing in. Joe: Absolutely. Adam: Right, well I've stopped us walking. We better… I better get my steps in. So, let's carry on. Where are we heading to now? Joe: So, we're gonna go and find our two volunteer wardens in a minute. Adam: So, we've got two volunteers hard at work. I can see just up the hill a bit. Joe: So, this is James and Kay who are both our two volunteer wardens. They've been working now replacing broken, rotted, fallen biodegradable tree guards, replacing the trees as they die as well, and these two have been working hard to help keep an eye on them for the last few years for us. Adam: It's got them hard at work! Joe: They are incredibly hard at work. Hey guys how you doing? Kay and James: Alright? Hi! Hello. Adam: They do have you hard at work! So Kay and James, so first of all before we get to what you're actually doing, why have you been doing it? What's your interest? Why did you volunteer to do all of this? Kay: Well, you've been a volun… a member of the Woodland Trust for about 25 years. James: Well, it's about 35 years now. Kay: Since this is really on our doorstep, this is a perfect opportunity to get really involved with the Woodland Trust. Adam: James, I mean, you've been a Woodland Trust member for a very long time. And, ah the debate around trees has changed enormously. Hasn't it? James: It has, and I am glad that people have suddenly valued trees. I was in the military but, before that, I was out of Kent, out near Canterbury and my uncle was a farmer with orchards and basically from the earliest days I knew about the trees, the names of trees. The pollards at the end of the field as windbreaks, the various wetland trees down in the floodplains around the Romney Marsh area. But I already had a fascination for the massive oaks, the spectacular deciduous trees on the horizon I think made this this countryside look like it does, so British, and so English, with these gorgeous round shapes, compared to a lot of conifers you see in all the European places I've been to. Adam: Okay, talk me through a bit about what you're actually doing here – I mean, you know, hammer in hand I can see. Kay: Hammer in hand, we're replacing some of the tubes that haven't stood up to the wind and the rain. We found that circular rather than rectangular and… Adam: works, circular works… Kay: circular works, because otherwise if it's square they act as a flag, especially cardboard ones. When they get wet, they just disintegrate – as you can see there's lots of bare sticks around here, so yeah, we're going through and replacing them with circular ones. Adam: Fantastic, now I know that the local community were very involved with the Trust, sort of when the Trust took over and sort of designed this site. Tell me a bit about what the local community feel. Kay: That was a great day. We had two schools frog marched in, and yeah, with their teachers and staff and they planted the whole area, which was lovely – they were naming the trees as they were planting them. I know the whole village got involved with planting 5,000 trees over a progressive few weekends and subsequently James and I have been replanting the failures. Adam: And James I mean very clear how engaged you are with this sort of issue but to tell me about the feelings then of the local community and what they what they felt when Woodland Trust first came here and how involved others are apart from you two. James: So, I'm very pleased that people are actually accepting, on the whole, that their backyard has been filled with trees and shrubs which are growing up for their children's lifetime. Kay: We have had some objections to this, but they haven't given their reason why. I assume it's because it's used when we do get snow, which is very rare, it's the sledging field. The Woodland Trust have kindly left a gap for sledging but then they moan that the grass is too long so you can't please everyone all of the time. Adam: But when it was first thought about, and I think it's really interesting isn't it, that you say the community are largely behind this, but I think if others are listening to you now where they may be talking about a woodland on their doorstep created by the Woodland Trust or their own sort of organisation – I wonder what people's first reaction, what were their concerns and hesitancies that you heard about that may have been overcome? Kay: People don't like change do they? And at the moment it's, yeah, it doesn't look picture perfect with the stakes and the guards on, but you've got to envisage what it will look like in 10-15 years' time. You've only got to look at the hedgerow, which is behind us now, and at this time of year which is beginning of May, it's absolutely gorgeous. The blossom's out, the fresh burst of the leaf is so colourful and vibrant, what's not to like about having a wood on your doorstep? And we were very lucky. Adam: Okay, well brilliant, well thank you very much. Look I don't want to disturb you anymore but that's brilliant. Thank you very much. Kay: Thank you! Adam: So, we're gonna head up now to the ancient woodland. Now this is certainly unique in any of the Woodland Trust sites I've been to, because normally the Trust actively encourages people to come in, but this is the only site I've been to where the ancient woodland bit you stop people from coming. Oh, look this is… Joe: This is our nifty little fenced area which… Adam: We're going through the barbed wire so just be careful going… So, explain to me why you've unusually actually kept the public out of the ancient woodland. Joe: Ash dieback really is becoming a huge problem across a lot of woodlands I manage. I manage about 30 woods across the West Country and every one of them has large amounts of ash that really grows really well on these sort of limestone soils and in these hills around the Mendips, the Cotswolds. Gosh there's a huge Buzzard just soaring over the edge of the woodland there. So, ash dieback is killing off essentially all our ash trees. Estimates vary at the moment. You know recently it was about 95% and then people said it was around 60%. So, the latest estimate is that about 60% of our ash trees will die over the next 50 years. How fast they die is the worrying thing but when we bought the wood in 2019 ash dieback was blowing across the landscape. It is a fungal disease. It naturally spreads. It came over from Asia originally in infected stock of nursery trees being planted out. So, no one's been able to plant any ash for the last three years. It's now being reported all the way from the east of Great Britain, all the way to the west, every year, until it's spread and spread and spread now our mature ash trees – whether they're in a hedgerow, along roadsides and country lanes, whether they're in woodlands – ash trees are essentially dying en masse, and this is killing off everything that lives and breathes on those ash trees. Adam: And the reason you're keeping the public out is because the trees are dangerous, are they? They might fall? Joe: Yeah exactly, so where you have a path or road or property you have to maintain, you know, what's reasonably practical safety for people to be able to walk under it. We realise if we were to create a load of paths, allow a load of people into now what is a fantastic ancient woodland, but it has never really had any paths in, it's been undisturbed for generations – over 100 years now – we don't think anyone set foot in it. So, we didn't want to create any paths because we didn't want to fell any trees, so we've kept it shut and all the locals have seemed to have bought into that and are really pleased this is just a woodland for wildlife. They're happy enough to walk around the fields where we've created woodland. Adam: And is it also something of a laboratory to see what happens to ash dieback? If you really don't step in and try and do anything? Joe: Exactly yeah, so, in so many woodlands across Britain because of the large amount of public footpaths, people are having to fell for health and safety reasons, so there's not very many examples where if no one goes in and nothing happens, what happens to that wildlife? Does it also dramatic- dramatically decline, with the trees losing? Or are there some winners? So, are there some decay species? Some fungi species? Some insects, beetles that love decay rotting wood that increase? So we don't really know. So, this site we've turned into a living laboratory, this is a unique case of where we are monitoring the species within the wood, how they react to ash dieback over time. Adam: We're now going into the bit of ancient woodland which the public are locked out of and so we have got this big “keep out, closed due to ash dieback” (sign). Joe: You have exclusive access! Adam: Brilliant, now I gotta say, I mean I've got to take a photo of this because this is a sea of amazing plants. I'm really, I want to be careful where I tread, I don't want to disturb anything. Because I'm completely ignorant, what are these plants? Joe: Can you smell it? Adam: Yeah sure, it's extraordinary! Joe: This is wild garlic. Adam: Is that what it is? Joe: Ramsons are all in flower at the moment and now we can see for literally, well, hundreds of metres is the white snowy tops of these wild garlic flowers that are just coming up across the thick green leaves and when there's no path in sight you have to be careful where you tread. So, luckily wild garlic's quite prolific, so we'll tread carefully, but an undisturbed wood looks like this. It's like a sea, or a carpet of sort of snow. Adam: That is extraordinary, isn't it? Yes it is a sea of snow and that's the advantage of actually having undisturbed places. Is that it, I mean, yeah sea is exactly what it looks like. These sort of white foaming tops to the rolling green waves of vegetation. Quite amazing. Joe: All you can make out are the occasional tracks of foxes, badgers, stoats, weasels, that have gone through it, maybe the odd deer as well. But insects seem to be declining catastrophically. The ideal analogy is, you know, people used to drive around even in the 80s and you get windscreens splattered with bugs and insects. It just doesn't happen anymore and that massive decline of insects, it's unknown the reason, it probably doesn't help with, you know, when people are using lots of pesticide sprays across the countryside, along with climate change, but as all those insects decline so do our birds that feed on them, so are our bat species – so they're not fat enough to basically get through the hibernation and then when they come out of hibernation and the young are born there are just not enough insects so they don't make it through the summer essentially, and they don't have another generation that makes it. So, yeah, bat species are declining at the moment, so that's one of the first things we've noticed, and well ash are declining en masse. There were a lot of these species of ash that we're monitoring that are all dying en masse. Adam: I mean so that, I mean, …you're telling me all these terrible things Joe: Yes, I know. Adam: But I mean that's important it's still amazing landscape still isn't it? Joe: Absolutely. Adam: And that's always been true with woodlands. That decay brings its own new life and decaying trees are very important parts the of the ecosystem, but even given all of those challenges that you talk about are there any, are there any high points, any reasons for optimism? Joe: Well, wild garlic's obviously doing really well in this particular wood! But there will be some species that do, really, there will be some species of butterfly that you know do really successfully with the increased amount of light. But one of the best success stories, the best things you can do to feel positive about it is to go back out into those fields, plant the trees, the next generation, so that if some of these woodlands do suffer for whatever reason then we've got far more woodland habitat. We need to increase our woodland cover from about 13% to 20% fast and then if we get 20% – we've got the shrubs, we've got the tree species, got the rewilding areas – to be able to provide those homes for the species that aren't doing so well. That's the key I think is to plant the next generation, get there quickly. Our woodlands have a fantastic history and have been managed over time. This is just the next phase in the management to basically keep an eye and ensure our guardianship secures for that next generation in the next 50-100 years. Adam: Well I'm going to leave Joe to smelling his wild garlic, because TV presenter and journalist Alice Beer, who I used to work with, I know lives not that far from this woodland. Now I know she's out and about today so I'm going to call her on her mobile to discuss what the countryside around here means to her and her family. Okay, so just Alice first of all we should explain a bit about our history, so everybody… Alice: Oh must we tell everybody? Do you think we should? Adam: I think we should share a little bit. I used to open letters on Watchdog which was a massive massive programme at the time and I can't, do you remember how many people watched it? I can't Alice: Well I don't know I'd come to watchdog from That's Life and That's Life, which was before you were born Adam I'm sure, had 15 million viewers in its heyday and I think Watchdog was around 7 million viewers, which now is completely unheard of, but then you know it was just 7 million people watching it and more importantly 7 million people putting pen to paper. No emails, pen to paper, and thank God Adam Shaw was in the post room! Adam: Yes I was opening the 7 million letters with one or two other people and Alice was much more senior, so we would come to pass those stories onto Alice and of course, you are now, what's your official title? Alice: I suppose I'm actually probably daytime television presenter but I'm far too much of a snob to say that! I kind of dip in and out of various things trying to still help the little guy or pass on information. Adam: You have a regular spot on a very big programme, This Morning? Alice: Well, This Morning, yes, it's every day, it's now two and a half hours, they keep extending it! I am waiting for it to bump up against the Six O'Clock News soon! But This Morning it was, “can you do a piece on brisk walking and the health benefits”, as a result of some survey that came out, so here I am for the second time today brisk walking and broadcasting at the same time which is fantastic! Adam: Very good! Don't trip over! You've got a couple of dogs with you haven't you as well? Alice: I have, I've got Stanley who's my five-year-old schnoodle and his girlfriend Tilly and there are times when they become quite amorous in the long grass but I'm going to try and keep it clean for your sake! Adam: I knew you when we used to work in Shepherd's Bush in London, but you are now a country girl aren't you? Alice: Yeah, wellies welded to my feet! I grew up in suburbia and in North London suburbia and the countryside wasn't really important to me, but my parents took me out, took me and my sister out walking quite a lot. There was always “shall we do the walk through the woods”, “should we do the walk through the bluebell woods” which is slightly longer or “should we go up and round” which involved the hill. So, there was always a consciousness of walking in the countryside as a pleasant thing to do, but as we've got older, the countryside has become more important to me and we have been doing that thing, my partner and I have been doing that thing where we're trying to move out of London and we've settled on this beautiful village, beautiful functional village not far from Malmesbury in Wiltshire, which is where I am now, walking alongside the River Avon. So not too far from Avoncliff and the same body of water sort of flowing past me which is rather nice. Adam: How lovely. I know, I've seen you on This Morning as you're talking about wellbeing, and in terms of actually, with your consumer journalist hat on talking about the gadgets you could buy to help with wellbeing and having lights I think that show, sort of, natural light. I mean, how important do you feel it's been for you and your family during these rather difficult times to have access to nature and the outside? Alice: It's been everything to me. Everything. I've got teenage girls in fact it's their birthday today, their 19th birthday today, so for them probably it spells isolation for them because they didn't grow up in the countryside, or this this particular part of the countryside, so you know this means being away from their friends, but for myself and my husband it's been, it's been really important. For me to leave the house and walk in space because in London everything has felt very close and very claustrophobic and I'm mentally not good at that at all! So, I'm incredibly lucky to be able to breathe and give myself sort of mental and physical space away from other people. I was able to work from here, so I did sixty live broadcasts from, in effect, my back garden during lockdown. Adam: It's really interesting that you talk about your girls sort of feeling a sense of isolation because they came from the city and now are in a very rural area. I often find that it's a curious thing to get one's head round because really the nature debate about sustainability and trying to be better for the world is often very strongly led by young people. Alice: Oh it's theirs, it's completely their campaign! But I'm not sure that they associate it with, I mean, I feel like I'm treading on dangerous territory speaking, you know, putting words into their mouths because they're both very eloquent, quite passionate girls. I feel that I'm not sure that they would stand out in a field and say “we must protect this”. Probably coming from the city, they feel more that they see stuff, they see things going into bins, they see landfill, smoke, pollution. So, they see the big preservation of our world from a city perspective, probably more than standing in a field and thinking “oh this must never have, you know, thousands of houses built on it”, which is what probably makes me panic as much as anything. Adam: Do you get a sense of a change in people's attitudes in the way they behave, I mean, I think people talk about the need for ecological sustainability. I see amongst my friends and family, I have to also be careful about what I'm saying, I see less actually willingness to change personal behaviour than a willingness to say it's important, but they don't do an awful lot. Do you see that real difference? Alice: I'm a huge hypocrite, but I am now suddenly, it was probably about six months ago I was putting something in the bin, and it sounds like a strange Greta Thunberg epiphany, but it slightly was. I was putting some plastic in the bin, and I was trying to clear out a room and I was thinking this is going nowhere! This can't be recycled. This has to go underneath the ground, and this is not going to break down. I had a sort of panic about the fact that well if I was doing this and everyone was doing this and though I sort of have had that epiphany and I am changing my behaviour, and nothing particular triggered that, apart from me clearing out a bedroom and realising I had too much stuff. You know, which is odd, but you know, in terms of the big picture in the world I think it's very hard to make individuals feel responsible when we see big companies not taking responsibility. It's that sort of, well what difference is little me gonna make? And I've sort of had that, well I'm going to make a difference, so I will. I've had that moment and I think we have to all have that moment and I'm just about to fall into the River Avon, which could be interesting! I'm trying to encourage the dogs to have a drink. There you go guys, come on, look Tilly have a drink! Yeah well they're sort of having a drink, but I'm the one that's most likely to go in here. Adam: Well look, Alice, I feel split because I quite like the sound effect of you going in to end this, it'd be a great end wouldn't it! But on the other hand not a great way of re meeting after all these years. Look I will let you get on with your walk but thank you very much, thanks a lot. Alice: Thank you, thank you. Adam: Well, let's leave Alice Beer there and indeed all our friends at Avoncliff Woods. I do hope you enjoyed that and if you want to find a wood near you, you can go to the Woodland Trust website, woodlandtrust.org.uk/findawood and you can find a wood that's local to you. So that's woodlandtrust.org.uk/findawood. I do recommend you do that. Until next time happy wandering! Voiceover: Thank you for listening to the Woodland Trust Woodland Walks. Join us next month when Adam will be taking another walk in the company of Woodland Trust staff, partners and volunteers. And don't forget to subscribe to the series on iTunes or wherever you're listening to us and do give us a review and a rating. Why not send us a recording of your favourite woodland walk to be included in a future podcast. Keep it to a maximum of 5 minutes and please tell us what makes your woodland walk special, or send us an email with details of your favourite walk and what makes it special to you. Send any audio files to podcast@woodlandtrust.org.uk and we look forward to hearing from you.

HIGHLIGHTSThe JB Sales difference: Access to immersive sales learning from the frontBeing "on" all the time is exhausting; balance is needed to thriveTip of the Spear: Blood, Sweat & Sales—James' first 2 years as an SDRPersonal branding and having conversations with prospectsGamification creates momentum and healthy competition QUOTESJames: "Pragmatism is the religion of sales. What works is the right way. So be wary of anybody out there saying well, my way is the right way to do sales. The right way is the way that works for every individual prospect because nobody buys from the same person the same way all the time."James: "Change in behavior and how people can change the trajectory of their career with simple acknowledgment of the fact that their behavior impacts everything about what happens in the future."James: "It's not our job to convince or persuade people that they need what we have. It's our job to sell what we have to the people that need it."James: "Marketing is finally waking up to the fact that, if they support these personal brands that sales reps are creating for themselves and they show them the road to success building it and they help them along the way, how about that, it helps them build pipeline."James: "Something that's gamifying it and having people feel like they're addicted to that name on a screen. I have to be there because that's the goal. It forces the creativity and that's the part of it that really helps reps stand out."Connect with James by following the link below:LinkedIn: https://www.linkedin.com/in/jamessaywhatsalesbuckley/Website: https://joinjbsales.com/

James Oliver Jr. is the Founder and CEO of The ParentPreneur Foundation, which empowers Black ParentPreneurs so they can leave a legacy for their beautiful Black children. Chad talks with James about inspiring, encouraging, and supporting ParentPreneurs to lobby to try to close wealth inequality gaps, shoot their shot and send cold emails, and engage in a community that supports one another. Parents Making Profits (https://www.parentsmakingprofits.com/) The ParentPreneur Foundation (https://www.parentpreneurfoundation.org/) Follow The ParentPreneur Foundation on Twitter (https://twitter.com/ParentPreneurF), LinkedIn (https://www.linkedin.com/company/parentpreneur-foundation/), or Instagram (https://www.instagram.com/parentpreneurfoundation/). Follow James on Twitter (https://twitter.com/jamesoliverjr) or LinkedIn (https://www.linkedin.com/in/james-oliver-jr/). Follow thoughtbot on Twitter (https://twitter.com/thoughtbot) or LinkedIn (https://www.linkedin.com/company/150727/). Become a Sponsor (https://thoughtbot.com/sponsorship) of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. And with me today is James Oliver Jr., Founder, and CEO of the ParentPreneur Foundation, which empowers Black ParentPreneurs so they can leave a legacy for their beautiful Black children. James, thanks for joining me. JAMES: I'm super excited to be here. Thanks so much for having me. CHAD: So I just said, in a nutshell, the tagline for ParentPreneur Foundation. I know it's a community that brings people together, Black ParentPreneurs together. How did you get started and see the need for this, and how did you actually then make it happen? JAMES: Oh boy, that's a great question with a semi-long answer, so just hang in with me, but I think it's a really compelling story. So back in 2013, (I'm from Brooklyn, New York) at the time, I was living in Northeast Wisconsin. It started in 2011. I was trying to build a startup called WeMontage, which was the world's only website to let you turn your digital images into removable photo wallpaper. CHAD: If you haven't seen it, by the way, you should look at it. That description that you gave, even though it describes it perfectly, I didn't realize until I went to the website and looked at the pictures exactly what it is and how remarkable of a product it is. JAMES: Well, I'm delighted that you say that. Thank you so much. And that's part of the reason why [laughter] it failed. I mean, it's still around. And I know we have a bunch of designers in the community. So look, the website still works. The underlying collage editing software is still brilliant, but the UI UX needs a lot of love. It's a bit of a zombie with about $10,000-$15,000 of technical debt floating around over there. [laughs] But the product still works. And we still print, ship them sometimes. And we have tons of repeat customers. It's just one of those things. You build a great product, and they will always come. But the product is still brilliant still today. So back then, I was a non-technical founder. I was out of money. I cleaned out my savings and living in the middle of nowhere. There wasn't exactly a bastion of technology startups or diversity, even for that matter. And I was fortunate to get into Gener8tor's...I think we were the second cohort. Back then, it was super early. We went to Madison. And right now, Gener8tor is killing it. But I was out of money. I was thankful to get into their Madison cohort, which was a two-hour drive away. My ex-wife now was pregnant with our twins. The kids were supposed to be born end of March. Gener8tor ended early April. So I was like, okay, this timing works out brilliantly. But a day or two before the program started, I had to deliver, and we had to deliver the twins prematurely. Otherwise, my son would have died. CHAD: Wow. JAMES: His blood just started to circulate backwards. It was crazy. So we had to take them out. They weighed two pounds apiece. Every time I tell this story, it gives me agita, man. The accelerator was a two-hour drive each way back and forth to the NICU, waking up at 2:00 a.m. every morning because I couldn't sleep. I cried every day. I had a really talented developer on my team, but he had his personal demons. So he was really unreliable. But he was a brilliant guy. He was so smart, really talented. But anyway, I got through the accelerator. Right before I was going on stage for demo day, I got a call from this angel that we pitched. We were raising $250,000 at the time, which really, in retrospect, was not nearly enough money. But I got a call. He said, "Hey, we're going to fill your round." I don't know. What does that mean? I don't take anything for granted. [laughs] What do you mean? "We're going to give you $250,000." And then I just dropped to my knees. I thanked God. And I cried because I had sacrificed so much to get to that point. Thankfully, my daughter came home after six weeks, and my son came home after ten weeks. The kids are doing fine. They drive me crazy, but they're beautiful. CHAD: [laughs] How old are they now? JAMES: They just turned 9 in January. So after I launched WeMontage, I hired just a really remarkable technical co-founder and just a great guy. We still have a wonderful relationship. We got in there, and when I started out, I was like, well, I'm going to start a blog. I started a blog, and I was like, one of these days, I'm going to use the content from this blog to write a book. CHAD: Before you move on, so in those early days, you had just gotten into the accelerator. You had this thing you needed to deal with with your family and delivering the twins. And did you ever consider dropping out of the accelerator at that point? JAMES: I wasn't going to go, but I knew with that decision, WeMontage never would have come to light because I just didn't have the resources to make it happen. But as a family, we decided that I need to go do that and crush that, and so I made that choice. We raised money. In retrospect, we raised just enough money to fail because, look, the software was cute. We were running around pitching angels. It was cute to show look at what we can do, look at what we could do. When we turned the thing on, it was so unsustainable. It was a black box. And I was on the phone literally with customers holding their hand to get them to place an order, and that was clearly unsustainable. So we made the decision that we need to fix this thing. We need to pull it apart, make it modular, stabilize the code, build on it. And by the time we got done with that, we only had a couple of months' cash left. And I remember...man, if anybody has never told you this to your face, I promise you it's a hard thing to hear. They were like, "We're not going to throw good money after bad." I'm like, well, damn. Like, thanks. We have our first Today Show appearance coming up here next month. So thank you for that. Thanks. [laughs] Man. CHAD: So you actually did go on the Today Show. JAMES: Yeah, we got featured three times on the Today Show. I mean, on my own without a publicist, I got Today Show three times, Good Morning America, Money Magazine, DIY, Martha Stewart, on and on. CHAD: I'm curious, after making an appearance like that, do your sales go up? JAMES: They do. They did with the Today Show. So it was funny, like that first appearance, they didn't even put the graphic on the bottom with the name of the business. When Mario mentioned it, he said, "wemontage.com." Man, our freaking website went crazy. It crashed the website. [laughs] But we were kind of already prepared for it to crash. We had a little splash screen up and information. We got it back up in; I don't know, it was less than an hour. But I spent literally all day getting back to those people. We gave them a coupon code. And we did about $15,000 that month from that one segment, which was great. That was our best month to date. I mean, all total, I've probably done $75,000 to $80,000 in sales from the three times we appeared on The Today Show. CHAD: That's great. We've had clients, or I've known people who have done appearances like that, and it seems a little bit hit or miss. Sometimes it won't even result in a blip, and other times it's huge. And I'm not sure what the trend is when it matters and when it doesn't. JAMES: This is the point: we all love these vanity things. We want to get exposure, exposure. So I have a really great relationship with Seth Godin, and he's a big supporter of the work I'm doing at ParentPreneur Foundation. He gives us scholarships to his marketing seminar, and he comes to visit with us sometime. The last time he talked about...he said, "Stop trying to do things to get attention. Spend your time getting your customers to tell their friends about your business." And that's a whole fact. We love the vanity, but at the end of the day, PR does not necessarily equal cash flow. I had some hits. I got on Good Morning America, and that was not nearly as good as the Today Show. But that was by virtue of the last-minute change that they made in terms of how they were producing the segment. When they introduced my product, they had the camera on somebody else's product. They had people calling me about somebody else's stuff which is like, are you serious? But what are you going to do? You can't control that. So yeah, those things are good. I will say that having that stuff on the landing page is good for credibility. People feel more comfortable, especially if they can see it. So that stuff matters to a point, but I wouldn't be spending a lot of time. I certainly would not be wasting a penny on a PR professional if I was a founder. I just wouldn't do it. All that stuff I rattled off I did on my own. CHAD: Awesome. So you started to build a blog. [laughs] JAMES: Yes. So the intention of that was to use that content to write a book to inspire ParentPreneurs around the world because it's hard being a parent and entrepreneur, especially if you're like early-stage scraping to get some revenue. You can't even talk about product-market fit yet. Can we make some money? [laughs] Can we make a buck? CHAD: So I've done a few things in my life. Writing books is one of them, and I can't say that it's easy. I don't know how you found it. I was doing it with a traditional publisher the first few times around, and it was pretty difficult. How did you find it? JAMES: So I self-published that book. And because of the way I approached it, I already had a bunch of content on my blog. It's funny; I was actually out of town. I was in Midland, Texas, because I got flown out there. I was on CNBC's version of Shark Tank, West Texas Investors Club, horrible experience, by the way. I swear if I ever go on another one of those shows, I'm going to bring the drama. CHAD: [laughs] JAMES: Piece of advice, for any of you guys listening, if you go on Shark Tank or any of those shows, do not leave it up to the creative people to tell a story about you. This is just me; I'm a little crazy, crazy like a fox. But you give them the story. So this is me and you talking, just the two of us. [laughs] If I go on Shark Tank or something like that, I'm not taking those people's money. They're going to be like, "Oh, well, you're just here clearly for the exposure." I'm like, well, so are you. You're doing it too. Why should I give you 20% equity in my company for $200,000 or whatever it is? How much time are you actually going to spend helping me build my company? And by the way, the people who came before you from an investment standpoint already took a ton of risk off the table. So why should you get that money? And how many companies are in your portfolio? 50? So, okay, so are you really going to be helping me or nah? Nah? Right. No, I'm good. CHAD: That'll definitely air. The producers will love that drama. JAMES: That will air, right? See what I'm saying? And the people watching will be like, "Hell yeah, you tell them. Let me Google that real quick." [laughter] CHAD: That's funny. JAMES: But that's just me. But I have no intention of going back on any of those shows again because, at the end of the day, it was a bad experience for me. I only got about $6,000 in sales, but that's because nobody was watching that show. It was canceled. But at the end of the day, if you have a customer acquisition problem which is what we had at WeMontage, those things don't solve your problems. They just don't. Not necessarily. They could; you could get lucky. But it's probably not going to solve your problem. CHAD: So I'm curious. So you wrote the book, and you focused on the concept of ParentPreneurs, Black ParentPreneurs specifically. JAMES: No, actually, so the book was just for everybody who's a ParentPreneur. So the book's called The More You Hustle, The Luckier You Get: You CAN Be a Successful ParentPreneur. So Mario Armstrong, who's my guy from the Today Show, wrote the foreword to my book. We're really good friends. And it's on Amazon. Some people have regarded it as the realest book of entrepreneurship they've ever read. It's unlike anything you ever read. It's the story of my journey, some of those things I just told you, and the up and down the back and forth. It will make you laugh, make you cry, make you wonder. You put it down, come back to it. There are some hard questions that I ask myself, and people read the book. It's a superfast read too. CHAD: Awesome. At what point did you decide to focus on empowering Black ParentPreneurs? JAMES: So that's a great question. So after I wrote the book, I had this idea. I said one day I'm going to sell WeMontage. And maybe it will happen. I don't know; if God can intervene, something could happen. Who knows? [laughter] It's just not likely at this point, and that's okay. But I was like, I'm going to sell this business. I'm going to take a million dollars of my own money and start a foundation for parents who are entrepreneurs because it's really freaking hard. It's so hard. Unless you've been there, you have no idea how hard that is. It's really hard. So then, in early 2020, the whole world falls apart with George Floyd, Ahmaud Arbery, Breonna Taylor. I had my own Karen experience here in my backyard. I live in a really nice neighborhood in the suburbs of Atlanta. And I had to call the police on her. After the second experience, I filed a trespass warrant. Then I started looking at all the Federal Reserve wealth inequality data. And I was like, I'm starting this foundation for Black ParentPreneurs because we need the help the most. We have got to try to close this wealth inequality gap. It's a big problem. I'm doing that. So now to answer your question, prior to that decision, so when I was going to Gener8tor, I met David Cohen and Brad Feld. They just popped up on a Google Meet to meet us. And these guys are co-founders of Techstars, which is one of the preeminent global startup accelerators. And I just stayed in touch with them through their blogs. I didn't want anything from them. I remember I got an email from Brad a couple years back. And he's a voracious reader. He's a prolific writer. He sent me an email out of the blue. He said, "I just read your book. I effing loved it." [chuckles] He said, "I got to feature it on my blog." I was like, wow, okay, dope. So he did that. And we sold some books, which was great. But so I reached out to Brad and David. I was like, "Hey, guys, I'm thinking about starting this foundation for ParentPreneurs in general." And they were like, "Yeah, I'm game. We can go back and forth with you about it," and which is amazing at that level those guys would be willing to do that. I appreciated that. And they were both like, "Eh, foundations are hard. It's a constant fundraising grind, blah, blah, blah." And, look, they're not wrong. [laughs] They're not wrong. But here's the thing, though. For me, telling me something is hard doesn't land with me because I've had to scrap and scrape for every single blade of grass on the field of life. And quite frankly, it's hard being Black sometimes. If I had $1 every time somebody told me that WeMontage would have been successful if I had a white face out there instead of me type thing, it is very frustrating. So then I got an email from Brad Feld out the blue after George Floyd, which was just a subject that said, "Hey, you're game for a 30-minute Zoom?" There was nothing in the body of the email. And I'm just like, yeah, I could as well want to talk to Brad. He's top of the food chain. He's not just a VC and co-founder of Techstars with a portfolio valuation north of $200 billion. He's also a Limited Partner. LPs are the people who write the checks to the VCs who write the checks to people like me and you guys listening who are entrepreneurs. So I'm like, hell yeah, I want to talk to you for 30 minutes, Brad Feld. Who doesn't? I just didn't know what it was about. So he said, "I just want to know what two things you're working on addressing racial injustice, inequality I can put my time on or attention on." I'm like, Oh, hell yeah. Chad, I'm like, he has no idea what I just decided. So we get on to Zoom. And I say, "You know, Brad, you remember that foundation thing I was telling you about?" He was like, "Yeah." I said, "Well, now that's just what Black ParentPreneurs is." He goes, "I'm so glad you did that." And this is the part that knocks me out of my chair every time I say it. He goes, "What would a 12-month operating plan look like? I can throw it up in a Google Doc, and I'll co-create it with you." [laughs] CHAD: That's great. I mean, it is unfortunate that George Floyd being murdered and these other things have instigated people to want to make change and to get involved in ways that they haven't been able to before. That's super unfortunate, but something's got to wake people up. JAMES: Well, that will come up because he was like, "Look, I'm this rich, middle-aged white dude. I've been doing things to support Black entrepreneurs in the past," but he's like, "I got to do more. So I'm reaching out to my friends, and I consider you a friend." I was like, wow, like, I knew you liked me a little bit, but I didn't know you liked me like that. CHAD: [laughs] JAMES: But he is a friend. I have his phone number. I can call him. He's a friend. Him and David these guys are friends. So I got the 12-month operating plan right back to him. He said, "This is great. What would a six-month plan look like?" I got to write back. And he's like, "Assume three things, one of which is a $50 000 seed grant from my foundation to start the ParentPreneur Foundation." So Brad has given now, I don't know, north of $125,000. He got us into the Techstars Foundation, which has been phenomenal. My relationship with David has blossomed. I went on the Techstars Give First Podcast with David, and David's a friend as well. I just love those guys and how they move, and they've been super helpful. And so our foundation, at the heart of what we do, you mentioned this at the top, is we have a community of now almost 1,800 Black ParentPreneurs hosted on Mighty Networks, which is phenomenal because it's not on Facebook. That's the thing I love the most about it. [laughter] CHAD: I actually have some questions about Mighty Networks on my list. So we don't need to take a tangent in there right now. We can come back to it. I want to ask you about Mighty Networks. JAMES: Love it. Love it. Love Gina Bianchini. She's the CEO. I actually had her on my LinkedIn live show a couple of months ago. CHAD: Well, let's do it now then, actually. So as someone who has built software before to put together a company, did you ever consider that for this? And why not? And why use Mighty Networks? JAMES: To build a community platform? CHAD: [laughs] It's a very loaded question, James. JAMES: Yeah, why would I do that? Listen, by the time I got done with my prototype with that; these guys would be like two versions past where they are today, which would be infinitely better than my little stinky MVP, right? CHAD: Yeah. JAMES: And these people live, eat, and breathe community. Is Mighty Networks perfect? No, of course not. But they're constantly making improvements. I think I told you at the top I'm actually about to launch a new podcast. I just signed a national podcast distribution deal. So we're launching a podcast on the HubSpot Podcast Network. You guys have heard of HubSpot, right? CHAD: I have, yes. JAMES: So it's for ParentPreneurs in general, kind of like my book, to empower ParentPreneurs to be the best parent entrepreneur they can possibly be because being a ParentPreneur is hard. And we came upon this opportunity. I saw an article; maybe LinkedIn, I don't remember, talking about HubSpot launched a new podcast network last year. And I told you I got all these PR opportunities. And I got that because I'm not shy about shooting my shot. A lot of people are too scared to shoot their shot, or they don't know what to do, how to do it. But cold emails I'm really good at sending cold emails. So I sent a cold email to the CMO of HubSpot. He was mentioned in the article. I went on LinkedIn. I scraped his email address using my favorite email scraping tool, GetEmail.io. It works on LinkedIn. You get their email address. I sent him an awesome email. Of course, he didn't follow up right away; well, not, of course, sometimes they do. He didn't follow up right away. I sent a follow-up email. And when I send follow-up emails, I like to give some kind of update. So in my follow-up email, I wasn't just like, "Hey, did you get my email? Please respond." It wasn't that. It was like some other update. I can't remember what it was, but it was an update following up about my email. He got back, copied somebody on the team. They got back, copied somebody else. They were like, "Do you have a clip or an excerpt of an interview?" And it just so happened we did because we knew we needed to get ready. So we did an interview with Neil Sales-Griffin, who's the Techstar Chicago Managing Director, and so we sent them an excerpt. They were like, "This is great. Do you have a whole episode?" So we edited that thing down right here that day. It was a Friday, sent it to them. They were like, "Thanks for sending. We'll get back to you by Monday with the decision because, by the way, we have this new program, this emerging podcast voices program. There'll be six to eight podcasts in this program. And we'll listen to this and consider it." So they got back to us Sunday night at 11:00 o'clock. "This is amazing. You guys are pros." I'm like, that's not me. That's really Mario. I have no idea what I'm doing at all. CHAD: [laughs] JAMES: But thanks, Mario. "And you guys are stars. You can't teach stars." But I'm like, hey, all right. I've never done a podcast. But hey, glad somebody other than my mama likes me. This is awesome. And they were like, "We want to invite you to be one of the companies in this new cohort with a new podcast," and just a swoop in at the last minute like that all because I shot my shot. So if anybody's out there listening, don't be afraid to shoot your shot, man. It's a mindset. You got to know what to do, how to move. But you've got to first have the mindset like, yo, I am going to shoot my shot. CHAD: I think as long as you...and you already said this, but you're making it real. Like, when you're following up, you're not just saying, "Hey, did you get my email?" You're finding ways to make it real and authentic. You got to show that you're real and not some bot. JAMES: Yeah. So I will say in terms of the cold emails, I send them all the time. Cold emails is how I ended up collaborating with Nasdaq Entrepreneurial Center. We're big partners with them. We're part of this grant project with them with this major Wall Street Bank Foundation they're about to be announcing this year any day now. We got a grant tackling the problem of Black or Brown founders, underestimated founders not getting access to early-stage venture and angel funding. So we're part of that with my foundation all because I sent a cold email to some guy at Nasdaq. I don't even remember who it was, Western president. Sent him an email, he copied the executive director from Nasdaq Entrepreneurial Center. The rest is history. My last round of grants, they co-sponsored the last round of grants. They put in some money. Great relationship with Nasdaq. They got 30 of my people from our community featured in the Nasdaq Tower in Times Square, let that sink in, all because of a cold email. So if you're going to send a cold email, just a couple of tips off the top of my head. You need to have a compelling subject line. Keep the emojis to a minimum. [laughter] If you can use the person's name in the subject, I think that increases your open rate by like 20%. The email's got to be right to the point. Hey, my name is James Oliver, CEO of ParentPreneur Foundation. Put a link to the ParentPreneur Foundation in that instance. We got funded by Brad Feld, co-founder of Techstars, and put a link to Brad Feld's article. Establish credibility right away and get to the freaking point. Like, what do you want? Make an ask. What do you want? Get right to it. That's it. CHAD: And then when you don't hear back, and you should follow up? JAMES: Oh yeah. You absolutely got to follow up. I'll follow up a couple of times. I know Mario is like, "I just keep following up till they tell me to stop." [laughter] He's gangsta like that. I'll follow up three or four times. But after that, I know when people are pestering me. At that point, you're pestering. I'm not interested. If I was interested, I would have responded, so knock it off. But I also respect the hustle when people are coming to me with something that's legit. And I will respond because I am them sometimes too. I'm like, "Hey, thanks for reaching out. I really appreciate it. I'm just not interested," or "I'm not interested now. Ping me back in six months." CHAD: As someone who gets cold emails, I do the same thing when it's a legitimate...and you can tell. You can tell the ones where they're just blanket sending the same thing to a bunch of people. And you can tell when it's someone legitimately sending you a cold email. JAMES: Because if you mention something about what they do specifically and how that's relevant to your email or your ask, that increases your chances of getting a response. Hell, I sent a cold email to Mark Cuban, bro. CHAD: Awesome. JAMES: He said yes. I interviewed him on my blog. I don't write on my blog anymore. But he got right back to me, and I interviewed him on my blog. He was great. CHAD: So I don't know if everyone does this. Like you said, even if it's not a fit for me or I can't do it right now or whatever, if it's a legitimate thing, I will almost always actually respond to it eventually. Mid-roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. JAMES: So, if I may, I just want to talk a little bit about the impact in the ParentPreneur Foundation. CHAD: Yes. JAMES: Because we have 1,800 people now. This current round of grants makes $95,000 in the last 19 months since we launched. We do micro-grants of $1,000 apiece. I think I just tweeted this morning that it just seems like people look down their nose at a $1,000 grant. And I'm like; clearly, these people are not or never have been a super hustling, early-stage entrepreneur and definitely not one of those with kids. So $95,000, again, keep in mind, I don't know anything about a foundation, a non-profit. I've never done it before. I've never started a community, but I don't care; it doesn't matter. [laughs] You know what I'm saying? In this instance, there's a tremendous founder-market fit because I am them. And that shines through brilliantly in all the things that we do. And the thing that I'm most thankful for that we've done in the community is we've paid for 320 mental therapy sessions for our community members. And that's important because historically, mental health is stigmatized in the Black community. And there's this belief of epigenetics, which is basically you can pass trauma down through your DNA to your descendants. And if that's true, Black folks got a lot of trauma, and we need to get it worked out. And when we do it in our community, people jump right on it. So I'm so proud of those guys that they take it very seriously. And that's really legacy, and that's impact because we're creating a legacy of mental wealth for the people in our community that influences how they show up for themselves, for their businesses, for their partners and spouse, for their children, all of which impacts how their children show up in the world. So it matters a lot. CHAD: I think the therapy sessions are a great example of when you have an authentic, unique community, something is going to come out of that which is so specific to that community. The impact of that is huge but also, where did that idea come from? Was that you? You said, "Hey, this is a need we have to do this"? JAMES: Yes. CHAD: Did it come from the community itself? JAMES: No. And see, this is why I'm talking about the founder-market fit. I don't know all the things that my people need, which is why a lot of times I ask them, "What do you want? What do you need?" But a lot of things I already know they need before they even need them because I've been where a lot of those guys are, and some of them ain't been there yet. I already know what you're going to be looking at in six months, bro. You need to pay attention a little bit. So right from the beginning, we use betterhelp.com. We created a BetterHelp account. And it's so easy. We use Typeform. Typeform is another partner of ours. They've given us lots of free codes, and VideoAsk is a new Typeform company. We use that for our application process, which is just brilliant. I keep getting compliments about how amazingly seamless and elegant our application process is for the grants using VideoAsk. But we use Typeform and first come, first serve. It fills up, and then I just get the email addresses, and I just drop them right into Betterhelp's account. And they reach out to people in the community, and they get them set up. It's so easy. CHAD: That's great. What happens in the community? Is part of the value of the community just support from each other? JAMES: Well, that's a big part of it. So that's a great question. So one of the things in the Seth Godin marketing seminar is he talks about tension and why it's important in marketing and how it drives change and drives people to action. And the assignment around tension I couldn't think of like what the tension was for the ParentPreneur Foundation. But when he came to meet with us, and we were talking about it, he said, "If I'm on an airplane and we're sky jumping, and they're like, 'Well let's jump out,' and it's a perfectly good airplane," the tension for him is what if the parachute doesn't open? And the answer is like, "Well, don't worry. We have a backup chute for you." Okay, banzai, let's go. [laughs] But for the ParentPreneur Foundation, the tension is what if we fail on this rocky road? What if we fail in our journey to leave a legacy for our beautiful, Black children? He said, "It doesn't matter because we have each other's backs on this rocky road." So I'm like, yes, that's exactly right. We have each other's backs. And I'm telling you, man, I see it. A lot of stuff is taking place; I have no idea. But I hear about it from time to time, just organically. People are collaborating. It's just amazing, man. It's just great. So yeah, I know it's lonely being an entrepreneur, a lot of different challenges, unique challenges of being a Black entrepreneur. And it's just great to have a safe space for that. We do a lot of different things. We paid for virtual assistants. We paid for when kids were being virtual schooled. We paid for some virtual tutors for some of the children. Social capital is another thing that I talk about a lot. We pay for people to improve their LinkedIn profiles and understand how to move properly on LinkedIn and build and increase their social capital, which to me is as problematic as a dearth of financial capital because, without social capital, you can't even imagine what's possible. And it was Albert Einstein who said that imagination is more important than knowledge. And it's just so true. So we're doing all the things. CHAD: So, do you have a sense of what the split is between moms and dads in the community? JAMES: Yeah, just off the top of my head, I think it's around 75-25 moms and dads, and that's interesting. Women like to build community, men we don't. We're like the king of the jungle. We're all okay by ourselves. [laughs] We don't want to build community. But, man, women love to build community, and they hold down our community in a big way, and I'm just so thankful for them. CHAD: So you started in 2020. One thing that I've seen, and I think it makes your timing good, is that a lot of people either had change forced on them because of the pandemic, and they lost their jobs. Or they felt like they needed to make a change. And a lot of people faced with that decided to do something on their own and make something happen. So there has been a surge in entrepreneurship from my... And another thing there's been a surge in is people going to coding bootcamps feeling like yeah, I lost my job, or I no longer want to do this job that I can no longer do remotely. I want to make a change in my life and learn to code. Does that resonate with you as something you've seen in terms of people who have never been entrepreneurs before who had it forced on them or making a conscious choice to do it, joining the community? JAMES: Yeah, absolutely. To a certain extent, at the beginning of COVID, when everybody was freaking out, because I understand that within every crisis exists an opportunity, I was looking for that opportunity. I was like, all right, where's the opportunity here? I was asking the questions. And then, I had a chance coffee meeting with some acquaintances and told them my intention of starting the foundation one of these days. And they were like, well, what are you waiting for? Why don't you do it now? And I thought that was like the answer to my question. And I was like, oh damn, like, yeah, what am I waiting for? Let's do it now. So yeah, a lot of people are moving towards entrepreneurship. I think a quick Google search will bear that out. I don't know to what extent, but I know it's a lot. The application for new businesses are increasing over the last few years. So yeah, I get it. People kind of hate their corporate jobs. They hate going to the office. I get it. My goal in life is to never have to wear a suit and tie again. [laughs] CHAD: Even when you go on Good Morning America. JAMES: I might wear a suit, but I'm not wearing a tie. Knock it off. [laughs] CHAD: Well, I'm sure everything you mentioned that you've been fundraising all this stuff costs money. Does the majority of your funding come from bigger donors? I know that you have a link to donate, and I encourage people to do that. But how much time do you have to spend fundraising? What is the donor mix? And how can people help? JAMES: It's just weird. We get in our own heads. I used to say, man, I kind of suck at fundraising, but I don't. We raised almost $300,000 since I started this thing with no experience. That's not somebody who sucks at fundraising, right? CHAD: Yeah. JAMES: But in my mind, we should have a million dollars in the bank so I can hire an executive director, and we can ramp up the programs that we know, or I can scale this thing up and do some other things. I have some other things I want to do. I want to do a startup studio. I'm trying to partner with Techstars right now. With Techstars, I'm already talking to the right people. I want to do a pre-accelerator program with them for Black ParentPreneurs and putting like $20,000 in people's pockets. That's going to cost money. We need a sponsor for that. But to answer your question, you can visit parentpreneurfoundation.org click donate. And $25 a month it all helps. It all adds up. We have things that we have to do to keep the platforms going and tools and resources that we use to keep it all going. The big chunks have come from people like Brad Feld and David Cohen. And Fred Wilson even donated $10,000 one-time but yeah, we need more. I'm just biding my time. And the work we're doing matters so much. It's making a big impact. We are literally helping people raise money and get their businesses off the ground. And one woman who just went through the Techstars Founder Catalyst Program with JPMorgan Chase here in Atlanta she went because I introduced them on my show. And she got in, and she just raised $250,000. And then she just told me she got a commitment for another half a million dollars. And this other woman she got a $250,000 grant from Wells Fargo because of our relationship with Nasdaq. And another guy got a term sheet for half a million dollars because of the introductions we're making. So we're literally out here building capacity for the members of our community in so many ways. I'm thankful. I'm honored. I'm humbled to be in this position to do this work. But this is purpose work for me. This is my purpose, and I'm thankful to have found it. It's like Mark Twain says, "The two most important days in your life are the day you are born and the day you figure out why." I encourage people to go figure out why. CHAD: And if you are Black ParentPreneur hearing what we're talking about and saying, "Yeah, now I know about this. This is for me." You also go to parentpreneurfoundation.org and sign up there. JAMES: Yes, sir. Click the join community button. Absolutely. CHAD: Well, James, thanks for stopping by and sharing with me and all the listeners. I really appreciate it, and I wish you and everything that you're doing all the best. JAMES: Yes. And, Chad, thanks for reaching out, man. Look at you; you're on your hustle. It wasn't you that reached out to me. There was somebody else. CHAD: It was, yeah. Another member of my team. JAMES: How'd you find me, man? CHAD: I think she's very good at LinkedIn, and you're good at LinkedIn and so -- JAMES: [laughter] Well, I got a big [inaudible 36:11] show them the receipts, man. Show them the impact because that's what you got to do. CHAD: Are there other places where if folks want to get in touch with you or follow along with you? Where are the other places they can do that? JAMES: Yeah, they can do that on IG. We're parentpreneurfoundation on IG. I'm not super active there, but we're there. You can follow me on Twitter. I talk a lot on Twitter. I don't think anybody's listening, but I talk a lot on Twitter. CHAD: [laughs] JAMES: That thing doesn't come on until you actually earn those blue checkmark thingies, I swear. Because I will say something I think is really profound, and it's crickets. And I see somebody with a blue checkmark say the exact same thing, and I'm like, okay, I see how it is, but whatevs. [laughs] So I'm on Twitter @jamesoliverjr, jamesoliver-J-R. Follow me on Twitter. That'd be awesome. Shoot me a tweet. Tell me you heard about us, heard about me on The Giant Robots Show here. I would love to connect, engage, and build and learn with your audience. So thanks. CHAD: Awesome. And for all of you listeners, you can subscribe to the show and find notes for this episode along with an entire transcript of the episode at giantrobots.fm. If you have questions or comments for me, email me at hosts@giantrobots.fm. And you can find me on Twitter @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks for listening and see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success. Special Guest: James Oliver Jr..

MBCers! This week we read Breakfast of Champions by Kurt Vonnegut, or as Sarah calls it Breakfast for Champions. Also known as Goodbye Blue Monday, BOC is not only a champion in title, it's also a CHAMPION of the NYTs bestseller list. (56 weeks!) But why?Mean Book Club is four ladies (UCB, BuzzFeed, College Humor, Impractical Jokers) who read, discuss and whine about NYT bestselling books that have questionable literary merit. It's fun. It's cathartic. It's perfect for your commute. New podcast every other Tuesday!Here's the book list for Season 12:- You by Caroline Kepnes- You Are a Badass at Making Money by Jen Sincero- The Sun Down Motel by Simone St. James- It's Not About the Bike by Lance Armstrong- The Grace Year by Kim Liggett- Breakfast of Champions by Kurt Vonnegut- My Dark Vanessa by Elizabeth Russi- Bringing Up Bébé by Pamela DruckermanSend any future book suggestions to meanbookclub@gmail.com! Follow us on the socials @meanbookclub! We're yelling!Rate, like, subscribe, and check out our Patreon page at patreon.com/meanbookclub to become a true patron of the mean arts.CREDITS:Hosted by Sarah Burton, Clara Morris, Johnna Scrabis, & Sabrina B. Jordan.This episode was produced and edited by Johnna Scrabis.Special thanks to FSM Team for our theme song, "Parkour Introvert." You can get it here: https://www.free-stock-music.com

MBCers! This week we read The Grace Year by Kim Liggett, a NYTs bestseller about 16 year old girls who have to go to a worse-than-the lord of the flies-type island to rid themselves of their whore magic. Can they do it? Will the book be better than the 5 other books it stole its plot from? Find out with us on this week's ep!Mean Book Club is four ladies (UCB, BuzzFeed, College Humor, Impractical Jokers) who read, discuss and whine about NYT bestselling books that have questionable literary merit. It's fun. It's cathartic. It's perfect for your commute. New podcast every other Tuesday!Here's the book list for Season 12:- You by Caroline Kepnes- You Are a Badass at Making Money by Jen Sincero- The Sun Down Motel by Simone St. James- It's Not About the Bike by Lance Armstrong- The Grace Year by Kim Liggett- Breakfast of Champions by Kurt Vonnegut- My Dark Vanessa by Elizabeth Russi- Bringing Up Bébé by Pamela DruckermanSend any future book suggestions to meanbookclub@gmail.com! Follow us on the socials @meanbookclub! We're yelling!Rate, like, subscribe, and check out our Patreon page at patreon.com/meanbookclub to become a true patron of the mean arts.CREDITS:Hosted by Sarah Burton, Clara Morris, Johnna Scrabis, & Sabrina B. Jordan.This episode was produced and edited by Johnna Scrabis.Special thanks to FSM Team for our theme song, "Parkour Introvert." You can get it here: https://www.free-stock-music.com

We're baaaaack! We read New York Times bestseller You Are a Badass at Making Money by Jen Sincero - will it help us all become disgustingly rich? Find out!Mean Book Club is four ladies (UCB, BuzzFeed, College Humor, Impractical Jokers) who read, discuss and whine about NYT bestselling books that have questionable literary merit. It's fun. It's cathartic. It's perfect for your commute. New podcast every other Tuesday!Here's the book list for Season 12:- [ ] You by Caroline Kepnes- [ ] You Are a Badass at Making Money by Jen Sincero- [ ] The Sun Down Motel by Simone St. James- [ ] It's Not About the Bike by Lance Armstrong- [ ] The Grace Year by Kim Liggett- [ ] Breakfast of Champions by Kurt Vonnegut- [ ] My Dark Vanessa by Elizabeth Russi- [ ] Bringing Up Bébé by Pamela DruckermanSend any future book suggestions to meanbookclub@gmail.com! Follow us on the socials @meanbookclub! We're yelling!Rate, like, subscribe, and check out our Patreon page at patreon.com/meanbookclub to become a true patron of the mean arts.CREDITS:Hosted by Sarah Burton, Clara Morris, Johnna Scrabis, & Sabrina B. Jordan.This episode was produced and edited by Sabrina B. Jordan.Special thanks to FSM Team for our theme song, "Parkour Introvert." You can get it here: https://www.free-stock-music.com

We're baaaaack! We read New York Times bestseller You by Caroline Kepnes - does it live up to it's Lifetime/Netflix adaption? Can a book club read about a serial killer who loves books and not feel morally confused? Find out!Mean Book Club is four ladies (UCB, BuzzFeed, College Humor, Impractical Jokers) who read, discuss and whine about NYT bestselling books that have questionable literary merit. It's fun. It's cathartic. It's perfect for your commute. New podcast every other Tuesday!Here's the book list for Season 12:- You by Caroline Kepnes- You Are a Badass at Making Money by Jen Sincero- The Sun Down Motel by Simone St. James- It's Not About the Bike by Lance Armstrong- The Grace Year by Kim Liggett- Breakfast of Champions by Kurt Vonnegut- My Dark Vanessa by Elizabeth Russi- Bringing Up Bébé by Pamela DruckermanSend any future book suggestions to meanbookclub@gmail.com! Follow us on the socials @meanbookclub! We're yelling!Rate, like, subscribe, and check out our Patreon page at patreon.com/meanbookclub to become a true patron of the mean arts.CREDITS:Hosted by Sarah Burton, Clara Morris, Johnna Scrabis, & Sabrina B. Jordan.This episode was produced and edited by Sabrina B. Jordan.Special thanks to FSM Team for our theme song, "Parkour Introvert." You can get it here: https://www.free-stock-music.com

Book Your Free Revenue First Podcast Strategy here!Get Your Free Dial Session here!Claim Your Free 200 Leads here!HIGHLIGHTSMoving away from addiction and the kitchen to salesUse all the channels available to you as a salespersonSales is about providing value, not persuasion and trickeryFind the people who resonate with you and sell to themCustomer experience is just as important as the productIt takes more than just one conversation to close a saleSDRs need to be more proactive in handing off clients to AEsKnow your real worth as a front-line salespersonQUOTESJames: "Omnipresence will win the day in 2022."James: "These types of knowledge points to open with and build rapport with becomes something that are expected by the time you finally connect with someone because you're so active in their day to day routines. It's a given that they're gonna talk to you. It's a matter of what we're gonna say to each other now."James: "It's like this mentality that's developed in our system over the course of the last decade or so where we believe our job is to convince, persuade and trick people into buying from us. This is not the way in 2022. This is the way to get bad reviews. This is the way for people to tell 10,000 others in their network not to do business with you." James: "I think people will pay more for a better customer experience all day, everyday. Especially if you can articulate the value in an effective manner, it's really difficult to say no to you."Collin: "For me, the question is how are you going to, as a sales organization, start to focus on more quality over quantity, and not try to play the numbers game."James: "The science is very clear, we know, 16 to 20 touches is what it takes to generate a meaningful conversation with a cold prospect. So, most people giving up after six, you're not even halfway there." James: "Know your real worth as a front-line salesperson and don't tie it to a number. Tie it to the impact that you can have on others and their lives and their routines. Your true worth lies right there, if you just focus right there for a minute."Learn more about James in the links below:Instagram - https://www.instagram.com/saywhatsales/Website - https://joinjbsales.com/Linkedin - https://www.linkedin.com/in/jamessaywhatsalesbuckley/Email - james@jbarrows.comLearn more about Collin in the link below: LinkedIn - https://www.linkedin.com/in/collin-saleshustle/Also, you can join our community by checking out @salescast.community. If you're a sales professional looking to take your career to greater heights, please visit us at https://salescast.co/ and set a call with Collin and Chris.

Welcome back, book nerds! In this Season 12 promo we announce the incredible list of books we are forcing you all to read in the next few weeks! We make our triumphant return January 11!Mean Book Club is four ladies (UCB, BuzzFeed, College Humor, Impractical Jokers) who read, discuss and whine about NYT bestselling books that have questionable literary merit. It's fun. It's cathartic. It's perfect for your commute. New podcast every other Tuesday!Here's the book list for Season 12:- [ ] You by Caroline Kepnes- [ ] You Are a Badass at Making Money by Jen Sincero- [ ] The Sun Down Motel by Simone St. James- [ ] It's Not About the Bike by Lance Armstrong- [ ] The Grace Year by Kim Liggett- [ ] Breakfast of Champions by Kurt Vonnegut- [ ] My Dark Vanessa by Elizabeth Russi- [ ] Bringing Up Bébé by Pamela DruckermanSend any future book suggestions to meanbookclub@gmail.com! Follow us on the socials @meanbookclub!Rate, like, subscribe, and check out our Patreon page at patreon.com/meanbookclub to become a true patron of the mean arts.CREDITS:Hosted by Sarah Burton, Clara Morris, Johnna Scrabis, & Sabrina B. Jordan.This episode was produced and edited by Sarah Burton.Special thanks to FSM Team for our theme song, "Parkour Introvert." You can get it here: https://www.free-stock-music.com

Today on an all new Who? we're talking Annie LIVE! — did Nicole Scherzinger scher-zing, scher-dance and scher-blowusaway? Tristan Thompson's in trouble (again), Raquel and James "It's Not About the Pasta" Kennedy split, Oprah helps supermodel Ubah Hassan sell some hot sauce, Julian Morris of OUAT fame introduces his boyfriend of 18 years, then Braunwyn Windham-Burke introduces her girlfriend of...a month. Plus: fake vacc cards, an award show dubbed the "Shoe Oscars" and Josh Lucas is ready for his "new era". Call 619.WHO.THEM to leave questions, comments & concerns, and we may play your call on a future episode. Support us and get a ton of bonus content over on Patreon.com/WhoWeekly and come see us on the final dates of our tour! Tickets at WhoWeekly.us/live. Learn more about your ad choices. Visit podcastchoices.com/adchoices

@JamesGarland is a Director at @DGB. He has a long-standing involvement in #fundraising in the #notforprofit area and #branddevelopment.He's also a #smallbusiness #owner and #investor.Dalton Garland Blanchard a boutique agency that works strictly with #forpurpose organizations and groups, large and small, including #startups that have plans to really transform themselves in the communities that they serve. DGB undertakes  #transformationalprojects. Larger scale, more complex growth projects, that help to build #organisationalcapacity.  DGB help with #fundraising for those projects.In our discussion we talk about;leaving #university and entering the  world of #advertising #marketing #mediasales #agencies #campaigns #promotionsIiving in #london and having a #careerdefining moment from working with a charity involved #childsafety, part of a #UKgovernment program called "Personal, Social, Health Education"#mum asking  "What are you doing? It sounds really interesting. It's very different. It's not what I thought you would do. Is it what you really want to do?"finding a whole lot more #workmeaning in working with organizations and engaging my #passion and my skills in things that are #changingtheworld, or at least #changinglives of people, rather than #sellingwhitegoods or something elsethe #business of #notforprofit#socialenterprise#thirdsector #privatesector #publicsectorconnecting with the passion of the #whyworking at @worldvision @savethechildrenhis sense that everyone is starting to realize that our #socialfabric and the #health of other people who are less fortunate actually impacts everybody, that we are in #onebigworldthe estimated (@deloitte) $100B size of the "third sector"the real #impact of the #thirdsector (not really about #finance or #economics) is on people, the #environment, on animalswhy the #thirdsector should really be the #firstsectorhow #innovations are really big drivers of some of the #coolest not-for-profit movements that are coming outregeneration of environment as a real hotbed for innovation, people talking about #plastics in the #cleanocean #cleanerworldthe need for #socialenterprises to make a profit so it can support either its supply chain, or employeesthe importance of #valuesalignment in #socialenterprise and who starts it, who runs it, who works in it, and who carries it forward #successionwhat happens when social enterprises become so successful - they become brands in their own right, they become really well-known, they become sought-after entities or businesses. The conundrum for #founders when this occursthe key day to day challenges in the #thirddsector;finding employees - really good, highly skilled people who can build relationshipsmatching the private sectorfundingthe pivotal role of the #thirdsector - doing what #government can't - taking risks that government and #privatesector can'twhy sometimes #failing as a natural outcome of trying to alleviate social issues because you can't roll out a #lowrisk private-style business plan to deal with major societal issues#foundations @cathyfreeman has done a huge amount of work for #indigenous #kids and #communities#scaling for #impact#sophisticatedinvestors#sophisticated #philanthropists#goodcorporates quietly funding #multimilliondollar transformational projects, some not heavily publicised at all and done because that organisation believes in something that it's a line with their #mission#worldchange and a #fairersociety is going to have to come at the cost of hard profits at some point - and the #hope that because people that have had success or intergenerational wealth are more attuned to social need than ever before  these #sophisticatedphilanthropists will make the differencewhy #gettinginvolved in #communityactivities is highly rewarding for self, and never more important than now because of the #mentalhealth benefits it can bring #selfless #senseofself@kerrcapitalA full transcript is below.Michael Kerr: Hi. It's Michael Kerr here, presenting Small Business Banter.A healthy micro and small business sector means a successful economy and a more vibrant society. Small Business Banter is about helping regional business owners better prepare for current challenges, but also for the next stage of business success.I'm Michael Kerr, founder of Kerr Capital, advisors to business owners.Each week, I interview a fellow small business owner or an expert, and they share their stories, their lived experiences, the wins and the losses, and their best advice to help you, the listener, get the most you can from your own business.Small Business Banter is brought to you from the studios of 104.7 Gippsland FM and is heard across Australia on the Community Radio Network. Thanks also to Kerr Capital, supporters of the show. Okay. Welcome to another edition of Small Business Banter radio. Today's guest, James Garland. James, the Director at the DGB group, he'll tell you what DGB group does, but he's also had a long-standing involvement in fundraising in the not-for-profit area, brand development. He's also got some personal interest in small businesses and investments. What we're going to chat about today is the business of the not-for-profit social enterprise, third sector. We're really looking forward to this chat, welcoming James. James Garland: Hey, Michael. How are you doing?Michael: Excellent. Thanks for calling in from a car, somewhere in Regional Victoria.James: No problem. I spent a fair bit of time here, so it's often a car call. Michael: Yeah. The sound is coming through really nicely. It's great to have you in. Look, I gave a really tight description. Do you want to expand a little bit more on your professional background, and also today, where you are with DGB group?James: Yeah, of course. I came out of university and went into the world of advertising, marketing, media sales, and working in agencies around State[?] campaigns, promotions, that side of the commercial world. I was over in London, working in an agency, doing live events, merchandising, marketing, and one of my clients was a charity involved in children's safety or child safety. I thought it might be a good thing while I'm away from home and tripping the light, fantastic across Europe, to maybe explore some different things in my career.I took a job that was offered as part of a big roll out by the UK government around what they call "Personal, Social, Health Education" for kids about being safe, and I just fell in love with it. I was young at the time. I was in my mid-20s, and I think a lot of people get into the not-for-profit or for-purpose sector a bit later in life, but it was really early for me. Out of what I thought would be a career in Commerce, I fell into the not-for-profit world really early, and I've been there ever since.Michael: It's a bit of a calling, was it?James: Well, I think I said to my mum, I remember she said, "What are you doing? It sounds really interesting. It's very different. It's not what I thought you would do. Is it what you really want to do?" I said, "Well, I'm finding a whole lot more meaning in working with organizations and engaging my passion and my skills in things that are changing the world, or at least changing the lives of people, rather than selling white goods or something else that, quite frankly, a well-loved[?] fridge." I really connected with the passion of the "Why?" while I was doing the work, and came back to Australia, took a contract at World Vision, Save the Children, worked at Cancer Research, a whole bunch of different not-for-profits on the inside, and loved them all. I went outside to the consulting side, and it's even better. You get to work with a dozen not-for-profits at any one time to, again, try and hopefully make the world a better place.Michael: Yeah. You really acted on something that came to you in your mid-20s which was something that you couldn't turn away. Working today in DGB across with not-for-profits and for-purpose businesses, what exactly does the DGB group do? James: Yeah. DGB is really, for guys who came out of advertising, naming it after the 3 principal directors is not exactly super creative, is it? Dalton Garland Blanchard, we're a really boutique agency. We strictly work with for-purpose organizations, so large and small, summer startups, some of the most exciting stuff in a sector's coming out of not-for-profit startup still. We work with those groups, specifically, that have plans to really transform themselves in the communities that they serve. We talk a lot abouttransformational projects, not so much your traditional tin rattling or, "Can you give us a gift this time at Christmas so that we can keep the lights on?" We work more so on a really larger scale, more complex growth projects, and our role is to help that organization build capacity, help them get ready, and help them carry out the fundraising for those projects.Michael: Okay, and bringing that experience you had in marketing and brand development to this sector, which I think, broadly, is called the "third sector" incorporating not-for-profit social enterprise, for-purpose. How big is the third sector, if that's the right term, at the moment?James: It's big. It's really big, and it's getting bigger off the back of what we've seen in the last few years. Everyone's starting to realize that our social fabric and the health of other people who are less fortunate, perhaps, than others, actually impacts everybody. We're in one, big world, and I don't think anyone could start. There's been a time, perhaps more prevalent than now, that everyone's really realizing that. We don't talk about the third sector much, but you're right. It is the sort of term, the "third sector", "private sector", "public sector", and then this "not-for-profit voluntary sector", but the contribution, economically.I think Deloitte did a study which was talking over $100 billion in Australia alone is the economic contribution of that sector, but I think the difference with that sector is that the impact is not really about finance or economics. It's actually about impact on people and the environment, on the world, on animals, on all sorts of things.It's interesting that we are now turning to needing the world to be a better place, in terms of climate, health, pandemics, and poverty, yet we call this sector the "third sector". Maybe it's the third thing that we've really cared about, but I don't know, maybe it should be the first sector [crosstalk] because if we don't have a planet to live on, private and public sectors doesn't mean much, does it?Michael: It certainly doesn't. It probably is an old term, but I was looking for something to collectively describe what you do, but it sounds like it's at a pretty exciting stage with the energy around startups. Would a lot of those startups call themselves social enterprises? If yes, can you describe what a social enterprise is and how it operates?James: Yeah, for sure. Definitely, social enterprises, it's more than a buzz. Perhaps I'll come back to that because some of these startups are just traditional not-for-profits that someone's got a great idea, or they innovate. Innovations are really big drivers of some of the coolest not-for-profit movements that are coming out.Regeneration of environment is big. In fact, environment's a real hotbed for innovation, people talking about plastics in the ocean and developing technologies that can create cleaner worlds, when obviously, some of that sits in biotech and agritech, and those sorts of industries. A lot of people do also go, "Hey, we've got a great idea. Instead of commercializing it, we're going to make a not-for-profit. We're going to allow everyone to invest in this and own it globally. Environments are great hotbeds for that at the moment.The social enterprise is kind of this next step in not being, a [inaudible] not-for-profit, because really, you want a social enterprise to make a profit. It's there to actually make a profit so it can support either its supply chain of fair trade coffee or the young people that it's giving a job to. It's different because it needs to be profitable, and it should be profitable. It's definitely getting a lot bigger, social enterprise. I think, fundamentally, the public wants all companies to have an element of social impact unconscious[?], and social enterprise is probably the peak of that, I guess, where all prophets, all outcomes, and all impacts go back to that social cause.Michael: Yes, it's a very clear purpose for that organization or that business if you like.James: Yeah.Michael: Yeah. I've certainly had some involvement in advising social enterprises and it's kind of what you said, it has to be a viable or sustainable business model because otherwise, all that energy, all that hope, it can all disappear if you don't have a fundamentally sound financial base. The social enterprise is kind of a blending of business and other objectives, and measures of success.James: Correct, yeah. I think you've got to have a values alignment around who starts it, runs it, works in it, and carries it forward. I think sometimes, social enterprises can be so successful, they become brands in their own right, they become really well-known, they become sought-after entities or businesses. Your values are going to hold true to, say, you could almost turn it into a retail chain, you could commercialize it. It's difficult because really, the function is there for what it is, a social enterprise. The people that are in it want them to be committed for the long term for it to remain that social enterprise piece.Michael: I think it could create a conundrum for the founders of these things because it is so successful, it does have value for other organizations. That's some of the experiences I've had with these founders, and they're unsure about how to take it forward.James: Totally.Michael: With the DGB group and the work you do, what you've acknowledged, it's a very significant sector. Did I have the same set of issues that for-profit businesses have? At the end of the day, are they struggling under finding employees and other day-to-day challenges that business faces?James: Yeah, massively. I'd suggest even more so, in particular, in the area of growth of business. If you're looking to recruit people under an award for community services or disability, generally, there's hardships in recruiting those people also, but certainly on the side of the work that we do around big transformational projects, project management, we're putting a different type of business case together for any one of these organizations, and they need really good, highly skilled people internally, who can build relationships much like some of your work around capital and advisory. You're dealing with sophisticated people that want to invest in social change. You need some pretty savvy people. We see a massive shortage of really good, savvy, articulate, strong relationship builders in the sector. The good ones get snapped up very quickly, and organizations that want to connect with philanthropists, major corporates, big businesses with government, they need really good people to be able to build those relationships, and you got to hold those relationships long term. It's really hard to get good people in the sector who probably do have to take a bit of a pay cut, because most [crosstalk] not-for-profits are pretty tight, [crosstalk] so it's tough.Michael: It reinforces the need, and however transformational the cause is and the energy, it's got to be underpinned by revenue, capital, and profits to be able to survive. [crosstalk]James: A hundred percent.Michael: On today's episode of Small Business Banter, we're talking with James Garland, who's a Director at DGB group and a very experienced operator in the not-for-profit social enterprise sector.Sounds like there's some heavy lifting being done by the sector. Is that what for-profit businesses aren't seeing, what don't want to follow some of these imperatives, and that's the opening for not-for-profit social enterprises to really take on these transformational projects?James: Yeah. That's an awesome question because it is absolutely rooted in one of the greatest things that the third sector or the full purpose organizations can do, and they can do what government can't. They can take risks that government can't. Private companies owned fundamentally by their shareholders, they can't necessarily always take the risks that are needed to generate social change. The third sector, not the largest, in terms of economic impact, is one of those places where you can play and you can fail, and many do. You're trying to alleviate social issues like child trafficking, poverty, and stuff like that. You can't roll out a low-risk private-style business plan to deal with something like that. You're going to need to adapt. You're going to need to find ways to achieve those goals. [crosstalk] It absolutely has this great role.Michael: Yeah. Do you need the founder to be totally absorbed, connected, and driven by that particular cause to really see the business, the social [crosstalk] enterprise?James: Yes. That's an interesting angle, too, because a lot of organizations come from our founders' passion. Over a period of time, what that organization will need will be much more than that founder can give because they're one person. Like in any business, you'll need a multidisciplinary approach to how you're going to tackle the root cause, so they're being great people that have started their own foundations, and people be aware of them are famous athletes, started foundations dedicated to specific issues. Cathy Freeman has done a huge amount of work for indigenous kids and communities, and is super passionate about that. Lots of these organizations start with a small number of founders, but as they gather steam, like any commercial business, they need a really good, strong, well-rounded team to be able to scale for impact.Michael: Yeah, it parallels exactly. You know what happens in startups.James: True.Michael: You need somebody or a team of people to see the opportunity and make it happen. It's got some shortcomings, and then it's a cycle, like a management team or a more broadly experienced team comes in. One of the things that I was exposed to in my work in social enterprise was, there's only so much money to go around from benefactors, foundations, and from government. The imperative was find your own revenue streams, which I think the UK has been pretty innovative in building and fostering the social enterprise sector. It seems like what you do with your client is also taking them to the next level, in terms of raising the money they need to deliver the transformational change.James: Yeah. We talked a lot about a lot of not-for-profits, and we've all been to the Black Tie ball, the luncheon, or have something arrive in the mail box saying, "Hey, we're a new charity, too. Can you support us?" There's a lot of low hanging fruit that a lot of organizations engage in, in order to try and keep those lights on, and it's all really valued. It's already really valuable investment. We probably look at more sophisticated approaches similar to any business, a startup, or organization looking to raise capital. We work with a lot of sophisticated investors, people that are real philanthropists themselves, and look at how they invest their money in not-for-profits. We work with the government, obviously, who have got to mandate across a lot of these issues to either be supportive, or help drive, and of course, big corporates, the big retailers, and others.Michael: That is some absolutely fantastic work.James: As to the banks, probably a lot of the time, we hang it on the banks, big retail, and other groups like that, thinking that they're just in it, making money, but we've seen some of our clients in the last 2 or 3 years, multi-million dollar contributions to not-for-profits from these big corporates, not just pocket change, but absolutely transformational support for different projects. Some of them aren't heavily publicized at all. It's just that organization believing in something that it's a line with their mission, and they invest accordingly. We work on those larger scale projects that really do require multiples of millions, but the impact will be really significant. That takes time, like all good things, you've got to do planning, you need strong budgets, you need to ask yourself all the questions that someone else would ask. It's certainly not as simple as shaking the team in the street, so to speak.Michael: Yeah. It's next level, I suppose, but I think the future for the social enterprise for-purpose sector is pretty bright because there's a lot of problems and challenges, and they're possibly more exposed than ever. It's that energy for people to take something on, is incredible. It's really wonderful to see somebody connect.At the smaller end, I think there are a lot of really, incredibly valuable work being done by small micro social enterprises where someone's attached to a cause, and they've created themselves a job, while also supporting the cause. Yeah, there seems to be a host of problems, the sector outlook pretty strong and bright.James: Yeah. I think that we're going to see slightly new models, too. There's a social enterprise group/organization forming, which I'm a part of, in a voluntary capacity. Traditionally we've seen this move to this, not necessarily be equal[?], but more social enterprise, where people start a cafe and they source all of their products ethically, they employ people with disadvantage, and so every step of their supply chain, they're engaged in social impact. That's great as a standalone business. I think the next evolution of social enterprise will be broadening that, so that social enterprise isn't just hospitality driven, cleaning, or some of those things where there's a logical fit. It will be really great when we have real social enterprise across financial sectors, across potentially, resources, and other services, so that it can be seen as an actual business model for all sectors. It does tend to be a bit pigeon-holed at the moment, but we don't have this, as far as I know, any social enterprise real estate agency chains or car dealerships. There's space for this model to play everywhere, so I think there's still a huge amount of growth in [inaudible].Michael: What's the cap on that, James? Is it just being brave to take on some of those much bigger businesses in bigger industries, or is that capital?James: Yeah, it's a good question. It could be all of the above there. I mean, we have a pure shareholder financial return model traditionally for [crosstalk] any business, directorship, or ownership.Michael: Three monthly reporting and bottom line, bottom line?James: That's right. More of the single bottom line than the triple bottom line, and then versus social impact in a fair society. Now, there's some really great intent out there, but we've all got to want to change the world and have that fairer society. That's going to have to come at the cost of hard profits at some point, but again, there's still a lot of hope, because people that have had success or intergenerational wealth are more attuned to social need than ever before, and we see that. We call these people, they're sophisticated philanthropists, they are looking at opportunities for this change to be made, and they're not necessarily wanting anything in return. Some underwriting some will invest in a social enterprise, some will just gift philanthropically, but there are some absolutely wonderful people out there who are really putting their money out as gifting seed funding contributions to real game-changing projects.I think that's where the magic might happen, Michael, where you get those really savvy people saying, "Listen, I'm fine, financially. I don't want for anything. That's a great idea. I'm just going to back it because." There is a lot of that out there, but again, in order to present those cases and in order to excite those people and align their passion with an area of social cause that floats their boat, it takes time. You got to really tip[?] into that, what we call a "case for support", which is fundamentally a business case for the for-purpose.Michael: Yeah. There's got to be more effort, doesn't it? Anybody that's got a profile and is well-off, I'm sure they get approaches all the time and [crosstalk] for anybody you see, there'd be individuals and companies around, but they are going to have their own processes to use a boring term, but to select who they're going to support and why? [crosstalk] You got any tips for the next generation of business owners, maybe they're in school now, or just out of school, in terms of encouraging them into the sector?James: As I said, I sort of fell into it early on, but there's a lot you learn from a sector, too, at an early age. In this day and age where we're rightly so looking at greater diversity on our boards and in governance, we want youth representation because everyone understands that young people have a different view point on the future, young people like you and I, Michael, and others even younger than us.Michael: Younger at heart.James: Yeah. It's exactly right.Michael: Yeah.James: Getting involved in community activities is highly rewarding for self. We often talk about how you can get involved, what you can do, but it's almost the giving to others is being shown that, especially modern days, and I'll bore you with a bit of MRI, health sciences on philanthropy, but it triggers the brain and lights the brain up when you give, you're involved, you give selflessly, and you're engaged in things above and beyond your own self. I'd encourage people to get engaged with this sector, with the altruistic, if we can call it the giving sector, not just for what you might learn and how you might connect with, on boards or in projects, and obviously, just to do really good stuff in the community, but do it for yourself.The days of mental health, being such a high agenda issue, it's incredible, the goodwill and the feeling that you get. People who are pretty much full-time philanthropists now will say, "The work that I do now is just so much more rewarding than anything I ever did commercially, because it gives me a sense of self."Michael: Yeah. That's excellent advice. That's a great, unfortunately, way to leave our time today, James, but I think that message is, "Get involved in something," and it's almost wide into you that there's lots of ways you're going to benefit and contribute.James Garland from DGB Group, thank you very much for your time today.James: It's a pleasure, Michael. Thanks for having me.Michael: That is all for today's episode of Small Business Banter. I continue to be inspired, bringing you small business experts and other small business owners, and hearing their stories.Do you want to listen to any past episode? Jump onto your podcast platform of choice and search Small Business Banter. There, you will find a diverse and fascinating collection of small business owners and experts openly discussing and sharing their experiences.For any of the links, resources, or information we've talked about on the show today, or to contact me, please head over to smallbusinessbanter.com, or you can find us on Facebook and Instagram.It would be great to have you tune in the same time next week for another episode of Small Business Banter.[END]

This is the message from our Thursday evening service on 7/15/2021 titled "Introduction to James - It's Time to Grow Up" on James 1:1 with Pastor Jeff Gill.

James: Hi, audience. This is James Kandasamy. You're listening to Achieve Wealth Podcast through Value at Real Estate Investing. Today, we have an awesome guest. His name is Nikolaï Ray. He's who's the founder and CEO of MREX, which is an acronym for Multifamily Real Estate Exchange; is considered by many of his peers in North America as the leading expert in apartment investing with over $1 billion analysis, underwriting and transactions. He's also a pioneer in mid-cap, multifamily financial engineering, which is, you know, he's regarded as the teacher, advisor and also the keynote speaker. He's also a real estate tech innovator to his current work on the multifamily real estate big data, artificial intelligence and property tokenization using blockchain technology. Hey, Nikolaï, welcome to the show.   Nikolaï: Hi, James. Thanks for having me.   James: Okay, so do you want to mention anything that I missed out about your credibility?   Nikolaï: No, that sounded like a mouthful.   James: It's going to be ready technology-centric discussion today, right?   Nikolaï: Yeah, the full story is that it should probably a lot longer, but I mean, that could be for, that could be for a whole other episode of the origin story of how, how'd you get to, you know, how you get to where we get in life, and professionally and personally, but yeah, that's, that's the gist of it, you know, everything that's underwriting and, you know, acquisitions, dispositions, refinancing, obviously, portfolio management, whether it be the small market, small cap market, you know, between 500 units, all the way up to the mid-market, you know, market cycles, and obviously, have a very strong penchant for data and for technology.   So, so that's, that's pretty much what I've done over the last, I guess, over the last seven or eight years, is focused on, you know, for the most part, I focused mostly on acquisitions. So I was in charge of an investment banking firm, we worked, you know, on both sides of the transaction advisory side of things, for investors and we also work with a lot of ultra high net worth investors, that's kind of where I built my speciality. Eventually, ultra high net worth investors and private equity firms and family offices, you know, by doing all that I kept on, kept on getting annoyed with the fact that the multifamily market is so fragmented, and the data is so packed, I just kept on thinking to myself, you know, this, this market this, which is an important market, I mean, the apartment building investment market is a almost a $10 trillion market worldwide.   It's a, quite, house is a primary need of human beings, which is to have somewhere to live. And yet, you know, we're kind of in the dark ages as multifamily investors, because number one, we don't have access to any centralized marketplace. If you compare us to a stock investor who can go on the NASDAQ and trade every type of tech stock or stock market investing world, the New York Stock Exchange, and we don't have access to any data, the data is very raw, it's very, it's kind of, you know, what I call legacy data, as you look at like Costar and, and all these various data providers who provide this very raw and inert data, without any actual, you know, context around the data, and without any helps with regards to making decisions business intelligence wise, as a multifamily real estate investor. So that's kind of how that's how my career has gone so far. That's why I went from transactions and more towards data technologies because I felt like there was so much work to be done to help investors just you know, be better investors for once.   James: Okay, so let me understand MREX because I think it's important since you have a lot of passion we need right now. Right? So --   Nikolaï: Yeah.   James: Multifamily Real Estate Exchange, if I understand it correctly, so what you're saying is right now, the data is so fragmented, and a lot of times when, you know, people like me underwrite deals, we have to do so much work, I did too. I mean, I really learn to write [inaudible 04:05] for four hours because I did all the property management financial, that there are so much of mistakes in the property management financials, you have to do T-3, T-12, you had to do expense ratio, you have to do market comps, and all that. So what you're saying is, you are going to summarize all that, and make it so easy to look at so that it can be treated as a commodity, commodity, is that right?   Nikolaï: Not necessarily. So, so the idea is taking you as an example or any of your listeners, right now, who are multifamily real estate investors actually acquiring properties, let's say you have the capital ready, or your investors have the capital ready to allocate to an acquisition, you know, just actually finding that first property to buy or the next property to buy is a very time intensive and energy intensive job, right. You have to go on, you have to go on all the different MLS, you have to go on the loop that's of this world, the [inaudible 00:05:00] and the [inaudible :00:05:01] and, you know, just --   James: [inaudible00:05:02]   Nikolaï: Right, and then you have all the brokers, and then you have all the broker websites, then you have all the pocket listings and you have not even really touched the majority of the market, you're actually still missing probably, you know, anywhere between 25% and 50%, of actual transactional inventory, depending which metro area you're in. So it's a lot of work, even just looking at the stuff that's on websites. That's a lot of work because you have to go on between five and fifteen websites, each website has a different user interface, this different user experience, and actually shows different information. On one site, maybe on [inaudible 00:05:42] you might have a cap rate, maybe on the MLS, you won't have cap rate, you'll just have gross revenue.   So then you have to figure out your own cap rate off of that. It's a lot of work, you know, and for me, I just never thought it made sense, to not be able to say, hey, I want to buy a multifamily property, whether it be a five unit, whether it be a 50 unit or 500 units, I want to go on to one marketplace, we're all properties are centralized in a unified, and normalized manner. Because that's the second point of it, is you have to be able to normalize expenses, if you want to start comparing apples with apples, and oranges with oranges. So that's the second phase. So what we're doing with MREX is we're building a unified, standardized marketplace for multifamily investors, where they will be able to see every single property that exists, that is for sale, despite on the way it's being sold or listed or marketed. We're going to be working with brokers obviously, the goal is not to get rid of brokers or anything like that, that's not, that's not what our goal is. Our goal is to help brokers, help investors just make the whole transaction process much quicker and more time efficient. And that way, you know, we're making the market more, you know, just a more efficient market.   James: Okay, okay. Got it. Got it. So you are basically streaming lining the whole selling and buying process, I guess, just to make --?   Nikolaï: Absolutely. Absolutely.   James: Okay, got it.   Nikolaï: And the analysis process as you said too, right, because it's one, it's one thing finding the properties and having them all in one marketplace. Okay, let's say, let's say you have the NASDAQ, let's say I wanted Lesson TechStars rather than multifamily properties. I go the NASDAQ and I can see every single company, I could have access to inventory, now that's the first step. Now the second step is, once you have access to inventory, and the information provided on all that inventory is normalized and standardize, well, I still have to be able to start comparing and start, you know, building my own models to say, well, if I'm a cash flow investor, which stocks are generating the most cash flow relative to the other, to the rest of the inventory. So that's where you know, context and alternative data comes into play with our platform, is that we want to be able to, to offer data and tools to you as a multifamily investor, to help you streamline your underwriting of the inventory that you've seen. So that's really the two things we're focused on at the moment.   James: Okay, got it. Got it. So interesting. So that'll be, that'll make a lot of, I mean, for investors or for buyers, they would be able to see what kind of deals that they want to buy,--   Nikolaï: Right.   James: Not just what they want to get the yield out of --   Nikolaï: Exactly and instead of going on fifteen websites, well, they've only one website, instead of having to, you know, start normalizing expense ratios and sifting through, through T-12 and T-3, and doing all that, it already kind of be all chewed up and kind of built up already. So you can actually focus, focus on analyzing, focus on comparing and establish, okay, I want to buy this property using this strategy. And why would I do that versus the other property that I see over there? That's ultimately what's the most important thing.   James: Okay, okay. So could it then be a good idea to match this with a crowdfunding platform, because during the crowdfunding, they can choose what deal they want, right?   Nikolaï: Right. So crowdfunding is an interesting thing. The problem is crowdfunding, obviously, crowdfunding, crowdfunding has tried to kind of attack two things. Number one is liquidity, right? Because, as a multifamily investor, the more properties that you acquire, you increase your net value, right, you're a richer person. But the problem with that, is that you have to leave equity in every single deal, right. The banks won't finance you 100%. So you always have to leave equity. So as you get richer and richer, value wise, you are actually cash poor, because you're leaving so much equity in each property that you acquire. And there's always a part of the equity that has to stay in those properties. But the problem, the second problem is that as you get, as you become a bigger investor, and you acquire more properties, and you're more well known in the market, well, you get access to better deals, but now you have less access to more money, even though you're richer. That's kind of the liquidity conundrum of multifamily investors. So that's why crowdfunding is interesting, because it gives kind of, you know, after the JOBS Act, it helps multifamily investors, particularly syndicators, to go and raise capital from, you know, from investors either through the regulation CF, you know, and obviously, regulation D506C was quite an upgrade also to be able to start to, to market capital raises. But what we're doing is we're actually building a second platform that is shadowing the Emirates platform. And what that platform will be doing is, we're actually going to create a sort of stock market and take the crowdfunding thing a bit further, because crowdfunding, as I said, tries to attack the liquidity conundrum. But the problem is, is that when you invest in a crowdfunding deal, you as an LP, are stuck in that deal for the lifetime of the deal. So if it's a five, it's a three to five year exit, well, your money stuck in that, so you, you as a passive investor, or as an LP, do not have liquidity. That's, that's one problem. And obviously, crowdfunding also helps with accessibility, right. So obviously, regulation D506C is only for accredited investors, which doesn't really help accessibility that much. Regulation CF has helped that because now then, that kind of lowers the barrier to entry for everyday retail investors who don't have that much money, but it's still a fairly limited regulation. At the moment, I know, they're trying to pass a couple of bills to increase the opportunity for regulation CF investors. So what we're doing is we're building a second platform, that's going to be basically a stock market, in its own sense, where, you know, through a broker-dealer partner that we hope to get. And then also through eventually a, an ATS license with the SEC, we would like to be able to take it a step further, and allow a multifamily investor to pretty much offer his property through one the various regulations on that marketplace. That way people could invest as passive investors, as LPs, either through Reg D, Reg CF, or eventually maybe even Reg A plus, but then they would also be able to acquire or access a secondary trading market so that they're not stuck in an illiquid period of three to five years. They would actually eventually be able to re trade part of their shares or all of their shares, kind of like you would at the stock market.   James: Wow. So it looks like you are trying to really disrupt the industry.   Nikolaï: Yeah, definitely. [inaudible 00:12:36]. You know, multifamily real estate looks like the stock market before the arrival of NASDAQ. Right? It's like before the internet, even though we have internet and multifamily real estate, it's as if people are still trading kind of like stock market investors were trading on floors, you know, with papers and screaming and doing all that stuff. It, you know, it doesn't make sense.   James: Yeah, yeah. It's so private nowadays, right? I mean, everybody has priority, we do not know how, even multi families performing under a different private LLC.   Nikolaï: Exactly.   James: There's a lot of good news out there. But there's also bad news, but nobody talks about it. right. So I think,--   Nikolaï: Oh, right. And the data, the data out there, like look at any of the data from, you know, even from the really big organization like NCREIF so the National Council of Real Estate Investment Trusts, NCREIT sorry. Even their data, when they know these indexes based on multifamily markets is based on a very low volume of the actual number of transactions. So when say a, a company, various data company says, well, the cap rate right now of say Atlanta is 5%, for example, well, that's actually based on a very small portion of overall transactions. So it's hard for us as multifamily investors, to really be sure are about the numbers that we're inputting into our underwriting models, because we're basing it off so little data.   James: Got it. Got it. Yeah, it's, it is just so limited, right? Because everything is done on a private basis on syndication, which is not much of the data being published out there, right. So --   Nikolaï: It's like investing in the stock market, but not knowing how the stocks have performed historically.   James: Yeah. Correct. Correct. So but why do you think this would work? And because if you look at the demographics of the, I mean, because I'm looking at syndication, when we whenever we buy for multifamily.   Nikolaï: Right.   James: But for me, it's just a small part of the whole market.   Nikolaï: Right.   James: Even though we are I mean, maybe my group or my network thinks that that's the whole thing how people buy multifamily. I don't know, that's true, because I network with a lot of different type of people, right. So looking at the classes of investors who are buying multifamily, I think I know for me, my thing is maybe we are one of the, I am one the lowest level part of it, right, because we are buying Class B and C using high net worth individuals and all that, but there are a lot of higher network, higher calibre people who are playing at a different level, which we don't have, which I don't have visibility, maybe you have it right so. So are you trying to look at different classes of investors and cut through all of them? Are you looking at only some classes of people?   Nikolaï: So we're trying to help what we call the small cap to mid middle market investors.   James: Okay.   Nikolaï: So anyone who owns between five units and about, you know, I'd say around 2500 to 5000 units.   James: Okay.   Nikolaï: That's kind of where we stopped, you know, that's where we're focusing on because that, you know, the majority of transactions are actually done by, by small cap to mid-market investors.   James: Okay.   Nikolaï: You know, the multifamily market is historically a mom and pop market. Now, it's, you know, it has transition a bit, investors are getting bigger and bigger. But the reality is the majority of the market is not an institutional market, you know, at the root level, or the private equity firm level or family office level, depending obviously, which metro area you're in, right. New York City is obviously more of an institutional market. Canada, Toronto is a very institutional market, but the majority of cities and metro areas are still, you know, very small cap market. And the problem is that, you know, take you for an example as a syndicator, or even take someone who's not a syndicator, right, because a lot of investors, multifamily aren't syndicators, they just buy their own properties, you know, they end up with maybe, you know, anywhere between 50 and 500 units as time goes by. Now, the problem with with those types of investors and syndicators as yourself is that you do not have access to a team of underwriters, you don't have access to, you know, expensive data that say a real estate investment trust has more than a very big private equity firm has, you don't have access to all those analysts. So, you know, we want to try and make sure that the market stays very level and stays is a level playing field. Because, you know, ultimately, I think the multifamily real estate market is very important for a couple of reasons. Number one, you know, everyone talks about the disparity of wealth, right of the 1%, and how the disparity is getting bigger and bigger. And we could do a whole podcast on that and why it's happened and where it's kind of going. But ultimately, I think, you know, the multifamily market is probably, the market, it's probably the asset class that offers the best returns based on risk, with the best risk-adjusted returns. If you look at Sharpe ratios, and Sortino ratios and all these things. Now, it's also been proven, there's a lot of studies about this, a lot of university studies done on this, that, you know, social mobility comes from education, and access to property, right. The reason why people have been so poor for so long, and like the Brazilian favelas, or the Indian shanty towns, is because people don't have education, and they do not have access to property, they are not able to become landowners, or owners of their own homes, even less become investment property owners, right. So I think multifamily stays as a very important asset class, because, on top of filling a basic need of human beings, that means providing somewhere to live, it also is a very important mover, for the everyday investor, the mom and pop, just the normal person need you to be able to access a very good, very safe, wealth building asset class that does not have the same volatility, or the same pitfalls as say, the stock market and other types of asset classes. So I think it's very important that we provide, you know, tools and data and allow for the smaller investor, the investor that has less than 1000, or even less than 5000 units to be able to continue on performing, continue on from this, this asset class.   James: Got it. Got it. So let's go to a bit more details on some of the big data and artificial intelligence, right.   Nikolaï: Yeah.   James: So yeah, I studied artificial intelligence almost 24 years ago, every now it has become really popular, a lot of startups with artificial intelligence, right.   Nikolaï: Absolutely.   James: So the question is, how do you, I mean, first of all, let's define what, can you define artificial intelligence in your terms in terms of real estate? Because I studied engineering standpoint.   Nikolaï: Yeah, well, I'm not an engineer, by trade, so at least I'll give more of a generalist definition to the people listening which I think is probably gonna be very good. The important thing is to understand, kind of the difference between machine learning and artificial intelligence. So you know, machine learning is more of a, it's a less automated process, right. So a lot of what people are calling artificial intelligence is ultimately just machine learning. And what it is, is that let's say, let's say, you know, I'm a data scientist or an economist, and I build a predictive model using, say, Monte Carlo simulations. Well, I set a, I build a set of hypotheses, I plugged them into my Monte Carlo simulation, and then that runs. Now, with machine learning and artificial intelligence, what becomes very fun as you know, statistics are a funny thing, right? And economic modeling is a very funny thing because even though, you know, people in the economics world swear by predictive analytics, the reality is in data science, it's garbage in garbage out, right. So the outputs always depend on the inputs. So let's say you're doing an underwriting model, and you're looking at an apartment building, and and you say, well if I buy this apartment build in this way, my internal rate of return is going to be 25%. Okay. Now, internal rate of return, net present value is a, is an output or their outputs based ultimately on the strength of those outputs are only as good as the strength of the inputs.   James: Correct.   Nikolaï: And the very important inputs that affect an IRR and NPV, which ultimately led to two of the most important metrics to help you decide whether it's a buy a property or not are rent growth, expense inflation, refinancing interest rate; if your IRR and NPV is based on on refinance, because obviously IRR and NPV has to be based on an exit model. And the exit model can either be a refi or it can be a sale; disposition. And then if it's a disposition, while your IRR and NPV is based, ultimately off the reverse, the reversion cap rates, so the exit cap rate upon sale. Now what everyone's doing right now, in the multifamily market, especially small investors, and mid-market investors is they're just entering these inputs. You know, they're just playing it by ear, and they're not even playing it by ear. They're coming up with these random inputs that are based off absolutely nothing. I just had a huge discussion on LinkedIn about this, with a couple of investors where one guy was saying, well, you know, if I buy it at 5% cap rate, my underwriting model, what I do is, to establish the reversion cap rate. So the cap rate upon eventual sale, let's say five years, is I add 20 basis points to the purchase cap rate per year. So if I bought it at five today at a 5% cap rate, well, then five years from now, I predict that I'll sell it as 6% cap rate, okay. And, you know, people kind of hide behind this type of rule of thumb model, say, well, I'm being conservative, therefore, my underwriting models very good. The reality of it is your underwriting model is bullshit. Okay. It's not worth the the Excel spreadsheet that it's been written upon. The reality is, where are you pulling this, this expansion of 10% or 20%,10 or 20 basis points per year? What are you basing that off? Right? That's what anyone should be asking, What are you basing this off? While being conservative. How do you know you're being conservative?   James: Yeah.   Nikolaï: How do you know you're not being optimistic? Right? You could be being you could actually be very optimistic with that. And conservative might be and then an increase of 0.25 a year, right? The reality of it is that everyone underwriting deals, right now, they're not basing their inputs off any data, right. And they're definitely not basing it off any predictive analytics, because it's one thing to have the data, the historical data. But you know, just because you have historical data doesn't mean necessarily, that's going to repeat itself in the future. That's why we have predictive analytics. So let's say that based on historical data, your 5% acquisition cap rates will actually be a 5.5 in five years. Now, the problem with that is that the future, that history is never guaranteed of the future, right. So that's why you then have to plug in various scenarios where you're considering this. And that's where predictive analytics come very difficult because you're pretty much just kind of taking a shot in the dark and basing things off the past, but you're putting in like a margin of error. With machine learning and artificial intelligence, you're able to make your predictive models better ex post based on ex ante results. So let's say you create a model to predict the future cap rates, well, you want to predict the future cap rate of in five years, it's your goals to sell within five years. Well, if you predict that today, the probability that your five-year cap rate from now is going to be precise, is a lot lower than let's say, in four years, you predict the cap that same cap rate, right, because you'll be closer to your exit. So there'll be less room for margin of error. So what machine learning and artificial intelligence will allow you to do is to consistently kind of reset your model as time advances. So maybe your initial model based upon acquisition was off. But as you advance in time, the artificial intelligence and machine learning continues on training that same model, the same algorithm that you had, and adapts the various inputs and algorithms to make it more and more precise as you get, as you get closer. And on top of that, as you get closer, the range of distribution of property probabilities get smaller. So it's a double effect, your predictive models get even tighter and tighter as time goes by. And that's where [inaudible00:26:03] machine learning and artificial intelligence can really help out. Is that instead of just plugging in these ridiculous exit cap rates, and ridiculous growth rates and ridiculous inflation of expenses, and absolutely ridiculous refinancing interest rates, when we get closer and closer to being able to actually put in inputs that are based on something very, very solid and then, therefore, our underwriting models will become more and more precise. And what we want in underwriting when you're buying a property, whether you're a syndicator, and you're responsible for money of your LPs, or whether it's your own money, the goal of underwriting is not to be conservative. That's not what the goal of underwriting is. And anyone who says that they underwrite, and they're concerned, their underwriting is conservative, what they're really telling you is they don't know how to underwrite, okay.   James: Yeah.   Nikolaï: You don't want to be conservative, you want to be right on the dot, that's what you want to do with underwriting, you want to be as precise as possible because the reason that you buy the property today is you buy it for future cash flows. And cash flows can come in various ways, they come in an annualized cash flow so, so free cash flow, they come in the appreciation of the asset, so the value of that asset gains because of various market dynamics and because of the way you're, you're managing that property. And they also come through the capitalization of your mortgage. So there's a part of your mortgage that you're paying down, which is principal, right. So those are the three cash flows that you can receive. Now, when you're underwriting a deal, and you're looking at how much you should pay for, say, this hundred unit building you're looking at, well, if your inputs are off, you might buy that property. But it's a bad acquisition because you were too optimistic in your inputs. But it also happens that you were too conservative in your books, therefore, you didn't buy the property. Because if you input that at the exit capital, that property is 7%, but, in reality, five years from now, the exit cap rate is five and three quarters, well guess what? You missed one hell of an opportunity.   James: Correct.   Nikolaï: And in real estate investing, the most important thing is time value of money, we only have a very limited time during our lifetimes in which we can invest and create wealth. And we only have so many hours during the day. Therefore the cost of opportunity, the time value of money are the things that we should consider the most in our underwrite. And that's really where machine learning and artificial intelligence will help investors become much, much better. Obviously, you also need education, right? You have to understand these, I mean, this is advanced stuff. And I'm trying to kind of explain it in a simple way, where people who don't have master's degrees and PhDs in finance and engineering can understand it. But the reality of the matter is that multifamily investing is very, it's a very complex, it's a very sophisticated asset class, and you need a certain level of education.The problem being right now, despite the very high level of education that some investors have, we just don't have solid, predictive analytics tools and data to be able to make sure that we're actually able to transfer education into decent acquisitions.   James: Yeah. Well, that's very interesting, because exit cap rate is always being misused or mis-conservative right? So --   Nikolaï: Well, even entering cap rates, even acquisition cap rates, I see people saying, well, you know, I'm not gonna buy that property because it's a five cap rate and the markets trading at 5.5. Okay, is that a stabilized property? No, it's a value add property. Well, the cap rate doesn't, the cap rate is meaningless then. A cap rate is a metric of a stabilized asset. If the asset is not stabilized, there is no cap rate, because a cap rate is a perpetual annuity. It's a return metric, based on an unlevel perpetual annuity, which means the same cash flow every year forever.   James: Correct.   Nikolaï: Now, if you want to be able to calculate that your property has to be stabilized. So if you're not buying a property, because it's a five cap rate, and the market sharing at 5.5, but it's a value add deal, well, I'm sorry, I'm sorry to tell you, you should change, you should change fields, you should go play, you should go to Las Vegas and put it on red.   James: Not only that, I mean, not only new investors don't understand the entry cap rate doesn't matter [inaudible 00:30:46] and I don't know, I never see a reason not to do a stabilized deal. Not on commercial, right? So for me, I'm always [inaudible00:30:53] guy, that's why I --   Nikolaï: Well, unless you're a private equity firm or your family office or you're a RET or you're an ultra high net worth individual who now has, you know, net value of anywhere between ten and hundred and fifty million dollars, there's no real reason to do stabilize deals, right. The reason you wanted to stabilize deals is, because you have a very high net worth, or because you're trying to de-risk your portfolio. Right?   James: Correct.   Nikolaï: That's why you would just stabilize deals for small cap or mid cap investor.   James: Yeah, yeah. Most of the time. I mean, commercials always value at play. I mean,   Nikolaï: Of course.   James: I mean, there's a lot of people doing stabilized deal nowadays, just by getting a higher mortgage and getting slightly lower price, play on the mortgage side with the interest to get a cash flow, but --   Nikolaï: And that can work if you're a neurosurgeon, right? If you're a surgeon making a million and a half a year, and you're 35 and you say, well, you know, I want to start buying multifamily property because I like, I like real estate and I like the tangible part of the asset class. But I don't need any money right now, because I'm making a million, I'm making a million and a half a year. I don't need any cash flow. And I'm very long term and I just want to build myself a nice retirement, you know, because you know, that's what I want as objective. Well, then yes, buy stabilize property or be an LP and syndication, or purchase that stock in the [inaudible00:32:23], that's fine. But if your goal is to increase your wealth exponentially, in a short period of time, and what I mean by a short period of time is fifteen to, five to fifteen years. Well, then, yeah, you're gonna have to do some kind of value add, you can't just do financial arbitrage all the time.   James: Yeah. Yeah, there's a lot of deals out there in different asset class, which can give you that cash flow, right. I mean, you can buy a stabilized mobile home park, you know, it'll give you higher cash in cash than any multifamily deals.   Nikolaï: Right.   James: So even self-storage, or even multifamily, which has been stabilized, you get, you'll get good cash flow. But how long will that cash be guaranteed? Because you have a very tight DSER at that point of time. And let's say the market turn, you may not be, your DSER might be compromised right now, because you don't have any buffer. Right?   Nikolaï: Especially if you did not properly manage the terms of your mortgages. Right. So that's very dangerous. Like if you feel that you're, if you feel that the markets going to shift, say interest rate wise, the easiest way to kind of pull yourself out of that situation you just talk about is, you know, just take longer-term mortgages, you know, make sure that the mortgage does not end in five years, make sure it's a 10 year term, or even maybe a 30 year term. Right? That's, that's the easiest way to manage that risk.   James: Yeah, just do a hard loan.   Nikolaï: Right.   James: Which gives you like, 45 years. I mean, there's the other trick that a lot of people play is, you know, showing you need cash in cash based during IO period. And nowadays, people are getting five years, seven years, IO period and sometimes people think, oh, I will not hold, you know, that deal for long term. I mean, you are hoping on not holding, holding, right. But you do not know what's going to be happening to the economy, right?   Nikolaï: It's a dangerous game to play. And I'm not saying don't play it, but make sure you have the, make sure you have the education and the know-how to be able to manage that risk. It's all risk management. Ultimately, that's what it is.   James: Yeah, yeah.   Nikolaï: The problem, the problem is a lot of people are doing this, and they don't know what the hell they're doing.   James: Yeah, I mean, I think so there's so much of capital out there right now, looking for money to be placed in some way.   Nikolaï: Oh definitely.   James: And people don't think that are they going to putting 1% in the CD, I might as well put here and get like six, seven per cent, right? Cash Flow, right? And,--   Nikolaï: And that's, that's the retail market. Like that's, that's small investors like me and you the reality of is the real cap, the real capital flow right now is at the institutional level, there is so much higher level money and smart money searching for returns right now. I mean, we can't even fathom small investors, how much money, I mean, family offices, typically, if you take the family office market, typically always allocated maybe like, I don't know, depending on the family office in the region, but usually anywhere between, you know, maybe eight to twelve per cent of their overall asset allocation, capital allocation to what they call alternative assets, right. And real estate as part of alternative assets. Now, over the last 10, I'd say over the last 10 years, the last decade, family offices have become more and more in tune to the real estate markets. High net worth families also, especially towards like multifamily real estate, and more and more real estate is no longer considered just as, as something under the alternative asset umbrella. But now it's kind of becoming its own umbrella. And what that's doing is that instead of family offices, and we're talking about family offices that have trillions of dollars, right. These are not these are not small things, these are big moving bodies with a lot of capital, we're talking about multi-billions of dollars, not trillions, multi-billion dollar family offices, that are now instead of allocating, you know, 8% to real estate, well, now they're allocating 20% to real estate. So and that's, that's a scale like, there's a lot of them out there. And we haven't even talked about the private equity firms. We haven't even talked about the pension funds, the International pension funds, you know, people talking about globalization and international money, thinking that it's just, you know, rich Russians is going to Sunny Isles, Florida, buy $10 million condominiums. That's not what it is. The global movement of money to American and Canadian Real Estate are things like the Amsterdam teachers pension fund, or government workers pension fund, you know, allocating, allocating, you know, 100 billion dollars to the American real estate market. Now that's, that has a big, that puts a big dent on the supply and demand of real estate. And that's what ultimately drives property value is much more than interest rates. Interest rates only, only influence property values, like people were talking about, especially the last couple of years, all we know, if interest rates go up, cap rates will follow up, they'll go up. That's not true. Capital flow drives cap rates and values and properties and multifamily; interest rates only influence cap rates and values.   James: Very interesting perspective, that's you are right. There's so many, too much money, even out of United States is looking for money to place, right. Like the other dad had a call from the UK. It's a family office who want to invest in the UK and they're looking for like operators like me, and I was asking them, what's the return expectation? They say this 22% IRR credits and I said, well, I [inaudible 00:37:58] you guys, I can get better money in the United States right, so --   Nikolaï: Exactly. And all the, all the money from the quantitative easing the follow the 2008 crash, I mean, all that quantitative easing money, a lot of it still, after even 10 years, has not even found a place for it yet. Right? So there, there's a lot of money chasing deals, there's a lot of money chasing deals.   James: Correct. Correct. Right. That's true. That's true. So coming back to the exit cap rate. So I know that's one of the hardest parameters to measure. Right? So.   Nikolaï: Absolutely.   James: But can you clarify again, how did you, how would you use artificial intelligence to find that a more accurate exit cap rate? You know, T minus five, my T minus 5, five years earlier, before you hit that five years mark of selling, assuming five years of selling.   Nikolaï: So it's the computing power, right. So it's a computer, what we do is, we'll build, so we'll do we'll say, I'm sorry for anyone who hasn't studied, you know, high level university finance, but or statistics, you know, we'll build a, say, a regression model. So we'll look at past data. We'll plug all that in, in order to build a predictive model, a future model being able to come out with future cap rates, and, you know, the more data that we're able to plug into our regression model. So historically, what real estate institutions and economists have use is what they call the linear regression model, use the Monte Carlo simulations. Now, the problem with the linear regression model is that you know, past transactions or data are, are, are also affected a lot by various things like, you know, political environment, and capital markets. And there's a whole bunch of factors. So there's a new model that's being used more and more, especially with a lot of postdoctoral students in statistics, it's called a Quantile regression model. So that's where we're able to create that same kind of, I'm saying this in layman's terms as much as possible, we're able to take past historical data, build that kind of linear model, kind of, like build that line chart for people to understand, and we kind of repeat that line chart in the future. But we're also able to start to weigh that those data points with various things like a new government, with quantitative easing, with the war, with various factors that may be affected that models to make it less linear. And then we're able to start to better predict future stats and future cap rates. So that's the first step of it. The second step is, let's say, right now, we built our Quantile regression model. And now we compute it and what it says to us is well, T minus five cap rates, or five-year cap rate is going to be between, let's say, we have a couple of tracks, it's hard to explain to people who have not done statistics. But we have a couple of tracks. And ultimately, what it says is that the highest probabilities are that cap rate is going to be between 5.75 and 6.10% in five years for that specific market. Now, like I said, as we get closer to the five year period from now, the less the margin of error is, because we're closer and multifamily market moves very slowly. So predicting, the easiest way to understand is predicting 25 years out from now, it's very hard? Your 25 year prediction is going to be way more, there's more room for it to be completely off than your two-year prediction. So we build a model for the five-year prediction, and then starting tomorrow, every day, our artificial intelligence recalculates that model. So as it recalculates, the model gets more and more precise, because let's say we took statistics from today to 20 years ago, let's say we took the cap rate of that market, starting from today, and 20 years back. Well, obviously, the next 20 years are not going to be exactly the last 20 years. But that's ultimately what statistics do, we try and kind of say, well, let's take the last 20 years, there's a margin of error, that's what's going to be the next 20 years.   So what's cool with the artificial intelligence is without actually having to do anything, every day, the artificial intelligence kind of brings the model a day closer and adapts the model with more and more weight on what's going on right now, rather than what happened 20 years ago. And the artificial intelligence is also able to measure what today it predicted for yesterday, versus what actually happened. And what's the spreading difference and what caused that spread? And therefore, once it's able to determine what caused that spread, it'll add that into the equation for the future cap rate model so it becomes much more precise.   James: Yes, but don't try to run it in iteration on a daily or monthly basis to watch the whole investment process. But how do you make it on day zero? Well, today we're buying today how does it iterate then when on a day zero?   Nikolai: Well, what it is I don't understand the question.   James: So my question is, you said the data is being fed into the system to get more accurate exit cap rate. But you're making a decision to buy today? Is the iteration happening from today to all the investment cycle? Or do you do it earlier before you decide to buy a deal?   Nikolai: Okay, I understand what you mean. So like, for determining your actual purchase cap rate,   James: Yes, correct whatever price that I'm going to pay today because that's what I'm getting into the deal. That's the point of me making a decision, whether this is a good deal, and I'm going to be raising money and telling everybody it's a good deal.   Nikolai: The purchase cap rate is a whole other set of statistics and data models. That's more I'd say, determining today's cap rate is much more endeavor of collecting more historical data. Because like I said, let's say JLL Jones Lang LaSalle which is one of the biggest brokerages, they come out with reports and say, Okay, well, the cap rate, let's say in Austin is, 5.2%. Let's say the mean cap rate is 5.2%. Well, that's based on maybe what like 30 or 40%, of actual transactions that happen because they don't have data on like the off-market transactions, or the pocket listings or this and that, right. And on top of that, they haven't normalized the cap rates on whether, let's say, a building traded at a 4.6 cap rate. Well, as we said, if that property wasn't stabilized, well, then that cap rate is off. That's not a good cap rate. So that's a second thing. So for establishing what you should pay to the intrinsic, what's intrinsic value today. that's ultimately what I think the question is, and correct me if I'm wrong, but let's say you're looking at a 100 unit property, what is the actual intrinsic value of that property? What's the real capital I should be buying at? Well, that's a question of having the proper volume of data, Okay, number one. So that's what we're working on right now is making sure we keep on building our database. So instead of our market cap rates being based on the off 30 or 40%, of inventory, or transactions. Well, it'll be based off maybe 60, 70, 75%, therefore, that cap rate becomes more precise. Secondly, we actually look at every transaction and say, qualitatively because that's the first thing is a quantitative aspect, in statistics, we have quantitative, qualitative. So the quality of the data, once we have the quantity, we look at the cap rates and say, okay, that property traded for a 4.2 cap rate. Was that a stabilized property? No, it was not. Once we add the cap x, we have the new revenues. And we adjust the sales price for cap x, but we also adjust NOI. Now we can look at the stabilized cap rate. So that's the qualitative aspects of it. And now we're able to say, here are the market cap rates, here's the low end of cap rates, here's the high end of cap rates, here's the mean, or the media. And here's that range of cap rates. Because cap rates are based on the Capri calculation ultimately, even though people think it's NOI divided by sale price, I'm sure that's not what a cap rate is, that's how you find the cap rate of a soul stabilized property. The actual cap rate calculation or formula is a mathematical equation of R minus G, it's algebra, so are being returned minus g, which is growth. And R is defined as RF plus RP. So the risk-free rate plus the risk premium that you as an investor are looking for or that the market is looking for, a perceived risk premium, obviously. So what we want to do then, that would be like a third step, and we're not at that level right now. But I hope within the next couple of years, we will be, and I'm sure you as an engineer, probably understanding how valuable our ability to do that would become for the market. Is that then you're starting to be able to say, well, right now, that property is being listed at a say, let's say the range for cap rates in Austin is really five to six, obviously, six is going to be in the worst neighborhoods. Five is going to be the best neighborhoods because it's a matter of risk. Well, then you're looking at the property, let's say it's at a 5.7 cap rate. But it's kind of on the limit of a bad neighborhood, good neighborhood. And then you're able to intrinsically say, but the intrinsic cap rate of that property, the real intrinsic value of that cap rate is actually 5.3. Now, if you didn't know that, and you just said, well, the average cap rate is 5.7 well, it's not so much of a deal, I'm not gonna buy that property. But now with this new data, what you're able to see is, wait a minute, it looks more expensive than what it should be but in reality it's not, it's actually cheaper because the real intrinsic value is a 5.3 cap rate. And that would really unlock the potential of what we call value investing, what like a Warren Buffett has built his entire career off of the stock market? Well, he was able to build that value investing exists so much, in the stock market, because of the quantity and the quality of the data. The quantity of data is accessible to everyone, the quality of the data is a bit harder to get the qualitative aspects. That's why Warren Buffett was has been such a great investor, because he invested so heavily into being able to pull out the qualitative aspects of the data, well, now we would be able to do the same thing, you would be able to do the same thing as a multifamily investor. You would have access to the quantity of data needed for you, then to increase your knowledge based on the qualitative aspects of it, and then be able to properly price that acquisition. And then once you're able to do that, well, then you can go say to your investors, look, this is why I'm buying this deal. This is why it's a good deal. And if on top of that, you're able to be more precise with your exit cap rate, and the growth rates of your revenues and expenses and your refinancing rates. Well, you're going to be a much more confident investor.   James: You are making it really what you call a --   Nikolai: It's a more efficient market.   James: It's a more efficient way of actually determining your purchase because you can really just say generally, Austin is what five cap, it's not true, [inaudible00:50:46].   Nikolai: It's kind of scary to say, but we're all kind of invested in multifamily kind of half blindfold. The guys like me and you, and there's a whole bunch of other guys out there really intelligent wrestlers. We're all invested, based on intuition experience, a very strong knowledge base. But we're ultimately kind of invested with one eye closed. Now it's even worse for people who don't have our knowledge base and experience because they're all invested in completely blindfolded.   James: Interesting. So, if you can get that kind of data where you can look at the stock market, and what's the potential, especially if it's in the path of growth. And what's the risk that you're buying? There are some deals, even though you buy it at the lowest cap rate for that market, it could be still the best growth because it could be just like another big explosion, in terms of jobs, is going to be happening in that area just because of the path of growth.   Nikolai: That's so important because if you're a pro forma and you're underwriting you predicted a 2% growth rate in revenue. But in those five years, the analyze growth radio was six. Well, you probably didn't buy that property, when you should have. And the other thing is the same if you predicted a 6% growth rate, and it was two, then you bought that property you shouldn't have, But what most people will say is well, the guy who predicted 6%, he should have put in 2%, like he should have been conservative, but that's not necessarily true. That's a half-truth. That's actually a mistake in logical reasoning because the other guy who says, I'm going to plug in a 2% growth rate because that's what historically happens. What happens if you invest in a market where the growth rate is actually 6%? And that the other intelligent investors knew or predicted that it would be 6%, while they're willing to overpay, according to you for a property, and then you're not buying anything, you're not generating any returns, you're not building your wealth, and you're just kind of sitting on the sidelines there, Bah, humbugging saying, well, the markets paying way too much for the properties and these guys are stupid, stupid money, blah, blah, blah, I'm going to wait for the market to crash and blah, blah, blah, I know guys who've been saying this since 2012. And they have not bought anything since 2012. They haven't generated any returns. All under the pretext of being conservative investors. You know what, they're not conservative investors, you know why because they're not investors. They haven't bought anything, because they take themselves out of the market, and they're sitting on the sidelines, and they're just making up for lack of precision in their underwriting through, this kind of pseudo-conservatism.   James: I think it just depends on the sophistication of the investors. If you look at nowadays, multifamily has become so popular, so many people who did not have the financial education background or the way to analyze a deal. There's a lot of parameters that go into any deals. That's what you mentioned, you mentioned so many parameters, nobody will look at that. Everybody said multifamily is good. I bought it and it went 300%. And they say, Oh, I'm a really good operator. Well, actually, you should have made 500% because the market gave you at least 400%. 100%, you just did 300%, why did you do 300%?   Nikolai: That comes down to what we call the search for alpha. We want to outperform the market. And all these people and there's a whole bunch of them now there's gurus and mentors and coaches, and they're giving all these online classes or seminars or whatnot, or they're boasting about being such great real estate investors. And the reality of it is they don't even know what they did. They're like, well, I generated X percent returns, and I've created X amount of millions of dollars in profit over the last five and 10 years. But that's actually quite average. That's what the market does, as long as you are in the market. Of course, that's what you generated. Now, did you generate more than what the market did? That's the real question. And unfortunately, there are not enough people in the market asking that question. And if you're a passive investor, that's the question you should be asking your syndicator or your GP is not this is what you generated, great. That sounds awesome. You generated 22% IRR annually over the last five years. What did the market generate? The market generated 23.   James: I remember the other day I saw someone, he said, I made 60%. In one year, I bought it in the first year and I sold it in twelve months, I made 60%, I said well, you should have made that 100% because the market went up by that much.   Nikolai: And that's why I'm so bullish on education, and why I think it's so important that multifamily investors get educated and push their knowledge base, because, this is not Nintendo, this is not Xbox, we're not just playing, baseball on our PlayStation three, or Playstation four, this is serious business, and even more, so if you're syndicator. Just in the knowledge base, you know needs to continuously be expanded. And that's why data also needs to be there because knowledge without data is also quite useless.   James: Correct. So coming back to being the alpha in the market. I know you can look at different market appreciation versus how much you are making money. So coming to, let's say, for a decision where you have a deal in your hand, and you're deciding whether you want to sell or you want to refile, or you 10:31 exchange. So can you give us a good methodology to do to make that decision?   Nikolai: To make the decision on whether you beat the market or...   James: Whether you want to sell a deal, or whether you want to refinance, whether you want to hold it for long term or you want to do a 10:31 exchange? How would you approach it?   Nikolai: Well, I'd approach it on a very individual basis. Number one, I think everyone has a very different investor profile. What I mean by investor profile is, what type of returns do you want? And when? What are the strengths and weaknesses that you possess as either an owner-operator or syndicator or whatnot? What access to capital do you have? How patient is that capital? What's the cost of the capital? Now, if it's your own money, obviously, it's probably the most patient money with the cheapest cost of capital. If you're raising money from other people, well, then obviously, there's a less patient aspect to it, and the cost of capital is going to be higher. If you're taking money from bridge loans, well, that's even worse. So if you're taking money from hard money lenders, well, then obviously, your cost of capital is going to be very, very high. So these are all things that you have to consider, you also have to consider where you are in your career with regards to what it is that you want to achieve, either as annual cash flow or just overall that value and what type of risk you're willing to accept.   So ultimately, you have to be able to answer those questions initially, to be able to decide on the strategies. Because ultimately, people in multifamily investing, what they do not understand is the difference between philosophy and strategies. Now, everyone should have their own investment philosophy, based on their investor profile. Now, once you have that philosophy, what you want to do is adapt your strategies according to where you are in the market, and where you are in your career. That's something that is very misunderstood. People say, I'm a buy and hold investor. We hear that a lot in multifamily. So ultimately, what you're saying that you do not have an investment philosophy, that you think you do. You think your philosophy is to buy and hold. But buy and hold is not a philosophy, it's a strategy. So what you're saying is, ultimately, you're investing all the time throughout the whole of your career, using just one strategy. That's very dangerous because let's say the exit point of that strategy eventually, say the day that you do have to sell upon retirement because even though you're buying a whole, you might not be a legacy buy and hold investor. What I mean by that is a legacy buy and hold investor is someone who's just going to pass down the properties to their children, upon death, or upon retirement, whereas most buy and hold investors, what they really need is, I'm going to buy and hold until my retirement, then I'll start selling off. Well, what happens if, during your retirement, you're in a trough of the market cycle. What if you're in that part of the market cycle, or you're at the bottom of it, that's a really bad time to sell? Well, that's the mistake of always investing using only one strategy. So what I would say is that you have to establish your philosophy, understand that your investor profile is going to change over time. And the market cycle moves through phases, there are different phases of the market cycle and your strategies, you have to be able to use different strategies at different phases of the cycle, and at different phases of your career as your profile changes, or adapts or morphs. And that's how you then establish well, with this property, should I buy it and hold it or should I sell it? Or should I just refinance it? What should I do? And I'll give you a very concrete answer. Once I've explained all this.   I have a student here because I do teach real estate investing courses. We actually built a college we call it The College of the Emmerich's. Now you don't have to, it's not college level education. But what we're saying is that from everyday multifamily investors, if you really want to learn college level stuff without having to go to college, well, we have a couple of courses that we teach you very high-level stuff, very concrete work. You still need coaching from coaches and mentors and all that stuff. We actually teach courses. So one of my students in these courses, he's a very successful real estate investor in Montreal, Canada, Montreal is the most important multifamily market in Canada. It's a very strong multifamily market, very competitive. Now he's up to about I guess, 150 units, all on his own, no outside money, no passive money. And he started having trouble refinancing out of his properties because what he was doing, it seems a very big value add investor. So he was using two strategies value added buy and hold. But he was erroneously thinking that value-added and buy and hold was his investment philosophy, which is not, those are two strategies that are part of the philosophy. So he came to me and he said, well, look, banks have now started to tighten their DSCR ratings, and their LTV, therefore, I'm buying a property at a billion dollars, and putting in $300,000 into it. And now the market value of that property is $2 million. But I'm not able to refine it $2 million, because of the banking standards, they're only allowing me to refine out of 1.6. So now, if they're letting you refine out at 1.6, on a 75%, LTV, what they're saying is when you have to leave in 25% of 1.6 plus $400,000, that's a lot of equity, that it is unable to pull out because he was doing too much of a good job at value add. And the capital markets, the banks are not able to follow market value, banks, especially in Canada, are much more conservative than in the US, but even in the US, there is a lot of people buying properties. And they're not able to refine the whole value, because their total loan dollars are blocked by either LTV or DSCR. What I call economic value, the economic value is not as high as market transaction value. Therefore, instead of leaving 25% of equity, you're leaving 25 plus, in this case, $400,000.00. Now that's where I said to him perfect, I looked at his portfolio, I said, well, you have to adapt your strategies, you have to change the strategies, you can no longer at this moment, use the buy and hold strategy, you have to use the fix and flip strategy.   Because you're too good at fixing value add. And you're not able to pull out as much equity as you used to be through refinancing. Therefore, now you have to seriously consider selling that property. Because you can go and get $2 million for other markets right now. So that's an extra $400,000. Because he was able only to refinance 1.6 out of it. So now he's able to get the full market value, pull that cash out, and he has access to a lot of opportunities. He has a really strong bird document work. So his cost of opportunity is very high. If he's leaving all that equity, in these properties that are all stabilized, he's making way more money by doing more value-add stuff. So he made the decision and now he holds zero properties. He sold all of his 140 units because that has allowed him to get more and more cash rich, with less and less money and equity and properties and gain access to more and more opportunities. And ultimately, his annual portfolio, the total return on investment is in the 40 to 70% IRR. Whereas while he was doing buy and hold his overall portfolio was only returned to him maybe 20% if you consider the weighted average return on investment. So that's how I would attack that. I know, that's a very long-winded answer.   James: I think that's the right answer. So I mean, the return on equity, which is date right now, I mean, on this deal. There's so much of dead equity not producing cash. And if your cost of capital, which is also equal to an opportunity outside is much higher, you might as well just cash that out by selling it off.   Nikolai: Because the refinancing is living you to a liquid.   James: Recently, I mean the banks have been more stringent on refine. So the last refine they did ask me to leave 5% my cash basis, which they never did in the past, things have changed. I think that's okay. That's how the banks work now.   Nikolai: It's okay. But the problem is that on a $15 million property, you know, that's two and a half million dollars less cash you have for the next acquisition.   James: Correct. I mean, it depends on what is the cost of capital outside plus how much you can pull out and how much your equity stuck on it. So, coming back to market cycles, because I think this is one thing that I want to ask you because I think you have studied with Dr. Glenn Mueller. So right now, if I look at the latest Q1 forecast for apartments in the hyper supply market. I don't know if that's something that you are aware or not, but...   Nikolai: Nationally?   James: Nationally yes it's not a local, but lots of markets are in it for supply. It's very, very few markets are in the expansion cycle. And even though they are in the expansion cycle, they are at the last stage of the expansion cycle. And all the markets that are on expansion cycle, or the market that recovered late like Las Vegas, Phoenix and a lot of Econo markets. So can you give an overview of what do you think the market is? And what would the strategy be for investors now?   Nikolai: Well, I think number one, I would say that I try not to look at national or macro market cycles. I think that's the first thing to consider. Because multifamily real estate is so hyperlocal. So I look much more at those markets, cycles of hyper supply and expansion and contraction, I look at more of like a metro area. So like you're in Austin, Texas, I look at Austin, I wouldn't really consider the multifamily market at large, because it's kind of like looking at cap rates on an unstabilize property, it's kind of a waste of time. Now, I'd say that I haven't looked at recent data of where all the cycle, where all the markets are, the phases of the cycle. But I mean, I think it is safe to say that, most of the markets right now are in the later phases of the game, or later innings, as Howard Marks likes to say, in the stock market and capital markets. But also, as he says, we don't really know, see the thing with market cycles, and whether it be with Dr. Mueller, whether it be with Karen Trice, out of Australia, and also all the other various professors and researchers of market cycles, is

Todd: James, I saw on your desk you have a nice picture of a dog.James: Yes.Todd: OK. Tell us about your dog.James: My dog's name is Piper. He was a mutt, a homeless dog that we picked up off the street about four and a half years ago.Todd: Oh, wow! So what kind of dog is he now?James: He's a yellow lab, golden retriever mix. He's very very sweet, very very fun to play with, really really nice.Todd: Oh, that's great. Can he do any tricks?James: No.Todd: No.James: We can do one trick where we point our finger at him and go Bang Bang Bang Bang and he falls over dead, but that is the only trick he can do and he only does that maybe half the time.Todd: OK. Does he bark a lot?James: Usually no. Usually, he's pretty good.Todd: Pretty quiet.James: Mm, hm!Todd: OK. Is it a male dog or a female dog?James: Yeah. It's a male dog.Todd: So, no puppies.James: No, puppies.Todd: OK. Would you like to have another dog, another puppy?James: It would be fun in the future but not for a while.

Todd: James, I saw on your desk you have a nice picture of a dog.James: Yes.Todd: OK. Tell us about your dog.James: My dog's name is Piper. He was a mutt, a homeless dog that we picked up off the street about four and a half years ago.Todd: Oh, wow! So what kind of dog is he now?James: He's a yellow lab, golden retriever mix. He's very very sweet, very very fun to play with, really really nice.Todd: Oh, that's great. Can he do any tricks?James: No.Todd: No.James: We can do one trick where we point our finger at him and go Bang Bang Bang Bang and he falls over dead, but that is the only trick he can do and he only does that maybe half the time.Todd: OK. Does he bark a lot?James: Usually no. Usually, he's pretty good.Todd: Pretty quiet.James: Mm, hm!Todd: OK. Is it a male dog or a female dog?James: Yeah. It's a male dog.Todd: So, no puppies.James: No, puppies.Todd: OK. Would you like to have another dog, another puppy?James: It would be fun in the future but not for a while.

In this week's show, Phil talks to James Stanger, CompTIA's Chief Technology Evangelist. James has consulted in cloud security, open source, and networking for organizations such as Northrop Grumman, Tesco, AWS, West Point, SoftBank, and Symantec. He has also developed education programs on a myriad of subjects, including security analytics, cloud administration, Linux, British Romantic literature and kayaking. In this episode James talks about the importance of interpersonal skills and why we should always remember that IT is a people business. He also discusses the value in developing your own network of people. KEY TAKEAWAYS: TOP CAREER TIP Always keep on top of your power skills, especially the ability to act effectively in an interpersonal way. Remember that IT is a people business, so we must show respect for others. WORST CAREER MOMENT Early in his working life, James realized that he had spent much of his time training and gaining qualifications, only to be stuck in a job that would not pay him accordingly. CAREER HIGHLIGHT James's public speaking touched the mind and heart of an audience member who later approached him to tell him that the advice he had given had been life-changing. THE FUTURE OF CAREERS IN I.T The incredibly rapid change that happens in IT. So long as we have the foundational skills, we can always adapt and pivot in the sector and find new opportunities. IT has also impacted the world in incredibly positive ways throughout the COVID experience. THE REVEAL What first attracted you to a career in I.T.? – James recognized the need to make technology do very interesting things for humanity. What's the best career advice you received? – Always be curious. What's the worst career advice you received? – Follow the money! What would you do if you started your career now? – James would have worked harder in learning the foundations of IT and tech. What are your current career objectives? – Understanding security elements and analytics, as well as project management and how to be more “agile”. What's your number one non-technical skill? – Developing empathy and working out where people are coming from. How do you keep your own career energized? – James likes to do deep dives into specific topics and really get to the heart of matters. What do you do away from technology? – Scuba diving, kayaking and working on cars. FINAL CAREER TIP As well as being curious, always do your best to develop your network. Learning from others is the best way to grow. BEST MOMENTS (8:55) – James - “If you can't manage your time, you're not as useful as you think you are” (13:52) – James - “It comes down to listening to your network of friends and people you work with and for” (18:20) – James – “Technology, when it's used right, can be there to help us out as long as we use our tools correctly, and don't use them for ill” (22:06) – James – “If you have an innate sense of trying to figure out how something works, you'll always get into the meat of a situation” ABOUT THE HOST – PHIL BURGESS Phil Burgess is an independent IT consultant who has spent the last 20 years helping organizations to design, develop, and implement software solutions.  Phil has always had an interest in helping others to develop and advance their careers.  And in 2017 Phil started the I.T. Career Energizer podcast to try to help as many people as possible to learn from the career advice and experiences of those that have been, and still are, on that same career journey. CONTACT THE HOST – PHIL BURGESS Phil can be contacted through the following Social Media platforms: Twitter: https://twitter.com/_philburgess LinkedIn: https://uk.linkedin.com/in/philburgess Instagram: https://instagram.com/_philburgess Website: https://itcareerenergizer.com/contact Phil is also reachable by email at phil@itcareerenergizer.com and via the podcast's website, https://itcareerenergizer.com Join the I.T. Career Energizer Community on Facebook - https://www.facebook.com/groups/ITCareerEnergizer ABOUT THE GUEST – JAMES STANGER James Stanger is CompTIA's Chief Technology Evangelist. He has consulted in cloud security, open source, and networking for organizations such as Northrop Grumman, Tesco, AWS, West Point, SoftBank, and Symantec. He has also developed education programs on a myriad of subjects, including security analytics, cloud administration, Linux, British Romantic literature and kayaking. CONTACT THE GUEST – JAMES STANGER James Stanger can be contacted through the following Social Media platforms: Twitter: https://twitter.com/jamesstanger LinkedIn: https://www.linkedin.com/in/jamesstanger/ Website: https://www.comptia.org/home

Todd: So, James, you're in a band!James: Yes!Todd: OK, tell us about your band.James: I play in a Swedish Bubblegum Punk Band.Todd: Swedish Bubblegum Punk Band. What exactly is that?James: I don't know, but that's what it says on the CD.Todd: OK. What do you play in your band?James: I play base guitar.Todd: OK. How long have you been playing the guitar?James: I've been playing the guitar for about 12 or 13 years.Todd: Oh, really! OK. Nice. Do you play any other instruments?James: I play a little guitar and a little drums.Todd: Since you're in a band do you meet lots of women?James: Yes.Todd: Really! You're a rock star.James: Yes.Todd: Nice. Nice. Do you tour or do you just play where you live?James: We just play in clubs. Local clubs.Todd: OK. What the best thing about being a musician, in the band?James: It's really good for relaxing and having fun.Todd: Is it your full-time job?James: No, it's not. It's only a hobby.Todd: Oh, OK.

Todd: So, James, you're in a band!James: Yes!Todd: OK, tell us about your band.James: I play in a Swedish Bubblegum Punk Band.Todd: Swedish Bubblegum Punk Band. What exactly is that?James: I don't know, but that's what it says on the CD.Todd: OK. What do you play in your band?James: I play base guitar.Todd: OK. How long have you been playing the guitar?James: I've been playing the guitar for about 12 or 13 years.Todd: Oh, really! OK. Nice. Do you play any other instruments?James: I play a little guitar and a little drums.Todd: Since you're in a band do you meet lots of women?James: Yes.Todd: Really! You're a rock star.James: Yes.Todd: Nice. Nice. Do you tour or do you just play where you live?James: We just play in clubs. Local clubs.Todd: OK. What the best thing about being a musician, in the band?James: It's really good for relaxing and having fun.Todd: Is it your full-time job?James: No, it's not. It's only a hobby.Todd: Oh, OK.

Part One:   (Running Time: (19:27) Dave and Chuck The Freak talk about their early years in radio, Dave as a news reporter and Chuck working behind the scenes. From interviewing Grandparents at the age of 8 to forming their morning show on 89X to the listeners picking “The Freak” as Chuck’s nickname.  Part Two:   Running Time: (45:06) Their radio journey continues with Lisa, James “It’s Friday Bitches”, Operation “Dark Stall” and the derivation of “Penis”.  Part Three:   Running Time: (65:33) Dave and Chuck move the show to WRIF and discuss the challenges of not being able to tell anyone, their first show of the Riff and what it was like to replace the legendary Drew and Mike show. Part Four:   Running Time: (94:00) Dave and Chuck the Freak hit incredible new heights, expand into syndication and keep their internal mantra of “the funny always wins” and never talk about politics. Mike Staff also asks the guys about the lasting legacy of WRIF as the station officially turns 50. See omnystudio.com/listener for privacy information.

Every day, we spend an average of 20,000 breaths with 11,000 litres of air, primarily made with subconscious effort. If you want better health, changing your breathing technique probably isn’t the first option that comes to mind. We don’t even think about it; we don’t pay attention to how we do it. But it turns out that how you breathe has far-reaching effects on many aspects of human health. Discovering what it means to breathe correctly is crucial for greater wellness. In this episode, author and journalist, James Nestor, joins us in seeking to unlock a person’s full breathing potential. He discusses the myriad of health benefits controlled respiration can provide. You’ll also learn how industrialisation made it harder to breathe correctly and how various exercises can improve your respiration. Listen to this episode to discover simple methods to maximise the benefits of each breath you take.   Get Customised Guidance for Your Genetic Make-Up For our epigenetics health program all about optimising your fitness, lifestyle, nutrition and mind performance to your particular genes, go to  https://www.lisatamati.com/page/epigenetics-and-health-coaching/. You can also join our free live webinar on epigenetics.   Online Coaching for Runners Go to www.runninghotcoaching.com for our online run training coaching.   Consult with Me If you would like to work with me one to one on anything from your mindset, to head injuries, to biohacking your health, to optimal performance or executive coaching, please book a consultation here: https://shop.lisatamati.com/collections/consultations.   Order My Books My latest book Relentless chronicles the inspiring journey about how my mother and I defied the odds after an aneurysm left my mum Isobel with massive brain damage at age 74. The medical professionals told me there was absolutely no hope of any quality of life again, but I used every mindset tool, years of research and incredible tenacity to prove them wrong and bring my mother back to full health within 3 years. Get your copy here: http://relentlessbook.lisatamati.com/ For my other two best-selling books Running Hot and Running to Extremes chronicling my ultrarunning adventures and expeditions all around the world, go to https://shop.lisatamati.com/collections/books.   My Jewellery Collection For my gorgeous and inspiring sports jewellery collection ‘Fierce’, go to https://shop.lisatamati.com/collections/lisa-tamati-bespoke-jewellery-collection.   Here are three reasons why you should listen to the full episode: Discover how carbon dioxide is necessary for getting enough oxygen in your body. Learn how soft foods and bottle feeding during childhood can impact your health as an adult. Understand how oral exercises and breathing practices can significantly improve your wellbeing.   Resources DEEP: Freediving, Renegade Science, and What the Ocean Tells Us About Ourselves by James Nestor Breath: The New Science of a Lost Art by James Nestor Wim Hof Method James Nestor’s website   Episode Highlights [04:03] How James Got into Breathing  James is a journalist who once covered a world freediving championship in Greece. Despite being a swimmer and bodysurfer himself, he was astounded by participants who can dive 300 to 400 feet in a single breath. Upon returning to San Francisco, James decided to write a book about freediving. His research exposed him to the art of breathing and its importance to wellbeing. He learned that improper breathing is damaging to the body. [10:29] The Physiology of Breathing Contrary to widespread knowledge, it’s possible to have too much oxygen and not enough carbon dioxide in the body. However, it is essential to have a balance between these two. Many standard breathing methods deplete carbon dioxide levels, leading to lower oxygen saturation and more unsatisfactory performance. A study found that by holding their breath comfortably for 25 seconds, 85% of the athletes will not have a breathing dysfunction. Instead of compensating, learning proper breathing techniques can increase your bodily tolerance for carbon dioxide. Listen to the full episode to learn more about the process of breathing! [19:57] Basic Breathing Techniques Most people breathe faster than the optimal rate without realising that many of their health problems come from their breathing rate. The point of breathing exercises is to acclimate your body to breathe through the nose without thinking about it. Slower breaths while maintaining the same volume of air can increase efficiency by 35%. Transitioning to slower breathing will temporarily reduce performance, but you will eventually see improvements as your body acclimates. [27:11] Nasal Breathing Listen to the full episode for James’ points on running and breathing! Nasal breathing leads up to 20% more oxygen absorption compared to mouth breathing, all else being equal. Nitric oxide is a potent vasodilator that increases blood circulation. Nasal breathing increases nitric oxide concentrations six times more than mouth breathing. Breathing through the nose is more effective in defending your body against viruses than any other form of breathing. [38:36] Why Aren’t Breathing Interventions More Popular? There’s not a lot of money that can come from breathing interventions. Hence, the development of this alternative practice isn’t promoted widely. That said, James believes that alternative medicine isn’t always the answer. Conventional Western medicine is still crucial for many health interventions. [41:38] How Modern Diets Changed the Way We Breathe In antiquity, people always had perfectly straight teeth and larger mouths. The introduction of industrialised food removed the need for a larger jaw. Evolution drove the shrinking of the human jaw, so more people have crooked teeth or impacted wisdom teeth. Smaller oral cavities also made breathing more difficult, and the incidence of upper airway resistance syndrome rose. [44:24] Childhood Feeding Improper oral posture can root from habitually breathing through the mouth. When we were younger, chewing was essential. The introduction of baby food prevented infants from performing the right chewing exercises. Breastfeeding changes the face structure and promotes more efficient breathing. Children need to eat hard foods to develop a proper jaw and airway. [48:20] Oral Exercises Even adults can see improvements in their breathing efficiency by doing basic oral exercises. After a year of oral exercises, James was able to improve his airway size by around 15% to 20%. Palate expanders are an option for people who need them. However, oropharyngeal exercises and myofunctional therapy are easier and more effective methods for improving your breathing. [54:33] Relaxation through Breathing Slow, focused breathing activates the parasympathetic nervous system, leading to greater relaxation. Doing breathing exercises several times a day will immensely help you cope better with stress. Listen to the full episode to learn more about how slow light breathing diaphragmatically stimulates the parasympathetic nervous system and the vagus nerve. [59:14] Hormetic Stress The quickest way to reduce stress is to breathe. It is all about working your respiratory system and working out your stress. James suggests starting with the foundations of nasal breathing, slow breathing and awareness. Similar to exercising at the gym, breathing exercises promote hormetic stress. At moderate amounts, hormetic stress is beneficial to human health. Listen to the full episode to learn more about the Wim Hof Breathing Method!   7 Powerful Quotes from this Episode ‘By mastering this sort of breathing, we can not only dive deep, but we can heat ourselves up, heal ourselves, and do so many other things’. ‘Scientific papers were published about this 115 years ago, showing very clearly that you need a balance of carbon dioxide and oxygen to operate effectively and efficiently. When we breathe too much, we can offload too much CO2, which actually makes it harder for us to bring oxygen throughout the body’. ‘That slower breath with that pressure allows us to gain 20% more oxygen breathing through our nose than equivalent breaths through our mouth.” ‘I think our bodies are the most powerful pharmacists on the planet and that’s been shown, so why not try to focus on your body and health a little bit’? ‘By having a smaller mouth, you have less room to breathe. And this is one of the main reasons so many of us struggle to breathe’. ‘Start slow, start low. See what your body can naturally do. If after six months, you’re like, ‘I’m still not, this isn’t working’, go see someone and take it from there’.  ‘I talked to dozens and dozens of people who have fundamentally transformed themselves through nothing more than breathing. I want to mention it again. I’m not promising this is going to work for everyone, for everything, but it needs to be considered as a foundation to health’.   About James James Nestor is a journalist and bestselling author. He has contributed to many newspapers and publications such as The New York Times and Scientific American. His first book, DEEP: Freediving, Renegade Science, and What the Ocean Tells Us about Ourselves, took inspiration from his journalistic coverage of a world freediving championship.  James also authored Breath: The New Science of a Lost Art where he combines thousand-year histories with modern research to shed light on proper breathing. His investigations have revolutionised the conventional understanding of breathing and have helped many people live healthier lives. His other projects include speaking engagements for institutions, radio and television shows, and collaborations for scientific research and communication.  Learn more about James Nestor and his work on diving and breathing by visiting his website.   Enjoyed this Podcast? If you did, be sure to subscribe and share it with your friends! Post a review and share it! If you enjoyed tuning in, then leave us a review. You can also share this with your family and friends so they can include more amino acids in protein in their diet. Have any questions? You can contact me through email (support@lisatamati.com) or find me on Facebook, Twitter, Instagram and YouTube. For more episode updates, visit my website. You may also tune in on Apple Podcasts. To pushing the limits, Lisa   Full Transcript Of The Podcast! Welcome to Pushing the Limits, the show that helps you reach your full potential with your host, Lisa Tamati. Brought to you by lisatamati.com. Lisa Tamati: Well, hi, everyone. Welcome back to Pushing the Limits in this new year. I hope you're enjoying yourself. You've had a good break over the holidays, and I have a fantastic guest today. Wow, this guy is insane. So his name is James Nestor, and he is an author, New York Times best selling author, Wall Street Journal best selling author, London Times New York Times bestselling author of a book called Breathe. So it's all about breathing. You might think, how the hell do you write a book on breathing. But I tell you, this is going to be a really exciting interview, and you're going to learn so much that you wish you'd been taught years ago. He's also the author of Deep, another best selling book that he did on freediving. And he's a filmmaker and science writer for many of the science magazines. Now in this book Breathe. He explores the million year long history of how the human species has lost the ability to breathe properly. And why we're suffering from a laundry list of maladies from snoring to sleep apnea to asthma to autoimmune diseases and allergies. And in this, on this journey in this book, which was absolutely fascinating. He travels the world and spends a decade in the attempt to figure out what went wrong and how do—we fix it. And, you know, the links that the sky week two—for his research has just absolutely next level. I really enjoyed doing this interview with James. He's an incredible person. And just so very, very interesting. So I hope you enjoy the show. Before we head over to speak with James in San Francisco, just like to remind you to do a rating and review if you came for the show. This is a labour of love. And it really really helps the show get out there if you can give us a rating and review, either on iTunes or wherever you're listening to this podcast. Or if you can't work it out, just send me an email with it. And we'll gladly receive those as well. And if you want to reach out to me if you've got any ideas for podcasts, or people that you would like to see on here, or if you have a question, health question, if you want help with health journey, health optimisation, epigenetics, run coaching, that's our day job. That's what we do for a living. And that's what we are passionate about. And that's what we love. So if you're having trouble with a tricky health issue, if you wanting high-performance, if you're wanting to do that next ultramarathon or first run your first five-kilometer race, whatever the case may be, please reach out to us, lisa@lisatamati.com. And you can find all our programs also on that website, as well as this podcast and lots of other goodies. So I hope you enjoy this interview with James Nestor. Over to the show now and thanks for listening. Lisa: Well, hi everyone and welcome back to Pushing the Limits. It's fantastic to have you with me and I am jumping out of my skin for excitement today because I have someone that I've been just so looking forward to interviewing. An amazing author, James Nestor, who is going to be sharing his research and his book, which is really a game-changer. Breathe is the name of the book. And James is coming to us all the way from San Francisco today. So welcome to the show, James. Fabulous to have you. James Nestor: Thank you for having me. Lisa: So James, can you just give us a bit of a background into your—who you are in your background? And how the heck did you end up writing a book about breathing? And why do we need to know about it? James: So I'm a journalist, and I write for science magazines and outdoor magazines. I've been doing that for years and years and years. And I think the real jumping off point for me was when I was sent out to go to Greece to write about the world freediving championship. And even though I've spent my life near the ocean, I'm a surfer. I'm a swimmer and body surfer, all that, I had never really spent too much time under the ocean. And I had never seen anyone freedive before because the water is very cloudy here on the West Coast. There's not a lot of places to do this. So I remember going out in this boat, it was the first day of the competition and just watching these people take a single breath and go down 300, 400 feet on a single dive there. And come back four minutes later and—just it was like they we're answering emails just like. Okay, next up, back for lunch. It was what the hell is going on here? I had understood that this was absolutely impossible. And yet here these people vary sizes, various forms - big, tall, large, small, all that - that had mastered this thing. And I got to be friends with a few of them who took me into this other side of freediving outside of the competitive freediving, which I just thought was pretty insane. And they allowed me to understand free diving as this meditation. And of course, breathing is at the core of this meditation. And by mastering the sort of breathing we can not only dive deep, but we can heat ourselves up, heal ourselves and do so many other things. Lisa: Wow, so that was the jumping off point in, for those interested. Yeah, I've taken an interest in freediving too. And my gosh, what they do is pretty next level, insane. I don't think I'm crazy enough to really have a go at it. To be fair, but absolute admiration for what they do and how they do it, in—the everything that they have to overcome. But okay, so if we just jump in now, the into—how does we know? What can we learn from these free divers and other traditional breathing techniques? And why is it important for the everyday person to be understanding how the breath works in the physiology, which we'll get into which I found absolutely mind blowing and thought, why is nobody told me this? And why did—why does, why should someone listening to this actually be interested? James: So the free divers told me that the only way to hold your breath is to master this art of breathing. And it was also something interesting to see all of these different people. And they all had these enormous chest, they had expanded their lung capacity. Some people double the average adult lung capacity by forcing. Well, they were not born this way. So it made me think about how malleable the body is depending on what inputs we give to it. And so I got back to San Francisco, and I wrote another book that featured freedivers. But in the back of my mind, that book was called Deep. And it looks at the human connection from the very surface to the very bottom of the deepest sea, magnetoreception echolocation all that. But as I was researching that book, and writing, I just kept finding more and more information about breathing, about how so many of us in the West, including in the medical world view breathing as just this binary thing. As long as we were breathing, we're healthy, and we're alive. When you're not breathing, that's bad, your dad or you have a serious problem. But that is such the wrong way of looking at this. It's like saying, as long as you are eating, you're getting food, you're getting nutrients. But it's what you eat. That's so important. And it's how you breathe. That's so important. So I was lucky enough to then meet a bunch of leading experts in this field who have been studying this stuff for decades, even publishing in these weird scientific journals. No one's been reading their stuff. I thought, why the hell hasn't anyone told me this? Like, I'm middle aged, I've been mouth breathing, through most of my life. I've been whenever I was working out or surfing, I'm just thinking I'm getting more oxygen in. And this is so damaging to the body, and no one was talking about it.    So this book took me so long, because I couldn't understand why some researchers on one side were saying how you breathe has no effect on your asthma, has no effect on your body, on your brain. And this other side was saying they're 100% wrong. Here's all the data. So it was going through all that and weeding through all that that took me a while. But I think at the end, I finally found the truth behind all of this. Lisa: He certainly did. And the book is such a deep deep dive like you know, and I've been talking to some friends about you know, reading this book and, and everything. How can you have a whole book on breathing? And I'm like, you have no idea. You could probably write 10 books on breathing and it's so powerful. And as an athlete I've, you know, I was just saying to you prior to the recording, I've spent my entire life as an asthmatic since I was two years old. I have a very small lung capacity. I have a low VO2 max, despite that I decided to become an endurance athlete. Go figure that one out, got some mental issues, obviously. But I'd spent my entire athletic career breathing in my mouth in places like Death Valley, in the Sahara, in the Himalayas, and altitude, and you know, freezing cold temperatures. And all of the problems that that brought and so this book has been a life-changing thing for me personally. Unfortunately, I'm no longer a competitive athlete bagger. You know, like I didn't get the memo back then. But now training hundreds of athletes. Wow, I can start to influence them and change them and are already started to adopt some of the information into the programs that we're using. So super powerful information, and in really important. So, okay, now let's go into a little bit—the physiology of breath because we sort of think if I take deep breaths, and breathe often in faster, if I'm running, then I'm going along. I'm getting as much oxygen as my body can get. Why is that completely upside down? James: That is upside down. And it's so counterintuitive. It took me months to get my head around this, even though we've known these scientific papers were published on this 115 years ago, showing very clearly that you need a balance of carbon dioxide and oxygen to operate effectively and efficiently. And when we breathe too much, we can offload too much CO2, which actually makes it harder for us to bring oxygen throughout the body. If you don't believe me right now, you can breathe 20 or 30, heavy breaths. You might feel some tingling in your fingers or some lightness in your head. This is not from an increase of oxygen to these areas, but a decrease of circulation. Lisa: Wow. James: Because you need a balance of CO2, for circulation, for vasodilation. This is—it is integral to providing blood and nutrients to our body. And for some reason, as Westerners we just think more is better, more is always more. That is not the way of the proper way of thinking about this when you talk about breathing, you want to breathe as closely in line with your metabolic needs as possible. Why would you? It's like being in a car. Why would you be revving the motor? Everywhere you're going, I had a stop sign just revving the motor. When you were over breathing. That's exactly what you're doing. You're causing a bunch of wear and tear on your heart on your vascular system. And you're sending stress in those—to your mind. People like you are very strong willed and we'll fight through it right you'll just keep going you're in pain, I don't care. I'm gonna finish this race. I'm gonna make it happen. Compensation is different than health. Oh, and and so this is why so many professional athletes, they'll be really good for a few years. The minute they stopped, diabetes, chronic health problems. Our body.. Lisa: Thyroid, diabetes, metabolic problems. Yeah, like no hell, you've spent your life being a disciplined athlete. I'm struggling with hypothyroid, for example, and high blood sugars. And I'm lean and I'm, you know, it's like what the heck. Like, wow. And I hope through the breathing in some of the other stuff that I'm doing that I can remove some of the damage because you're because it is so counterintuitive. So that carbon dioxide there was a real mind bender for me, because I've always understood carbon dioxide as a negative thing. You know, we want to breathe it out. We want to get it out of the system. That's the end result of you know, what do you call it the electron chain in the ATP production, and we're producing this carbon dioxide, we're gonna give it out. And that's not the case, isn't it? It's a controller of the acidity in the blood is something that we want to train, our chemoreceptors need to be trained in order to be able to tolerate more carbon dioxide. So this just dive into the winds a little bit on the actual physiology that I've just touched on the air so that we can actually get to the bottom of this carbon dioxide, your mind bender, really. James: So when we take breath in, it enters into our lungs and the bronchioles, to these little air sacs, the alveoli, and from there it goes through various layers and enters into red blood cells. The vast majority of oxygen enters into red blood. So there's some free floating but not much. So in those red blood cells or something like 270 million hemoglobin, and so then it enters into this hemoglobin. And it's, you know, it's funny, why would when we're working out, why would we get more oxygen in one area than another? So CO2 is the signaling molecule. So where oxygen is going to detach is an areas where there is CO2, and oxygen isn't going to attach otherwise. So you need this healthy balance of CO2, we have 100 times more CO2 in our bodies than we do oxygen.  Lisa: Wow. James: Okay, so this is this very carefully controlled system that needs to be in balance, and our bodies are so wonderful at keeping us alive. So when we become imbalanced, all these other things happen. If we become too acidic, we'll learn to breathe more, right? We’ll trigger that if we become too alkaline, our kidneys will release bicarbonate. So all of this is incredible and so important. Compensation, different than health. We can compensate for a very long time. Imagine you can live maybe 40 years eating garbage crap food eating Fritos. That doesn't mean you're healthy. No offense to Fritos. Delicious, absolutely delicious. But, you know, it doesn't mean you're healthy. So… Lisa: Yeah. James: ...the reason why you have to understand this balance of CO2 and oxygen is because you can't just understand CO2 as a waste product. It's still considered this a medical school. Yeah, you don't need it. But people who study this know that is—it's absolutely essential to have that balance, you don't want too much. But you don't want too little. You want your body to be able to operate at peak efficiency without having to go through all those compensations, right? To keep you there.   Lisa: Exactly. So when we breathe in, we.. When I say, we don't hold our breath, and I'm holding my breath for a long time, as long as I can. And then that's horrible urgency that comes up and you start to—your diaphragm starts to make that sort of hiccup thing. And this is actually the chemoreceptors in the brain, which is the area that is what I understand, correct me if I'm wrong, that is measuring the CO2 levels more than anything in the blood, not the oxygen levels. And it's so, the CO2 going up, and then the body's going “Oop, time to breathe,” and it makes you do that, you know, hiccup thing in order to make you breathe. And when I'm doing my breathing exercises that I've learned from you, I let that reflex go for a while while I'm training my body and to be able to accept more carbon dioxide. And that will help me be a better athlete with a bit of a EO2 mix hopefully, and make me faster and so on. But it's the CO2, that's actually pushing the oxygen into the cells as well, isn't it? And that was another, a mind bender as well. James: It's an exchange. So you can think about those red blood cells as this cruise ship, right? So and they're full of oxygen. And they cruise to areas where there are other passengers that want to get on this is CO2, and they exchange. The CO2 hops on as oxygen hops off. And this is just how it works. So that need to breathe, you're 100% right. A lot of people think, gonna exhale, hold my breath. “Oh, I don't have enough oxygen, I need to breathe.” No, that is dictated by rising carbon dioxide levels. And so many of us are so sensitised to CO2, that we can't hold our breath more than 10 seconds without going. But they've done a study with athletes. And they found that to very comfortably hold your breath, over 25 seconds, 89% of those athletes will not have any breathing dysfunction. So this is a great practice to do. And this is why this is used in so many different breathing techniques for so long. The ancient Chinese were doing breath holds. Pranayama ancient Hindus were doing breath holds for thousands of years—is to exhale softly. And to hold your breath calmly. You don't want to be struggling and feeling your diaphragm moving. Just calmly, when you feel a little teaspoon of discomfort. You breathe and you calculate how long that is. Don't look at this as a competition. I know that there's a lot of people out here. No, you can compete later. So what you want to do is to get your CO2 tolerance higher, because by having a higher amount of CO2, which is really a normal amount of CO2, your body can operate better. You will have more circulation. Oxygen will detach more easily. And when you're doing endurance sports, this is what you want. You don't want to use energy for things you don't have to use energy for. You want to be burning clean and tight. And that's what this allows you to do. Lisa: This is about efficiency isn't and maybe you're saying that the average person is breathing 12 to 18 times a minute, on average. And ideally, we should be around the five and a half or six times a minute would be ideal. “So breathe light to breathe right” was one of the catchphrases that stuck in my head. And that's my trigger for all over breathing again. And so it's actually slowing down our breathing rate and not increasing the volume so much as diaphragmatic breathing. So using the deep, lower lobes of our lungs to actually get the breath end and doing it a lot slower. And why are we all you know, doing it 12 to 18 times a minute and overbreathing? Which is yeah. It is... James: Sometimes a lot more than that. I mean, I've talked to clinicians who see people breathing 25, 30 times a minute just and they've been doing this for decades, and their bodies are just destroyed. So it's, these things become a habit after a while and our body gets used to that cycle of compensation. And we start acknowledging this is normal. We started thinking having migraines is normal, having cold toes and cold fingers all the time is normal, being exhausted all the time is normal. None of this is normal. And especially if you look at modern populations of what's considered normal now, I mean, what 15% of Americans have diabetes, 25% have sleep apnea, 10% have autoimmune like, what is going on here? And that this is just accepted that, “Oh, just you know, I've my diabetes...” Lisa: Aging. James: ...my drugs. So anyway, I'm getting off track here. You when this becomes a habit, again, compensation different than health. And a wonderful practice to try is to breathe in at a rate of about five to six seconds, and breathe out at around that same rate. I put in the book 5.5 yet, but then people have been writing me, saying, 'I'm a half a second off'. Oh, my God. So now I'm saying anything in that range. And if that's too difficult for you, slow it down, go three seconds in three seconds out. It's perfect. This is not a competition. This is about acclimating your body. So we can't breed this way all the time, that's going to be impossible. But whenever you become aware of your breath, that you're breathing too much, you can bring your breath back by breathing this way and recondition it. And the point of all these exercises is not to think about them. You want to do them often enough, that you're always breathing through your notes that you're always breathing lightly and slowly. And that range of diaphragmatic movement, especially for athletes, I cannot tell you how essential this is, when you're breathing too much. Okay, here's what's happening, you're breathing up into your chest, which is extremely inefficient. There's more blood further down in your lungs, so can participate much more, much better in gas exchange. But you're also doing something else. You're taking air into your mouth, your throat, your bronchi, bronchioles, none of which participate in gas exchange yet do you bring it in? You go? I'm using maybe 50% of that breath. If you slow down with the same volume, six laters a minute, to about six or seven breaths, right? Per minute, your efficiency goes up 35%. 35%. And if you're not gonna make a difference, you're running for five hour days. You're crazy. If you look at Kipchoge, check out how he's breathing, you know, an hour and a half, extremely light. He's completely in control, you can hardly see his chest. And he is in the zone. Sanya Richards-Ross was the top female sprinter in the world for 10 years, check out how she's breathing through the nose in control, destroying everyone else and all of our competitors. So it takes us a while, which is why people don't, you're going to see a decrease in performance when you switch. Okay, guaranteed that it's gonna to go down. If you stick with it, it's gonna go up. I don't want to say that it's true for everyone. But I would say 95% and the breathing experts, the elite trainers I've worked with have told me 100% of the people they've converted, their performance goes up and the recovery is cut by half. Lisa: Wow. And then I mean, who the hell doesn't want that as an athlete, you're fighting for 1%. So when we're talking, no such mess of possible changes that don't rely on your genetics and don't rely on you know, things that you can't control anyway. And like, for me, transitioning has been hard. I'll be honest, because I was completely congested all the time. And that's why I'd heard that nasal breathing because that’s the next thing we'll discuss that nasal breathing was very, very important for a number of reasons. I didn't really understand why. But I was like, well, I can't breathe through my nose is just blocked the whole time. And I don't have a show on hell of doing that. So well. Well, I'll carry on doing my breathing. And then when I learn how to decongest my nose and sometimes it will take me two or three breaths. And the first time the first couple of weeks when I was doing it, my nose was running and I wasn't getting anywhere and I'm like, this is not working. But I pushed through that phase. And now I can run for like a team case at a fairly good pace, completely nasal breathing, if I do the warm up phase properly, if I go out the door and just try and do it straight out, the gate won't work, I need to do the walking, holding my breath, and get that cleared first, and then I can get into my training. And then I can hold it in the first 10 minutes, I'm still finding it a little bit like I want to breathe with my mouth, but that instinct is there. But I'm slowly training myself into that system. And saying, I can actually, you know, I can actually run for a good hour just through my nose without any problems. And I've also not done the high-intensity. So I backed off the super high-intensity, because I know I'm automatically going to open my mouth when it gets to that. So while I'm in this transition phase, I'm not doing anything beyond that sort of aerobic capacity level. And I think I need this just to adapt. So these are huge types of people listening out there, if you are congested, and you think, well, this is all well and good guys, but there's no way in hell that I'm going to be able to breathe through my nose. Think again, there is, it's just a matter of being taught how to do it. And that's a pretty simple couple of exercises that were, you know, that's in the book. It can really, really help us if you persevere through it. And then I expect to see improvements and my VO2 max and all the rest of it. Now, let's talk a little bit about the reason why it has to be nasal breathing. And so it's not just about breathing slowly. We've talked about breathing slowly, we've talked about diaphragmatic breathing. We've talked about CO2 and the role that we don't want our CO2 levels too low in the body. Let's talk now about the whole. Where was I going James? Help me out. I've just hit a.. James: You wanted to talk about breathing, you want to talk about fitness, you want to talk about nasal breathing. Lisa: I hit a moment. So nasal. So we want to understand the physiology of the nose and why the nose is what we want to be breathing with rather than our mouth. James: So I want to mention a few things. A few more things about running. This may seem overkill, but just a couple of points. So what I've heard from various instructors, Patrick McKeown is a world renowned breathing therapist, top got Brian Mackenzie the same thing. Never work out harder than you can breathe correctly. So if you're entering the zone, your mouth is open, slow it down and build your base and work up from there. Sometimes it took Dr John Douillard took him six months to fully acclimate. But once you get there, you are going to find a power in yourself that you did not know existed. And this has been proven time and time again. When Carl Style was working with the Yale running team and the US Olympic running team. He said that these people suffered way more sicknesses, respiratory problems, asthma, COPD than anyone else. And he said, “They push through it because they're competitors. They're gonna push through it.” A complete mess. So there has to be a slight shift and thinking of like, you have to accept your performance is going to go down for a little bit. Right now's a good time to do that. We're still in a pandemic. So you know, once things open up, you'll be kicking everyone's ass. And that's not a bad thing. But just know that this is a wave. This is a process. So the reason why you want to be doing this, we'll get to nasal breathing now is I will bring on my guest. He's been waiting over here patiently. Steve, for the people who aren't watching this, I'm holding up a cross section of a human skull. You can see the nose right here. When you breathe through the nose, you're forcing air through this labyrinth. It's so similar to a seashell. It's called the nasal concha. So seashells have their shells this way to keep invaders out to keep pathogens out. Right? Our noses serve the exact same function. This is our first line of defence. So when we breathe through our nose, we're heating air which is important in cold climates where humidifying it, which is very important in dry climates. We're pressurizing it, we're conditioning it, we're removing particulate which is important, if you live in a city or basically anywhere else now. We're helping to fight more viruses. So there will be a smaller viral load breathing through the nose. And we condition this air so by the time it enters our lungs, it is properly conditioned to be more easily absorbed. When you're breathing through your mouth. You can consider the lungs as an external organ. Yeah, because they're just exposed to everything in your environment. So not only that, not only is this the most effective filter we have is it forces us to breathe more slowly. This is a self-regulating device. Yeah. How long did it take me to take that breath took a while? How long does this take? Yeah, nothing. So that's slower breath with that pressure allows us to gain 20% more oxygen breathing through our nose than equivalent breaths through our mouth. Again, if you think this is gonna make no difference to, you you're absolutely crazy. And this is simple science. You know, this isn't controversial stuff. Lisa: No, this is simple science, but not well, knowing until your book came out and became a worldwide best selling book. Thank goodness because this stuff needs to be out there. And I'm called silly because I'm deep in the waves and in researching all the time. And by hacking and the latest longevity, and the goodness knows what I'm just always into the latest and greatest. And I'm constantly surprised at how you know that some fantastic information never sees the light of day, because of the systems that are in place, or traditions and laws and stuff. And it's like, wow, we have to get this information out there. And this is one of those times when I'm thinking thank goodness, someone has put this into a book that's readable for people to understand the science without having to do such a deep dive themselves. And I think that that's really important. And that nasal, you know, nasal breathing. Also, it does another thing that I found really, really interesting was all about the nitric oxide. Can you explain what nitric oxide is and what it does in the body and why the nose is so important in that regard? James: Nitric oxide is this amazing molecule that our bodies produce that plays a central role in vasodilation. Having more nitric oxide will decrease your chances of having a stroke, will decrease your chances of having a heart attack. It will increase circulation to your brain. I mean, I can go on and on here. It's no coincidence that the drugs Sildenafil also known as viagra, guess what it does, it releases nitric oxide in your body. That's how it cleans. Yeah, we get six times. One study showed that we get six times more nitric oxide breathing through our nose than we do through our mouth. And if we hum we get 15 times more nitric oxide. So this has an incredible effect on the body and especially now there are 11 clinical trials right now where they're giving patients with COVID. Guess what? Nitric oxide. And apparently, according to Nobel Laureate, Louis Ignarro, oh, it's working wonderfully well in these. Studies are going to be out soon. I heard something. My brother in law's an ER doctor, my father in law's a pulmonologist. So we talk all about this stuff. And the vast majority of the people suffering the worst symptoms of COVID are people with chronic inflammation. And as an opposite, very observational study. There are also mouth breathers. Yeah. And this was known 100 years ago, they were saying 75 to 80% of the people with tuberculosis are mouth breathers, chronic mouth breather. So there's been no official study on this just this is just observational stuff. Don't go write me about this, that your nasal breathing got COVID. It can happen. Lisa: Can happen still, we're not saying that.  James: It's to me, but we know that can happen. But we also know something else. That breathing through the nose will help you defend your bodies so much more effectively, against viruses. And this is what Louis Ignarro again, he won a Nobel Prize. So listen to that guy, if you're not gonna listen... Lisa: Yes and I've actually I've heard Dr Ignarro speak a number of times, and I'm hoping I can get him on my podcast to actually just to talk a whole session on nitric oxide and what he discovered, because he he won a prize for discovering this, this gas if you like in the body, because nobody really understood what it was or how it operated. And it is being used for Viagra. And the reason it works for that is that it expands and dilates the blood vessels, but that's what's actually doing it and all parts of our body. And therefore when we're doing this nasal breathing, and we're getting more of that nitric oxide and I mean, a lot of the athletic supplements that you can get now in your corner supplement store are about, you know, drinking beetroot juice or whatever increases your nitric oxide. So this is another way to get at an info for you athletes out there. You want better performance, you know, a lot of my athletes are on beetroot juice and things like that. Just nasal breathing is another way of doing that. You know, so that's a really big piece of the puzzle, I think. James: And those don't work. They certainly work but the key was so much of this just like with a key with oxygen. You don't like, go and get a bunch of oxygen for five minutes, then walk away so I'll fix them. You want to constantly be producing this stuff. So beet juice, you know what we'll work for a short amount of time. But to me, it seems like a much better idea to use something that we're naturally gifted with to use our nose. And to constantly be having a body that can constantly produce a healthy healthy level of nitric oxide. I drink beet juice. I'm a big fan of that, the nitrates and other vegetables can help release more nitric oxide. Great stuff, right? But nasal how often can you be drinking beet juice, you don't want to be drinking that 10 times sugar in it. Lisa: No. There's a lot of sugar in it. James: There’s a lot of sugar in it and you know, occasionally is great, but there's other ways of doing this. And you know, I think our bodies are the most powerful pharmacists on the planet and that's been shown so why not try to focus on your body and health a little bit? Well last thing I want to mention that I just find, is so frustrating here in the US is all this talk of COVID all this talk of you know wear a mask, which I'm a believer in that stay at home. I'm a believer in that. Zero talk about not eating four double cheeseburgers a day.  Lisa: Hey, mean. James: Ola, like getting your health and breathing through your nose. like where's that conversation? Getting vitamin D, getting vitamin C. And so anyway, we've seen what the government's you guys have a much more progressive government, let me tell you, we're so jealous of it. But now we have the whole... Lisa: We’ll be a medical society, though there's nothing. It's not that late. But yeah, and I've had a number of episodes, I've just done a five part series on vitamin C, and intravenous vitamin C, and cancer, and sepsis. And, you know, the whole gamut in the problems there. In this, every single doctor has said to me too, when it comes to COVID, why aren't we building up our immune system so that we don't get people in our ICU on ventilators? You know, so that we don't get to that point, or we have less people and, you know, that just seems like a no brainer to me, but we're still promoting eating crap and drinking crap. And, you know, and not taking into account. It's, yes, I mean, the vaccines and all that, but how about we just take a little bit of self-responsibility we might not have as bad if we do get it. You know, like I've got a mum. I've just written a book called Relentless that my listeners know about and it was about rehabilitating my mum back from an aneurysm four and a half years ago, where she hit massive aneurysm. Hardly any higher function, I was told, like, should never do anything. Again, I spent four and a half years rehabilitating her and she's completely normal. Again, she's driving the car, she's walking, jogging, everything's fine. And this is why I've ended up doing what I do, because I'm very passionate, because none. And I mean, none of this was offered in the standard medical system that we were in. They were great at the surgeries, they were great in the crisis. But when it came to rehabilitation, there was just nothing there, and so I discovered all of these things. And one of the passions I have is just staying one step ahead of here and giving her the next thing now she's 79 years old, I want to keep her healthy. So when COVID threatened us, you know, I've, you know, got over there in the corner, my hyperbaric oxygen chamber, my ozone over the air, and, you know, you name it. I've got it so that if it does come, we prepared as prepared as we can be. And that is a good approach, I think prevention, rather than waiting for the disaster, and then trying to pick up the pieces at the end of the day. You know? James: Yeah, and I just want to be clear, and I know that you're saying the same thing here. There's, doctors in my family that practice Western medicine who've helped people, when I get a car accident, last thing I want is acupuncture. I want to go to the ER and have somebody say, “Sir, I break a bone. I'm not doing pranayama breath work, I'm going to go and get a cast.” But about rehabilitation. This is 100% true, because it costs a lot of money. There's no way a system can support full rehabilitation. And one thing that I've heard from almost every expert in the field, whether it's a professor at a university, or an MD, or a nutritionist, or whatever is they believe, this isn't my view. This is their view. I want to be objective here but they believe that there's a reason people aren't talking about breathing again. It's, there's no money in it. There's a money. Oh, why the US government isn't saying “Don't go to McDonald's today.” That's going to shut the economy down. So the good news about this is people who are interested want to take control of their health. There are now other means of getting information from people who have studied this stuff, people who are into scientific references, who are looking at science in a real objective way. And so I view this thing, hopefully, this is going to be a lesson we can all learn then that we can acknowledge how incredible the human body is, how we become susceptible to illness, and how to better defend ourselves in the future. Lisa: I'm just so on board with all of that. And I think it's our right and this is a problem we do. You know, we love Western medicine, they do some brilliant things. I love naturopathic medicine, I love alternative, complementary, whatever you integrate, or whatever you want to call it.   We've all got deficits, and we've all got blind spots, and every single piece of this. And it's about bringing the whole lot together, and not letting money rule the world. I think is, if we can ever get to that point, that would be fantastic because it is at the moment. And there's a lot of things that are being hindered, like things, simple things like breath work, like stress reduction, like intravenous vitamin C's, like things that don't, nobody can make money at, or hyperbaric oxygen is not going to make millions for anybody. So it's not getting out there, that information is not getting out there. And it needs to be out there. We got I reckon we could talk for days, the job's because we were obviously on the same track. But I wanted to touch on a couple of areas. One was the whole skeletal muscle record of our ancestors and our facial, you know, our whole facial development and why that's part of the problem and the food problem, the mushy food that we eat today. And then remind me to talk briefly about the immune system and all this inveigled the vagus nerve and stuff. So let's start with though, with the skeletal record, and the difference between our ancestors and how we are today. James: So early on in my research, I started hearing these stories about how humans used to have perfectly straight teeth and I don't know if you're like me. I had extractions, braces, headgear, you name it, every single person I knew had the same thing. It was never if it was just went this is what how it was done. At wisdom teeth removed. If you think about how weird that is, you're like, why are we removing teeth? From our mouths? Why are teeth so crooked? Where if you look at any other animal in the wild, they all have perfectly straight teeth. And what I learned was that all of our ancestors, before industrialisation, before farming, any hunter-gatherer all had perfectly straight teeth. So I went to a museum and looked at hundreds of skulls, and they all stared back at me, these perfectly straight teeth. Completely freaked me out. They had these very broad jaws, wide nasal apertures forward, growing powerful faces. So if you have a face that grows this way, and you have a mouth that's wide enough for your teeth, you have a wider airway. Having a smaller mouth, you have less room to breathe. And this is one of the main reasons so many of us struggle to breathe, we have upper airway resistance syndrome, sleep apnea, snoring, and so many other respiratory issues is because there's less room in there. And what happened is this came on, in a blink of an eye with industrialised food in a single generation. People went from having perfectly straight teeth, wider nasal apertures, to having crooked teeth and smaller mouths and a different facial profile. And this has been documented time and time again. Yet I had learned in school, which for me, it was zillion years ago that this was evolution-meant progress we're getting we're always getting younger, you're getting taller, we're getting better, look around the day and ask yourself if that's true, it's complete garbage. And then I went back and looked at the real definition of what evolution means. All it means is change and you can change for the better, or for the worse. And humans, as far as our breathing concern is concerned, are changing very much for the worse. Lisa: Wow. And so we're, I mean, I'm saying I grew up have had so many extractions and teeth completely crooked and a tiny little mouth and all of those sort of problems that you're describing. So what was it that their ancestors did differently? So it was just the food being not we not chewing as much was that basically? Yes, like that's that was a real chain game changer for us when the industrialisation happened and we got mushy food. James: There were many inputs, chewing is the main one. So when you live in an extremely polluted environment, sometimes your nose can get plugged, right? You start breathing through your mouth, that can create respiratory problems, but if you breathe through your mouth long enough, your face grows that way actually changes the skeletal picture of your face. So that's another input improper oral posture is what that is called, but it's for when you're younger chewing is so essential and it starts with breastfeeding. There were no Gerbers food. I don't know if you have that out there, but there were no, like, soft foods. Just a few 100 years ago. So if you think about it, so now we're eating the soft processed foods right out of the gates. We're going, we're being fed on a bottle, soft processes. All of our mouths are too small and too crooked. So this chewing stress starts at birth. They've done various studies looking at kids who were bottle fed versus those who are breastfed. When you're breastfed, your face pulls out your mouth, gets wider because it takes a lot of stress to do. Two hours a day, like every day, every two hours, you're doing it. And literally, and I've talked to parents who had twins, I just talked to a lady yesterday who bottle fed one did love not want to be breast fed breast fed the other. They look totally different. One has crooked teeth, one has autoimmune problems. One has swollen tonsils, the other doesn’t. So that is anecdotal. But there's been studies in the 1930s they did tons of studies into this. So I'm a dude, I'm not going to sit here and tell everyone they breastfed people for that is not my point yet. But some people just can't. But I think it's important to acknowledge that the physics of how this works. And after that, if you have bottle fed a kid that's fine. But they need to start eating hard foods baby led weaning, this is what needs to happen to develop that proper jaw to develop that proper airway. And even if you don't do that, if you then go to soft foods, and your kid is two to three years old, and it's snoring or sleep apnea, which is so common now it's so tragic, because that leads to neurological disorders, ADHD, again. This isn't crazy New Agey. This was at Stanford, there's 50 years of research on this from the top institution here. So there are direct links between those things, but luckily we have technologies now that can help restore to the mouth to the way it was supposed to have been before industrialisation. They actually widened the mouth of these small little kids, and open their airways, and it drastically improves their health. Lisa: Today so it's palatal expanders that you you tried out and actually isn't even as an adult was you developed I remember it was at eight coins worth of new bone in your in your face and in a year or something crazy so we can still so if you've missed about if you've not received your kids or your you didn't get that yourself or whatever, it's not all over there is things that you can start doing even starting just to chew now like that to eat some carrots and whatever you know, whatever hard foods you can find to actually use those that powerful joy in order to make it stronger. It's just like every other muscle in the body isn't it? And when we're mouth breathing to our remember you saying or the muscles here get lax and flattered and just like any other muscle that we're not training, if we're if we're going to mouth open all night and we're you know, then we're causing those muscles to be lax and over time that that leads into sleep apnea and things as well can do. So yeah, so this is something that we can practically get a hold on now even if it's a bit late for you and I think. James: Yeah, I talked to my mum I was bottle fed after like six months my mum was like six months is a long time when I was growing up bottle fed soft foods industrialized crap my off intel I was you know 25 and it discovered these things called vegetables. But you know, so so this isn't pointing the finger at anyone we were sold this story by our governments that said you shouldn't eat mostly refined grains, eat your Cheerios, eat your bread, or crema wheat eat your oatmeal like that this is eat your sugar, that's good. Eat your chocolate milk, you know, so we have knowledge now we know the folly of our ways. But the one thing that was inspiring to me this is easier to do, when you've got a developing kid quickly growing it, you can set the foundation and their face will grow around like their faces grow different. It's just, it's beautiful to see how the body forms to its inputs. So I, you know, youth was several decades ago for me, for far too long. I was a child of the 70s and 80s. Right? Yeah, we thought I thought once you're in middle age, you're completely screwed. What can you do, but that is just a convenient excuse for people to say, “Oh, it's genetics. Oh, I inherited this.”  Like genes turn on but they can also be turned off and so I wanted to see what how I could improve my airway health in a year and so I took a CAT scan, and I did proper oral posture, you're 100% right when, when you're just eating soft, mushy food in your mouth is open. All of those tissues can grow really flabby just like anywhere else on your body. But if you exercise them if you exercise the jaw, the strongest muscle in the body, you know, for its size, the tongue, extremely powerful muscle, you exercise these things, they get tone like anything else. And this can help open your airways. So this is just an anecdote, this was my experience, it'll probably be different for other people. But I did a number of these things. And a year later to the week, I took another CAT scan, and the results were analysed by the Mayo Clinic, which is one of the top hospitals here. And they found that I increased my airway size about 15 to 20%. In some areas, and I can't tell you just as a personal story, it has absolutely transformed my life because I can breathe so much more easily through my nose. At night. I am silent. I didn't snore before but I was knowing that my wife would always tell me, totally silent now. And of course I am because I have a larger airway, things are more toned air can enter more easily. Lisa: Is it easy to find palace expanders are these like any a couple of dentists in the world doing this sort of stuff? James: Not everyone needs palatal expansion. I've gotten so many hundreds of emails of people, you know how we are, it's like, what's the latest thing, oh, there's a new pill, there's a new device. Oh, I get it, that's gonna solve all my problems. So they can really help people who need it just like surgical interventions. For people who have severe problems in their nose are a huge help. They're transformative. What I found is a lot of people don't need that. And what I firmly believe is start slow, start low, see what your body can naturally do. If after six months, you're like, ‘I'm still not this isn't working,’ go see someone you know, and take it from there. But palatal expansion absolutely works for people who really need it, but you would be amazed by just doing something called oral-pharyngeal exercises. There was a study out in chest, which is one of the top medical journals, you know, they found this significantly cut down on snoring, not lightly, significantly. And all it is, is exercising the tongue, roof of the mouth, proper oral posture, just working out this area. Toning it, of course, that's gonna help you if this is flabby and hasn't been to.. Lisa: The gym for your mouth. James: That's what it is. And I view that world, there's a whole separate school called myofunctional therapy that is helping people do this, which is so beneficial. They focus mostly on kids, but they also work with adults. And this is what they do. They are the instructors, the gym instructors, for your mouth and for your airwaves. And I strongly recommend people looking that up, there's a bunch of instructionals for free on YouTube, you can go that route as well. Lisa: Oh, brilliant, we'll link to some of those on your website. And, you know, I get people those resources. It's just, it's just amazing and fascinating stuff. And who would have thought this conversation would go so deep and wide, I wanted to just finish up then with talking about the immune system and stress reduction and vagus nerves and all of us area too, because, you know, me included in this and most people are dealing with, you know, massive levels of stress, and breathing can I've, since I've read your book, and I was really, you know, quite aware of how to bring my stress levels down and movements and the importance of you know, yoga and all those sorts of things. I've had that piece of the puzzle sort of dialed in, if you like, but the breathing exercises and actually calming the nervous system down within minutes. Now I can fall asleep in seconds. And you know, what seconds is a bit exaggerated but minutes, and I can I can take myself from being in this emotionally, my god and i tend to be like that because I'm like, you know, busy, busy, busy. And then go, “Hey, I'm spinning out of control. I've lost control of my breath. And I hear myself and I pick myself up on it now.”  And I go and do two minutes of breathing exercises. That's you know if that's all I can afford to do, and I can switch into parasympathetic now, that's been gold. Can you just explain why the heck does doing this slow light breathing diaphragmatically stimulate the parasympathetic nervous system and the vagus nerve from what's actually going on there? James: Sure. So what people can do now is take a hand and you can place it on your heart. And you can breathe into rate of about three seconds and try to breathe out to about six to eight seconds, just whatever's comfortable. Now, breathe in again. 123 and exhale. And as you're exhaling out very softly, you're going to feel your heart rate, get lower and lower. And lower. So when you are exhaling, you're stimulating that parasympathetic side of your nervous system, our breath can actually hack our nervous system function. And by exhaling more, and taking these long and fluid breaths, you can trigger all of those wonderful things that happen when you're parasympathetic. You reduce inflammation very quickly. You send signals to your brain to calm down. You actually change how your brain is operating the connectivity before the between the prefrontal cortex and the emotional centers of the brain changes when you slow your breathing.  So throughout the day, if you want to remain balanced, you take those soft and easy light, low breaths, to account of whatever's comfortable, three, four, even up to six, and six out. But if at some times you feel “My stress levels are starting to increase. I'm feeling my mind slip. I'm making rash decisions.” Start extending the exhale. An exercise I like to do is inhale to about four, exhale to six, you don't have to do it that long. Inhale, two, three, exhale to five, whatever's comfortable, as long as that exhale is longer, you're gonna feel your body slowing down. And if you don't believe me, all you need to do is get your heart rate variability, monitor your pulse oximeter and take a look at what happens after 30 seconds of slow, focused breathing. And you will see this transformation occur in your body, if that can happen in a couple minutes, what's going to happen to you after a couple of hours of taking control of your breathing, or a couple of days, or a couple of months.  I'll tell you what's going to happen. I talked to dozens and dozens of people who have fundamentally transformed themselves through nothing more than breathing. I want to mention again, I'm not promising this is going to work for everyone for everything. But it needs to be considered as a foundation to health. Lisa: And you need to stick at it for a little bit. And you know, I do my HIV monitoring every morning before I get out of bed and do my breath holding exercises and look at my boat score from Patrick McKeown. And you know, all that sort of stuff. Before I even put my feet on the floor, and I yeah, I can control my heart rate to a degree just through my birth weight. So I know this works. And I know that when I do a longer exhale from that, and compared to the inhale, immediately, I just feel a bit more calmer, and a bit more in control. And it's reminding myself and this is the trick because we, when we're in the middle of work, and we've got meetings and phones are going and emails are coming at us, and it's like the “Lions are chasing me.” And it's been trying to remember to breathe in. Bring yourself down and calm yourself down. And just take that couple of minutes many times a day, you know, depending on how stressful Your life is. And in doing that on a regular basis, over time will have massive implications. Because we're talking here, your digestion. You digest food better if you're in a parasympathetic state versus a sympathetic, your immune system. Again, coming back to COVID in that conversation, you're going to be improved, you know, your hormone balance. Yeah, just to fix everything, the way your, the brain waves, all of these things are going to be affected by your stress levels. And what is th

Let’s get this out of the way now: most companies will not have someone go from intern to CEO in a matter of months. That’s a situation unique to James Standley and Solé Bicycles. What isn’t out of the ordinary, though, are the many challenges and hurdles that James and his team had to deal with when scaling Solé into the success it is today.On this episode of Up Next in Commerce, James takes us through the trials and tribulations of the Solé journey, including various shipping and manufacturing disasters and lawsuits that nearly bankrupted the company, and he explains how he worked his way out of those troubles and what he learned along the way. Plus, he gives some secrets on what’s working well for Solé now, such as the strategy of finding different touchpoints to reach customers in a way that has absolutely nothing to do with selling to them. Main Takeaways:Starts With Heart: While the relationship with your supplier or manufacturer might seem like a cut-and-dry part of business, it has to go deeper than surface level. f you are working with overseas partners, taking the time to meet, and understand, the people you work with in person and form a relationship with them will carry you further and ease some pain if there are ever problems in the supply chain process.    What You’re Known For: Through unique partnerships and marketing opportunities, there is potential to reach people in different ways, even if that means you’re not necessarily selling them a product with every touchpoint. Having a relationship with customers is more important than selling to them at every opportunity, because if they know you for one thing and then find out you sell something else, they are more likely to buy from you across the board. Shot on an iPhone: There will always be a place for highly-produced, glossy marketing materials. But, more and more these days UGC and lower-budget content is what is resonating with consumers. As opposed to showing potential buyers something they have to aspire to, like a model, highlighting people and experiences that are familiar to them as they are now will convert better. For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. This is Stephanie Postles and you're listening to Up Next in Commerce. Today on the show, we have James Standley. He's the president and founding partner at Sole bicycles. James, welcome.James:Hey, how are you guys doing?Stephanie:Doing good. Thanks for joining us.James:Yes, I'm super excited to talk about all things ecommerce with you guys.Stephanie:Yeah. I was just looking through your website and I am very excited to get a bicycle after this. I didn't even know I needed one, but now I do.James:Totally, totally, yeah. We have tons of great bikes and yeah, and tons of cool different colorways and options and a bike for just about anyone's kind of need.Stephanie:Awesome. Tell me a bit about how you started Sole. I think it was in college, right?James:Yeah. My business partners, that I ended up starting the business with and I, we met back, funny enough, my first venture, which was a music festival I helped start back in college. We were both partners in that.Stephanie:It was called the Coachella for the Mountains, right?James:Yeah. It was called Snowball, and the idea was Coachella meets on the mountains. Yeah, there was this guy, Chad Donnelley, who I knew through the lacrosse world. I played college lacrosse and he came up with the concept and I was always involved in music. Growing up, I was a concert pianist, and I had DJ'ed in college and been in bands growing up. We met through the lacrosse world, and he came up with this idea. He had reached out to me just to ask my opinion on the project and what I thought about it. At the time, I was a freshman in college and he was asking me about it and I ended up just going back to him and say, "Hey, I want to be a part of this. I think this is amazing."James:I was part of that initial team. We kicked off this event with ... Our first, we had Edward Sharpe and the Magnetic Zeros, and Bassnectar, and Pretty Lights, and Diplo and all these amazing artists come out and sold like 15,000 tickets. It was a really cool first venture and a first event. Yeah, so Jake and John, my original founders with Sole, they were partners in it as well, and they helped get some of the money for the project. We met, first year was a huge success and we stayed in contact. At the same time, they were coming up with the idea for Sole, and going back that summer, between my freshman year and my sophomore year of college, they were looking for some additional help on Sole.James:I said I'd come in and I've got a more like operational financial sort of background or mind, and they were more of the creatives and the visionary type of people. I came in, helped clean things up. We got the business off the ground. Then going through the summer, they ended up going and raising some money and starting another business, and I ended up taking over the business. I went from being technically an intern in May to the CEO in August. Yeah, so that's how I got involved. Shoot, that was 2011. So, we're going on nine years ago, and I've been CEO ever since.Stephanie:Wow. Very cool. That's a wild story. How many bikes were you guys selling when you took over, and where are you at now? So I can get the scale of the company.James:Totally, totally. Yeah. Our first year we were featured on this big Forbes article and the business sort of took off, and I think we sold maybe a thousand bikes our first year, which was a lot for a first year business. This past year we're going to sell about 15,000 bikes.Stephanie:Wow.James:Yeah. We've grown quite a bit.Stephanie:That's great. What is the selling point of Sole bikes? How's it different?James:Totally, totally. Yeah, for us, our main selling point is you go look at the bike and it's just going to look different than any other bike you've ever seen before. We're really heavy on our marketing and design and colorways and wanted to make something that's really, really simple, easy to use, easy to maintain, but also looks really beautiful, and something that has a personality, and really people can relate to. I think a bicycle, for most companies, is more of a utility product, something that's really spec-driven.James:For us, we wanted to make something that people were really, really proud of, and it's like, they can relate to, and find a colorway that really matches their personality, or they could this store music fixed tapes or find these other ways that people can relate to the product. That's really allowed us to set ourselves apart from other bike brands.Stephanie:Cool. It seems like pricing is also a big thing. The one thing I've always thought is, why the heck are bikes so expensive? Why? How'd you get your guys cost down so much?James:Totally. Totally. Yeah. Yeah. The biggest way we do it is we work directly with a manufacturer and we sell directly to our customers. Just the natural, by cutting out some of the normal distributors or middlemen, we're able to offer what would be a traditionally higher price point products for a lower price and pass those savings onto the consumer by selling direct.Stephanie:Tell me a bit more about that, because what did that look like finding a manufacturer? I think I saw you found, in the early days, your manufacturer on Alibaba. Right? Which I was like, oh, that's interesting because I feel like Alibaba ... I've been there before and there's a lot going on. There's a lot of people. It's hard to know who to trust, it's hard to know if they're going to send me something good. How did you guys go about finding a manufacturer there? Did it work out well? Give me some behind the scenes.James:Totally. Totally. Yeah. Our first, when we got the business kicked off, we actually were involved in this Ali-Baba business plan competition. Back when we were in college, Jake and John had applied for this business plan competition. They won it and we got a $15,000 grant from Alibaba. That grant or that money paid for them to initially go over, meet our first supplier who Alibaba had helped set up, and we got our first order of bikes in. That's what the initial financing that got the business kicked off. But over time, went through a few different suppliers and really had to iterate our process.James:I spent a lot of time over in China meeting with different suppliers, refining the product, getting it to a place where it is today. It took a lot of trips over there and a lot of refining.Stephanie:In the early days when you're picking your suppliers and manufacturers, what would you do differently this time around? What lessons did you learn or what things did you maybe stumble on in the early days that you can avoid if you were to redo it now?James:Totally. What I would recommend is, we got placed with the supplier via Alibaba, and we just worked with the first person we were placed with. I think we ended up switching a few different suppliers over time, but what really ended up getting us with a supplier that we were super happy with is we went over there, and I went to one of the big trade shows, and we ended up visiting another 15 or 20 during this trip I went on about year two or three, and that trip we ended up finding the supplier we worked with, still to this day.James:We really got to go out and meet these people and do your diligence and find the supplier that makes the most sense for you, and not just use the first one that you end up getting placed with or you end up meeting with. You got to go over there and develop a relationship with them. I mean, it's so important. They have this saying there. It's first, you drink tea, then you drink Maotai and then talk business. What I mean by that is, they want to meet you, the different suppliers and the different people over there want to meet you. They want to build a personal relationship, and then they want to talk business because it's so important there to have a personal relationship, as well as a business relationship.James:If you're going to try to source something from China or overseas, I'd recommend going over there and meeting these people and spending time with them, and learning, meeting them as people, and really developing a relationship, because that's going to help that business relationship over time and make a really, really strong business relationship.Stephanie:Yep. If you don't go and meet them and you didn't really do your due diligence, what kind of problems could a new company encounter? Did you encounter any issues in the early days with some of your suppliers that you stopped working with?James:Totally, totally. Yeah. The supply chain for a bicycle is pretty complex. For our product alone, there's over 50 parts. Those 50 parts come from 20 different other suppliers, and then those have to come into an assembler, the assembler puts the product together and then it's shipped over. There's a ton of different things that could go wrong. A good example would be we had one of our biggest shipments ever, at the time for the business. We had put in an order for summer, and it was like 2000 units. We had also set up a big sale online with a company called fab.com. At the time, they were having ... I don't know if you remember the company, fab.com, but they were one of the fastest companies to a billion dollar valuation, I think, and people were talking about it as the next Amazon.James:It was having this really big moment. We were selling really well on there. We partnered with them and we were like, hey, we're going to bring in a bunch of units. Let's have a really, really big sale. We have this massive sale. We sell like 1,500 to 2,000 units, pre-sell them, and ends up being the biggest sale ever on fab up to that point. So, do the sale, goods come in, and then we ship all the product out. Well, our manufacturer had packaged the bikes slightly incorrect to where ... The crank arm usually woven through the front wheel, which is detached, and then tucked to the side of the bike when it's shipped. They were all packaged slightly off that almost every single bike came with one of the spokes popped off.James:You get your brand new bike that you just bought offline, brand new, beautiful bike, you open it up, and one of the spokes popped off, which it's like ... You can't ride it, but it's a small problem, but it's not an easy problem to fix. Oh my gosh, that situation almost bankrupt us. What ended up happening we-Stephanie:What did you guys do?James:Yeah, we had the product on credit. We had given we had been sold the product on credit, so we went back to the supplier and we were like, hey, this is going to bankrupt us. We got to figure something out, and they refused to take any discount on it. Then, our advisor was like, "Hey, we're going to just hold payment until we get something settled." They ended up serving us a lawsuit. They came to America, served us a lawsuit.Stephanie:Oh my gosh.James:So we were served, and had to go through this entire ... Mind you, I'm like 21 years old at the time. I'm still in school. We get served a lawsuit. I'm like, oh my gosh, what is going on? So, we had to hire a lawyer who was our body. He was only like 30 and we didn't have a ton of money. We had to put together a case and actually go out and defend ourselves.Stephanie:Yeah, did you win?James:We go through this, and we hired this lawyer, and he's like, "Look, you guys don't have the money, [inaudible] afford me, so I'm going to teach you how to build this case." I went and actually built this timeline of everything that's happened, and we came up with a case theory and counter sued them. They responded and deposed me. I had to go through this 40 exhibit eight hour deposition. But we held our ground and got through it. After that, it got to the point where it was like, financially it made the most sense to settle and were able to settle for what ended up being about half off of what the original was. Yes.Stephanie:That's wild. I'm just imagining being in college, dealing with it. How was that experience being in college? I'm just thinking, all of a sudden, you have this company and you're having to go to China and now you're getting sued. What was the college experience like for you when you were having something very different than probably a lot of your peers go on?James:To be honest, it was really exciting. You felt like it was just so cool to be building something and going through this. We were so ignorant, I think, going through a lot of this stuff, which I think ended up actually helping us. It was just very shoot from the hip and like figure it out. Yeah, so many of these different scenarios could have totally bankrupt us or ended us, but I think it builds a lot of character by going through these different situations and surviving it and learning from it and growing from it. Yeah, it was exciting. It was really fun and exciting. The goal was just like, don't go bankrupt, don't die. Keep fighting and figure it out.Stephanie:That's good. I like that. I could see it also just making it seem like, well, what else ... Nothing can really scare me. I've gotten sued. I almost went bankrupt. There's nothing too scary out there after that. I think it's a good place to be.James:Yeah. I think it's part of building a business. You're going to face adversity and a lot of ... There's a reason nine out of 10 businesses fail. There's so many things that can go wrong with building a business, but you have to learn to embrace those challenges and know that you just got to fight through it. There's not always a way to figure it out, but there's oftentimes, if you keep working at it and keep fighting, you can find ways to get through these things. If you do get through them, these are like business cards, I guess you could say, or things that'll stick with you and you could grow and build on as you continue to build your business.James:After going through all this stuff over so many different situations over so many years, we've now learned to embrace the challenge and just know, hey, here there's going to be some new challenge, every year, there's going to be some new thing that's going to ... we're going to get hit with, and you just have to learn to embrace it and take it head on and not let it beat you up.Stephanie:Yeah. I love that. You guys seem really good at partnerships. I've seen some of the very well-known companies that you work with, who they get their own custom bikes built, and you've got things with artists going on and music and all that. How do you how do you view that strategy in your playbook to be able to access new customers and new markets, and how do you even develop those partnerships?James:Totally, totally. A lot of that was built from, again, when we started the company, we weren't the traditional bike guys. We were coming from the music background and fashion background. A huge art scene. We had all these relationships early on, and just out of pure having those relationships, we intertwined it in business, and you have the fixed tape series, which one of our early employees was a professional DJ, so he's like, "Hey, I got this idea. Let's create an hour long mix to listen to while I'm riding our bike, and we'll go get some other DJ friends to do it." That piece of content. Just that, that we created that and it's been rolling ever since. We just launched the Sofi Tukker one, which was, I think our 76th mix tape.Stephanie:That's cool.James:Then that artist creates that mix, and some of these DJs are very globally known DJs. We posted on our SoundCloud and they showed on their SoundCloud, and it creates this nice piece of content that people can come back to and find Sole, or find that mix each month. It's funny because we're not ... you wouldn't think of us as a music business or a bike business, but there's people out there in the world that only know us as the fixed tape company. There are people who'll find out, they'll be like, "Oh my gosh, you guys sell bikes. I thought you were just the fixed tape company or something." It's just organic sort of different little marketing tricks that we've, or little tactics we've built over the years.James:They just are organic, unique way to reach new customers and relate with our customers. We do the different partnerships. Again, I'll use the Sofi Tukker example. They're a big DJ group. If you don't know them, they're a big DJ group, globally known. I think one other fun facts, I think they have a platinum record in every country in the world except Antarctica. They're pretty big and they're up and coming. They had a song that's called Purple Hat. One of the lines in the song is purple hat cheetah print. We thought, how cool would it be to make a purple hat, their purple cheetah print bike? So, we had connections.James:One of their agencies or marketing companies or whatnot. So, we were able to get a pitch in front of them and they were super stoked on it. Yeah, now we're selling purple hat cheetah print bikes. Again, it's a cool way to ... What other bike companies are selling purple cheetah print bikes? It's just a unique way to reach new customers and provide a unique product and put a cool product out in the world that no one else was doing. I think it's just thinking that way with the bike industry has allowed us to build up these partnerships and set ourselves apart from other bike companies.Stephanie:Yeah. When you're doing these partnerships, these partners can also sell it on their website. Right? So, it's not all being sourced back to your website as a central hub. You're essentially letting these partners also sell the bikes on their websites as well. Right?James:Totally, totally. Yeah. For each partnership's bespoke and different in their own way. Sometimes like, we did a partnership with Wildfox, which is a women's centric fashion brand. We did these like really beautiful floral prints all over a bicycle. They took them in and they sold them through all their retail shops, as well as their partner wholesale shops, as well as their website, and we sold on our website. There's a bunch of different ways we can structure it. But yeah, it's usually just bespoke to whatever that partnership is.Stephanie:Well, that's a good segue into, I mean, when you're thinking about, you've got these mixed tapes going out and partnerships that aren't anywhere close to like the biking industry, how are you tracking conversions? Is your goal to try and get people to listen to these mixed tapes and then come back and buy bikes? Or how do you think about what your goals are around these different projects that you're doing?James:Totally, totally. With the fixed tapes, I think we're trying to push out a certain amount of content each month and each quarter. Then we go out and we build content calendars around what are different initiatives that we can tap into? I think when we're thinking about content, we like to look and start with email. Email is like one of our highest converting marketing channels. We're constantly filling and adding to our email list, and then from there, we're trying to push out two to three emails a week. We're mapping out our email pushes. We say, what are the different content initiatives that we can tap into? So, we try to do a fixed tape every two months. We try to do artist series every quarter and large-scale partnership once or twice a year.James:We map out all these different things we're trying to do, and then we funnel, and then that leads into email. With email, where you can't really just send very bland marketing type style emails every month. You're not going to get good engagement. So, we have to create stuff that's engaging. I think we've just gotten so good at creating this stuff very cost-effectively that it ends up paying for itself through the conversions of email. It's also a great brand building. They're all great brand building initiatives, and they all kind of build on themselves.James:If I do a big large-scale partnership with like a Sofi Tukker, that's going to come back and open up new opportunities down the road for other potential brands, or other potential artists. It's sort of all builds on itself as we go bigger and bigger.Stephanie:When you're talking about emails really high, when it comes to converting customers, how do you think about creating that engaging content? What pieces of content are working or what emails work best?James:I think one of them more interesting fun little emails that we came up with years ago and it's like the easiest thing [inaudible] to create ever, is we do what we call Sole Saturday. Sole Saturday, it's one photo by the Sole team and then three user-generated photos. Every bike we ship out has a little tag on it that says tag at Sole bicycles hashtag, and you use hashtag of the bicycle for a chance to be featured.James:Then, what we do is as we're spelling product, customers are going out and taking photos for us, and every Saturday we feature three of our customers. That, again, it's just like ... we're using user generated content and it's creating a nice email that people can go back to and see if they're featured. It's actually very high converting as well.Stephanie:That's fine. Do you think having actual customers and photos is where a lot of brands are going to be headed, less about the models and the people who look perfect and more about ... Is this someone who reminds me of myself and I can see myself riding that bicycle, yeah, feeling a better connection with them?James:Totally, totally. It's funny you say that. Because even when you look at ... you go to our paid spend or paid marketing, a lot of times the [inaudible] produced sort of content where it's on a really ... Get a really expensive content creator to produce it and it looks very professional, versus like content that's shot on iPhone or content that's just shot with customers' photos. That ends up converting a lot better than the higher produced stuff. I think that's just the people can relate more to it.Stephanie:Yeah. I agree. What kind of channels are you putting that content or the more natural looking content that your customers are creating? What channels are you finding are working best right now to convert customers?James:We're constantly testing when we're doing Facebook and Instagram ads. I've been serving different type of ads to different audiences on Facebook and Instagram with different types of content, the more professionals type of content versus the more just shot from iPhone vibe. Even like, over the last year, we've had a big uptick on our online business because of COVID, and people being at home and wanting to find a way to get outside and escape from this madness.James:One of the craziest things that we found was iPhone ads or the story ads-specific, so had to build just enough format for iPhones were converting at like crazy, crazy higher row ads versus just more static or traditional images or ads on the Facebook or Instagram. That was like a crazy thing we came up on this year.James:There's a very beautiful, simple ad where it's just like the bike on the beach and you have the sky in the background and then the sand below it. Then just the brand and a little copy below it. That little ad actually absolutely killed it for us this year.Stephanie:That's great. Are you still using, maybe not that ad, but still putting new ads into the story section on iPhones?James:Yeah. I recommend any brand out there that's doing ... I mean, I've been learning a lot of this as we go and trying to get better at it, but when you're creating your ads on Facebook and Instagram for when you're setting that ad up, you can actually split it so that it's like, you have this certain photo for the stack set up and then you have a different photo for when it's served on story. My biggest eyesore, or I hate is, when you're on a story and you get an ad, and it's like an ad that's built for the display. So, it has the kind of squared picture and then it has the words under that.James:I don't know if you guys have seen that, but it's such an eyesore to me compared to a beautiful ad that's like really built for the stories. Just making sure that you have the ad set, the story specific ads, it'll help your conversion so much. That's helped us a ton.Stephanie:Yeah, that's a really good point. What kind of return on spend should a brand expect from the iPhone story ads versus maybe Instagram or Facebook or Tik-Tok.James:That's a tough question. I think it's specific to the brand and the product they're selling, and then, even the time of the year. For us right now, our ROAS is way lower than like the middle of summer. It's almost like a 10th of what it was during the summer. That's just because it's seasonality, our product. We saw specific ... static first story during the summer, I think it was converting 3 or 4X of what it was static. But that's specific to us. I think every brand is different, every product's different. But yeah, I think that can give you an idea of the potential.Stephanie:Yeah, very cool. Is there any other new marketing channels that you're trying out, that you're like, I'm not sure if this will work, but we are allocating some funds here to try this out?James:No, for now we're focusing just on Facebook, Instagram. We're doing Google AdWords and media retargeting. I want to dip my toes in some other things. I want to try the Tik-Tok and I want to try some Pinterest. I've heard about the Tik-Tok, but the tracking is not that great on it. We haven't done anything yet. Also, Tik-Tok's I think for a little bit lower age or younger demographic than what our target audience is, so we haven't tried-Stephanie:I don't know. We've had a lot of people on here saying Tik-Tok works well. That originally, it was just the dancing videos and younger people and all that. People are like, it seems like there's still a good arbitrage opportunity on Tik-Tok right now, because the attribution and tracking might be worse, but you still get a lot of the benefit of going onto a new platform before they increase the pricing and actually understand what kind of conversions they're hitting. I don't know, [crosstalk] to check out.James:Totally, totally. There we go. That's my takeaway from this. We'll give it a go. We'll give it a go.Stephanie:Yeah, give it a whirl and see. When new customers are coming on your website, I want to talk a bit about like, how do you guide them through the funnel? How do you personalize things and show them, not only content, but also maybe a bike that would work for them or that might peak their interest?James:Totally. Totally. It's an interesting ... there's a few things we do. We have about our bikes page, where it's like, which Sole are you? That walks them through the different, we have like six different models. You have the single-speed fixed gear, you have the City Bike, you have the Dutch Step through, you have the three speed City Bike, and then you have the Coastal Cruiser. Top Bar and Coastal Cruiser are down and slanting more. We have a page that we'll walk the customers through the difference between all of those and the pros and the cons of each of those. That can explain the style.James:Then once you know the style, what we do different than maybe other companies is we actually ... Each product, each colorway has its own product variant versus like, you may go see a single-speed version of one of our competitors and they keep all the colors on one product page. We create the personality and each colorway has its own personality and its own page. It really helps customers, like okay, I like the red bike, and see the lifestyle on it, and just for that red bike. The red bike would be [inaudible] for a walk and it's got its own story, help the customer really fall in love with that product, and tell a story around each of them, versus them all being bundled up on the one page.Stephanie:That's great. Very cool. Then, I was seeing a couple of retail stores that you were partnering with, probably pre-COVID, but it seems like there'd be a really good opportunity to have those partners also kind of market and share for you while they're getting in front of their own new customers as well. It seems like they would kind of take on the budget, the marketing budget to then share your brand under their brand, if that makes sense.James:Totally, totally, totally. Yeah. We're seeing a big uptick with like these online third party wholesalers and distributors. That's been, for us, I think our product, it's got such a great look and feel to it that it can transcend from, not just traditional sporting goods or traditional bike-centric channels. We can sell on sites like an Urban Outfitters or on Zola, or some of these other more lifestyle driven sites that want a cool lifestyle product in the bike space.James:That's one of our big initiatives that we're trying to get on more of these like third-party digital wholesaler channels, because in the last year, what we've seen the biggest takeaway from all this is like, everything is going digital much faster than it was prior to COVID.Stephanie:Yep. Are those partners showcasing your brand? Are they more white labeling, like ordering the bikes and then putting under their brand to say, okay, this is an Urban Outfitters bike, or are they actually saying no, this is Sole [crosstalk 00:33:32].James:Yeah, we're selling us as Sole. Yeah, we're selling us Sole through these third parties.Stephanie:That's good. That's awesome. How are you getting in front of these big partners? Urban Outfitters is huge and super popular. How did you even get in front of them and convince them to partner with you guys to sell your bikes?James:Yeah, just cold email them. Right?Stephanie:I hear you cold emailing. Tell us your secrets. Come on, James.James:Very easy. Yeah, we'll go out there. If we believe our product could fit in someone's store or someone's space, then we'll hit them up. We're very confident in our product and our brand and we'll sell them on it. It works a ton. Then there's other partners that have reached out to us and want us to work with them. I think, a good example we were connecting ... Target reached out to us and we've just recently started selling on Target's website, which I think is ... It's interesting with them. Target's trying to, in each of their product categories, bring a more 21st century brand in. I think like we really fit that really lifestyle driven 21st century brand for a product.James:Normally, there's not a lot of brands in the space that have that kind of fit. I think we really fit those as well. That's an exciting one for us. Then, like I said, the Zola. Zola's a massive, or one of the biggest wedding registry sites. We're one of the only bike brands on there as well, and do really, really well on there.Stephanie:Ooh, that's a good angle. I wouldn't think to put a bike on a wedding registry website, but that's awesome, because a lot of times it's just the same old, same old. You're like, I don't need more plates, but I can go for a bike. I would put on my registry.James:We sell so many likes there. You'd be really, really surprised. It's a great wedding gift. We have a his and hers, so almost every single order that goes there, it's two bikes, obviously.Stephanie:Yeah. That's awesome. Really good strategy. How are you keeping up with fulfillment in the backend? Especially when you're integrating all these partners like Target and Urban Outfitters, what happens if target has a big surge and they've got a bunch of traffic come to their website, and all of a sudden, you've got 500 bike orders? How are you guys keeping up behind the scenes to make sure that you don't go out of stock or have issues on the backend?James:Totally, totally. This was something that this year that we've invested a lot of time and energy and effort into, is leveraging technology to make sure all of this stuff runs super smooth. We're using a third party warehouse that has their own systems. Then, we have to use an EDI software or partner to connect to a lot of these systems. It's just spending the time, energy and effort to really automate all this stuff and make sure all these systems talk to each other, and there's inventory pushes going out multiple times a day. You put in the front end work to automate all this stuff so that you can avoid those problems.James:There's systems that say, hey, there's inventory pushes that happen multiple times a day to all these systems, so if there's a big spike on say Target, that inventory is removed and pushed out to the other channels so that there's no overselling or minimal over selling. That still happens a little bit here and there because the inventory pushes don't go out all the time. It's a couple times a day, but yeah, it's just about leveraging. There's a ton of technology out there, like using the technology to your advantage to automate the stuff.Stephanie:What are some big bets that you guys at Sole are making over the next couple of years? Where do you think the bicycle market is headed? What are some things that you're betting on that you're not sure if they're going to pay off or not over the next couple of years?James:Yeah, totally. I think it goes back to digital. We're super focused on digital right now and we're super bullish on digital. We're investing in this technology to make sure that we're set up the scale and then we want to continue to expand where we're selling and who we're selling in front of. Then, on top of that, it's continuing to expand how we market our product and where we market our product and the media partners we can use to get in front of these different people. I think the biggest thing ... People having a stay at home as a result of COVID has set all these new habits. I think they say like, it takes three weeks to set a habit, and what? We've all been at home since April.James:Everyone's having to shop from shop online and shop at home. Once we come out of COVID, those habits, I don't think are going to go away. For us, we're super bullish on making sure we have a really solid foundation with, not only our website, but the online e-retail partners that we're selling through so that, as we come out of COVID, we continue to have really strong distribution digitally to the future.Stephanie:Yep. I could see some of the retail partners leaning on you guys also for maybe advice and best practices. I've seen some of the bigger companies kind of looking at, not that you're a startup, but looking at startups, looking at people who are able to be agile and move quickly, and trying to figure out like, well, what are you guys doing? Tell us what are the best practices right now, because what we've been doing for the past couple of years was just thrown up into the air and we have to rewrite how we do things now. So, do they ever hit you up and be like, "Hey James, how should we set this up? Or how are you guys doing this so we can replicate this?"James:Totally. No, no, no. There's always like other people in the industry that we're talking to. There's always people that we ... Whether it's people in the bike industry or other businesses, other friends that have businesses. Again, always happy to talk with them. For us, you say that we aren't a startup, we are a startup. We've been doing this for 10 years, I still feel like it's a startup. Our team's still pretty lean. There's only 10 of us. We're super nimble and able to move quick, which is great and allowed us to pivot and make changes when things like COVID happened, that bigger companies can't do.James:Once we find successes, we can double down and grow on those. Yeah, we're staying nimble and going with the flow and learning quick. Yeah.Stephanie:That's great. All right, cool. Let's jump over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, James?James:I am ready.Stephanie:All right. Stephanie:What is your favorite business book that you think about or refer back to [crosstalk 00:40:28]?James:It's not a business book per se, but it is You Can't Hurt Me by David Goggins.Stephanie:Oh, okay. I like that. I actually have not heard of that. I don't think.James:The quick hitter on it, it's about overcoming adversity and pushing yourself. I think that's so important in business is understanding that you can overcome adversity and always setting your bar higher and higher. Again, it's not technically a business book, but I think there's ton of good business lessons you can learn from it.Stephanie:I like that. That sounds good. I'll have to check it out. If you were to have a podcast, what would it be about, and who is your first guest be?James:Oh my gosh. If I were to have a podcast, I would talk about ... Personally, my favorite thing outside of business and bicycles is traveling. I would do a travel blog and my first guess would be, Oh my gosh, I would pick Barack Obama.Stephanie:There you go. I'd listen to that. That sounds good. What is the nicest thing anyone's ever done for you?James:Oh my gosh. The nicest thing that anyone has ever done for me. The nice thing, oh, this is big.Stephanie:Heavy.James:My friend, Mario and Ken, in the early days when we started up our USC shop, these guys would come out every year and work for back to school, which is our craziest time of year for that shop. We sell like a thousand bikes in two weeks, and they would come out and stay at my place, crash on my floor and help us every year for the first four years. So, shout out to Mario and Ken.Stephanie:Oh, that is really nice. That's a good answer. What trend or tech do you not understand today that you wish you did?James:What trend or tech? Tik-Tok.Stephanie:There you go.James:I don't get it, but I feel like I need to get it.Stephanie:Okay. I've had some other people say that as well, so you're in good company. Others don't also do not understand it. All right. Then the last bigger one. What one thing will have the biggest impact on ecommerce in the next year? It can't be COVID because we've had too many people say that.James:I think the big thing impact on ecommerce, I think it's going to be shipping. I feel like shipping is going to change drastically over the next one to five years. You have like Amazon starting to do their drones. We're starting to see in LA these little robots that are delivering food. Then, on top of that, FedEx and UPS are just killing everyone with all their fees and their pricing. We've been in peak surge charges since July. I just feel like there's so much potential for disruption there, shipping.Stephanie:Yep. Oh, that's a good answer. Yeah, I agree. I see a lot of companies, a couple of them actually are in Canada who are trying to get one and two day shipping. I think a lot of more companies will be leaning into that once they figure out how to make that work, and they also see how reliant they are on the FedExs, the UPSs, and how much it disrupts businesses.James:Totally, totally. Please someone come out here, please help us [inaudible 00:43:54], it's so expensive to ship bikes.Stephanie:Well, maybe James, that can be your next business. You've done a lot in your day. You might as well just start a shipping company as well.James:There we go. There we go.Stephanie:All right, James. Well, thanks for coming on the show. Where can people find out more about you and Sole bicycles?James:Totally. You can check us out at solebicycles.com, or our Instagram, which we update daily, @solebicycles, and then my personal is @JimmyStans.Stephanie:All right. Thanks so much.James:Thank you guys so much. Appreciate it.

What does it take to be a well-rounded athlete? Find out below! Perhaps you are into training or know it's important, but what if you don't have a particular goal? What if you just want to move better and look good naked in the process? How can I know what to focus my training on if I don't have a goal? That's where this interview with James Cerbie will blow your mind. He has carefully designed a training plan that builds all the essential performance qualities one needs to be a healthy human being. In this podcast, you'll learn: What life proofing is, why it's important for your health and performance, and how to build it. The 5 fitness attributes you need to become athletic as can be Which metrics are useful to measure fitness qualities, and how to adjust your programming based on testing Has your progress stalled? How can you pivot your training to keep the gains going There are 4 categories of athletes, how does training differ for each? How can you build athleticism with minimal gym equipment? Is the performance vs health dichotomy really a thing? If you are ready to push the envelope with your training, become more athletic than ever, then you definitely need to give this a listen. Convinced that this training program is for you? Sign up for the Apex Athlete Team Training, which is open from January 11th-15th, 2021. You can sign up for it here.  Missed the deadline but still want to hop on the gain train? James and the folks at Rebel Performance offer coaching year-round. Work with Rebel Performance Coaches here. Look below to watch the interview, listen to the podcast, get the show notes, and read the modified transcripts. Watch the interview here. Learn more about James Cerbie His website: Rebel Performance His podcast: Rebel Performance Radio. You can check out the one he did with yours truly here.  Facebook: Rebel Performance Twitter: @rebelperformnce Instagram: @therebelperformance Bio James Cerbie is the founder and head coach at Rebel Performance. He can be found lifting, drinking coffee, roaming in the mountains, reading research, or watching superhero movies. Show notes Here are links to things mentioned in the interview: Costa Rica Underground S&C 2018 Retreat Review - This was an awesome performance retreat that James and I spoke at a few years back. So much fun! Elevate Sports Performance and Healthcare - The spot in Vegas where ya boi works. Ryan Patrick - An excellent strength coach out of the Cinncinnati area. Tim Ferriss - One of the best bloggers out there. A person who learns things quickly and interviews high performers. Alpha Brain - A nootropic supplement to help you be focused AF. Train Heroic - An interface used for coaching Rebel Performance - This is where you can find James Transcripts What is life proofing? James: I've been an athlete my entire life, that's very much how I think of myself, my self-image. I can remember there being this moment of crisis when college ended, and I was fortunate to play baseball in college. So, I was always on a team, I was always training, I was always competing, it was always underneath this umbrella of being a well-rounded stack across the board athlete. When college ends maybe for some people with high school or some people that are lucky enough as professional. It's the Thanos finger snap moment where this thing you've known your entire life disappears. Fortunately, I had fallen in love with the weight room along my journey of planning sports. And so, I looked at the landscape said, you know, I'll be fine. I'll go compete in something like powerlifting, maybe I'll try bodybuilding. CrossFit was a thing at that point. Strongman existed. I'm gonna go try these things. I'm sure one of them is going to definitely do it for me, that's gonna be my thing. So, I started dabbling and trying all these things, just to come to the realization that none of them were for me. Just really frustrated in that journey in that process. Because I love training, I love throwing down but I couldn't find the right avenue or outlet for what I wanted. I wanted a blend of what these things gave me. Like, I don't want to just be a powerlifter. I'm not attacking any of those sports, they are all each incredible on their own, right? They just weren't the right thing for me. I'd get to about eight weeks into a powerlifting program and I would feel like a refrigerator. It's like I can't sprint, I can't jump, I don't move. Like, I just hated the tradeoffs that I was having to make. And so, I said, all right, there has to be a better way of approaching this so that I can get the outcome I want, and then I've got to figure out how to make that competitive. So, I can still have a competitive outlet, I need to have a team component to this thing as well. And so that's where I started playing around with this concept of being Life Proof, or this concept of being Apex. It's kind of saying, okay, I want to be well-rounded as an athlete. And I think if you're a human, you should want those things as well, right? Because, in my mind, if you're a human, you're an athlete. And what that means in my definition is I want to give you kind of five attribute bars: Strength hypertrophy Power Endurance Movement IQ If I can give you all five of those, if you have all five of those, then I think you are pretty Life Proof. You're gonna be able to handle whatever life throws at you. Exactly how high you want these attribute bars to go will differ from person to person. [caption id="attachment_13325" align="aligncenter" width="500"] Personally, I'm a level 35 physical therapist with Elven magic. (Image by Parker_West from Pixabay)[/caption] How much time do you have to train, how much you want to make your life revolve around being in the weight room and lifting? But I don't care if you're a 55-year-old CEO, I want you to have all five of these things so that you just do well in life. If you want to ramp that up to a much higher level, then we can do that as well. Are you the 23, 24, 25-year-old kid who wants to spend two hours training, you want to make your life will revolve around eating, training, sleeping, etc. We can bump those attribute bars up significantly higher for you. But regardless, I want all five and that's the point is I want to give you all five of those things. If you have all five then I think that you're probably pretty Life Proof. You should be able to handle just about anything that you're going to tackle in life. If you need to lift something heavy you can, look like a superhero, go rock in the mountains, do Matt Condon medleys, jump, sprint, throw.  you have all your bases covered. Zac: Do you think powerlifters get triggered and offended with your disclaimer? [caption id="attachment_13326" align="alignnone" width="600"] the bigger the beard the more easily triggered, they say (Image by revolutionprinters from Pixabay)[/caption] James: Nothing against the sports  I think they're all incredibly they do shit that I could never do. It's just not for me. And I have found that there are a lot of people out there who have dabbled and tried these other sports and feel the same way I do so. Zac: You sacrifice things James: A lot. Zac:  I remember when we went to Costa Rica, there are these big dudes at the retreat that we went to, and they absolutely destroyed the weightlifting competitions we had. But then you go hiking and it's a struggle. Or we play a sport, frisbee on the beach. You're not gonna get picked first by any means. James: And that was the tradeoff that I wasn't comfortable with. I still need to be able to go sprint, jump, cut, do athletic things.  for me, that's where power lives. Olympic lifting is cool. It's great. If you want to use it, awesome. Just not my interest.  I would rather sprint, jump, throw, and cut. Zac: Yeah. And I think as social animals, unless you're going to be spending all day every day in those, you know, doing Olympic lifting, which is fine. I've watched people do that. But sometimes you might meet up with friends and go play something Spike ball as we've been doing a lot at Elevate. You're limited in your capability of doing that and enjoying that. So, I think this concept is very useful. I also think that having a baseline you need at least this amount of a given attribute, and then you can expand upon whatever you want to depend on your task is very effective. I think a lot of people think that they have to push X number of weight in order to have success in whatever it is that we have in our movement realm. But that's most certainly not the case. When you came up with these five qualities, do you feel as though it filled that void of not having baseball in your case? I went through a similar crisis with running. Now obviously, I could have kept running because that was my sport. But I hated it. I only did it because I was decently fast at it. But did you feel as though it gave you similar satisfaction in pursuing that compared to baseball? James: Yes. So, the key there was in actually finding the other people, finding your tribe, finding your people who felt similar, who wanted to train in a similar way. And so, then you actually were able to get the team-based component back. So, it did successfully fill that void. And the first experiment that I essentially ran with that was The Silverback Training Project. It was a very big success for the people that we got on board. We saw improvement across the board. We have people hitting 50 to 100-pound PRs in the big three! I'm not talking about going from 100 to 150 pounds either. We're talking people squatting 500 for the first time, people deadlifting 600 for the first time, people who were in pain who are no longer in pain and feel good. 30% improvements on 10-minute assault bike challenges. And all these other met cons we we're testing. They're putting on muscle, they feel good. We're hitting three, four-inch PRs in verticals, broad jumps, we're doing better on 10-yard and 15-yard sprint tests. To go back to the attribute bar analogy, we're essentially taking all the attribute bars, and they're all getting moved up. And so that was a nice reassurance to see. One, conceptually, my thoughts on a whiteboard, when actually given to humans worked. Because there's always that thought that I'm gonna sit down and write a program and it's just not gonna work. But it does. Contrary to what a lot of people think, you can actually get a lot of progress across the board if you're smart in how you implement these things. But the biggest one was just seeing how the people came together. You filled that void for them, they got to compete again, they got to have a team. And so, it was a lot of fun to watch that transpire. We did it for a couple of cohorts, just to make sure it wasn't an anomaly the first time. And you see a similar thing happen every single time. So yeah, that was the first big win into that realm. Now we just need to spread the word and find more humans that believe in this concept. [caption id="attachment_13327" align="aligncenter" width="500"] Team work making the dream work and shit (Image by truthseeker08 from Pixabay)[/caption] Zac: It's kind of what CrossFit was trying to do. And there are some CrossFit boxes that probably implement this successfully is you want to be well rounded in all of these qualities. But then the issue is that because you're varying the workout so much, you don't get that progressive improvement in specific qualities. Whereas you're advocating that you can get improvement in all these qualities, but you have to apply the concepts of progressive overload in order to make that happen. And it sounds like you also measure each of these qualities to let you know, where we have to tweak the program to improve even further. The best tests to measure athleticism James: Strength is pretty straightforward. We don't use one rep max very often just because it's so skill and technique based. So, I use more three, five, and ten rep maxes. I want to see strength improve across a range. Hypertrophy is a much more difficult one to measure, I don't have a great performance-based metric for that. I think your performance on higher rep stuff or timed sets would probably be a little bit of an indicator, but we're probably going to use more just vanity metrics. Take a before and after picture. Do you look more jacked? Are you happy with this outcome? You could also test body composition. Looking like a superhero just comes with the territory when you do what you're supposed to do training-wise and in the kitchen.  Endurance is easy, we use a 10-minute assault bike challenge. You go as hard as you can for 10 minutes, and let's see where you're at. Four miles seems to be a pretty good threshold. I've had a couple people push five, which is outrageous. These dudes are freaks. They just have engines for days. We will also look at the resting heart rate and see if there are any drops. Zac: I can't push volume on a bike for whatever reason. And it's not because of the lack of the ticker. It's because of the local muscle fatigue for me. It's the same for lifting. Although I've gotten significantly better at tolerating more volume with a single move, which I need for a training effect, I have to vary the. exercises to train enough. I might do an Arnold press and only get four sets of whatever rep range. And then I just I cannot output anymore. But then if I change to an incline, then I'm right back in action. we're back. The cardiac adaptations are there, it's just the supporting structures aren't there to carry it out. So that's where a lot of my training has been going because that's what I know is the rate-limiting step. James: It's those capillaries and mitochondria, bro. On the power attribute bar, I'm looking at jumps, sprints, and throws. Vertical, broad, lateral. I want to see multiple repeat jumps as well. 10-yard sprint, 15-yard sprint, maybe out to a 40 or 60. I don't have Olympic lifts in my model. It's not because they don't work, I just choose not to use them. I think that jumps, sprints, and throws are more effective and less technical. Movement is obviously really hard, so our measures are subjective; things feel easier, pain reductions, getting muscle fatigue instead of joint pain, etc. Oo the endurance side of the coin, are resting heart rates dropping? If I can get actual numbers, I want to get actual numbers. This allows us to see where we need to focus our efforts. Say all qualities but endurance are improving. We may potentially change volume or something else in their template.  Zac: Then would you do things to maintain the other quality, so perhaps, you'd increase volume to potentially improve endurance components, but then you're just adjusting maybe it's less volume, less volume on the power components or, you know, you're doing less volume of the strength work? James: Yeah, I'm a big block periodization fan, physiologically. That just makes a lot of sense to me. And it works. So, I talk about all five of these attribute bars, but we need to appreciate that I'm not hitting the Go button on all five of these all the time because that can't work. It's more of how you stack the blocks together in a sequential fashion, that allows you to get this good development across the board. And so that's the biggest thing. It's making sure that we have you in the weekly training template for whatever type of athlete you are. And we can talk more about that. And then from there, it's just making sure we sequentially have a block of training that makes sense. What am I focusing on for these four to six weeks, and then what am I going to focus on for the next four to six weeks while I maintain these other things? So, when I have maintenance with progress, you are slowly bumping these things up over time. If you only zoom in acutely, you may only see one or two attribute bars going up. But when you zoom out and look at what happened over 12 to 16 weeks, we've got all qualities to improve. And that's what we're chasing. Zac: To be everywhere, to be nowhere. That extends to not just fitness qualities, but all things. You can't be an expert in all things mitochondria and real estate at the same time. Your outputs in each domain wouldn't be as high as if it were a focused effort. So too with training. But where I also think you are doing a far superior job compared to other people is you don't build one-trick ponies. You allow for adaptability. Mastering only one quality can help if pursuing a specific sport, but it puts you at risk for bad things to potentially happen when you have to call upon those other qualities. James: Yeah, and if you have a highly specific goal, and you want to be the best in the world of that highly specific thing, then you have to be a one-trick pony. And that would be good for you. If you want to be an elite level powerlifter, if you want to step on stage for bodybuilding, if you want to compete in Olympic lifting, I think all those avenues are incredible. And if that's your thing, and that's what lights your fire, go do it. That's awesome. But if those things don't light your fire, then maybe we think about training in a different way. Athlete archetypes Zac: Once you've established a life proof baseline, where do you go next? James: This is where it depends on what avenue are you in? Are you in a one on one training experience where you're getting a dedicated coach with individualized coaching? Because those conversations happen pretty often, and we get pretty detailed nitty-gritty into the weeds. Or you're doing more the team-based approach, where you're getting into a pre-written training template that you're funneled into based on your goals. So those go through more pre-determined cycles. We essentially will go through waves of hypertrophy, work capacity, focus block of training, and then we're going to go into a more strength, power, etc., focus block of training. If we decide on improving a specific quality like strength, we may lower the rep ranges and have that be the main focus. Then, we're blending power and throughout that with jumps, sprints, throws, etc. Endurance is getting thrown in there as well, whether or not we're doing a short to long, longer, shorter approach, etc. It kind of depends. But again, I think what we do first is we try to funnel the athlete into determining what is your specific archetype? Because the concept of life is very broad, so we need to narrow that down. We've found that people generally fall into one of four categories: Base athlete Stacked athlete Strong Athlete Tactical athlete Base athlete A base athlete cares most about movement. They want to move really well and feel good while sprinkling other pillars on top. These athletes will use more of a sensorimotor-based approach. Your big squat might be a heel-elevated Zercher squat because movement is the highest priority. https://www.youtube.com/watch?v=gmDnYnGWA-I Stacked athlete Stacked athletes want the five attributes to be as level across the board as possible. They want to be the middle linebacker of humans. For them, we're more aggressive at how we're chasing performance outcomes. They get put on a three training split: three lift days, two low conditioning days, one high conditioning day. Strong athlete The strong athlete cares most about strength and hypertrophy. Fantastic. You can put on a four-two training split into four lift days and two easy conditioning days. You're not going to get the hard conditioning day, because there's nowhere to fit it into your scheme. Plus, you don't care that much about that outcome. But we still want the two low conditioning days because we need that at least low-level aerobic ability and capacity to feed into everything else that you're doing. Tactical athlete The tactical athlete cares most about endurance. They have more met-cons and medleys, rucking in the mountains.  These athletes also are put on a four-two split as well. So, they have four "lift days" and two easy conditioning days.  Their lift days are a bit different. They'll first have two big lifts (e.g. squat and press, hinge and pull, etc) and instead of accessory work, they'll do met-cons or medleys. These exercise choices fall somewhere in the hypertrophy and endurance realm, so it helps them out. How people should train who have general fitness goals James: I would say the vast majority of people we get in this team-based programming training approach have very generalized outcome goals. They just want to see the attribute bars move up. For these people, we bleed in competition throughout the program, allowing them to train for something. Whenever we can get away with it in 2021, we are going to do some events in-person. Zac: In Salt Lake? James: Yeah! There's a really cool facility up outside of Salt Lake. It's an old airplane hangar. And it's gutted out, and a gym. It opens up onto an outdoor rig, which then goes on to about a 40-yard field, and there's a sand volleyball court. So, it'd be the perfect place to do it. And you got the mountains as the backdrop. We will likely split this meeting into a competitive and general division. The reason why is because we have people of various performance capabilities that believe in the concept. Some can squat 500 pounds, some just want to feel good, but we're all on the same journey.  Just show up with the mentality, attitude, and desire to get better. That's all we want. We are very fortunate to have a community of people where we don't have egos. We just want improvement. We just want you to get better. Improving athleticism with minimal gym equipment Zac: How do you adapt the thought process in the life proofing concept to someone who has minimal equipment? Especially during these home-gym COVID times? James: We have three tiers of options for people that want training. So, the top tier is you come in, you get a one-on-one coach that's totally personally dedicated to you. And it's totally customized. Then we have the Apex team, which is one that we've been talking about, which is a team-based programming approach. We put way more of an emphasis on the community, the competition bit, and you're plugging into just really, really well thought out, science-backed and tested programming that is going to work phenomenally well, for the vast majority of people. For both of these tiers, you need to have access to equipment. So, I tell people that I write the programming assuming you have access to the same garage gym I do. So, my garage gym has a rack, a single cable machine, an assault bike, a rower, a ski erg... Zac: A ski erg in your garage gym? That is badass. James: Yeah, so I don't use a skier very often just because that's a weird one. Most people will have a bike or rower. And then assuming that you have access to most of the dumbbells and kettlebells. Assuming you have access to most of those things, we can make adjustments within the team training. For the people that don't have any equipment, if you're the I have a dumbbell, maybe I have a kettlebell, I have a few bands or just my bodyweight, then we have pre-written programs in our program shop that are built for just at-home training. To respond to gym closures, we added several different training programs that you can do at home. You don't need anything more than your body weight, maybe a dumbbell, kettlebell, or some bands. However, training without equipment is not a long term strategy. We hope we can maintain during what is hopefully a short term problem. Zac: Progressive overload in most things is really tough unless you have some degree of equipment. James: Yeah. Zac: However, there are people who exist who can get pretty big, doing just bodyweight things. Do you ever go on those YouTube benches of what was a guy called Kali Muscle? https://www.youtube.com/watch?v=vUHRCipX_Sc James: Oh, yeah. Zac: He was just massive; doing just a bunch of stuff at playgrounds. James: I'm always curious about what exogenous aids exist in those situations. Yeah, that's the first place my mind goes, just because I know there's gonna be some limit on what we can accomplish with just bodyweight and maybe a pull-up bar. I have a program in there called Apex athlete at home, it assumes you have access to nothing. We rely on a lot of tempos and metabolic stress-type training such as timed sets. This works in place of mechanical tension and load. Fortunately, you can still do jumps, you can still maybe do sprints, we can get outside. So, the power component we can still have, the conditioning stuff, we can probably still get in there. Zac: Basically, your goals have to somewhat shift during this time period. James: Yeah, we actually it was funny, I was talking to my buddy, Kevin Horton the other day who coaches with us at Rebel, and he was talking about some of his clients how it actually ended up working out in their favor. He's working with a 40-year-old New York lawyer who's very type A. Gym closings were actually the best thing that could have ever happened. Because he didn't have access to a barbell, he had to focus on other qualities. Armed with only a kettlebell, some adjustable dumbbell, and bands, he focused on movements he wouldn't normally tackle over a three month period. Lot's of sensorimotor work. He felt so much better once he got back to the bigger, sexier lifts; hitting tons of PRs in the process. He thought it was totally weird because he wasn't focusing on these qualities. He finally addressed the foundation that he never spent time on. And so, once he actually put that in place, magical things happen. It's like a pyramid; the larger the foundation, the higher the peak can be. Zac: I've seen that a lot of times with many of the big lifts. With most of the people who I work with, the first few blocks, especially if there's someone who's a little bit more beat up or they need a bigger movement foundation, we stay away from hinging. It doesn't extend movement options well enough for most people. Instead, we emphasize more squatting and other activities that increase movement capabilities. Without fail, I see most people when they do go back to deadlifting, even if they haven't touched that for an extended period of time, numbers shoot up, it feels better, and/or they pull faster. I think it really carries back to the concept that you're talking about James of you have to build up all of these bars to some degree, because there's just so intermingling between developing all of those qualities. James: 100%. Zac: Even the person who says they want to powerlift. I really liked that you're still emphasizing aerobic components for them because they still have to recover. They still need to be able to attain enough movement so they don't hurt themselves from the very heavy loads. James: It's interesting because I think we have people who will go do powerlifting comps, and strongman meets and all this other stuff, yet they don't view themselves as those types of athletes. They simply spend time building their attribute bars, then eventually tweak their program to emphasize the quality they need for the given competition. It's wild because they go win powerlifting meets and they win strongman contests. But that's not really who they are. They don't train that way all the time. We're just building all these attribute bars, and then we peak for a meet, and then they come back in right where we were. You might not be the best in the world, but you can still be pretty damn good. Zac: It sounds like the key is to have the capability of doing pretty good in anything by starting with a robust foundation. James: You can go and show really well both of those. Zac: Yeah. James: Which is awesome. , I think that's so cool. Zac: Tim Ferriss would always talk about how it doesn't take much to get up to the 80th percentile in anything if you just spend a little bit of a dedicated amount of time to a specific thing. I think in the movement realm, or the performance realm, it's the same thing as long as you have that foundation to build on. James: Mm-hmm. James: We have another guy who's in the Apex team who had competed in the CrossFit Games. He eventually ran into the problem that I've seen from a lot of former crossfitters, which is things start to break down. It wasn't a sustainable training style for him. We had to do a lot of work on the front end of cleaning up a lot of movement deficits; focusing on baseline foundational work. He totally bought in! He messaged me the other day saying that he was better than ever, even compared to when he was a CrossFit athlete. Granted, if we throw Olympic lifts or gymnastic stuff at him he may not do as well because we don't train those movements. he's gonna get towards it because we don't do either of those. But he was mashing on squats, dead, and bench; hitting huge PRs in the process. His work capacity and engine is through the roof, his body composition is as good as it's ever been, and he feels really good. God forbid, you can actually perform well and feel good at the same time. [caption id="attachment_13335" align="aligncenter" width="500"] You and me both, yikes! (Image by Kate Trysh from Pixabay) [/caption] That was an interesting message for me to get because he's the one who's kind of getting ready for the competition roll around. He's totally bought in and plans to train this way for the rest of his life! Performance vs health Zac: It seems as though the concept of the performance versus health divide is something we don't talk about as much as we used it. It's such BS.  James: I think the only place it rears its head is at the very, very, very far end of the bell curve. Zac: Exactly. James: And I think that the bell curve is far larger than people want to give it credit. Because it used to be that you can't have both, but you really have to push to the far ends of performance to make that a thing. If you want to be a world-class triathlete, a world-class marathon runner, if you want to be Thor and go be the strongest Strongman in the world, those pursuits likely aren't healthy. The sacrifices you have to make to accomplish what those people do results in some tradeoffs.  But that is so far to the extreme end of the curve. People get lost in that conversation for some reason.   Zac: The reason why it is so far right on the curve is that you are literally are pushing your body to its physical limits. But most people cannot output to that degree, whether it's the inability to coordinate their bodies the way they need to, not built for the task, etc. Some cars can't go 100 miles an hour. And you're more prone to have a violent accident if you can go 100 miles an hour as opposed to 30. And I think the same thing applies to us humans. I don't know if I'm going to ever pull 600. That ship likely sailed when I pursued endurance running.  For the overwhelming majority of the population, you can pursue a lot of the performance qualities that we've been talking about this whole time with few ramifications. James: If it's done well, it can work. If it's implemented poorly, it won't work.  Zac: Yeah. And I think most people just don't have an idea of how to do it well. Because there is an inherent risk when you're chasing these qualities. If you don't have technical mastery, if you don't have intelligent planning, you may be at risk for an injury. It's not like learning a musical instrument where there's an inherent negative feedback loop when you don't hit the notes well. James: I'm very upfront in saying that, if you look at all five of those attribute bars, those five pillars, I can find you numerous coaches that are far better at me at any one of those attribute bars. If you just want to focus on strength, there are people way better at that than I am. If you just want to focus on power, people way better at that than I am. If you just want to focus on hypertrophy, just endurance, just movement. There are coaches that specialize in those pillars, and they are far better at that than I am. I haven't met many people who are as good as we are at actually taking all five of those and blending them together into a comprehensive plan that makes sense, and that works. Because I found that that's where people really struggle is in putting it all together. People have ideas or concepts, but they get stuck. They overthink things. They second guess stuff. They develop shiny object syndrome and jump from program to program. And it's simply because it's hard to put all that together in a way that works and makes sense. That's where I find that people really struggle. Zac: And that's why I'm excited that you have put this together. Because I would agree with you 100%. It's really hard to coordinate a lot of concepts into one thing and it goes back to the conversation we were having about developing expertise in a given thing. But if you can get good enough at several things, that just leads you to be more enriched, adapted, and being able to do a wide variety of things. Sum up Life proofing involves increasing your power, strength, endurance, hypertrophy, and movement over the course of a block periodized training program.  One can better specialize when one builds a bigger foundation.   Though harder to build fitness, power, movement, and endurance can be improved with minimal gym equipment.  The divide between performance and health only exists at the extreme ends of the bell curve, and most people can pursue high levels of performance with few ramifications.  

So old I remember Blockbuster Bootleg books James is tired of paying dead authors James's unpopular copyright ideas Disney's secret Hitler movie "Where the hell is the coffee!?" Christopher: "I use coffee like a drug." James: "It is a drug." Coffee is not gendered James's brother-in-law is shocked, shocked how good James's free over the air digital signal is Christopher gets triggered by NPR, but still loves Science Friday Our podcast is so good that even Christopher listens to it James explains to Christopher how podcasts work RSS isn't so Simple when it comes to Google and Spotify "I hearted my way into science." Tik Tok wins because its algorithm actually cares about what YOU want to see Socialism benefits the people (in theory), Fascism benefits the people in power Christopher can't say "Boob shots" so James has to "Parley? What, am I a pirate?" Parler is the "Entertainment" Right Twitter vs Parler is James vs Christopher Instagram is dumb and only wants to show me dumb things and is totally untrainable YouTube is advertising me to death Christopher likes to watch old TV shows (because he's old) Tootsie Pop ad Christopher educates his kids only so he can one-up Europeans The guy with the shotgun tells you where you can camp Why is it up to James to correct Congress Woman Gabbard? Our brains are not built for the technology we have

Scam alert with KC(Fashion designer) and James(IT specialist

James:  Hi, audience and listeners. This is James Kandasamy from Achieve Wealth Through Value-add Real Estate Investing Podcast. Today I have Ryan Gibson from Spartan Investment Group. It's an investment group that focuses a lot on Self-storage. They have almost 4,000 units. They have a lot of units in DFW area and a few other States. I think Ryan's going to talk about in a short while, and they recently started to [00:32unclear] in a mobile home parks, which we'll touch upon in a short while. Hey Ryan, welcome to the show. Ryan: Thanks, James, for having me. It's fun to get on your show. It's great. James: Yeah, absolutely. Absolutely. So why not you tell about yourself and your company, things that I've missed out? Ryan: Yeah, so we are based in Golden, Colorado, and we buy existing and develop self-storage properties. And we do all of our properties and projects through syndication. So we raised capital from private investors and we go out and buy storages that we can buy and get existing cashflow on. And then we can eventually either expand them or just improve operations to make additional income. We also build self-storage from the ground up and we do a little bit of RV park investing as well, but storage is the primary focus. So, you know, previously, we were land developers and built condos and flipped houses and focused on storage mostly just because of the recession resistancy, you know, during downtimes. And when we were first looking at the industry, that really is what you know, attracted us to jump into the business. Was the, you know, kind of how it performed during the last two recessions. James: Got it, got it. Yeah. I mean, I did a lot of research of different asset classes. I wrote it in my book as well. Like how many asset class, six asset class for the past 15 years and just on my own, this is not from Marcus and Millichap or this is not from CoStar.  I looked at all the asset class and was looking at all the past 15 years report, which that's a report called Integra Realty Resources. That's the report that all the commissioner pays us a report to, that's the organization. And I was looking at self-storage and multifamily and all that. I was surprised to see that self-storage did do well the past 15 years, even during the downturn. I know at the beginning, you know, 15 years back, they didn't really allocate a specific asset class for it, but they did talk about it. And in general, I didn't see any downturn, even though every other asset class goes up and down. So that's very interesting. And why do you think is that? Ryan: Because it relies on life events and life events never stop happening. No, I'm serious. You get divorced, typically, stuff goes in storage. You renovate your house, stuff goes into storage. In times of good times, stuff goes into storage and times and the bad time, stuff goes into storage. When you get downsized, when you move, when your job relocates, when there's a disruption in the market that triggers self-storage events. And added onto that, businesses use it because not everybody can park their work truck in their HOA driveway, if they're in a covenant restricted community and not everybody can have all their utilities and supplies in their house. And so, you know, simpliest way to say it, you know, for an extra 50 bucks a month, imagine having a whole other room in your house. And that's really been a big driver for demand and self-storage.  We like it because unlike other asset classes, when a customer comes in, we have a lien against all of their stuff. So if they don't pay, we can auction that off for a profit. So, you know, the revenue loss is much lower for you know, the potential when a tenant doesn't pay. With COVID and everything, there was still a rental rate, great increases. We still had high occupancy. We still can host auctions and have people move out if they don't pay. We held back on that in a couple of properties and a couple of markets, but for the most part, you know, we didn't have the government restrictions that a lot of other asset classes had on that kind of stuff. James: Got it. Well, I mean, I'm sure the audience is thinking why not James jump on self-storage. So but let me tell you why I didn't, you can always debate this. So one thing I didn't jump on self-storage at that time. I mean, of course, for me, focus is very important. I mean, every asset class has so many nuances in it. I mean, it's not easy, even though self-storage is like four walls and there's nothing in it, but there's a difficulty in finding the deal and difficulty in executing the business plan and turn around and, you know, disposition and all that. So, I mean, but I didn't do it because at that time there was not much of nonrecourse loan available, I think, unless you go really low on the leverage. So how is that right now? Ryan: You can get a non-recourse right now on ground-up construction James: On ground-up construction. Okay. Got it. What about on the... Ryan: Oh, and of course you know, that would be rare in our industry. Of course, on buying existing self-storage properties, non-recourse is widely available. James: Got it. Okay. So now it's available right now, at what leverage level? Ryan: It just depends. I think we just tied up a deal that around 70 to 75% non-recourse institutional loan. So, you know, it just depends on the lender. Depends on the deal. Depends on the play. James: Oh yeah. I had a friend who was like 85 years old. He's a broker, but he's a very healthy guy. And he said he started multifamily and moved on to storage and he owns a lot of storage unit and I was calling him and he said, maybe at that time, he said, yeah, it's hard to find non-recourse loans. The other challenge in storage is, you know, I mean, anybody can build a new self-storage development in front of your storage unit. It's very easy to build Ryan: Maybe. Yeah. So, you could say that as a general statement, that wouldn't apply everywhere. So there's a lot of moratoriums on storage. There is a lot of restrictions. Some communities don't have zoning for it. Some cities quite frankly, would not allow you to use it at all. So, you know, it just depends on where you are. Some jurisdictions it's, Oh yeah, come build it. No problem at all. So you just need, you know, it just depends on the market. You know, we have markets where there's no zoning and we could build whatever we wanted and there are markets where it's taken us 40 years to get a permit. So it really just depends. And then there are some markets where you get your permit and then they slap a moratorium on there and you can't build your storage anymore. That's happened out here in Washington and a few places.  So you really got to pay attention. And, you know, and I think really if someone was like, what's the one thing that I could take away from talking to a storage operator? It's the market study. It really comes down to: do you have the demand and is there the supply of people and demand essentially in the market to fill up your property or execute your business plan? It's huge. You know, someone might say, is storage a good play? I don't know, make up a city, Austin, Texas and I will say, well, generally, no, it's not, it's actually a terrible market, no offense, but it might be good on one side of the town and catastrophic on the other side. It's a three-mile business so it's like whatever's happening around in that immediate micro-market is really what it comes down to. So some markets are generally better, some markets are generally worse, but at the end of the day, it's right in that five, 10 minute drive time of the property. In the market study, that makes the difference. James: So, all your details that you're telling me right now, that's why I say there are so much of nuances in any asset class that outsiders may not know. I mean, it's easy to say, you know, it's easy to build but there's so much of a market research knowledge that, you know, only the operators who are specialized in it knows about it. So, and I do have a lot of respect for every asset class operators. There are definitely people who are really good at that. So let's walk through a deal in self-storage.  So not in terms of deal underwriting, but let's look at the demographic of that storage. Let's say you found land in a city. Walk us through the steps you would take to say whether this is a good site for a self-storage facility? Ryan: So a couple of things. The first thing I would look at is what's the population. So I would drop in on the facility, we have data and maps that will show us the drive times. And then based on those drive times, we'd get the population within the drive times of the property. And then we would look at saturation levels. James: And what are the drive times? Minutes? Ryan: Yeah, four minutes. I think we use eight minutes and 15 minutes. Think of it this way. If you're in an urban core, you're not going to drive 15 minutes across town, you're going to drive eight minutes so that there's relevancy to where you are in the market. But what we look at is, you know, we'll look at what are the comparable rent comps to what our subject facility is charged. So, you know, we might be getting $15 a square foot on the average but it's important to know kind of what type of facilities those are: three-story glass, Class A facilities, are they first-generation roll-up metal buildings, you know, big difference. Is it non-climate controlled is it climate controlled and in that market, is it a hot market, like a warm climate that likes self-storage to be climate controlled? Or is it a market that prefers drive-up or, you know, climate control would be overkill and people would be unwilling to pay the extra money for that.  So we look at price per square foot, you know, probably just like multifamily. And then, for Spartan, we look at the ability to add onto that property, you know, can we expand it and what is the existing dirt that's there? What is it? Is it flat gravel? Are there stormwater requirements, setbacks, easements restrictions, how usable is that land, and how much would it take to get the land pad ready? Cause we're developers. I mean, we take properties and develop them into bigger... James: What about zoning? Ryan: Zoning is important. That's kind of a little bit further down on the checklist. The top thing is demand. Cause you know, you could have, Oh, this is a zone for self-storage. And of course, everybody knew that. And then everybody built, a bunch of storage is there and there's no demand. James: But is it easy to change as zoning from, let's say in multifamily to self-storage?  Ryan: Ah, that's a loaded question.  James: Maybe not multifamily. I know residential has a lot of high priority in terms of city development. Let's say, commercial office building, commercial land to self-storage. Ryan: I mean, it depends. I know you don't like the word, it depends, but it depends. So like if you are looking in a market where, you know, we entitled the self-storage project in a city that had no zoning for storage. So everything was a conditional use permit. Everything was a public hearing. The public had come in, the city had to make a recommendation to a hearing examiner. Huge process. We've taken a residential land and rezoned it into commercial so we could build self-storage. We had to go in front of the board of county commissioners. We had to go in front of, you know, there had to be room for public comment. There was opposition, but we were successful and got the land entitled, but every jurisdiction is just a little bit different. We've bought properties that are zoned for storage and we've gotten the entitlements and they can take anywhere from two to six months to get it,  it's a building permit, you know, depending on how fast you're pushing and assuming no closures in the city and things like that. It just runs the gamut. You know, as I said, I have colleagues in the industry that have bought property, they got the entitlements. So yeah, you can build storage here. And then the city puts a moratorium on storage and now they can't build anything. So they bought this land, they got the entitlements, they've spent all this money, now they can't even build it.  James: How do you prevent that kind of thing from happening? Ryan: You don't. James: Because you've already bought the land.  Ryan: I mean, you could negotiate the contract to close upon building permits, but then you've got to find a willing seller and you know, of course, that's always a negotiation.  James: It's too messy, I guess. Ryan: But yeah, when you develop, I mean, it can be riskier and there's a potential for a bigger return but you also introduce a lot more risks. So yeah. I mean, is it easy to do? It can be, and it can be very difficult to the point of being impossible so it really just depends.  James: So when you guys raised the money from your investors, have you already done that, let's say for a [13:57unclear]  project. Have you already done that part or are you are still looking at that entitlement? Ryan: Yeah, we've really learned our lessons through the year. So you know, we bought a storage property and when the rezone of the land from, you know, so you have kind of a couple of different phases of development when you're doing like the paperwork to get it ready to go vertical. So the last thing you get is their building permit. So your building permit is pretty straight down the fairway; that is meeting building codes, getting your building permit, not a lot of risk in that - a risk, but there's not a lot of risks. But the phase just before that might be your entitlement so that you can actually do what you want to do, or might even be some type of site plan development where the city has to approve your site plan but you don't necessarily have your drawings done for the buildings they've just approved. Okay. Building here, building here, building here, this is your height. This is your step back. This is how much square footage you're going to deliver and a site plan approval. And then you have the zoning that might be before that. And it might already be zoned that that might be your first step. You know, do I meet the zoning if I don't, I might have to rezone that could take years. So, you know, we just kind of look at the projects and negotiate with the seller to buy the property. You know, when it hit a point where we're comfortable with closing on the land, and then we negotiate the purchase and sales agreement as such, and then we do the raise in accordance with how we feel our comfort level to be. Because we don't want to raise the money until we know we can do what we want to do. And you know, we've really refined our processes for that over the years to know that, Hey, we can close. And we've gotten better at negotiating. Like how can you expect me to buy this land and I don't even know I can do what I want do with it? If it's a hot market, you know, make a decision; you either want it, or you don't. If it's a property that's been sitting on the market for a year, you can come up with some pretty creative ways to keep the property tied up while you go through that process. James: So how many percents of these 4,000 units were developed versus how many were bought from....? Ryan: 25% James: 25% newly developed. Okay. Are you guys more trending towards development rather than buying? Ryan: That's a great question. I would probably say we're buying more than we are developing right now for no reason other than our development pipeline is full enough. Development is expensive and development requires a lot of cash and you don't want too many of them going on at one time. So we have two very large, about $22 million right now with development. Actually, no, we probably have about $30 million in development right now and that's about our comfort level. That's our spend for 2020 for development and we really don't want to get much past that. We also only develop in the states that we live in so Washington and Colorado. Adding onto a property is not a big deal, but we don't like to do ground-up development where we go through the whole process if we live out of state, because inevitably if you want to get things done, you gotta be down at the county, down at the city hall, down at the office, all the time. You're going down there all the time. Oh, you want this? Okay. No problem. James: Otherwise, it's going to just take forever to get a project done. Ryan: And who wants to fly an hour and a half somewhere to drop off a piece of paper and then fly back? I mean, it's just not efficient. So we just like to be in town.  I can't tell you how many times I've gone down there to, you know, shake the trees and get progress. James: Yeah. I've done a small land development beside my apartment. We were converting it. We were combining the adjacent plot of land into the apartment. And that itself was a lot of work already. But the city was supportive and it went through well by just the amount of paperwork, the amount of bureaucratic process that you have to go through. So, absolutely. What about a demographic? I mean, we talked about demographics. How do you say that this particular submarket is a good demographic for a good self-storage business? Ryan: We like at least 1% growth. We like to see trending growth. We like to see 50,000 income. We like to see saturation levels like a seven square foot per utilization for storage. James: How do you get that data? Seven square feet per utilization? Ryan: We have Radius Plus and we use a couple of different programs. Radius and there's one other program that James: So Radius is a software for self-storage investors? Ryan: Yes. James: Okay. For them to see the demand, I guess. Ryan: If you gave me an address, within 20 minutes, I could tell you what's the drive time around it. I could tell you the demographics. I could tell you the demand. I could tell you all the permits in the pipeline. So that's another thing. This is great. I can tell you everybody who's building, everybody who's applied, who's canceled, who is coming. And then of course we do our boots on the ground research where we go knock on doors and go to the city and ask them like, Oh, Hey, you know, is anybody else? Oh yeah, John, you know, he was over here last week. You know, that doesn't show up on record but the intent. And then you go talk to John and you say, Hey, you're really going to do this because we're thinking about doing it too. And we've got into situations like that and you know, either we've given up or they give up or whatever, and we just move on to a different market if the market can't supply all that additional. James: So does the self-storage purchase involves stringent requirements or stringent terms like what multi-families like day one, hard money, you know, very tight on inspection, do due diligence process? Ryan: It's extremely competitive. And it might be as competitive or more competitive as multifamily. Because when people think of storage, they're like, Oh, I've never really heard of that. I don't know what that is. And then they do multifamily and they're like multifamily is really hard. You know, there's always people doing it and Oh my God, there's so much competition. Maybe I'll go try storage because it'll be less competitive. And then they go over to storage and they're like, Oh, there's a lot of people that do this. But what the difference is there are so many multifamily properties in the United States. Self-storage, you can't even hold a candle to the wind. I mean there are 50,000 facilities total in the entire United States. So yeah, when you're talking about competition, if you're looking at a property that's a million dollars or less, no problem. You can go bid on it as a mom and pop.  When you go a million to maybe 6 million that you can reposition or that, you know, show some signs of a mom and pop operations, you're competing against the best of them. You know, the all-cash, close in 30 days, 60 days, whatever it might be. But generally what we do is we do about 10% earnest money deposit...sorry, not 10%. On a $6 million facility, we might put up anywhere from 25 to 50K. And that doesn't go hard until due diligence is completed and signed off on. James: Oh, okay. So that's not bad. It's not like day one hard money, like what's happening in multifamily, right? Ryan: No. And if we were in that space, we wouldn't play that game. So yeah, whether you think it or not, you're competing with yourself at that point. You're worried about losing that money. I mean, we have a 100% contract-to-close ratio, so everything that we've put under contract we've purchased. I mean, we had a bank pull out three days before closing, we went and raised a private loan. We did our own deal. So we've done everything to really help get the deal closed and we've got that reputation to close. And I think that people value our relationship a lot more than they do necessarily how much earnest money we put up. And we've had a broker bring us a lot of deals and just keeps bringing us deals because we make it real simple on them. You know, it's a very simple process with us. We get everything on the table. We are very transparent and as you know, in multifamily that'll go a long way. Any business, right? James: Yeah. That's true. That's true. Yeah. I mean, brokers, love people who are easy to deal with. Because you know, this is just multimillion-dollar deals and you do not want to have a tough person to work with when you're going to such a big transaction. So at a very high level, what are the value add that you usually do in self-storage? Ryan: Cameras for security, rental rate increases. James: So what, you put a camera and you get higher rental rate or it's just...? Ryan: People walk in and they want to feel secure. So our target customer is a 70-year-old woman, that's who rents our properties. So when they walk to your property, is it dark, are there cameras, is it secure? Does it feel like the fence is going to fall over? So we take the properties, we'll put in a new fence, we'll put in new cameras, we'll paint all the doors, we'll replace doors, we'll rehab the office, we'll put in notary services, we'll put in ice and vending machines.  James: Why do you need a notary service in a self-storage facility?  Ryan: Convenience. So we like to be a shop of convenience. So if somebody has got an Etsy, Amazon, they have a home-based business and they can come to our storage facility, they can drop their FedEx/UPS deliveries off at one of our properties. They can get their items notarized. They can ship, they can store. We even have a car wash at one of our properties. So, we try to be a place of convenience for people. Not that we were going to make any money on it. It's just a place where people can go and know that I rent my Uhaul truck to move my goods somewhere. At your property, I can notarize my documents, I can store my belongings, I can do a lot of different things to transact and do my business obligations. And so what we try to be kind of a helpful facility. Not all of our facility does that because not every facility even has an office. But the ones that do, you know, we sell retail. We start, you know, people pay cash, we get rid of cash payments and we go to as many automated payments as possible. We enforce the lease. You know, a lot of these facilities we take over, tenants might not even be on adequate leases. So without being on an adequate lease, you don't have an adequate lien against their belongings. You can't do an auction.  James: Have you guys done auctions? Ryan: All the time. James:  It's like Storage Wars on TV, right?  Ryan: Yeah. Yeah.  James: That really happens? Ryan: Yeah. The semantics are true or the actual process is true, but the way that it's carried out is not true. So nobody goes in person, you know, there are some old school places that still kind of do that, but we do them online. So you can go to selfstorageauctions.net, you can register. And then in your neighborhood, there could be a storage auction and you get alerted like, Oh, Hey, this unit is going up for auction. You can kind of log into your account and see, Oh, what's in there. James: All right. I can see all our audience and listeners are doing that right now. I didn't even know that. What was the website? Ryan: I think it's selfstorageauctions.net. And so as a company, what we do is we say, you know, that the storage auctions is revenue producing or whatever. They're not really revenue-producing. They're basically just to get you to get out and get a new customer in. Like we clear out the, you know, and it's the threat of losing your stuff, right? If you don't pay, you lose your stuff. James: So it's like an eviction process, I guess.  Ryan: Right.  James: Except the government can put the moratorium like what they did in multifamily right now. Ryan: The government hasn't touched us. So usually within 30 to 60 days, if you're not...so let's say, your rent is due today. If you haven't been paid in five days, you get a late fee and your unit gets locked automatically. So the gate code that lets you into our properties, the revenue management system will automatically turn the gate off.  James: Really? [26:40crosstalk]  Ryan: We over-lock your unit. You can't even get into your unit.  James: You don't pay your rent and after five days, it locks by itself? Ryan: Just like that. And then we'll over-lock you. So we'll put a red lock on your unit as well. Some of our properties will have the smart locks where it'll lock behind the door so you can't get in, you can't get into your stuff. So if you don't pay after five days, you're automatically locked out. So we liked that. We don't have to really manage that too hard. I mean, there's, you know, we have property managers are onsite staff that deals with that, but the gate code, that's automatic. And then once you pay it, we'll let you back in. But if you don't pay, you're locked out. So now you don't have access to your stuff and after 30 days we do our notices, our legal notices and then, we can take pictures of your property, do our publications and then it goes on this website and then people can buy your stuff.  And then you know, any earned income from that auction goes directly to us first, to recoup the costs of whatever the tenant owed us and then any costs of legal fees associated with it. And then anything that's left over after all of our money has been recouped, goes to the tenant, you know, cause they gotta be compensated for their stuff. So, we get paid first and then, but most importantly, we get our unit back and in multifamily or residential, they might trash the place. They're gonna do whatever they do. In storage, I mean, you can try to trash the place, but I mean, it's a box. And you know, we just sweep it out. They moved their stuff out and they're gone. And then, you know, for us, we just get our unit back and we let our customers know when they book, you know, Hey, sign up for our online auctions. You know, so they can bid on stuff and they can also know that, Hey, we do online auctions.  So a lot of places we take over, I mean, the delinquencies are a mess when we take over and that's a way to increase value. So we took over property last year, for example. And I just heard from our management that, you know, auctions were like, I mean, there were people that were 180 days delinquent and the manager just wasn't collecting on the units, they just weren't enforcing the rules. So we'll come in and we'll just follow the rules. You know, your lease says this, if you don't pay with this, you go to auction, you know, and then we make money on late fees. And some facilities that we take over don't charge late fees. I mean, if you don't pay on time, you should get charged a late fee. So there's a lot of different things we can do. You know, and plus we'll repaint, we'll redo the doors. Some doors of the old cabinet doors, you know, to open up the lock, the storage locker, we'll put the roll-up doors on them. We'll improve the lighting, we'll redo the asphalt, whatever it might be, we just get it nicer so that the customer feels safe and secure and they feel like they're getting good value for their money.  James: Got it. Got it. Got it. All right. Why don't you tell our audience how to get hold of you and your company?  Ryan: Yeah, sure. So my email is Ryan@spartan-investors.com. Our website is spartan-investors.com.  James: Awesome. Thanks for coming in and adding tons of value to our listeners and audience. Thank you.  Ryan: Yeah, you're welcome. It was nice meeting you, by the way.    

“Pivoting” isn’t just an industry term anymore - in the wake of COVID-19, educators have had to pivot as well, quickly adopting XR collaboration and video conferencing technologies just to teach their students. Educational consultant and innovation director James McCrary explains how his most important work lately is just making sure teachers and parents are adjusting to the new norm. Julie: Ok. Hello, my name is Julie Smithson, and I am your XR for Learning podcast host. I look forward to bringing you insight into changing the way that we learn and teach, using XR technologies to explore, enhance, and individualize learning for everyone. Today, my guest, James McCrary, is an educator located in Baton Rouge, Louisiana. And since 2012, he began presenting at state, regional, and national conferences such as LAC-- what-- James: Yeah, that's LACU. Julie: LACU! And FETC and CUE and ISTE, on topics around 3D and immersion technology. He is a co-founder of Singularity Media Group, which specializes in spatial awareness, and learning in augmented and virtual reality. He also hosts the VR podcast in Simulation Live, discussing the impact of immersion technology. In 2019, he was recognized as an Apple Distinguished Educator and Google Certified Educator for his work integrating immersion technology into the classroom and positively impacting students globally. Recently, he began partnering with LSU College of Education, Faculty and Research on virtual reality with pre-service educators, and as the incoming president of ISTE Virtual Environments. Thanks so much for joining me, James. James: Oh yeah. Thank you so much for having me. I mean, I love talking about this stuff. And so I think podcasting just lends itself to me just kind of rambling on a little bit, so... [chuckles] Julie: [laughs] Amazing. Well, there's so many things to talk about in education today. And I know I'd love for you to share with our listeners a little bit about what you do on a daily basis, and how you're making the biggest impact as your role of director of technology and working with schools in Louisiana to introduce immersive technologies. James: Primarily, right now my direct role is I am a director technology at -- essentially -- an elementary school through fifth grade. And the thing that we focused on the most right now is a augmented reality, both in terms of consumption and creation. And I work with other schools in the area. I'm very fortunate to have really good relationships with a lot of other directors of technology, not just in our area, but in our surrounding extended metro area, in our state, even in surrounding states. And I've been kind of adopted [chuckles] by other organizations in Florida and California that have graciously allowed me to interact with their schools, their students, and their teachers to kind of go beyond just AR and looking at other type of spatial learning, using things like head mounted display, VR experiences, both in terms of consumption and also creation and collaboration. And so on a daily basis, throughout the day, I'm working with teachers and students, obviously with their technology needs, but also integrating the AR methodologies, primarily using things like CoSpaces and Merge EDU -- that's two of the biggest ones that we use -- but also in the evenings, and on weekends, and times that I take off with other schools to implement those other levels of technology that we just talked about. Julie: That's great. I have to ask, how has that role changed for you since Covid has changed the way that students learn? You know, implementing that into schools is obviously a challenge *without* having a pandemic being a part of the solution. James: It'

James:. Hi, audience and listeners, this is James Kandasamy from Achieved Wealth through Value Add Real Estate Investing podcast. Today we have a special session with Rama Krishna from Zovest Company from California. Hey Rama, you want to say hi to our audience and listeners?    Rama: Yeah. Hi James. Thank you for inviting me on this special session. I know definitely the primary reason is we are attending so many webinars on this COVID19 impact for multifamily, a lot of other groups that we're discussing. I wanted to just compile all that strategies that I have compile and also mine as well. What I'm actually going through right now with my properties, compiling the blog posts and whatever you wanted to talk about it.    James: Yeah. Today's a special session. I'm trying to make all this podcast release. I'm actually rearranging all my podcast releases to make it really timely. So all of you guys, listeners, can we take action from whatever you're listening from this podcast and listening to podcast that was recorded one or two months ago, which is like super boring because all that is pre-Corona. I'm sure all of you guys are wondering what is this guy talking about. 3% rent growth at that time, so this is timely. We're going to release as soon as possible. Rama has done a really good job compiling fifty strategies for multifamily operators and asset managers to tackle Covid19 and we're going to go to each one of those quickly and also in detail so that each one of you can take a pencil and paper and write down what are some of the things that you can use right now. Rama, let's get started.    Rama: Yup.    James: What's the first one?   Rama: I think before even getting there, I'm reading the primary thing that we need to do here is, people lost jobs in the sense that we need to become passionate about the way how things are going. I think we are actually suffering as operators. We also have to put ourselves in the tenant's shoes and they got impacted. Some of these strategies to also have to work with them to see how they can weather the storm, including us, have to weather the storm here. Another thing is, I mean, there are federal regulations right now that we cannot evict tenants. So in a sense, even though, we can do some of these things, but the strategy is what we have before we cannot do it because of the regulations in place and then also shelter in place right now.    The first primary thing that we wanted to do to alleviate the problems of tenants is the late fee waiver. We actually wanted to not to communicate this thing until the fifth, but we did communicate before that itself, just wanted to give some assurance to the tenants saying that you're not going to charge late fee for the month of April and May. That's the first strategy you want to do. Also they cannot; they are impacted. The primary thing we wanted to do, James is when you're working with the tenant that they have an issue, you want to get a proof from them that they got laid off from their job and then put it into your resources, your folders so that in case if you're applying for any other benefits in the future, any ADL program or a PPP program, or maybe a forbearance or forgiveness, you can have all these things noted in your documentation.    The second thing is some of the tenants are not misusing this thing. There is a late fee waiver. There's a flexible payment plan, but if you're not impacted, you're not eligible for that. That's the reason. The second point where we wanted to put them into a payment plan, if they are impacted and then they can continue catching up these payments. The second thing again and then typical guidelines to the tenants saying that you need to do the shelter in place and follow the state or CDC guidelines to make sure that there are protected. The last thing that you need is a Covid19 patient in your properties and then they're spreading and they don't know what, and God forbid there's a death. There are lot of things that you need to do to make sure and also fundamentally you want your tenants and everyone to be safe. Then follow the state guidelines and what you have to do or they have to do somebody tested positive in your property. How they can do self quarantine and how you can help them also.    I know maybe there is one more point in here is to, for us as an operative to disinfect the common areas and especially, I think we'll come back to those points again in the later strategies is to disinfect the common laundry mailboxes and other things, leasing office and other things. The other thing from a financial standpoint was security deposits. When we found out about this program called [05:15unclear] there other insurance programs, even not just for this one later also the operators can use this strategy to actually use in lieu of security deposit. They can actually get into some of these insurance programs like the Rhino or like Nash tag, Lemonade, where in this strategy, James, I think you might already know. Let's say the security deposit is thousand dollars. They need to pay $5 per month as insurance and they don't need to deposit this thousand dollars. So somebody coming in new as a tenant instead of paying first month's rent plus a security deposit of say $2,000. Now the need to only pay $1,000 and an insurance program for $5 a month. If it is $2,000, it will be $10 a month. It covers both security deposits and also any damages that they do, including they haven't officially confirmed but when I talked to rhinos representative, they're saying even wear and tear. Say if we want to do and make ready and there is damage that you have under the unit it covers that. So the way how it works is, so let's say if the tenant vacates and you go and do the move out inspection and you saw overall to make ready of this is twelve hundred dollars, and you do it claim to rhino and then they pay you within 48 hours and they collect from the tenant later because it's still learning deposit. There is wear and tear or some damage happened to the unit.    James: So that is a sayrhino.com, that's what you're saying?   Rama: Yeah.    James: And there are a few other people as providers?    Rama: Providers, yeah.   James: Let me get a bit more structured here. We are on that line item number five, which is basically the first one, is look at late fee waiver. Second is look at payment plans for your residents who are impacted, make sure they are impacted. Third one is a make sure that you communicate to residents and make sure they follow the shelter in place and follow the State and CDC guidelines. Fourth is basically if they are exposed to Covid19 patients who are tested positive you want to do a self-quarantine as well. If you as a property manager knows about whether any residence has been impacted, usually a lot of property management software have given us access to additional fields in the tenant information to mark them as Covid19 quarantined and all that. I do have it recently on my property management software. So check with your property management company, so they can mark it as someone was impacted or quarantined or what's the status.    The fifth one is basically using some of the security deposit for some of the two months rents using some companies like sayrhino.com where you can use it as an insurance for evictions and if they evict out or if for any make ready, if the tenant cannot pay.    Rama: If you collected the security deposit, you can convert to a sayrhino agreement.    James: Okay.    Rama: The minimum is at least they need to have six months more left in the lease because at least whether the new person coming in or maybe like another two months are done in the...   James: But this program already existed before Covid19? Rama: No, sayrhino has 700,000 units insured.    James: So they already existed right now. So you can just use this at this stage, I guess. Use some of the current security deposit and convert it to this insurance program, I guess.    Rama: Exactly.    James: Okay, got it. So sayrhino.com and REIG insurance, call home, [08:59unclear] king.com and these are the some of the providers?    Rama: Yes, there are some other insurance providers in lieu of a security deposit.    James: Okay. Let's go to number six.    Rama: Okay. Let's say from an operator perspective you feel that there is one more point here that we can come back to this. I think I haven't ordered this in the right format, right numbering. The first thing before doing that is to privately segregate our profile tenants. Go each lease by lease and profile your tenants how exposed are they with this Covid19 impacted businesses. Are they in restaurants, are they in travel tourism industry or whatever it is to see what would be the impact of it. Say if you have 50% of your tenants are in medical profession or maybe some other which are not really impacted into that. So at least you will know yourself if you own [09:55unclear] unit, Hey, like, I'm 50% of my tenants are restaurants, maybe. Then you can actually be really alert and also do go to these programs, what we're talking about here. Talk to your Fannie/Freddie lender and see if they have any mortgage forbearance or relief. No, they already have it. Fannie and Freddie already rolled it out, for 90 days you can forbear your mortgage not to pay that. Then how the payment plan of twelve months to catch up on this 90 day payment.    But make sure that there will be some negative remark or agency loan history and to see, make sure you go through all the agreement before actually signing up. But yeah, if you're really impacted, definitely if you're going on water with not being able to make mortgage payments, for sure you should consider this mortgage forbearance.    James: Okay, good. Let's go to the next one.    Rama: Yeah. And then so that is one aspect of it. The other aspect of it is the SBA disaster loans. There is an EIDL emergency loan...   James: I think it’s called Economic Injury...   Rama: Economic Injury Disaster Loan. So that's the loan that SBA is giving up to $2 million for small businesses including rental apartment owners, there is 3.75% interest and then there is some times that you need to pay. The idea here is based on your situation you can actually apply for this a disaster loan for EIDL program so that you can weather the storm for the next three to six months or nine months. There's another loan for a payroll protection program, PPP, which I can update this as well. If you have a payroll that you're running by yourself, you can actually apply for this PPP program to get two and a half months of payroll from the government or if your property management company actually runs the payroll, you can ask them to apply for this PPP loan so that they cannot bill you for the next three months for the property management personally. James: Yeah. I think the caveat is anybody who's applying for it to be having less than 500 employees.    Rama: Exactly. I think they figured out some more than 500, but overall, yeah, up to 500. Yes. And then also thing from I think from a tenant perspective some of this one's four or five points series. If they are actually having some hardships right now how they can use some of these federal programs. They're actually sending a $1,200 to $3,400 checks every person who actually filed their taxes. Also they can apply, if they are a small business, they can apply SBA loan or they can apply a PPP loan and they can weather the storm and actually use that money and then if they get referred, they can file the taxes immediately and use that money to pay rents. Some of these aspects that you can think on their shoes and see how these federal programs can help them as a tenant. Maybe one of your tenant is a restaurant owner, then you can see how the federal programs can help them so that they maybe they can file an employment benefits and then you can tell information about that or you can find local companies which are hiring and then see if some of these tenants that actually wants to find a job right now. Then you can ask them to continue pay the rent.    James: Yeah. Let me add some more things. Some of the apartment association in many big cities have given renters resources, which includes how to file unemployment. What are the resources for them to get different types of help from different organizations. Rama: Yeah. So again, two aspects of our operations, one is income and the other is expenses? Right now we've talked a lot of stuff from income perspective and some are expenses perspective. The other aspect that we kind of brought in is with all these people talking about are expenses. So in the non-essential expenses, even send email like a message to all the tenants, memo the tenants saying that, if you have any emergency only like create a service request, non-emergency service request will be done once the things settle down. Now if you are a light bulb vendor where you can fix it yourself or you leave the light bulb at the doorstep, let them fix it. Instead of you exposing your maintenance staff to more people, either they can fix it themselves or we can drop the light bulb there or they can wait for a few weeks until these things settle down so that you can cut your non-essential expenses and other controllable expenses that you can eliminate and you can close all the amenities, pool, the common amenities so there is no need to continue maintaining them.    James: I think also you do not want to people to use that and spread the virus more.    Rama: Exactly. Those are shelter in place, not using the common amenities, throw a party in a club house then you will have 50 people infected there. Primary thing is the common amenities. You have laundry room, everybody's coming in there to do the laundry, how they can sanitize this thing or maybe one person at a time or have a roster, Hey, this building one to ten people using Monday to Monday 9:00 AM to 12:00 PM some roster so that not everybody coming in Saturday morning to do the laundry. Or maybe some mailbox to see if somebody is there at the mailboxes, have some instructions that say wait for them to leave and then you go, wait for a minute and then you can go and pick up your mail.    Some of this stuff that you can instructions at the mailing and laundry, or in any common areas. The other thing is aspect of income perspective is primarily focused on the leasing aspect. Can you put some deals on renewals or lease modifications or if you already gave notices and then maybe cancel the notices and then pause the rent increases right now to make sure that you're at least a hundred percent physically occupied and then later on 100% how it can be economically awkward as well. At least at this point right now if you can make this a hundred percent thing, James, both physical and economically, you can weather the storm for the three to six months and come back and again go back to your typical asset management strategies to increase the valuation of the property. Right now it's more a fight or flight mode right now. Let's see how to make it smoother for the next 90 days to 120 days is the strategy here.    James: Yeah. So what you're saying is rather than pushing for rent, try to keep people in the units, whether they're paying or not.   Rama: If you renew it, we're going to not increase it, let's say if you renew it in April, May, we're not going to do any rent increases. The last thing for you to do is make this unit empty right now and then we don't know what the situation of leasing activity in that building. So continue withholding rent increases, especially if you renew it in the next two months, we will not increase the rent, for example and the things that were discussed already, it'd be sympathetic and then also profile your tenants, see what jobs they do. Another strategy on this is, you don't need to pay April or maybe May but that rent will be amortized in the next 12 months. That's another strategy they're doing. Hey, you know, you're affected. We're not going to charge you for April or maybe half of May as well, but that $1,500 will it be amortized for the next twelve months. James: Okay, so you'll give them a break for one month and you take that money and amortize over 12. Rama: Yeah. Just like forbearance from a mortgage, same thing. That is amortized for the next 12 months. Same thing that you can do here, but some of these are lease modifications and see how painful it is, but whatever that is kind of, it takes it to get this thing done right and extending the leases. One more thing in the leases we can come back to later on is usually when you do a short term rentals at the three months lease, six months lease, you have a premium. You can actually reduce the premium, no premium for short term rentals. Say, hey, like, we are leasing right now. Hey, you want a six months, and then it will be same as the 12 months’ rent. So at least you can fill up your units by doing that. James: Yeah, even on a month to month. I think they can usually we charge premium for month to month, but you can either reduce it or don't charge that for now. Rama: Exactly. So I think maybe for them also they also wanted to try for month to month, three months, and then they can do an annual release after two to three months.  So you can at least fill them in coming in, let them pay, and then you can think about this after three months. The same topic we discussed before is the go to a local; even though there are jobs lost, some are trying to hire. Amazon is hiring for the warehouses, grocery chains, hospitals; some of them, they're not able to have enough staff. So you can find these in your market, in your sub-market and see and take those information and then send you to your people who actually came, Hey, I lost my job. Hey, why don't you try to go to Amazon warehouse five miles from here, they're actually hiring. That you can help to see if they can come back to the employment at least for temporary for the 90 days until this thing comes back.    A lot of these people are furloughed right now just because they can get unemployment benefits, but if they can get some other job for the next 90 days, because what if just delays more, they can get some job for the next six months and come back to the workforce later. Another thing is something similar is lot of charities and churches and they pay the rent and if they're part of the local church or a charity program now there are so many people paying rent and also their utility payments.  James: To help our residents and one good resource that you guys can use, all the listeners can use. It's findhelp.org, that has all the completion of all the organizations which are helping people in terms of money, housing all kinds of things there, so use that resource. Rama: Yeah.  And like this is the first step. So whatever that's happening for us or for them, the message to tenants is the rent is due, just because we have to have utility payments, we have to have mortgage payments, we have to pay salaries for employees. This is a laser thin business. This is not; we're making 50% as profits here. So we had to send that message properly that we also have expenses. We cannot  just not forego this thing, not paying rent. That's the message that I might not be putting into the right way here, but you have to [21:24unclear] because some of these articles in some of these markets saying, Hey, don't pay rent for three months. So it's just showing a wrong message, but they're not thinking about the operators. James: Yeah and the government or our mortgage providers did not give us a break on our mortgage. The rent is still due, we do sympathize with all the residents. Let's work out some plan. But rent is rent and it still needs to be paid in some way. So we have to figure that out and see. Rama: Then another thing is if you're doing renovations, if you have draw requests, it's already competitor immediately do the draw request because there might be some delays right now because of this demo here, the inspector might not come in to verify that renovations that you did to approve the draw request. Submit your draw request as soon as possible so that your money, you had to pay your vendors. James: So this is the capital or replacement reserve, what we're talking about here?  Rama: Exactly. So you renovated like say five, ten units and usually the bridge loans, other loans which we have escrow money. Get the draw request and then get the money at least and then you can pause. The idea here is to release what you did to now, get the money, pay your vendors and pause your renovations for some time until this is done. Another aspect is until it is utilities, because now everybody's at home. They're going to use all their deliveries for the maximum, the water, the electricity, the heaters, the air conditions, and the internet, everybody utility company is right now maxed to the capacity. So just keep it down on the utilities and see how things are going on that. All bills paid or you're doing the reps program. Do you need to increase the reps? Like whatever it is, just keep an eye on it. It'll definitely be a much higher. James: Yeah. I think because everybody's staying at home right now and the one or two months when the utility bill hits to everyone is going to be much higher and now I appreciate why all this spend people go to work, somebody else is paying for their utilities when they are at work. Now operators do feel the heavy load here, but it is what it is.   Rama: And also the load on this, if you're continuously using something like your HVACs maybe break broken, or your water, something that issues that you need to make sure that you do the regular maintenance of these stuff and then make sure that you have ducks in row. Like, hey, we're talking to the Water Company, talking to your Plummer, talking to your electrician or HVAC Company, making sure they're ready for any service request that comes in. Because if the HVAC broken or some water broken, last thing is that the tenants are not happy.    James: Correct. Correct.    Rama: So I think we discussed it the month to month of high risk tenants, rental increases on this. Yes. Pausing all upgrades and the distribution side. Another thing is we've talked about lenders, talked about the tenants but you did not think about the investors. If you're syndicating this deal or if you have the private money that you raised or whatever that you have investors in your deal, make sure that you inform them about what's going on and how well your assets are performing and what are the things that you are doing as an operator to get some of these strategies are what your strategies that you're already applying to whether this storm and maybe there are some other great topics, uncomfortable things that you need to talk to them. Say there might be some pause on distributions because we don't know what's going on here. We need to preserve the cash, preserve our reserves right now, what if this goes beyond 90 days. So maybe pause or reduce your distributions or pause it for now and then you can catch back once everything kind of settles down. That's one of the conversations you should have. James: Yeah. Make sure, I mean, just a caution to everyone who's listening. Make sure that any operators are communicating to the passive investors more frequently than what they used to know. This is very important right now. Just because everyone knows Covid19 is happening, the whole country is in a lockdown, doesn't mean that you can't communicate. So make sure you communicate all your plans and what are you doing to your passive investors? Rama: I think we kind of came through this reprint reserves. We need to make sure that you're are person maintenance; so make sure that now is the time that you have a pause. So you can actually flag kind have all your depreciated items, have HVACs these other things. Make sure that you have all of them done properly. Also, again, the same thing, use audit, full use audit to categorize your employers. So their dependents are at risk or not. James: Yeah, I mean, you can do a general lease audit as well because most of the time, right now our offices are closed for public. Most of the apartment office. So in my company, most of my staff are doing lease audits. Just as part of the normal thing, but to keep them busy.    Rama: So this is the right time, everybody give it time we are running, now is the best time to profile your tenants lease audits and make sure that what strategies that you can employ to make them in place and again, same thing as utility, like just how you can do savings of utilities. Is it a new water leaks that are happening. Let's see your old bills in the last six months or one year. See any patterns that you can identify or any other measures that you can save utilities because the utilities will be stressed in the next a few months. Again from the expenses side, completely renegotiating all your contracts and [27:30unclear] every insurance, everything that you spend, your controllable expenses like non-controllable, property taxes and mortgage. You cannot do anything. Maybe yes, if you can refinance now if you have ability you can do that, if the rates are low. But if the controllable expenses you have the negotiating ability, your pool vendor, hey, pause for a few months or maybe renegotiate the contracts, go through every line expenses that you have and try to get renegotiate these things.    There are even companies it seems, which can do like this, that can help you go through all your bills and then find anything that you can renegotiate the contract. The thing is noise notices because now everybody's home. There will be a lot of complaints. Hey, like my neighbor is making a lot of noise. Make sure that you again send it across back to the tenant notification saying after nine o'clock it is a quiet time for what it is like in the night. Any of the notices that you want to do, the courtesy notices to make sure that everybody's people are working from home. Whatever it is and again, so a lot of people kind of saying maybe on the section eight, what's yours? Maybe this is a time to think about rethink...   James: It's the best time to get section eight vouchers because that's guaranteed income for now.        Rama: Exactly. So if your property is already approved and you have a few tenants in section eight now go through, go to your city and say, hey, do you want any more? We have vacancies right now. Hey, absolutely we have so many people are looking at it and we are already approved as section eight for your property, they'll let them send your way. And you can fill up easily and these are at least for the next one to two years, it'll be like in a way standard and then not all section eight is bad, just make sure that you profile your tenant properly and then...   James: Yeah. And I also heard that the government provided a lot more funding for housing people so there could be a lot more section eight vouchers coming in and what you're saying, they're not bad people. I mean they are definitely a lot of good people there you just have to make sure that you screen them properly and make sure you get the good ones.    Rama: Yes. I think we kind of briefly touched based on this too about the [29:57unclear] and all the forgivable loans or the loans and then property managers can use some of these loans. Each LLC, that own asset can use this. Check with your lending terms to see that it's not violating any terms. There are a couple of things, I got it from the CVRE webinar, make sure that you have fire productions on the building equipment and backups and mission critical operations that you have. These are kind of into the back-end of it that we already usually ignore. Make sure that all the buildings are inspected properly by the fire inspection because now that everybody's at home, there are higher chances of some of the stuff they could make big dormant happen. Do you have your backups of emergency?  And then any mission critical operations your cooling any heating water or anything, we have redundancy on these things. Make sure that you're building physical aspects of your buildings, make sure that you do those and then if you don't have credit card payments, for rent payments, make sure to enable them and also inform tenants that you can pay rent through credit card or maybe in that you can actually give back the money or the transaction fees. Usually in a credit card payment there is a two and a half percent transaction fee. Hey, you can use credit card. If you use a credit card, let us know. We can refund you the transaction fee.    James: Yeah. That's something that we are happy because we moved all to online payment for the past one year. So now it's so much easier during this kind of thing because...   Rama: Especially if you're not yet on the credit card payment option, make sure that you talk to your property management software and enable that and then also inform them, Hey, like you already have ACH but you have an option to pay through credit card. That's another thing and also another incentive is, I think Neil was using his, if you can give some credit, if they pay the rent before fifth of the month, or if you pay April and May upfront now you'll get a $100 off or $150 off. Give them incentive to pay for the next two to three months upfront. So that if somebody has that capability to do it now they can use up the program and they can get, they can get a credit for that and make sure, again, this one is, I think should be the first stop. If you're working with the tenant, either a late payment waiver or a traded audit, lease modification, any other that you're working with them, make sure that they show the letter that they lost their job. Otherwise people will make use of these features that you would actually giving. So that's the primary and then the couple of things we already talked about the short term rent leases and renegotiating the contracts and other one is primary, the model unit. Now that nobody's coming in and seeing the units, maybe you can use your model unit as lease apartment for short term, but this is the [33:07unclear] idea and lease to traveling nurses because right now with the Covid a lot of these hospitals are actually getting healthcare professional from outside, from other towns, other places and they're hiring more people as a temporary staff, but these traveling nurses and healthcare professionals need to have some place to stay. You can go; I had to find this link, James. I'll talk to Ellie and then send it to you as well later on; you can put it into your notes.   James: Is this a link for traveling nurses?   Rama: Yeah, there is a way to find out these people and then post your apartments there. Hey, if your apartment is say five to ten miles from a hospital major hospital and you can actually use these resources to actually post, hey, we have available short term rentals, maybe for lease or not, we can give you this for the next 90 days to 120 days. That's another way to actually fill a unit. James: That's awesome, it looks like we went through the list. So let me add one more thing, which I just remembered. If you have never done a virtual 3D tour of your units, you want to prepare right now, there's a lot of photographers out there that they can do a virtual 3D two of the units. Right now that's very useful because right now we can't use our leasing agents to go and tour the units, we just tell them to go themselves or drive around or look at the pictures or look at the videos. But if they have a really nice virtual 3D picture, there'll be a really good way to attract leases to you. Rama: Rentally has a self-touring technology. You can purchase webcams. So if you're using Rentally, also Rentally is also an app into existing property management. You can put the webcams there. You don't need to be there, your leasing staffs are not exposed. So they can come in 24/7, you'll send them the lock core. You'll open the unit and you can monitor from your leasing office or whatever desk you are and then do that, Rentally has that. James: Yeah, I did look at that as well. So that's awesome. Rama, thanks for sharing this. Is there anything else you want to mention to the audience and the listeners? Rama: Yeah, I think we have some light on the other end of the tunnel. The government is helping us. Hopefully I think this will pass and we'll back stronger and stay safe.    James: Yeah. Yeah. Multifamily is still one of the best asset classes to invest in because there's so much help we are getting from all our different sauces. Imagine if you are an office or warehouse or industrial or everything is closed down, or hotels. Right now things are doing really badly in that asset classes. But shelter is part of the Maslow's hierarchy of needs, food, shelter and safety. So absolutely everybody needs housing to stay on and live on.  So thanks for coming in and hopefully we can add this as soon as possible and that's it. Thank you very much, Rama.    Rama: Yeah. Thank you, James.   

James: Hey, audience and listeners, this is James Kandasamy from Achieve Wealth True Value-add Real Estate Investing podcast. Last week we had Kevin Bupp who's an awesome syndicator and a sponsor in the mobile home park space. And he gave a lot of insight on why did he choose mobile home park and what happened during 2008. And you know, how he rebounded in his real estate career and a lot of other things. So you guys want to check out that episode.  Today we have Todd Dexheimer. Hey Todd, welcome to the show.   Todd: How are you doing?   James: Good. Good. Very good. Very good. So Todd owns almost 550 units and he has been buying in Minnesota, Wisconsin, Kentucky, Ohio, Tennessee. Is that right, Todd? I mean, is this all that you're focusing, which is completely different from the usual guests that we get who buys in Florida and Texas, right? So I want to really dive into these States, which is not the usual focus or not the usual point of discussion that you know, a lot of multi-families syndicators and investors have. So let's talk, you know, Todd, why not you introduce yourself in case I missed out something?   Todd: Yeah, sure. I mean, you know, a little bit about my background. I started doing this business actually right when the crash happened. I started in 2008 so the timing was great. At the time people were telling me I was stupid and crazy because the sky was falling, you know, but luckily I didn't listen to them. I, you know, buck the Trendon instead of running away, I ran headfirst in. So started buying single families, did a lot of fix and flips, did a bunch of them, probably 150 or so, and was really, they'll want you to focus on rentals at the whole time. So while I didn't have any money as I flipped, I would just keep a little bit of that cash that I would get from the flip and buy some rentals. And that's how I was able to build up my rental portfolio.    Bought a lot of one to four families, some small apartments, did that all locally in the twin cities. And I got up to maybe close to a hundred units just under that at one point in time before I kind of transitioned them. Yeah. Out of the flips, out of that smaller one to four family stuff and into apartments, I've since sold a few buildings in the twin cities, but I've been buying in mostly out of state; in Cincinnati, Kentucky area Tennessee. That's been my main focus now is just buying... I went from buying kind of 20 to 30 unit type buildings to then now and buying larger hundred-plus unit buildings. So that's my main focus now is looking at a hundred plus unit buildings and doing value add syndication.   James: Awesome. Awesome. I mean, looking at your bio, you also have done some office, some ski resorts, some mobile home park. And finally, I think now you're focusing a lot on, I mean, you have been focusing a lot on apartments, right? And why is that? I mean, didn't the other businesses make a lot more money than apartments?   Todd: Yeah, I mean, everything made plenty of money. They all make sense. And that's the beautiful thing about real estate and the confusing thing about real estate is it all make sense, right? I mean, you know, I can make a lot of money in office, I can make a lot of money in retail and warehouses and all kinds of stuff, and I can make money in development and owning land and mobile home parks. I mean, you talked about Kevin Bob, he's a fantastic guy. He's making a lot of money, I'm assuming, in mobile home parks. And so that's the beautiful thing about real estate, but you got to pick your focus, right? And so, yeah, I did some development, I did some land, like you said, I owned a ski resort, which is just super random.   James: Do you still own it?   Todd: I don't, I sold it. It was a distraction. It was a beautiful place. Look, it was like 190 acres or something like that. It was beautiful. A really nice river ran through one of the edges of the property. It was nice hills and it was an amazing property, but you know, it was a distraction and you've got to get focused. And I actually talked to my...   James: Can you hold on? Sorry, my dog is disturbing. Hey, Todd so it looks like you have done, you know, quite different types of business, right? Like an office, some ski resort and some mobile home park and you know, you started with smaller common, complex and all that. But finally you ended up focusing a lot on a common complexes. Right. And why is that?   Todd: Yeah. because apartments make you a lot of money. No, the answer is I needed to focus on one main thing. And I could've chosen office, I could've chosen retail and warehouse or buying, you know, distressed land, like the ski resort and I did all that. But there's just no focus when you're doing just random stuff like that. And I wanted to really focus and I wanted to build something big. And so ultimately, it was a choice of, okay, what do I really enjoy and what do I really want to focus on? You know, the beautiful thing about real estate, there's so many different options, every way makes money.   And I've gotten friends that do note buying. I've got friends that, you know, flip houses that wholesale, that do land development, everything. And they all make a lot of money if they focus on it and they do it well. So that's why; I just had to focus. I just had to have one niche that I picked and ultimately I was most attracted and most led to multifamily.   James: Awesome. Awesome. So looking at the States that you have invested right now, I'm not sure whether, you know, like the popular state, I would say like Texas, Florida, Las Vegas, Arizona, Phoenix and all that, right? I mean, how is the market different compared to this populous state? How's the market in Minnesota, Wisconsin, Kentucky, Ohio, Tennessee, different from the other markets that a lot of people know?   Todd: Yeah. So first of all, Minnesota is a totally different market than all of them. Minnesota is a extremely competitive market. You and I talked offline. I mean, it's a super competitive market. There's very little inventory, very competitive. Cap rates are extremely compressed. almost impossible to find deals. Not that you can't, but I mean, extremely hard. There's just not a lot of deals that sell, especially when you're talking a hundred-plus unit deals, just not a lot of deals itself.   James: The twin cities are there, right?   Todd: Yup. This is Minneapolis and St Paul, the twin cities. You know, if you go way out state, it's a different story, but you don't want to invest there cause nobody lives there. So if you're going to remain populous, which is Minneapolis, St Paul or the Rochester area, which is where the male clinic has...a lot of people know what the male clinic is. It's one of the best hospitals in the US, those are the two areas of most people are investing in and it's next to impossible to find a deal.   James: What is so special about these twin cities? I mean, now it's like what Phoenix and Las Vegas, but past three, four years, I mean, I used to read Marcus and Millichap report and they always say the top city to invest in is twin cities. And I can never Google it. And now you're telling me that it is the twin city, right? What's the real definition of it, where it's located and what is so special? Why is it the top city?   Todd: Yeah, well, look, I mean I think we're the 16th largest Metro in the US, if I'm correct and I think we've got 3.8 million people in the whole Metro area, which we called the twin cities. We have a large portion of Fortune 500 companies are based here. It went down recently because there have been some mergers, but they're essentially still here. It's just a couple of companies that merged. So we've got a very large amount of Fortune 500 companies. It's just a stable, steady place, right? We're never going to have big population gains, but we don't have population loss and our rents never go skyrocket up. I mean, they've skyrocketed recently, but we call skyrocketing three and a half percent increase, you know, that's skyrocketing for the twin cities as far as rent goes.    But we're going to see, you know, that just stable, that really stable, it's never that up and down. It's not like a Phoenix, it's not like a Florida, it's not like that. Just that roller coaster ride, we're just straight. And so people like that. Our occupancy rate in the twin cities is, I mean, I think we've now come down a little bit, but we're at about 97% occupancy up until fairly recently.   James: On average. Wow, that's really good.   Todd: That's amazing. People couldn't find places to live. I mean, if you were an okay landlord, you were full. The only people that weren't full were just the slum Lords and even they were close to being full.   James: And that probably could be the reason why, you know, you can't find inventory, right? Just there's no inventory. Right.    Todd: Yeah. Yeah, it's good. So the difference, that's one market. And then, the other markets that I'm really focused on are going to be like Cincinnati. Now as you start to really look, Cincinnati's in some of the lists now, market is to be looking at, and I just looked up the other day, like the cities with the best population growth, job growth, and Cincinnati was on there. So you're starting to see the markets that I'm invested in beyond those lists and they weren't on there before. So basically what it was is through my research, I wanted to find markets that hit all the criteria that I'm looking for. That's job growth. That's population growth, that's strong government and independent support for businesses, bringing in businesses. That's good rent affordability. That was huge on my list. I wanted cities that had good rent affordability, opportunity to purchase assets that were cash flowing with decent cap rates.    I wasn't necessarily looking for like a 10 cap, but I want decent cap rates. I wanted a market that I didn't feel like compressed to the point of where when we do see whatever recession is coming next, that they're gonna go way back up. And so those were the markets that I really tried to focus on. And that's what I feel like I've found. Now, since I found them, they have definitely compressed a lot more. You know, it's challenging, but when I first started in those markets, there's a lot of opportunities and there still is.   James: Got it. Got it. So how was your experience from going from buying and flipping houses into syndication, right? Why did you make that leap into syndication?   Todd: Yeah, flipping houses suck. It's a lot of work.   James: I mean, I've tried two times and I promised myself I'm not going to do it again.    Todd: Yes. It's just so much head damage in flipping houses. And can you make some good money? Yeah, I made some good money. I'm not gonna say I didn't, but there's just a lot of liability, a lot of head damage. You're dealing with a lot of contractors and you're in use always, and homeowners and emotions and it's just...you're always grinding. You're never...not that like I care about it, I enjoy grinding. I mean, I do it in multifamily right now, but I feel like I'm actually getting somewhere; where with the flips I felt like I was on that hamster wheel or I got to buy one and I got to immediately find another one and I'm always like running in a circle. And so that was kind of the reasoning that I wanted to get out of it.   Plus I'm paying, you know, short term capital gains or ordinary income, I just didn't like that. Now multifamily syndication made a lot of sense because I had a lot of investors. When I was doing flips, I was bringing in private money to my flips. I wasn't using hard money. I was using just private money. People I've met that wanted to invest in my deals and that's how I got them involved. And so when I wanted to transition into multifamily, it was pretty easy to say, Hey, this is what I'm doing. If you want to come on board or not. And all my investors said, yeah, let's do it.    Ultimately that was what James I wanted to do from the very start. When I first started this real estate journey back in 2007 when I started reading books, before I ever bought anything, I read several multifamily books, one by David Lindel called multifamily millions and another one by Ken McElroy called ABC's of real estate investing and I loved those books and that said, this is where I want to go. And I had always been kind of obsessed with it, but I had no clue how I was going to take down $1 million-plus building. And so, I just kinda got scared and let it fall by the wayside.   James: So how did you take that leap? Who helped you and was it like a aha moment? One day you wake up and you bought it or?   Todd: I had a business partner and ultimately it was time for us to kind of separate and go our own ways. I wanted to do something different than the flips and wanted to take this multifamily leap. I started by buying some smaller, you know, as I said, 10 to 20 to 30 unit buildings and that was making a big step there. And then just started like listening to people on podcasts and going, no, why am I doing this? I hired a business coach too and I remember talking to him and going, I think he said, like, what? Why are you buying another 20 unit? And I said, well, you know, like I got to keep on buying these and then eventually I'll get up to, you know, hundred-plus unit buildings. Why not do it now? And I'm like, Oh yeah, why not do it now? So it's just like somebody just needed to tell me like, what are you doing? Let's just do it now. Like, and it wasn't like, Oh wow, that's a scary thing. When he said it, I was like, well, yeah, yeah, let's just do it now. You're right. Yeah. So I don't know, sometimes you just gotta be told like, what are you doing? Just go do it.    James: Just go do it. Yeah. You just need someone to, I mean...   Todd: Just a little kick in the pants sometimes.   James: A little kick or a knock on the head, hey, you can do it now. Right. Why not you do it? Right. So that's very interesting. So what are the things that you when you started syndication, right? I mean, when you look at a deal, when you get a deal, I mean, first of all, you're already finding it hard to find inventory, right? But whenever you find an inventory that comes to you, what kind of things do you look at?   Todd: I'm sure kind of the same as most people. I'm looking, you know, beyond the city and the neighborhood, which I already kind of mentioned. I'm looking for that population growth, that job growth, I'm really digging into the neighborhood too. And I want the neighborhood to have the same fundamentals that I'm looking for in the city. I want that specific neighborhood to have too and low crime and that growth is what I'm looking for. So beyond that though, as property-specific, I'm looking for an opportunity that has something wrong with it. And it might have really high expenses that I can take down. You know, utilities are a big one where people aren't, you know, we can put some like led stuff and we can put low flow toilets and we can do energy-efficient stuff that's really going to cut down on our bills and increase our ROI.   We can do RUBS which is ratio utility billing and where we're charging back to the tenants,  those people who don't know. And then potentially, you know, depending on how the property is being run, there might be some other potential small things that we can do. And then of course on the income side, we're looking at can we raise rents by doing improvements to the property? We don't like to raise rents just to raise rents, I like to provide something good for my tenant base. And then, you know, there might be other things, like there might be a just occupancy issues that the other management company or other owner just wasn't on top of things, collection issues. Potentially. there are crime issues or there's other just management issues at the property where they have the wrong tenant basin and we can correct those problems that are happening.   James: Got it, got it. I mean, out of these five cities, five states that you invest in, is there any difference in landlord friendliness within this city?   Todd: You know, they're actually all fairly similar as far as this landlord friendliness. They all have different quirks to them. You know, some of them might have to give a like a five-day notice to the tenant before you can evict them. Some of them, you can't set their stuff out on the curb right away, you have to give them, you know, like in Minneapolis, if you evict a tenant and they leave stuff at the property, you have to hold onto that stuff for 28 days. That doesn't have to stay in the property. You can put it in storage or whatever. They have time, it used to be 60 days but they have time to be able to get their belongings. So they're all a little bit different. But I would say, all in all, they're kind of probably less right in the middle.   You know, I hear some other States are being better. For instance, Texas I hear is really good. But yeah, you just kind of raised your eyebrows and rolls your eyes a little bit and I've heard that too by other people. And I think what happens is, you know, and not saying every state is the same cause there are some states that I'm sure are really hard on landlords, but I think if you know and understand the laws and understand what you can and can't do to get your tenants out and that type of stuff, most States are just fine. Like it's not that difficult to move tenants. So, for instance, Minnesota, a lot of people have that kind of misunderstanding. I don't know where it comes from that you can't kick a tenant out in the winter and that's not true.    My company just evicted one of our tenants and there's date to be sat out is, I think December 12th. You know, so you can, you know, it's winter here. I mean, December 12th is...next week is going to be zero degrees out. So, you know, you just have to understand it and if you understand the landlord laws, the tenant laws, you're going to be just fine. So get the right people around you, surround yourself with the right people.   James: Got it. Got it. And also, I see in your bio that you have a passion to teach undeserved youth and adults on how to create financial independence. So can you explain about that?   Todd: Yeah. You know, so I've volunteered for a nonprofit called Junior Achievement, a lot of people know that and my passion and I don't know exactly where I'll take it, but my passion is just to continue to do that and raise awareness, raise money and for people who don't have the opportunity to have what we have and do what we do. A lot of people don't even know a business or being a business owner, being an entrepreneur is even like a possibility for them. And it's possible for everybody. Cause there's a lot of people that come from nothing especially, you know, I see people from different countries come here that have nothing or start with nothing and they do amazing things. And there are people living in this country that just don't even think it's possible. Like they don't know that it's there. So I want to just really educate people.    The other thing is I love to figure out somehow how to get financial education into the schools. And that's a tall task, I know, and it may never happen, but that's one of the things I really want to do. I used to be a high school teacher. I really think it's important to teach our youth about how to be responsible financially and just about the amazing opportunities that there are out there.   James: Yeah, absolutely. Especially in the US right. Where it's a capitalist country, right? Anybody can, you know, make a lot of money, as long as they're willing to work hard, you find the right people to be coached on, right. You're on the right path, you work hard, you should be able to make a lot of money. I mean, it's completely different from a lot of other countries out there. I mean, people may not appreciate how much freedom to create wealth in the US unless you have travel outside and you have lived in other countries, right? So a lot of people did not know that, so that's really good. Yeah. I mean, a lot of people take it for granted and a lot of people do think that somebody else owes them something.   Todd: Yeah. It's a hard mindset to change. I mean one of my very first tenants, and this is partly where it came from, one of my very first tenants in a single-family house, she moved in. She had section eight and she said, "You know, I'm not going to have this section eight for very long so could you take me when I drop out of section eight?"  I said, "Oh, absolutely, yeah, as long as your income and you meet the requirements, no problem."  "Okay, I'm going to do that. I'm getting my real estate license. I'm going to get out of this. My mom had section eight, my grandma had section eight and I don't want to be part of this circle." She never got out of section eight. I had to actually evict her because she wasn't even paying her portion of the rent and I don't know where she is at today. I'm hoping she's out of section eight but my guess, my gut is she's probably still in section eight and never learned really what to do and how to get out of it. And I'd like to be able to help end that cycle.   James: Yeah, that's a very good thing that you're doing because I think sometimes they need someone in the business circle to go back and, you know, just tell the possibilities out there in the business world. So, yeah, that's very important. So, Todd, when you look at the multifamily apartment, I'm presuming you're doing a lot of value add deals, right? Is there anything that you find in terms of what the most valuable value add when you're doing all this turnaround?   Todd: I mean, it's different for every project, but one of the things I like the most is trying to find expense, just expenses that we can cut but efficiently cut. Like I don't want to just cut repairs and maintenance because those are going to come back. And they're going to probably come back and bite me because I tried to cut those and be cheap. But now if we can do things, we can cut down by buying in bulk, by buying the right materials, by being efficient at our scheduled repairs versus just randomly doing it when it finally breaks. If we get into a more of a rhythm and a schedule, we can actually cut expenses, which a lot of people don't understand. Like how is that possible? Cause we're always on the property and always scheduling things.   But preventative maintenance is actually going to save you money versus having something that breaks, I mean, think about a furnace, right? If you go and you change the furnace filters, every month, you're going to extend the life of your furnace by potentially 10 or more years just by doing something like that. So that's one big thing. The other big thing with expenses and this is my favorite one, and I already mentioned this, is the utilities and cutting back on a lot of the utility costs by doing, there's a lot of different things we can do. We can replace the toilets with the low flows, we can put on a water reading system where it can tell and it can send us a rating if we have a water leak. You know, just silly things like that that seem like they shouldn't, you know, save you that much money, end up saving you a ton of money.    And the reason why this stuff is my favorite, the expense reduction is my favorite is because this is a recession-proof system, right? If we cut our expenses and a recession whacks us, guess what? Our expenses are gonna go way up. But if we jack our rents up today and a recession happens, what happens with our rents? They go back down. Right? And they do, and I don't care what people tell you that multifamily rents don't go down, they do. And so, so raising rents while I like that, and I'm not going to tell you we don't raise rents, but we know that by cutting expenses down, as long as we do it the right way and not just cut to cut because we want to be cheap, but if we do it the right way, that's recession-proof and that's going to continue to keep our NOI high during the recession.   James: That's a very interesting perspective because yeah, you're right. I mean, rents can go up and down, right? But once you optimize your expenses, you're probably going to be, you know, sticking to it, right? So you could invest on your expenses. That's a very interesting perspective. That's good. So Todd, let's go to a bit more personal side of it. So do you have any secret sauce to success? I mean on your personal side?   Todd: You know, I mean, there's no secret sauce, right? It's all out there. It's all about yeah, several different...if you can do the few things, focus, following one course until success...keeping yourself completely focused that's extremely difficult, right? But because we got so many distractions out there, but limiting those as much as we can. You know, never giving up, always pushing on, always continuing to persevere, being consistent and persistent. Those are all really big. I mean, it's very easy in this industry and in any industry to get kind of discouraged. You know, you get beat out on 10, 20, 30, 40 properties and you don't get one and you get discouraged. Look, I haven't bought a property since May. Do you think I'm excited that I haven't bought a property since May? No. I would love to have a property right now under contract, but I don't.    But I'm not discouraged. I'm going to keep on going and keep on pushing on and keep on putting on offers until I get one. So I think those are just really important things to focus on. I think obviously you need to be clear, you need to have goals, you need to understand where you're trying to go with this business. Those are all so important. So there's no secret. I wish there was and I found it, but you know, it's hard work. Being an entrepreneur can be lonely. That's out there all alone. You're getting your butt kicked in but it's a fun business at the same time, there's a lot of reward in the end when you're building something bigger than yourself.   James: Yeah. It's interesting. And even on the previous podcast, we were talking about how the world has changed compared to like past five to six years to now. Because now with social media you feel a lot of FOMO, right? Because you start seeing people are closing deals and doing deals and you are like, Oh, I didn't buy since March. You know, so you have to really, really control your fear of missing out. Especially when you can see everybody, what's happening.   Todd: Stop comparing yourself to others. For one, you don't know what others are doing. You don't know what type of ownership structures they have or anything like that. And when I look at my properties and I really probably dive into them, I have a really good ownership structure on my properties and some people that have three times the amount of units, four times the amount of units than I do, they probably have less ownership, less overall, whatever you want to call it, equity than I potentially have. And so if you want to compare yourself to others, you're always going to be disappointed. You just have to look at yourself and go, I'm happy where I'm at today. You know, where are the goals that I have for myself in the future and where am I today and what do I need to do to keep on pushing on? That's how you gotta look at it. If I look at what you're doing and what everybody else is doing, what Kevin Bop is doing, I'm going to be disappointed in myself. I'm going to want to buy these properties and I'm going to end up doing stupid stuff.    James: Correct. Yeah. I mean sometimes it's surprising. Sometimes people can claim they own a half a billion dollars in assets, but he may be poorer than the guy who owns a hundred units on his own. Cause they had half a billion, they probably own like a what, 10-20% out of it and out of the 20% they probably own like...   Todd: Or half a percent.   James: 30% out of it. And out of that 30% they probably gave so much money for all the capital raises that they are hiring.  And they probably wouldn't do the 0.001 of that billion. Right. So you know, I mean just audience, I mean, you guys really want to make sure that you don't get caught in all this marketing hype that you're seeing in Facebook or LinkedIn. So the real guys are really working. So you'll be able to identify the real guys just by talking to them in terms of what are they doing and how are they portraying themselves? And, you know, talking to their passive investors.   Todd: Yeah, yeah. I mean, there's a lot of noise, like you said.   James: It's a lot of noise and sometimes the rise of social media, I mean, you have a Facebook group. I have a Facebook group. Sometimes they know the amount of I mean just in general, Facebook itself, there's so much of noise out there that it creates a lot of FOMO in a lot of people, so you have to be really watching out for that. Yeah. Was there any proud moment in real estate that you think I'm really, really proud of that moment? I'm really proud that I did something that's gonna stay with you for a long time?   Todd: Boy. you know, I guess just getting started from the beginning is probably what I'm most proud of is that well, like I said at the beginning, everybody goes 2008 that was an amazing time. you're a lucky guy. But at the same time ask yourself this, did you invest in 2008? You know, most everybody listening has to say no because they were either, well, maybe too young or they're running the other way. And I was young in 2008 but I just took that risk, I believed in it and I saw what was possible. And so that's probably what I'm most proud of when everybody else was running the other way, I ran right to the fire hydrant.   James: Yeah, yeah, that's true. I mean, even now it's hard to find deals. I mean, it was the same thing in 2008, it's hard to find deals. Even in 2010, it's hard to find deals, all the time. It's always hard to find deals.   Todd: Well that's the thing is, and you said it, that's perfect right there. And I'm glad you said that because it's always hard to find deals. It's always easy to say there was a lot of deals back then. We might be saying in 2025 that every deal in 2019 and 2020, we should have bought. We don't know right now, but in 2011, 2008, you know, all those years while it was happening, there was not a lot of great deals to buy because the market was totally different than it is today. And you didn't know where it was going to go. You just didn't know. You have to buy on today's fundamentals. You can't buy on to tomorrow's fundamentals because we don't know where that's going.   James: Yes, absolutely. Absolutely. Hey Todd, why don't you tell our audience how to get hold of you?   Todd: Yeah, so I've got several things. If they want to listen to my podcasts, they can definitely listen to that. It's Pillars of Wealth Creation. They can reach out to me if they want to learn more about my company and invest in that kind of stuff. They can reach out to me at my websites venturedproperties.com or they can email me, todd@venturedproperties.com. And then I do coaching as well, run some mastermind groups and coaching. And if they want to learn more about that, they can either email me at the email address or they can go to my website, which is coachwithdex.com as well.   James: Awesome. Todd, thanks for coming on the show, you added tons of value. Give us a lot of perspective of different markets that I'm not familiar with and I'm sure a lot of listeners are not familiar with and how did you, you know, came up in life and you know, you have been giving back as well. So really happy for that. Thank you. Todd: Yeah, definitely. Lots of fun. Appreciate you having me on.   

James: Hi, listeners and audience, this is James Kandasamy from Achieve Wealth True Valued Real Estate Investing Podcast. Last week, we had Rich Fishman(?) with 8,000 units. Almost half of which he owns by himself and he had bought over 20 years across five to six different states. And he gave us an outstanding overview of what happened during the crash of 2008. Was it true that everybody needs a roof above their heads? And that's what a lot of gurus are telling us in multifamily or is it true that multifamily has the lowest default rate? You will definitely need to listen to that podcast. Because he went through the whole downturn with all his multifamily(s) and came back up after the cycle and he gave a lot of awesome perspectives. Today, we have Kevin Bob. Hey Kevin, do you want to introduce yourself? Kevin: Hey James, I'm excited to be here. Yeah, I'll give you the quick overview for sure. So, I have been investing full time in real estate going for on 20 years now and I got started like a lot of folks did with single-family investments. It was just what my mentor was doing. It's what he was good at and what he taught me and so I didn't reinvent the wheel. I did exactly what he told me to do and that evolved into multifamily investments and other types of commercial real estate. That led me up to the crash of 2008. That's a very challenging time. It kind of was reborn in 2011, 2012 and was introduced then to mobile home parks. Which is what we focus on today. So, for the past seven years now, we've been solely focused on mobile home communities. We own parks in thirteen different places throughout the US and that's our niche of choice as of now. James: Awesome. Awesome. I mean, Kevin is being very humble. So, just to give you guys some background when I was in my W2 job, one of the first podcasts that I listened to was Kevin's podcast. I mean, the podcast is called Real Estate Investing for Cash Flow With Kevin Bob and it's an awesome podcast. It focuses a lot on commercial real estate and I really learned a lot when I was in W2 and I was listening to it in the car. Are you still doing the podcast, Kevin? Kevin: I am. Absolutely. I do two podcasts. So, I do the Real Estate Investing for Cash Flow Podcast and then about three and a half years ago I thought it was a good idea to start a second podcast as if I wasn't busy enough already. And I started the Mobile Home Park Investing Podcast, which is specific to that topic. James: Got it. Got it. Kevin: James, I remember the first day we met. Not to interrupt you but I always joke with you every time I see you because I got a weird memory. I forget a lot of things but I remember the odd things and I do those free Friday calls. I've been doing it for like five years now. And I remember that's how you and I originally met. It was during one of those 30-minute calls on a Friday and I don't recall why I remember this part of our call but I had been making lunch with my Bluetooth in while we were talking about a multifamily deal that you were taking down in San Antonio, Texas. James: Yeah, it was my second deal. I was buying 174 and have you found it on our yellow letter marketing campaign. It is very interesting because when you had your podcast, you announced it that you're giving thirty minutes of your time and I was like, ‘Wow, that's awesome. I'm going to talk to a celebrity.’ Right now, I do offer like fifteen minutes of my time for whoever wants to talk to me. You just have to send me an email at jamesatachieveinvestmentgroup.com. We're not big celebrities.  We're just normal people. Kevin: I get as much value from those calls as the person on the other side. That's how I like to think and you just never know who you're going to meet on the other end of the phone, right? I mean, that's how I that's how you and I met. You just never know and so I think that you have to keep that normalcy in your life and I enjoy those calls. I’ve met a lot of great people on the way. James: Surprisingly, I still remember the day you called me and the moment you called me. I'm not sure why but that was like probably five, six years ago. And I don't remember my other calls. Kevin:  Yeah, yeah. I have been on for five years. Yeah. James: Yeah, that's awesome. Awesome. So, I mean, I want to dive deeper into mobile home parks. I can see you have like a 150 million real estate transaction. Is it all mobile home park? How many parks do you own right now? And can you give those kinds of details? Kevin: No, we don't have. Our current portfolios are not 150 million. That's just that's like my transaction for the principal. You know, investments over the years. James: Thanks for being honest, Kevin. Because a lot of people misuse those big numbers to do their marketing and then we find out they don't have anything. They're probably on a passive investor and that's really awesome that you're being very upfront with that. Kevin: Yeah, I’m the majority principal in the parks we own as far as on the GP side and things like that. So, we'll get that clarity out there as well. James: Awesome. Kevin: We're not really sellers. So, to answer your questions about what we own today. We've been teetering around like the 2,000 mark. We go above it. We go below. We have a park that going to be closed in a week and a half. We sold a park earlier this year and then we're going be selling one in probably February next year. That's in contract currently. We got one that we're closing on in 45 days, which is 215 lots and so we keep teetering around this 1900-2000 mark. We've really been evolving our portfolio by selling off some of the smaller properties and by selling off some of the properties that we don't really have an interest in scaling in a particular marketplace or maybe it's just one that just doesn't fit our model moving forward. I don't know how else to answer it other than that. So, that's where we're at today. We're really long-term cash flow investors, though. That really is our business model. It just as far as the selling side of things I like to take advantage of an opportunity when it arises. That's one thing I did not do before 2008. I never would sell anything and it came back to bite me at that point. So, I am not a seller. However, I will sell when the timings right the price is right. James: Yeah. Yeah. Let's talk about that experience. Because I heard about that in your podcast and so you are doing single-family homes before 2008 and you were doing very well. Kevin: And multifamily but mostly single-family was our focus. That was our business model. It's what we were very competent at. We had acquired a few hundred multifamily doors over the years almost by accident. We didn't really put much effort into it because deals would just come our way like small multifamily stuff. Thirty-six units forty-eight-unit type properties that we just kind of threw into our rental pool. However, the biggest part of our model and the thing that took the most time and energy was a single-family. You know, buying the single-family rental properties and managing a portfolio across multiple different counties was just very inefficient. And it's unfortunate because I think we just got very complacent with our model. You know, we were we felt we were really good at it and we never took the time to be honest with ourselves about how inefficient that was and that we should have just taken our efforts and converted them over to multifamily at that given moment. I think that we would have fared through the downturn a lot better. The single-family properties… it wasn't really the single family that sunk us during the downturn. It was a whole mixture of ingredients. You know, Florida was ground zero for the crash. A lot of our properties, not only did they lose within a year but they also were upside down. Our leverage point on the front side was originally somewhere in between the 65% to 68% range. So, we were very low leverage. Most of them were upside down underwater within a year. Another big thing in Florida that really was a major impact on us was there were a lot of speculative single-family builds happening back then. I don't know if you remember back in that heyday. I guess you could say that was back when a new build property in like Vegas or Phoenix or Southwest Florida would literally flip three times before it was ever even occupied. Before it was ever finished. It was crazy. There was like thousands of new home builds happening in Southwest Florida for a population that wasn't really coming in. So, the big nail in the coffin for us back then was a lot of these builders that had these properties who weren't selling and they started renting them out. And so now, they started pulling the populations away from our rental properties and they offered better incentives. Because what they had was a new product. So, we had an occupancy issue. We were under wonder water value and like it's just a perfect storm and it was ugly. It wasn't fun at all. And the banks at that point weren’t willing to work with us. This was like a year within entering into this downturn. The banks didn't have loss mitigation departments. They weren't prepared for this and so we struggled with a majority of our lenders to even do work out deals or loan modifications. James: Yeah, I read some books about how the lenders can be nasty during the downturn but now they're super nice. Kevin: I think they got a lot more flexible. Because they had to. In the first year of the downturn, no one knew how bad it was really going to get. It was like ‘Are we at the bottom? Are we at the bottom?’ I feel like that question was asked for many years before it's like, ‘wow, it's 2011 and it's still messed up like things are still fairly bad.’ You know, I think it took the bank's a while to realize that and they even put the infrastructure in place to manage all these defaults. It was a disaster for the banks as well. I mean, they had more defaults than… they had to build entire departments within their companies to manage this onslaught of default. So yeah, it was a challenging time for everybody. James: Do you think you could have done better if you had a lot of non-recourse loans? Kevin: Yeah, absolutely. I mean, as far as my personal assets being attacked and things of that nature absolutely. And I think there is also a lot more flexibility with the non-recourse lenders to work with a borrower because they have quite a bit of leverage. You know, another thing that hurt us pretty badly on our part was a lot of our apartment properties and a lot of the commercial loans and a lot of times we would package up like eight to ten or twelve single-family properties and put a commercial loan on and it takes money out. That was kind of our model. A lot of that debt was shorter-term recourse debt. It was five years,you know, either resets or five-year balloons, twenty-year [inaudible10:23]. What happens we didn’t default on multifamily. However, after all the credits were going bad on the single-family stuff and we started having issues there. We couldn't get new loans when the time came due for them a couple of years later. We couldn't get any debt in place. We had to sell things for basically fire sale prices and give them away. We basically either gave it back to the bank or did some minor workouts, did short sales or had to sell at fire-sale prices. It is what it is. I learned a lot from that period and things move on and I've learned a lot from it. And I think I'm a stronger investor and a better investor nowadays because of it. James: Absolutely. Absolutely. So, you brought up three or four cities that are very, very high growth right now.  We’re at the late stage of this cycle. Which is similar to 2008 before that. They are Phoenix, Las Vegas and Florida, right. So, do you think we're in the same stage right now because they are one of the highest growth rental rates for multifamily? I would say I'm not sure how much you would be able to compare multifamily at that time.    Kevin: I think the reasons behind the crash back then are a little different. I mean, back then the lenders were so loosey-goosey. Because anyone could get a loan and I mean anyone. Even a waiter who just started the job yesterday. Who had no provable income could get a loan on a property. You know that that's one thing that hasn't gone back to the way it used to be, lending restrictions are still very tight. So, I don't think that we have that fear. I'm not an economist and by no means am I an expert here but I don't think our fear should be related to anything that was similar to back in the 2007, 2008 crisis and what caused that. So, I'm not sure what it could be. I know that there's a huge demand for multifamily. There’s a pent-up demand for supply still in a lot of these markets based on population growth. I think that the bigger risk lies and like A class stuff or like some new developments as far as like, you know, the game of musical chairs. It’s about who's ultimately left holding the bag. I think that what you do as far as like BNC grade apartment complexes are very similar to our business and that as long as you provide a clean, safe and high-quality product at affordable prices. There's always going to be a demand for it no matter what happens. I'm a firm believer in that and that's played out time and time and time again and that you were making mention of the last guest you had on. I'm going to give listen to the show but what was his take? You know, what did he tell you was the ultimate outcome of his multifamily holdings through that downturn? James: Yeah, it was very hard for him during that downturn. I mean, He has to cut down a lot of it and if I remember correctly the default rate was pretty high. It was like almost 8% where a lot of people did lose their property to the banks. Kevin: I wonder if that was because they were over leveraged but I'm not talking about him though. I was talking about the operators. See that's it leading up to that recession and the last time people were overpaying for apartment complexes and if you recall one of the big the big hot trends were buying an apartment and doing a condo conversion. So, you saw people buying apartment complexes for valuations that had no relative nature to the actual NOI that was in place. It was all based on a pro forma exiting out as individual condos and a lot of those condo things failed miserably. Anyway, how did the guy you interviewed fare? James: I think he was not talking about condo conversion. He was just talking… Kevin: I mean as far as multifamily investments. How did he fare? How did his investment go? James: He did say that it was pretty bad for him and for a lot his friends and who were buying at that time. Kevin: Specific markets or…? James: Across the country and he has been down twenty years right now. I mean, he has like a thousand units right now. The key thing is I mean everybody says ‘everybody needs a roof over their head.’  But he's a says that people become creative on how to get a roof above that they’re head. They double up. They live in their basement. So, it's not like everybody's going… Kevin: Yeah. Well, I think another thing that changes is  the quality of your prospect changes as well. You know, people lose their jobs. People miss payments on their credit cards.  They get bad credit. They get into this revolving cycle or downward spiral. And so, although everyone does need a roof over your head, the quality of that prospect might change. It might actually deteriorate over time but what you can really get to fill that unit which a lower quality resident typically is going to equate in a higher turnover, rate higher expense and maintenance costs associated with running that property. So, I think that there are other factors that are derivative of a downturn  even though everyone does really need a roof over their head. James: Do you think the optimism that you had or the entire market had before 2008 crash like in 2006…  I'm sure everybody was optimistic. Nobody knew about the subprime mortgage. Because nobody really knew in detail, right? Do you think that the optimism that people had during those few years before the crash is the same as now? Kevin: There's some Deja vu that I've had and I think maybe a lot of that has to do with even just watching like social media feeds and things of that nature. A lot of the kudos and congrats are given to folks just because they like buy a property and that’s only a part of it. James: They just started running. They haven’t done the marathon yet. Kevin:  It not what it looks like today but it’s can you execute the plan accordingly? What does it look like three years from now? Because you bought something doesn't mean that you've won yet. It's easy enough to get on the front side. So, that's a different form of that optimism. James: Social media has increased the FOMO syndrome. Kevin: Yeah, that's it. Success seems to be equated on social media to actually just doing a deal. Whatever it means to get the deal done: overpaying for it, over raising investor capital, putting capital your investors capital risk. I mean buying bad markets and I think that was a very similar sentiment that was shared by a lot of people back prior to the crash. ‘If we don't buy now, there's like anything left. We’re going to get priced out of every market and then will never own real estate. Let's buy whatever we can. Let's get that 95% loan.’ So again, the lending standards have not gone back to what they were then. Which was a big cause of that crash. But I do think that there's some Deja vu that I've had.  You know, the FOMO thing… the fear that you’re missing out, that's real. We've seen things be much more competitive over the past year. We bought nine properties last year and we wound up buying two this year. So, we did get side-tracked a little bit this year with building a property management company. And we that's another discussion but even then, I don't think we would have bought more than maybe three or four properties. If that was our sole focus but we're very conservative. I think we had seven or eight deals in contracts that we ended up killing… for various reasons.  There just a lot of hairy things out there and you can make money with hairy deals but you got to really know what you're getting a deal go to. James: Yeah, exactly. I mean, that the experience of going through the crash will make you’re really a conservative person, right? Because people have never gone through it [inaudible17:59] including me. I didn't go through it. So, I didn't know how painful it was, right?  But I do read a lot of publications and try to feel the fear at that time. I mean, you can be too much of an optimist. I'm not so engaged in the height of optimism right now. So, you did single family and you went through this 2008 crash and suddenly you started doing mobile home park. Why that mobile home park asset class and why not go back to the single-family apartments? Kevin: Well, it's a great question. So, I answer the second part of that question first about why not go back to like single family properties. You know, I finally had an internal point of reflection probably like two years after the crash started. There were a couple years where it was pretty challenging to even think about what was happening in my life. So, there were a couple years, I don't like to say that I put my head in the sand and buried it. But somewhere around, 2010 to 2011 I would go through like a reflection point in my life where I tried to look back and just really be honest myself like, ‘what I should have done differently.’ What I ultimately felt went wrong and I came to a quick realization and I kind of knew it back then.  You know, you're comfortable and complacent you know we should have made the switch. Our model is very inefficient with the single-family properties. You know, running multiple maintenance crews and management crews amongst many different counties. You know, having a home here, a home over there, home over there, hundred something that way. It was incredibly inefficient and it was very hard to scale. You know like just going out and trying to buy one by one by one and buying a hundred and twenty, a hundred and fifty, two hundred single family properties is a lot of work. That’s two hundred individual closings. That takes a lot of effort to make that happen. And you'll being honest with myself, I knew that those same efforts could have been multiplied like 10 x but by actually putting that effort into multifamily and that multifamily is much more efficient to operate. It could truly provide that cash flow and help me get back on top much faster than trying to go back into the single-family space. I didn't have an interest in the single-family. It was what I was taught at a young age and I rolled with it and I did really well with it. And then now, I felt more grown-up and it was time to make a big change in my life and I knew multifamily is going be it. And so I went on this exploration journey, knowing that it was going to be multifamily. What I wanted to do, James, I wanted to go back and talk to everyone. I went on a six-month binge of interviewing and talking to everyone I could, locally and on the phone, who have either been in the multifamily and made it through the crash and you'll just get a sense from them how things have changed today?  How the landscape has changed? I always spoke to those who just got their start. You know, what's their perceived notion of the next couple of years? What the lending environment look like? Where are they finding opportunities? Where was the risk? I just wanted to get an update because I basically stepped away for years from real estate. And things had changed over those three or four years, right? And during this period, I was introduced to a guy named Randy through a mutual friend. And Randy had mobile home parks here in Florida. He owned three of them. He had been a banker for thirty years and I like meeting new people. So, I said ‘let's grab lunch. You’re local to me. So, let's grab lunch.’ And we did. I didn't go there with the intent of like, ‘I want to learn about mobile home parks.’ I just wanted to meet someone new who had been quite successful in their life. And that after like a two-hour lunch with Randy I walked away, saying ‘I'm going to buy a mobile home park.’ I need to either prove or disprove all these great things that Randy had to say about this niche and this asset class. And that's what I did. It took me about 12 months.  I bought a park up in Atlanta. We still own it today. It was a small part of a highly distressed Park and I bought that one and then I bought a second one and I bought a third one. I just spent a couple of years of my own money proving the concept. And then ultimately once we proved the concept and went full cycle on a few things. I went out and actually built a business out of it.  Where we started hiring multiple team members and investors into the game and that's where we're at today. James: What were the top three ‘aha’ moments from that discussion with Randy in that one-hour lunch that you had with him? Kevin: Yeah, and this isn't to compare multifamily to mobile home parks. I mean, but this is what he told me. This is how his conversation went with me. He was like ‘You know, the bottom line being C class apartment complex is great. Everyone needs to roof over their head.’ Just like we talked about. Affordable housing is in high demand and that demand… James: And what year was this? Kevin: This is in 2011. James:  2011 which is supposed to be one of the lowest and best times to buy. I guess, right? Kevin: Yeah, absolutely. Absolutely and so he went on to say that one of the big challenges with multifamily that he found in his career, and he wasn't a multifamily guy but from a theoretical standpoint was the turnover and you're turning 50 to 60% of your tenant base every 12 to 18 months. In mobile home parks, he's like, ‘95% of our residents owner their homes and it costs a lot of money for them to move their homes.’ So typically what happens, Kevin, is if they want to sell that home or they want to go somewhere else move. They don't move their homes. They just put their home up for sale and they move and go buy a home somewhere else. And basically, you never lose that lot rent. That lot rent continues to come in day after day and you don't have that down period like you might have an apartment and you don't have to that make-ready costs like you might have an apartment. So, that was one of the big ones. Another big one that really piqued my interest was the just really the barrier to entry and that there's really no new supply coming in the marketplace. You know, municipalities don't like our asset class. It's got a bad stigma attached to it. And so, no new parks being built and so if you find a good quality park in a great market, you don't have to worry about competition coming down the road. It’s not going to happen. It's just not a chance of it happening. James: It's not like a straightaway somebody can just come and build something in front of you. Kevin: Right. Right. Exactly. So, that was a big one. I liked that and then another big thing that he sold me on was just the management side of things. You know when the residents own their own homes you're not maintaining the roof, you’re not maintaining their plumbing, you're not maintaining their electrical. You’re not maintaining anything whatsoever that happens to their unit. They just like a homeowner, they call that vendor. They call the HVC company. They call the roofer. They call the plumber to fix it. You're not in charge of that. Our only requirement is to maintain the infrastructure. So, the roads, the water and sewer lines leading to the houses and the electrical infrastructure and that's pretty much it. And so I was like, ‘Wow, that's interesting.’ So, like low turnover, fairly lower management responsibility and very rarely is there ever a point in time where you have a down unit or a lot that's not paying you rent. So, the fourth, you asked me for three but the fourth big thing that really sold me on it was He's like Kevin there's a lot of first- and second-generation park owners still out there. Either they built these parks or their father built these parks and now they're aging out. All of these parks were built in the 50s and 60s and 70s and these owners are getting very old. You know, like five years ago the statistics were that 85% of Park owners only owned one Park. And so, to me that means they're a mom and pop, right? They're not a big professional or institutional operator. And so, his point that he made was that these individuals have been working these parks not like you or  I, where we run them like a professional company,  but with their bare hands. They are working these things from day to day. And they're either getting old or their health is becoming an issue. They're getting tired and they're aging out of these things at a very fast rate. And so, there's the opportunity to get in and run it like a professional. You know, get markets up to the market rate in the area and run it more efficiently and do a better job of collections and whatever they might be doing wrong there. So, that was a big thing that piqued my interest as well is working through that ‘mom and pop’ generation and finding opportunities that had a lot of meat left on the bone. Those were the big ones he threw at me and many others as well. But those are some of the big ones that just really sold me. I was like, ‘I’ve got to learn more about this.’ James: Yeah, that's awesome. When I learned about mobile home park, I went for like some three-day class and I really learned it. I love it. I mean, it's a really good asset class and I didn't want to do it because I believe in focus. I mean sometimes as entrepreneurs, we are like, ‘Oh, mobile. Oh, that's so cool. The self-storage let's go do this.’ Kevin: Shiny objects. James: And I realized that to be really good at something you have to have focus. So, that's the one thing I wrote in my book, right? Whenever a passive investor chooses your sponsor make sure that your sponsors focusing maximum to asset class. There are so many details in this asset class but with this market being hard a jack of all trades can’t really make money. Kevin: True. James: Some of their mobile home parks are a bit small, right? I mean, it used to be like 3 million for like a hundred parks or something like that. So, we were like all in doing like large deals and we thought, ‘Okay, we're just going to stick with apartments and stay focus and make sure we get good at it.’ So, that's important, I think. And so, at a very high level can you explain how the cash flow is generated in a mobile home park? Kevin: Yeah, absolutely. It's pretty straightforward. You know, we own the entire community and in a perfect world, this is how we’d like to own the community, where we own zero of the home. So, let's just give an example: we have 149 space mobile home park in Buffalo, New York. In that community, we own zero of the homes that are in there. There are 140 of those lots that are occupied with residents. Who again, they own their roof above their head and they pay us on average $428 a month in lot rent. They also pay their water and sewer; you bill it back for the trash usage. So basically, our job in that community is to maintain the roads and make road improvements as necessary. We cut the common areas of the grass. We trim trees throughout the community. Just making sure that the community or the subdivision is up kept and their responsibility is to pay us for the renting of the lot that they're homes are sitting on. That's it. We make money in that manner. That is the sole source of our revenue. Now I’d say, ‘In a perfect world, we don't own the homes.’ Unfortunate, we're not in a perfect world, James, are we? So, we have our portfolio of approximately two thousand lots that we own and it changes every day. In somewhere between two hundred and fifty and two hundred and seventy of the mobile homes and some parks we own zero homes and in other parks around twenty. It just really depends on how that older owner who we bought it from was operating it. And so, our goal with those homes that we own is to get out of the ownership as fast as possible. And so, what that means to us is that we'll go in and we'll do a very nice builder-grade renovation on them. We’ll sure make everything is operating as it should and make them look good and ultimately try to sell them at a breakeven or we'll even lose money on the homes if we can find a cash buyer, who will come in and purchase. Who we know once they own it outright that they will be a very sticky resident and they'll end up staying there for a very, very long time. And so, our goal is really good to get it back to the lot rental model. Because at that point our management and our maintenance responsibilities are incredibly minimal. James: Yeah, let me try to summarize this for the audience. It’s like a parking lot for a car, right? But it’s Just a car that doesn't have a wheel to move. Kevin: We’re the home parking lot specialists. James: You make a lot of money, right? Because I just own the land, right. The earth is one of the best business on earth. Kevin: Yeah, that's a good way to put it. We are definitely a parking lot.  Except the homes are very expensive to move… I don't want to say that's a great thing about our resident base because that's not the best way to put it. But typically we cater to workforce housing. That's what we have. You know, so good hard-working blue-collar folks. And the average single-wide cost about 5-6000 to move and reset in another the community and a double-wide 10-12,000 and the average folks who live in our communities do the average do not have that type of money lying around to move their home but some of them. And so normally, like I said what happens is that they sell it. Just like you would sell a stick-built home. They put it up for sale and someone else buys it and that person comes in and takes over the lot rent responsibility. So, it's a beautiful thing. James: Yeah, it's a beautiful thing. So, just in terms of the lot itself are there any other issues with the city? Or do you just own the whole lot? Kevin: Issues with the city meaning…? James: So basically, you own the entire park. So, that whole thing is an SL real estate, right. Kevin: That's correct. James: The city doesn't own any of the things inside. Kevin: Sometimes, every park is a little different. We have a few communities where the main road going through it is owned by the town or the city and we own the park. So, they maintain that one road. We have other communities where the water company direct build the water and sewer lines. So, when that park was built the local municipality handled the water and sewer and they literally put the lines and they own them. And we're not responsible for water leaks or anything like that. In most communities, we own the lines but there are some communities that are just anomalies. They are kind of stand alones, where we don't have to maintain them. Every park is different but normally, we own everything. For the most part, we own everything in the park and we have to maintain it. James: So, do you get a lot of depreciation because you just own the land? Compared to like multifamily? Kevin: You do. You do. You know, we did a bunch of cost ex studies last year and we were actually pretty shocked. In fact, Tom Wheelwright from Rich Dad Advisors… I didn't know that he's good friends with the person who does our cost ex studies. He personally reached out to me because he had never looked at a study from a mobile home park before and she shared one of ours with him. And he's like, ‘You got to come to my show. I'm actually baffled at the amount of depreciation that you guys able to gain.’ So, the infrastructure… So, all the improvements in the land. Most of the value of that property because we're not buying the homes. Most of the value is in the improvements of the properties. Because a lot of our property that we're buying it’s not like a path of progress. I mean, the dirt itself isn't worth the money. It's the infrastructure that's there that is really worth the money. And so I don't want to just off the cuff share with you some of the cost ex studies but it's a fifteen-year depreciation schedule.  And I think we've been able to, on a couple of our deals, depreciate it like upwards of 60% of the actual purchase price within the first year. So pretty significant. James: [inaudible34:57] the bonus depreciation. Kevin: With the bonus depreciation. James:  Got it. Got it. So, is it fifteen years or is it similar to like twenty or fifteen? So, mobile home parks[inaudible], okay. That's something that I didn't know. That's very interesting, Okay. That's really good and what about what is the primary value at the mobile home park? Kevin: Yeah, there are a couple big ones. I kind of classify them as like low hanging fruit, middle hanging fruit and then the high hanging fruit. Which is hard to get to. The low hanging fruit for us are simple operational changes. You know, the heavy payroll. We will go in and…  they’ve basically got their family members and their cousins and their brothers on payroll and we'll go in and chop it down to what it really needs to be. That's very low hanging fruit for us. Some other low hanging fruit for us are just your rent increases. There have been many communities that we have purchased that literally have not had a rent increase in fifteen years or twenty years that’s a long, long time. And so that's very low hanging fruit. Medium hanging fruit to us would be controlling the water and water sewer and other utility expenses. So, a lot of these parks when they were built back in, back in the day, water and sewer weren’t expensive utilities. They just weren't. It was included and was factored into the lot rent. You know, the infrastructure was new back then. So, there weren't leaks or wasn't waste or anything like that. Over time the infrastructure gets older and leaks that happen. People tend to abuse water. Water and sewer are expensive in most parts of the country. And that's normally a very large line on the PNL expense statement. And so, we'll go and we'll basically buy individual water sub-meters. They’re pretty advanced meters that are digital and have remote reads. And then we will install them to a lot and will essentially start building the residents back for their own usage. Proportionately speaking we will do the reads each and every month build them back. So, number one: we'll save anywhere from 20% to 40% of usage because people now get responsible very quickly when have to pay for it. And then they'll all those savings basically good to our bottom line. So, it costs us a little bit of money but typically in a normal-sized Park, we will recoup that entire investment of the water meters within like 12-14 months. It's pretty quick. And then the high hanging fruit of the value-add side is infilling of new homes on to vacant lots and so a lot of communities that we own they might have some vacant lots of them. Some more than others. So, I'll give an example: we buy a mobile home parks 100 lots in size. It's got eighty that are occupied with trailers that are paying. The other twenty they were fully developed when the park was built. They've got infrastructure there. However, they do not have a mobile home sitting on them. We've got dealers license in every state that we own a park in and so we can buy wholesale from the retailers and the manufacturers. And we’ll go buy brand new home inventory and we'll bring it in and will basically create a retail program and find buyers for those homes to infill those lots. So, we'll buy the homes. We’ll bring them in. So, I say that's high hanging fruit because it's very capital intensive. It costs money to purchase a home and that money is tied up until you sell that home. So, there are different programs out there that help you to facilitate that but it's still very capital intensive. And there are a lot of logistics involved with moving homes in and setting them up and things like that. So, those are the big ones of how we add value to communities. James: Got it. Got it and I believe the mobile home park homeowners compared to multifamily which are renters, right? So, it’s a completely different mindset when it comes to pride of ownership. Kevin: That's it. That's it. That's why we try to convert them to a homeowner as fast as possible. I mean, you still have your homeowners who you have to kind of kick in the butt every once in a while, to keep your house in order, to keep the yard in order. We’re pretty strict with our screening processes and for the most part, the homeowners within our communities have pride of ownership and take care of their units quite well. James: Got it. Got it. Got it. So, let's go back to the property management side of it. Because I remember when I was listening to your podcast about five years ago, you were always saying or the apartment guys had it easy. Because they have their own property management. They are more professional. Finally, after five years you are going to be moving your property management company under yourself.  You going to self-manage, right?   James: Yeah. So, you guys do have it easy. All you have to do is pay it and just hand it off. Buy it and... Yeah, joking. I know there's more to it than that. So, up until a little over a year ago, we managed all our own assets in house. And unfortunately, the property management side of any business there's a certain size to where you can actually break even and we were nowhere near that size. And so, it was a losing endeavor for us. And so, sometime in the middle of last year we were introduced to a property management firm…. we’d never considered property management in the mobile home park space. Only because we were always told that the options of the companies that were out there were poor, very poor. And I was told so by many different people, many different veterans of the industry and so we never really explored it. And so, we always manage it ourselves but last year we were in contract to buy a property up in Michigan. It was in receivership and the bank had engaged this management company, a national management company, a property management company that were mobile home park experts in the business forty years. They were engaged to actually manage the day to day of this thing while it was in receivership. We were buying a note on this thing and we got introduced to this property management company. We got to see them in the real world. James: [barking] My dog has been like a... Alright, Kevin. So, one thing that I got to know since a long time ago is apartments have an easy way of getting into third party property management and buying it and giving it to third party property management. More recently, you have been trying to get your own property management company or maybe you already done it. So, can you explain why that is? Kevin: Yeah. Yeah. So, in our space it is not the norm to hand off to a third-party management company. I think we're like the redheaded stepchild or the anomaly of the real estate industry. Because pretty much every other asset class multifamily, office, retail, all of them have multinational property management companies and lots to choose from, right. They can choose from many different people in the space, best in class things of that nature. I had always been told in the mobile home park space by many industry veterans that it just doesn't exist here that there are only a handful of property management companies and most of them aren't very good. So basically, in the initial years of us owning parks, we managed it ourselves. However, in order to build an appropriate property management company that's profitable, you have to have a certain scale and we were never there two years ago. We just weren't large enough. And so, it was kind of a losing endeavour for us. We're okay with it. But it was prohibiting our ability to grow at the scale that we wanted to. We were good at finding great opportunities and we were good at raising capital. The roadblock was actually the operations of all these different parks were buying.   And so just by happenstance, we were buying a note on a distressed property up in Michigan and it was in receivership. And during that transaction, we got introduced to the management company that was running the show and it was this large group. They've been in this space for 40 years. They are the largest fee manager in our business and they've had a footprint nationwide. And I saw them first-hand and it seemed like they were doing a great job within the first couple of months of us being introduced to them and of them managing this asset that was not yet ours. And so, I flew up and met their team and flew my team up to meet their team. I got to see their operations. I got to learn about them and everything seemed great. I mean, I was impressed. Again, they had a lot of experience… way more experienced than us in this business. They knew everyone in the industry. They knew all the intricacies of the business. They had different departments to manage those things whereas we were basically were trying to wear a million different hats. And it seemed like a perfect match made in heaven. And so, after another month or two of kind of testing them out on this asset. We were buying this and we said ‘You know, let's hand them the majority of our properties and let's see how they do.’ And we kind of did it like two different chunks. And long story short, they're great guys. However, no one's going to ever manage your property like you would. No one's ever going to care as much as you do. And so within four or five months, we started seeing some pretty readily available signs that things were not going as planned. The promises weren't coming true. You know, decisions that should have taken three minutes to make were taking three months to make. Everything was moving like a snail's pace and nothing was getting done and we were actually regressing and it was frustrating. However, what happened during these first six months of us being with them is that we literally acquired like another nine properties. So, we doubled in size. So, unfortunately, it wasn't as easy as us making a decision saying, ‘Hey, we're going to give you our thirty-day notice and we're going to take it back in house.’ Because we surely did not have the infrastructure now to actually manage our assets because we literally doubled in size in a short period of time. And so over the last six months, we've been kind of behind the scenes building out a legitimate property management company with systems and processes and in hiring new team members. We didn't want to bring it back in and fumble. We want to make sure that we brought it back in, we basically built our own best in class operation that we could do it better than anyone else. Whether it be for ourselves or current assets or new assets that we were buying. If we woke up one day and we ended up going crazy. We thought that we wanted to do a third-party management for other people that we would be best in class. I don't think that's going to happen. But that's what we've done over the last five or six months and that's actually side-tracked some of our acquisitions we've only bought two properties this year. We probably could have bought a lot more but anyway I guess long story short, James, is I'm somewhat envious of you guys in the multifamily space. Because there's a bar that set with property management companies and if one company is doing poorly you’ve got other options to go to and typically they kind of keep each other in line a lot of times. And I know that they’re still never going to treat your property like you would yourself personally. However, You've got options and things that might not be working with one company you know that you could probably actually go and get served correctly at another company. We just didn't have that option. We just didn’t have that option. This was the once and done. There were other companies out there but these are the best in class and I'm like, ‘If these are the best in class, we got to build our own. Because there are other options for us.’ That's what we did. We brought it back and so that just happened on November 1st. That’s when we actually truly brought everything that had migrated back in was November 1st. So as of the time of this recording, it was like six weeks ago. James:  Got it. Got it. So yeah, it's a different ballgame, right?  of course, it's going to slow down in terms of acquisitions because now you're also managing the property management. But I think overall, in the long run, it’s much better for you. Right? Kevin: Absolutely, at the end of the day the amazing strides that we've made just in the construction side of our business and the marketing side of our business as far as like sales are concerned…like we've done more in the past two months then was completed in the past year. I'm not even joking. It's been absolutely amazing. So, I'm excited. I’m like, ‘Hey if I'm going to screw up, I want it to be my fault. I don't want it to be someone else's fault that our properties aren't performing.’ I'm okay taking accountability if they're not performing if it's me that's running the ship or driving the ship, right? But if it's another company and they're doing a poor job and we can't control it. I've got issues with that. So, that's kind of where we're at. James:  And I also think that when the market turns people with their own vertical integration will have a lot more leverage in terms of control, right? I mean a lot of property management companies are doing a mediocre job right now but they escape because the markets are super strong right now. Kevin: That's right. The market props everything up. James:  When the market turns then we will know how good they are. Because now we have to be answerable to our investors and we have to go to third party. So, one other thing that I want to touch on about the way you do business a lot of times you raise money and not deal by deal but you use fund model. Can you explain what's a ‘fund model’? And why is that beneficial? Kevin: Yeah, to keep it somewhat simple… I mean, it's really not much different than your deal-specific syndications other than the fact that we've got multiple properties that we're putting underneath that fund umbrella versus just one individual property. So, an investor is going to get their investment diversified amongst multiple properties and possibly multiple different markets rather than just one. So, simply put that really is the only true difference between probably how our business operates and how your business operates. The reason that we decided to go that route happened about three years ago…We were going into the end of the year and we had just founded Sunrise Capital Investors. As like a formal company, rather than just me and buying parks on my own. And we had a pretty stout pipeline and a lot of deals kind of fell apart. And we were like, ‘Oh, we only have two deals now. They're going to either going to close January or February next year. This is due to individual deal-specific raises.’ That's fine. And then all sudden like within like two weeks somehow all these other deals came back to life and we all of a sudden had five deals that absolutely looked like they're going to close. We had like four to five money that went hard and anyway we're like, ‘Okay, well now we have five and they're all going to end up dropping like in the same like week or two. Logistically speaking, it'd be an absolute nightmare to try to do five deals specific syndications. Because of the paperwork and logistics behind it and then the legal costs associated with it and that just didn’t make any sense.’ They're going to close right at the same time.  I think there's more of a benefit for our investors to give them diversification amongst all five of these versus just one. You know, one individually. And so we didn't know what the feedback was going to be and we put it out there and it was well-received. So, it was great for us. It gave us a little bit more flexibility on the buying side. Gave them risk diversification amongst multiple different assets and markets and so it's been a win. So, we did really well with that. That was kind of our test fund and you're last, actually about eighteen months ago, we launched our second Fund. Which is a little bit larger fund twenty-million-dollar fund and it did the same thing. So you know, we're a little different, though.  A lot of funds… a lot of institutional funds will go out and they'll get really aggressive. They'll raise all the money. Let's say it's 100-million-dollar fund to go out and raise I'll spend all their time and energy raising 100 million dollars. And once they've got the commitments for, let's say, maybe 75% or maybe more than that. Then they'll actually start going to buy it. You know, once that money's there and the costs of capital is very high. We didn't want the money sitting around idle. And so, we just continued our building our pipeline and we would only bring money in tranches. So, we'd only bring enough in during that fundraising that we actually knew we're going to need or the next like two months to close deals. So, although it was an eighteen-month buying period over the last fund, we would raise it in tranches. Which meant our investor capitalism is sitting around idle, not collecting a return. We weren't occurring pref on money on millions of dollars that were sitting being around idle. And it just held us accountable and it held everyone accountable which I like. Our interests were very much aligned with one another. James:  So, you basically do capital calls whenever you need the money.  Kevin: That’s it. That's it. James:  These are good capital calls, not the other bad capital calls.  Kevin: Right. Exactly. Like the verbal soft commitments are there. And some of them might not come through but the majority of them do.  You know, I think about 5% drop out of folks. James:  So, you basically make a verbal commitment. And when you have a deal, you say now let's make it hard. Kevin: Yeah, absolutely and each one of these two funds that we started, we actually already had deals and contract going into them. So, it wasn't like we were raising a blind pool like, ‘Oh, here's what we're going to do. We're going to raise this much money, and then we're going to buy.’ It's like we got X amount of properties in contract right now. So, while there might be more properties in this fund, you can physically see and see the performers in each one of these. These are going to be properties that are in this fund. So, there's something tangible there. That's another thing so different about us and how we do these funds. We don't go into it blind. Where we're just raising money and then we're going to go do what we say we're going to do. We're actually doing it simultaneously but we've got deals coming in. We've got deals in contract money hard--- James: ‘Semi blind’ I would call it. Kevin: Call it ‘semi-blind.’ That's a perfect way to put it. It sounds like a rock band. James:  Right, right. Right. Alright, Kevin, can you give some advice to people who are trying to start up in this business in real estate or even in mobile home park? Kevin: Yeah. Yeah. Trying to get started up I'd say go try to mute a little bit of social media because everyone's on social media now, but I’d try to mute a little bit of that and go find the one individual girl or gal who is actually doing what you want to do. They can prove to you that they're doing what you want to do.  They're an actual GP. They're not they don't have five thousand units of very minimal shares as an LP and they're touting that. I know that's happening a lot out there. So, you know try to mute all that crap because I know it gives people anxiety. You know, like social media gives people anxiety because they see how everyone else is doing deals and ‘I’m like stuck here I can't get going.’ Just try to mute it out. Silence it and go find the James. Find guys like me.  We're very good with our time. We’re not going to just give everything away for free per se. We only have like so much time today but like find an authentic individual like us,  I don’t want to tout ourselves here, who will actually like give you some real advice that can give you some proper guidance or at least give you some nuggets get on your way and let all that other noise go. Because I think that that that that bottlenecks people a lot. That fear of missing out man. That anxiety creates just this internal turmoil of like, ‘I'm missing out’ and then like you get nothing done right. You’re like, ‘I'm going all these conferences and I'm reading all these books. I'm doing all these things.’ And you feel like a… James:  And you pay big money to some gurus out there. Kevin: Yeah and I think that a lot of folks’ mistake that with like productivity of …attending things like that. It's great. I do it all the time. You do it obviously. We're part of a mastermind together. But like you've actually got to like at some point get granular and you actually have to take some risk and take that leap. It's easier to do when you know someone like you or someone like me or there are other people like us. That one person who you can just kind of lean on and get some general advice from and get the real picture from as well. You know, what's real and what's not.  James:  Absolutely, absolutely. Kevin, why do you do what you do? Kevin: Why I do what I do? I really enjoy it as far as investing in real estate, I really enjoy it. I mean, I love the people I work with. I love our team here. I really enjoy being active and so everyone likes different parts of the deal like as far as what I do I'm not an Excel junkie. Not like my other partner he'll sit in from an Excel platform and run the model many different ways over like five hours. I want to shoot myself when I think of that. I'd rather be out in the field, I like executing on the plan. I like taking something from what it is today and actually seeing the end result of our hard work and effort over a period of six to twelve to eighteen, twenty-four months. And I also like seeing the smiles on the faces of residents. When we take something that's been blighted and actually make improvements to it. Especially folks who have lived there for many years. That's pretty rewarding to be seeing that kind of stuff. Especially, you get the one residence like, ‘God, I’ve been in for twenty years and this place over the last ten years was just scary and I didn't want my family to come over. Now, I have dreamt of the day that it will be the back to its former glory.’ And I like that kind of stuff. So, I like the lifestyle that that real estate provides, right? I get to spend a lot of time with my wife and my kids and friends and family and things like that. James:  Absolutely and was there any proud moment towards your real estate career that you can never forget? That will stay with you.  Is there one proud moment that you were like I’m so proud of myself. Kevin: Yeah, actually there is one. It was the very first mobile home park that we bought. If you got time, I'll tell the story. It's probably two- or three-minutes story but anyway, I'll try to keep it short. We were buying a very, very distressed park in Atlanta, Georgia. It was in a good little town but it was in the southern part of Atlanta. Which was got hit really hard with the recession and was slower to recover because there were a lot of the new developments that were out that way.  Anyway, we're buying this park that had been receivership for two years. It was fairly poor condition. Lots of squatters, all kinds of bad stuff happening there. The chief of police and the mayor's office were right across the street like a catty-corner. They had to drive past this place every day and we got it tied up and it was a small enough town and corporate town that we actually got a meeting with the mayor and this entire city council including the chief and everyone. And we went in there with his grand plan of how we're going to literally spend hundreds of thousands of dollars to clean this place up and to improve it and make it a proud part of their community.  And we gave this big sales pitch to the mayor's like this really tall guy with a bald head and the handlebar mustache. He is a really mean looking guy and this was in Georgia. He had like a rifle on the wall and a fox. He was a  very intimidating guy but he let us talk. Everyone's kind of looking like shaking their heads. I thought we were like getting their acceptance and he let us talk for fifteen minutes and then he looked at us and he said, ‘If you guys buy that park, you're wasting your money.  Get out of my town. I've been trying to shut that thing down for years now and I'm not going to stop until it's completely closed down. So get the hell out of here. Take your money somewhere else.’ So, we walked out of that room and we and I looked at my partner I said, ‘What do you think we should do?’ Because we weren't getting financing, we were paying all cash for this thing, too. Because it wasn't financialable. So, it was like basically all the money we had at that point. We bought it anyway. ‘So, let's buy it. I mean what are they going to do? Listen, let's just show them what we're going to do. I mean, how are they going to truly stop us, right? Let's do what We're going to do. We know we're going to clean the place up. He doesn't believe us but let's prove them wrong.’ We did that cleaned it up. We became really good friends with code enforcement officer that's kind of that was our like our foot in. We got her gift cards and made her like us and it was a very very open with our communication to her. So, if there was ever an issue, we addressed it right away.  Anyway, twelve months later I got a call from Mayor Bobby Carter's that his name and we got a call from him and I answered I didn’t know it him and he said, ‘This is a Mr. Bobby Carter.’ He has a southern accent. He said, ‘I just want to take a moment to apologize. I want to apologize for the way I treated you guys. I want to apologize for thinking that you wouldn't be able to execute on the beautiful plan that you have done over here.’ It was a long apology and he's like, ‘I just want to take a moment today. I've been meaning to call you over the last six months as I've seen progress being made but it's a year later and this place is great and actually, one of my staff members lives there.’ James:  He was holding it off until he had to tell you. Kevin: That was pretty cool. He literally wrote me a letter then he wrote a letter of recommendation to another Mayor who we were having an issue within another state in another town. Basically, saying like, ‘I thought mobile home parks were the problem. I thought this and the other and that's not the case. And these guys proved me wrong.’ And that's pretty cool. I'm pretty proud of that one. James:  Yeah. It's a big change especially with one of your first ones.  Kevin: He was the very first one. James:  You must have been really scared. I like how come the is not behind your back. Kevin: Well, we could lose that money either. I didn't have much at that point. In 2012, I was pretty broke back then. So, I had to make the money work. James:  That must be the fuel that launched your rocket and your motivation I guess. Kevin: Yeah, that's it. James:   So, why don't you tell our audience how to get a hold of you and your company? Kevin: Yeah, the best place to reach me personally is my website, Kevin Bob. You can find me on LinkedIn and Facebook as well. As far as our company if you want to learn what we're doing in the mobile home park space, you go to sunrisecapitalinvestors.com and get signed up there as well. We don't have an offering open today but get signed up. We have a secure portal and get updates from us when you know we have deals coming about and things of that nature. But other than I'm not too hard to track down. So, it’s pretty easy to find me on iTunes. I've got a couple of podcasts as we've mentioned earlier. You can find me in many different places. And now you can also find me on Jame’s show. James:  Yeah. So, thanks for coming. It was an awesome podcast. It was a lot of value that you gave us and I'm happy to have you on my show. Kevin: Thank you. Thanks for having me, James. And it's been a pleasure knowing you. I appreciate all you do with the podcast. I know how much work it is to put these things out. So, thank you for taking the time to get back to everyone. So much appreciated.  

James: Hi, audience and listeners. This is James Kandasamy from Achieve Wealth at Real Estate Investing podcasts. Last week, we had Jake and Gino from Wheelbarrow Profits. You know, Jake and Gino have tons and tons of deals on their own and you know, recently have moved into syndication space as well. And their story is just very interesting in terms of knowing how did they get started, how did they refinance their first deal to launch their multifamily investing career.   Today I have Rich Fishman from Dallas, and Rich has almost 8,000 units right now across 23 complexes and he has been buying in Texas, Tennessee, Indiana, Pennsylvania, Ohio, Mississippi, and South Carolina. So Rich is going to be giving us a lot of valuable insights into how he had bought so many apartment units. And imagine half of that 8,000 units is fundamentally owned by Rich itself and the other half of it is more of a partnership and syndication. Hey Rich, welcome to the show.   Rich: Well, thank you, James. Glad to be here.   James: Good, good. So, Rich, it's going to be a very interesting podcast because, and I'm going to be learning so much from you and I'm sure my listeners is going to be learning so much from you. How did you get started? I mean, you have like 8,000 units right now. You started almost 20 years ago. So walk back, how did you get started in multifamily immediately when you get started in real estate?   Rich: Well, actually, I was the owner of a mortgage company in the San Francisco Bay area in Berkeley, California and I financed mostly half homes, but I also financed apartment complexes. And I had a deal to finance, it was a six-plex in Alameda, California, and it was a foreclosure. Back then, there were a lot of foreclosures and the realtor gave me the deal, I got the loan, and then the buyer fell out of escrow; they didn't like the deal. And then there was another buyer; same thing happens. And I said to the realtor, I said, “What's wrong with this deal? It looks like it makes money.”  And she says “Nothing's wrong with the deal.”  And I said, “Well, I don't know how to manage anything like this.”  She says, “Well, I know management company, don't worry about it.” So I went to the property, then I dragged my wife there.   And it's a funny story because my wife is from Scandinavia and they don't do very well there. And so we went to the property and we had one of those, you know those long screwdrivers that the termite guys have because we are poking around, seeing if it was well-built. And the screwdriver went right through the wood into the drywall. And my wife says, "No, I can't buy this with you.”  I said, "No, we're buying this.”  And she looked at me and she said, “Okay.”  And so we bought this six-plex. And the six-plex was the beginning of us starting to buy real estate in earnest. So that's the story is we cut aside. There was a sidebar from the mortgage business.   James: Got it, got it, yeah. I always wonder, like whenever I meet brokers, mortgage brokers, and even brokers, I always ask them, why not you guys buy these deals, right? Why are you just doing transaction? And a lot of times, I mean not a lot of times I think once I talk to someone who went from a mortgage broker to become an investor. I'm sure you know him; it's like Michael Becker, right? Yeah. I think he's a big buyer in Dallas. I asked him this question because he used to be working in Wells Fargo and he told me not everybody likes to take risks like a business owner.   Rich: It's not only about the risk. The main reason that people get into the investment side is because, when you're doing transactions as a broker, you're making income and you're only as good as your last deal. You have to keep churning and closing deals to make a living, and every broker is off to the next listing, or the mortgage person is off the next loan and you'd live and die by the transaction. So eventually, most people either say, I've got to own this stuff; build wealth rather than income. Or I'm not interested; I really don't want to own anything. It takes the risk and the responsibility of owning property. So that's the thing, I had to make a decision to own it, take care of it, use my free time because I was still a mortgage broker. I had to use my weekends to run the real estate with my wife. We want to get started because we couldn't just go into multifamily; we needed the income from the mortgages. So it takes a lot of sacrifice for the first couple of years to get into something like this.   James: Got it, got it. So you must know the industry; working as well in the mortgage and to really successfully become owner and take advantage of that knowledge as well. So after how many years or after how many unit count that you, you said, okay, I'm going to give up this mortgage business, I'm going to be just a fulltime, a real estate investor?   Rich: I think we hit about a thousand apartments. And at that point, I let go of my duties in the mortgage company and concentrated on just buying and selling apartments.   James: Got it, got it. So, 20 years ago you started buying the six-plex, when did you see your fastest acceleration of purchase or acquisitions?   Rich: Well, we hit about 4,000 units and then the recession came 2009 to 14, 12, 13 as on the area of the country, and that was really hard. So we didn't really grow during that period. We were selling off as fast as we were buying, just kind of trying to keep our head above water. We got to about 5,000 units, about two or three years ago, and then we've grown a lot more. I could probably have 50,000 apartments today if I wanted them. I would have to basically align myself with someone on Wall Street or some investment banking for like a Goldman Sachs or something like that. And they would be happy to raise the money and give me all that money and I could then own five or 10% or 15% or whatever it is that is bought, BUT I'm not that going to ho for that strategy.   So the growth at this point is really about organic growth for me and our company, and also quality of life because when you have institutional mining, you have to take care of it in a way that suits the institutions. And they have requirements that family and friends and other people don't have. For example, they might want audited books every year. That doesn't sound like a lot because we don't; we have books [inaudible 08:46] and everything, but that just takes a lot of time to get an audit done. And if you multiply that by 15 or 20 EO, now you have to have a whole audit department, and CPAs work who for you and things like that. So it's been really about opportunity and raising money mostly from either my own, resources or family and friends and other methods.   James: Got it, got it. So, Rich, I think you bring a really good perspective in terms of economic cycle because you have went through, I mean, you started 20 years ago, you went through that 2008 and everybody said 2008 multi-family, you know, fat better than any other asset classes, they are very, very low. What you call, you know, who went into a receivership or bankruptcy; multifamily, so is that true?   Rich: That's not true at all. Most of the people who are in multifamily today, we're not even involved in the business.   James: Exactly, that's what I'm asking because everyone is sort of newbies--   Rich: A lot of people were wiped out in that recession and a lot of other people were underwater. I mean, there were thousands of apartment complexes that were foreclosed on. Now was it as bad as office buildings or retail? Maybe not, I really don't know, but it was bad. Now they say anybody who lasted eight years, they could come out the other side feeling good. But most people don't have the capital to take five or six or seven years of losses, and large losses. If you're not making debt coverage, if you're not able to pay your loan and you're coming out of pocket, that might be okay for one deal. But if you have 20 deals like that, yeah, that's a whole different story. So it's quite a different thing than when people say. Now, the multifamily was hitting extremely hard, and I think the default ratio was up to about 8%.   James: 8%. Okay.   Rich: Yeah, I think so. Yeah. That doesn't sound that bad compared to student loans. But if you think about it 8% is, you know, you're talking about housing that touches the lives of millions of people.   James: Got it. Yeah. It's very interesting data because you are giving me true data. I mean, sometimes we read in the news and they say low delinquency rate and it was not a hard hit and we don't have real, true story. Right, because a lot of it depends on the sub-marker, depends on which class we are talking about, and you know, depends on the operator as well. So how did you survive the 2008 crash?   Rich: Well, I have some properties that cash barge really well and I had others that really couldn't survive and I got rid of them. I sold them off or actually, I had you cut my portfolio down in order to survive and retrench a little bit, but I only had a few deals that were like that, the rest, I didn't have the leverage. If you were totally leveraged up in a bad market, then you cannot save yourself because, and if you're a partnership, you can't save yourself either. Because, if you own 10 or 20% of the deal and the loan is negative, then you would actually have to make a capital call every month on your partners in order to make those payments, and if you raise money. You know that there are two words that should never be spoken ‘capital costs’.   James: Exactly.   Rich: And so it's hard to really get money out of people to feed something that's losing money. So, there are a lot of people who gave; I know one fellow in the Houston market, he had property all over Houston, Atlanta, I think he gave up about 40 yields back. And there were other people like that who had just a tremendous amount of deals that they gave back to the banks.   James: So was this deal when they give back did Fannie and Freddie was giving non-recourse loan at that time?   Rich: Yeah, non-recourse loans, they just won't; if you give them deals back, they don't want to lend to you again unless you pay a heavy penalty to offset their losses because they take losses, themselves or the service or takes the loss. And in Fannie Mae's case, the loan originator slash servicer usually takes about five to 10% of the risk of the loan. So, you know, that could be pretty substantial too, to them because they're usually own companies by either large wealthy individuals or by banks. They don't like taking losses at all.   James: Got it, so they--   Rich: Hopefully we won't be there again.   James: Yeah, absolutely, we didn't want to be there again. So it was non-recourse and the owners were able to just give up their property, they lose their equity and the service that takes some loss and they gave it back to Fannie Mae and that's it.   Rich: Fanny Mae never own; one of the problems with the way the system was set up, is that Fannie may never really own the loan. People don't realize this, but Fannie Mae is just a broker.   James: Really? Okay.   Rich: There's really like nobody, you know, there's not like someone in Mumbai who owns or in Shanghai who owns all these loans. I mean, they basically securitize the loans and they sell the loan as a bond in the world financial markets. And so there's a special servicer who represents the interests of the bondholders and that person is delegated decision making, but they're not able to cut deals on Fannie Mae loan. So, they don't generally go and say, we see that you're negative, and why don't we go from 5% to 3% and you can owe us the money later? Things like that; they're not flexible. So, actually, Freddie Mac is, is more flexible, they act more like a bank, and so they can do workouts in a much better way than Fannie Mae can. It's just one of the things people don't know.   James: Got it. Wow, that's interesting. That's a lot of information out there. Yeah, I mean, Fannie Mae does a, securitize the loan and they sell it to the investor who buys it as a bond and they get certain percentage out of it. And in the middle there's servicer, there's Fannie Mae, everybody makes a few percent like this one [inaudible 15:59].   Rich: Everybody is making money, and at the end, the only people who generally lose money are the bondholders.   James: Okay, are the bondholders. But if the deal is given back, I mean the equity holder, whoever, the owner also lose the money as well, right? So there are two people, the buyer, and the seller, right?   Rich: The borrower absolutely loses a whole lot of their entire investment. And then the lender, if the lender can't be made whole by the sale of the real estate, they may lose money too. Things can get pretty bad in that cycle, that the value of the property often sunk below the outstanding balance of the loan. There're a lot of negative things to talk about, but let's talk about more positive things.   James: Got it. So you talked about people who are highly leveraged, right? So let's say you're buying a deal at 75% leverage. Do you think that's high level, I mean, can you define highly leverage? What is the highest leverage that you think?   Rich: Well, in today's world, you can leverage up to, Oh, even 90% for the first and second or preferred equity. And that's not necessarily a bad thing. It's just that you don't want to leverage that high on a stabilized property. It's one thing if you buy a property that's a value add and that you're going to add value and renovate a property, increased rents, increased value, and you're looking on a stabilized basis that okay, you went high leverage, but within a year or two you're going to be catching up and the leverage point will be at 60%, 65 or 75% or something. But if you're basically highly leveraged in stabilized properties without any value add then. If the rents go down five or 10%, then you're underwater, you want to have some protection; you want to certainly have 20% or debt coverage or something like that.   James: Yeah, that's a good point. I mean, that's the reason where I'm going with the question because we buy deals, we buy deals or value at deals even at 80% leverage, but in one to two years, that 80% leverage is going to be, 70 to 65% leveraged. So basically it's not leveraged at the start of the loan, it's basically, where are you going to be once you're stabilized; that's the more important thing. Sometimes people get confused that you shouldn't be highly leveraged? Why highly leverage and you don't understand that we are looking for buffer for DSCR? We want to be as further up from the debt service coverage ratio. That's the fundamental discussion about what highly leverage and costing higher risk.   Rich: Right, leverage is your friend, if you're using the leverage to invest capital, if you're using leverage to service debt or to pay out dividends, then you're making a huge mistake.   James: Okay, absolute point, that's an awesome point. That's well-said. I couldn't have said it better. So what about the guys who have done breach loans at that time in 2008 what happened to them and what would you give advice to that kind of people who are doing--   Rich: You mean the answer 2007 or 2008 with a value add deal, and then they had a bridge situation. While those people probably suffered, I mean they didn't execute. If they executed, that's fine. It was hard to push rents back then, everything is based on increase in rent. Fundamental multifamily strategy is how can I increase the rent? What value can I give the tenant so they'll pay more? Now, between 2008 and 2012, the only value add strategy that I know that worked was the fixed deferred maintenance to make sure you kept the lights on, for the most part. So beyond that, I didn't see people putting granite countertops in and all this other stuff because everyone was just trying to supply.   So those people, many of those people who got in at the cycle; at the end of the cycle, didn't make money unless they stayed all the way through 2015-16, so there were about seven years. But you would have to stay in that deal in order to make it. Now I did buy a property in the Midwest that I bought for about 15,000 units. You can get things that way back then. And I bought it in 2006 and I did do really well on it, but it was unusual because I got it so cheap; my basis lever was very high. But at the time it seemed like I had really jumped the shark as they say because the economy wasn't very good, and it wasn't easy to rent up any apartments for a while.   James: So coming back to Midwest, which I believe is MAVA secondary or tertiary market, right? So like right now in 2019 right now, market is so hard and people can't buy in the hot cities like Dallas, Houston, San Antonio, Austin, people are, I mean, I'm just looking at Texas, right? I mean, we're in Florida, we have Orlando, Tampa, and what Jacksonville, and I mean a lot of people have started going to other States and tertiary market or States which is like supposedly supposed to be upcoming. So, what would you give advice to them?   Rich: Well, I think my advice on the States like South Carolina or those kinds of places, is that to study the local market and make sure that it's vibrant, that there are good jobs there. There are a lot of great secondary and tertiary markets. Huntsville, Alabama or Hoover, Alabama or you know, Greenville, Columbia, South Carolina, I mean there's just, you know, Asheville, North Carolina, there's a lot of great secondary markets. I think the biggest problem that people have in these markets, one is they think they can increase rents more than they can. Because if you go to some of these markets and you think you can get $200 for putting in a new kitchen, you might find out you can only get $35 and 20 cents because there's a limit to what a lot of these people were willing to pay in these markets.   And if you go too high, they just want [inaudible 22:56], but there are still some markets that are small that people are really surprised at. I mean if you've been to Indiana and you know, there is Columbus, Indiana, well that sounds like a real nothing place, but Commons is located there, it's a very large company, and it's a pristine town with really high rents. Bloomington is also a great town in Indiana; it's got the college there. So there's a lot of college towns and there are capitals and there are places where there's a lot of manufacturing that's particularly in the Southeast that they didn't have manufacturing before. Some of these places have become very desirable for retirement and for our businesses like Charleston, South Carolina, nothing was going on there except history about 20 years ago. If you've been they are now, they are building homes like crazy. People are moving there to retire. There's a huge tourism business, I think ranked the number one wedding venue one year recently. And then they have they're making small planes there; just tremendous amount of activity going on.   James: What happened to this kind of tertiary market? I'm sure you had similar tertiary market during 2008 where you thought, okay, this is really good to go in and invest in. Looking at some of the cities that you're looking at it right now, what happened to that kind of market in 2008 how did they do compared to the major cities that are well known for--?   Rich: I own the property, and the answer is different. Every tertiary market was different, just like every major market. For example, if you look at the major markets or the secondary major markets take Tucson. Tucson was wiped out in the recession, now people say it's a good investment. Phoenix was wiped out, Vegas was wiped out, Reno was wiped out. Today Reno; people think Reno is part of California. It's hard to buy something under 150 a door in Reno now. So back then it was 50 a thousand a door was a great retirement exit. So I own property in Sierra Vista, Arizona, and there is an army base there. Now, I will never buy another property next to an army base. I don't care what the numbers look like because the politics of the army base are things that I cannot control.   And they decided that army base that they didn't need hardly anymore. So they cut the enrollment at the army base there by about half. And it was the town that depended upon the army base almost completely, not just the army people, but the people who were feeding and the vendors, and everybody else. And so the town really; rents went down about 30-40% in the town, but then there are other locations. I owned a property in Davenport, Iowa and it got hit, but it didn't get hit that bad. And agriculture, which was a real feeder for Iowa, stayed pretty good. And you know, they had the ethanol and that was pretty good. We never got below in general 90% occupancy in the properties that we own there, so it just really depends, you've got to do your research. Just how you can't make a blanket and say tertiary market, secondary market; core markets; it wasn't long ago that people considered Baltimore to be almost a core market.   Because of its proximity to DC on the Amtrak corroder from New York, the new Harbor that they had built there with the aquarium and today, a lot of people don't think of Baltimore as a core market and back then people didn't see DC as a core market. They thought it was crime, wedding blah, blah, blah, you know, stay away from DC. And now today, I mean, you're talking about very expensive real estate all over DC.   James: Awesome, awesome. That is a lot of insights there. So Rich, which market have you been focusing on, I mean, you bought in a lot of markets before these and you probably own some of it over there, but what has your strategy has been at this hot--?   Rich: Right now my strategy is really to buy more in DFW.   James: Okay.   Rich: Our office is here. This is probably the best multifamily market in the country. The cranes are all over the skyline. The jobs are coming in like crazy every day or week there is another multinational company that's relocating from California generally to Dallas Fort worth. There's a lot of vibrancy here. Rents keep tricking up. I like DFW. I've liked Houston a lot in the past; Houston is very squatty though, and there's a lot, I can't just tell you that Houston's going to do well because every part of Houston is so different and there's no zoning, so it doesn't have a character. Neighborhoods don't have as much character that they do here. But Houston is great Austin is great, it's just the real question, isn't what do I like, the real question is, is there an upside? Where is the upside in multifamily today?   And the answer is that there isn't the kind of upside today that there was until a couple of years ago because we were still basically catching up from the recession; a lack of housing, deferred maintenance and household formation. During the people said to me, "aren't there going to be more renters?" Because people were foreclosed, I don't know if you remember that. They will say, "You're in a great business". All these foreclosures, they have to rent now. No, they didn't have to rent. They moved in with their families, they hold up; whatever they had to do. People are much more flexible and adaptable than statisticians and university professors. So people didn't create households, kids stayed in the basement, and so here we are 2012 wondering where are all the renters? Well, it turns out that they were hiding out.   So when the economy got good and they got jobs, they all came out and that created a lot of household formation, a lot more renters. And that created a boom in multifamily. So, either more and more people who need rental housing, absolutely, and particularly in areas like Dallas, Fort Worth where they're coming in for the jobs, they need housing; Austin, they need housing. That puts pressure on rents and they usually start building a lot more too. The areas that have a declining population, I wouldn't invest.   So if a deal's in a city that has a declining population, I automatically say no, I'm not interested in, even if I could fix it up and make some money, to me that's; I'm going against the tide. I'm just one guy, I can't make an ocean. I have to get in my little boat, and I have to have the-- I want the ocean to work for me and not against me. I don't want to fight that. Same or crime; if I'm in an area that has just tremendous amount of crime, it's still, crime is [inaudible31:42], but if it has a lot of crime, I don't want to own it because I can't do all the things necessary to stop crime in my neighbor. I'm not a police department. I'm just one person owning one complex or two in a neighborhood and I've got to have an ability to deliver safe housing to the people who rent from us.   James: Got it, got it. Just want to add one thing to the listeners and audience. If you want to find a city where there's declining on appreciating one free resource, which is very quick to check, it is called bestplaces.net. Bestplaces.Net, and you can go and enter the city information and you can go to a household. I believe it's a real estate statistics and it shows you whether there's a declining population or increasing population. I mean in general, I think Texas is increasing in general. Everybody's moving to Texas and I believe Florida as well, so--   Rich: I mean, if you're looking in Texas and you say, well, why don't I buy in Amarillo or Abilene or these kinds of places, I don't have anything to say. I don't know those markets, but those are not vibrant places generally.   James: It makes sense; vibrant. Okay, got it. But I think the major cities in Texas are pretty vibrant.   Rich: The major cities are really San Antonio, Austin, Houston, and Dallas. Then you have cities like El Paso, Lubbock, Tyler, you know, places like that that are in the second tier. Corpus Christi is another one that is in between the second and third-tier cities. Aon, actually in Corpus Christi real estate, and that's on a lot of people's radar because they are putting along money to the ports and the petroleum industry, but it's not as vibrant as it San Antonio or Austin.   James: Got it. Got it, got it, very interesting. So but Dallas, I mean, I know you're focusing on Dallas, but Dallas prices have appreciated from what 50,000 a door. I mean, I think all over Texas it's like this, right? For the past five years, $50,000 a door to almost a hundred thousand a dollar for a C-class property. So how are you planning to buy deals? I mean since, don't you think at some point the price per door is just going to be limited by the rent wage growth of the--?   Rich: Well, I think that it's a mistake to really focus on price per door. I think it's a better thing to focus on cap rates.   James: Cap rates, okay.   Rich: And if you could buy something over a five cap rate and put loan on it for under 4%, then you have positive arbitrage, and you're going to make money. So a lot of properties are expensive, but property in San Francisco is 350,000 a door. Now, I was a mortgage broker there when they were going for 100,000 a door, and I thought people were crazy. Who would ever pay that? So, we can't let a number and you shouldn't let a number per door impact your buying decision. What your buying decision should be based on is what return on your investment you're going to get. Now, it's true that you want to make sure there's an exit there, meaning that there's somebody else who would buy a property at more per door if that's a problem.   Now there are some markets where maybe that is an issue still, but they're generally very depressed; places like Detroit or things like that or Cleveland. But even those places are not any more per door oriented. So I've seen deals recently that are 120,130 a door. They were bought for 80 a door just three, four years ago. And before that, they had one for 55 a door. And I don't really care what people bought them for in the past, I just care what can I do? What's my return going to be? If I could hit my numbers and I don't really care. Now the question is, can I hit my numbers? Am I chasing a dream that's-- is the ship already sailed? Is there really any more room in this property to enhance value? And the answer has to be yes. And a lot of the areas in Dallas are improving. The income levels are going up in some of these places. The number of jobs in the area is going up, so they're not static environments. Today, a suburb of Dallas is not the same place as it was 20 years ago because now there are four times as many people living in the area, shopping in the area, working in the area, and those people are all competing for housing.   James: Wow, that's interesting. Okay, so how do you underwrite your deals? I mean I'm sure you're looking for upside, right? That's what you talk about in any deals and whether you can make a return on your investment, right?   Rich: I'll tell you my tricks of the trade, which is nothing unusual; first of all, we go into the numbers and make sure we understand the expenses. And we also increase the property taxes based on what we think the assessor will increase the taxes too. Yeah, that's a really big thing; people don't realize they come from out of the outside Texas that your property is assessed every year a new bag. So you can't look at a tax that your seller's paying and think that you're going to have the same tax. So we get the real expenses, and then if we're going to do a value add, we want to find a property that's very similar, same vintage and everything that's already done the value add and see what rent they're achieving, what they've done, and we're not going to go past that.   In other words, I'm not going to be a pioneer and decide that I need golden faucets or Berber carpets or whatever it is; I'm going to make a nice value-add, the same as everybody else. Maybe you are a little better, but I'm not going to a guest that I can get more rent, so that's where I get my revenue, just estimating how many of this was going to renovate? What rents can we get today, today in the marketplace, not tomorrow? And then use those numbers, and if those numbers show that I can get a great return based on what it costs and what the money we put into the property, then it's a go. If the numbers, there's nothing here, I can't get a return from doing this or the rents are tapped out, that kind of thing. Then I pass. And we use a model. I think we use the CRM model. We bought the model because it got too complicated for Excel for us. And so we use a model that we bought to program the IRR and all that stuff.   James: What about the rent growth assumption? How do you usually predict that?   Rich: We don't put more than two or 3% a year in there? We're not looking to create false expectations. 5% rent growth sounds nice, but that doesn't happen all the time. In fact studies in Houston show that there's been virtually no rent growth in two or three years in Houston. And every year they say that they had four or 5% rent growth. And I asked the realtors, is the four or 5% rent growth that these reports say? And nobody seems to know where the data's coming from.   James: Yeah, absolutely. But do you think we can get that 3% rank growth moving forward from now on the next five years? I mean, do you think it's real estate?   Rich: I think we can get the two to 3% rent growth just by doing nothing; if you're in a market that is strong.   James: So it depends on the market as well.   Rich: It all depends on one thing and one thing only, which is wage growth in the market you own.   James: Correct.   Rich: I own a lot of property in San Antonio and there was virtually no wage growth in San Antonio. And I have property that I've owned there now six years, seven years. And the last two or three years there's been virtually no increase in wage growth or rents in none of these markets. The cap rates keep going down, so people keep paying more for these properties. They expect wage growth and rent growth, so everyone has a different expectation.   James: Got it, got it. So what about the, I mean, you mentioned that I mean, you did this for 20 years, own like 8,000 units, you could have multiplied 10 X your holdings by going with private equity money which some people have done. And some people have gone to private equity and came back to be a [inaudible41:31]. Some people are trying to get into working with private equity because it's easier to rent and raising money from retail investors which is like family and friends. I know you mentioned some perspective, but can you give a full perspective on why you didn't choose that route at all?   Rich: Well, we do have family and friends, and private equity, and some family offices in our deals. I have three deals that I have is tuition in, and I just prefer the flexibility that-- I prefer working with individuals and with people I know because multifamily is not a straight line. You buy something a lot of times prizes after you close, you don't know, some problems that you run into. Sometimes you have to replace staff. A lot of times you have a staffing issue. It could take a year or two longer to execute your business plan. And still, it's very good. When you execute your business plan, you make a lot of money, but instead of taking one or two years, it could take five years or four years. And when you have institutional money, they're not very patient and they are very willing after; if you don't make your numbers for one to two years, they're very willing to take the management away or threaten you with your cramming, taking away your investment. Actually, you're cramming down; they call it crammed down; to make the return.   It can be pretty nasty, so that's one of the reasons. It's getting easier to raise money from family offices privately. There are a number of crowd-sourcing platforms; we've done some crowd-sourcing rising for a couple million dollars as infill, you know, to fill in a partnership after a family or friends invest, and we still have a couple million left. Well, we've been successful at raising that money there. We've also used preferred equity, which is kind of a hybrid deal. It's not secondary financing, like mezzanine financing, but it's similar. What they do is there is a pay, they want a pay rate of around four to 6%, and then they want a complete return of let's say nine to 11% or 12%. They'll take the difference when you sell the property well when you refinance. So, it gives you more leverage, you might say, but it's not partnership money, so it reduces the money that you have to raise as a partnership.   James: Got it, got it. And what would you give advice to people who are saying that you know, when the market turns, I mean, they will not be any more private investors anymore, I mean, you have to go back to private equity? Do you think that's the true case?   Rich: You mean institutional equity? You have to go back to-- that's all private equity. I think the reality is when the market turns, everyone goes back into their little clamshell, so what you call it and money is money. And if people don't feel that they can make a return, then they won't invest. Now, what happens is that if the market turns and people are not making return, some deals will go south and will go sour, and then you'll start a new cycle of this trust real estate. And then there'll be opportunity funds or vulture capital guys who are trying to invest in those deals and they'll be looking to invest. So every part of the cycle has a different kind of investor. Right now the profile of the average investor is looking to clip coupons. Most people know that the glory days of making two, 300% on their money is over and they're very happy with what they'd done and now they really don't want to lose their principal. There have gotten more conservative as wealthier people do, and then they say, well, can I get a seven or an 8% or 6% coupon clip every month when you send me a check? And there are a lot more of those people today. There is virtually none of those people in 2008, nine, 10, 11, 12. Yeah, but today, most people have the profile as investors of wanting to have lower risk and are willing to take less reward.   James: So what you're saying is in 2008, everybody disappeared; nobody invests retail, right? And then after that, there is some vulture capital and then now people are looking more into stabilized assets with lower risk.   Rich: The people who appeared in 2008 were the people who worked at Goldman Sachs or Blackstone or these other Carlisle group and these other large accumulators of capital. And what they saw is a tremendous amount of blood on the street as they say. They saw just a lot of financial suffering and they were looking at enabling because of their massive amounts of capital to scoop up troubled assets for pennies on the dollar. So a lot of the mortgages that went bad were sold off for 20, 30, 50% of their mortgage value to these conglomerate; these large companies. And then they went through the process of foreclosing on individual assets. Some of them actually created management companies themselves, and they got the properties back. A bunch of then they put them back on the market and made a lot of money. So there was a lot of business, a lot of wealth created in that time frame, but it wasn't created by people like you and I, it was created in Goldman Sachs, and in Blackstone, and these kinds of places.   James: Got it, got it. So where do you think we are heading in the next two or three years or five years? Are we going to have a slowdown bump or it's going to be a crash into like 2008 or there is just going to be a coupon rolling in multifamily?   Rich: I don't think that we're going to have a crash. I see it more that it's just a steady market and I just think it's going to go up and down a little bit here and there, and I don't see much change from where we are for a couple of more years. I can't see out too far into the future. Sometimes politics and things like that intercede, and we don't know if someone politically comes in and starts changing the tax code like they did in 1986 or something like that. But the way I see it is that America is fundamentally becoming a retro society. People are living a lot longer, and the longer people live the less they want to own a house. A lot of people will own houses and raise families there, but they will exit houses more and more frequently to live in places like central cities or small main street America so they can be near services and doctors and entertainment and [inaudible 49:41].   And I don't think that we're going to go back to the white picket fence for everybody's environment. Now, that doesn't mean people won't buy houses, but when people are not raising children, they will prefer generally to live in smaller environments, more like Europeans do, and I think that pertains, well, for multifamily. There are so many good trends that are feeding into the multifamily trough that I can't imagine right now that in general, multifamily would have a crash.   James: Got it, got it. And so we're coming almost to the end of the show. Can you give us one advice to people who are thinking of becoming like you owning thousands of units and they're just getting started?   Rich: Sure. So this is my main piece of advice is that if you want to be in this realm, then you must make it a full-time job. This is not an investment, multifamily is not a stock that you-- it's not putting money on Microsoft and watching it go up and down. It's an active business, and if we're going to try to be somebody who owns several apartment complexes, then you just really can't buy the complexes and hand away the keys to the management company and expect great results. You have to be very actively involved, visit your properties, know the rents in the market, walk vacant apartments, and make sure you hire good people. It really is a business, and if you're not prepared because of your lifestyle, your other job or something like that to devote most of your time to this business, then my recommendation is become a limited partner in a deal or two, try to make money that way. But don't think that you could become a principal and own five or 10,000 apartments that way, no, it's not going to happen.   James: Got it. I mean, this is one of the requests from our listeners. Is there anyone advice that you want to give to a passive investor who is investing in this deal? What they should look for [inaudible 52:14]?   Rich: Well, the big issue for passive investors is that they should really understand what they're investing in, like any other investment, and not take the offering that they get from the company or the operator at its face value because it could be too optimistic. You want to make sure you agree with the assumptions. So you would probably at the very least get on the computer and look at how much are units really renting for in that area. If they're going to renovate, well, what does a renovated unit look for? Is this an achievable rent that they're projecting and are their expenses realistic? Are they in line with what expenses really shouldn't be? So do a little homework; that's my main thing, and don't just trust that, just because somebody sent you something that said that there's a 30% return, that that's a real thing.   James: Yeah, I have many, many times some passive investors just look at the final return numbers and decide whether they want to invest or not, but they forgot that we are making thousands of assumptions in that spreadsheet. So you rather check the assumptions rather than just the final numbers.   Rich: Absolutely.   James: Right, so Rich we're really happy to have you here. How can the listeners and audience reach out to you?   Rich: Well, they could, we have a website, alcapgroup.com and they can send me an email through there. If they want to know about our upcoming deals, we'd be happy to put them on their list and work with them, talk to them, and see if we can do some business together.   James: Awesome, awesome. Thank you very much Rich for coming onto the show.   Rich: Thanks James, been a pleasure.   James: Pleasure to have you. Thank you.

James: Hey, audience and listeners, this is James Kandasamy and you're listening to Achieve Wealth Podcast where we talk about value-add real estate investing and we interview a lot of commercial real estate operators where you can grab a pen and a paper and start learning.    So today we have Jake and Gino from Wheelbarrow Profits. And Jake and Gino own around 1500 units with 1000 of that units were done solely by them without any syndication. And they have another 400 units, which they started syndication and their primary focus is on Southeast market. Right now, the deals are in Tennessee and Kentucky. So, Hey guys, welcome to the show.   Gino: Hey, James. How you doing? Nice to be here.    Jake: Hey, thank you for having us.   James: Yeah. Did I miss out anything in terms of introducing you guys?   Gino: Well, I mean, for me, I've got six kids. I mean that's probably my biggest achievement to date. I live down in Florida. I relocated two years ago from New York to Florida. I'm a certified life coach. I think that's a really big accomplishment for me and I've got a fantastic partner on the other end. So that's what I guess made my success, having an amazing partner, having an amazing person pushing me and telling me, Hey Gino, we need to buy this deal. Hey Gino, you know, we need to write this book. And I'm like, come on, another thing? So having a great partner really will excel you in life. Did leave anything out, Jake?    Jake: We're economic deserters. We left the high tax Northeast for a better life of sunshine and rainbows and I'd [01:54unclear] friend. No, it's been a great ride. You know, Gino and I, back in 2011, started really looking hard at multifamily. We wanted yield. We wanted something that was going to pay us every month. We had very challenging jobs at the time. I was under threat of layoff all the time. Gino was in the back of the kitchen trying to make sure that he could get dishwashers in every night. And ultimately, we knew there was more to life than what we were experiencing and we sought out to make it happen for ourselves.    So we got into the first deal. It was a tough one. It was a 25 unit and we've never looked back. We've done multifaceted, multifamily ever since. We have four core businesses, we have property management, we have education, we have a mortgage brokerage, we have an investment business and over 20 holding companies to go along with that. So we really look at multifamily, you know, being the place to be because we know that it's a basic human need and we've grown our brands all within the multifamily space. And it's been, again, just a fantastic ride. We've focused a lot on culture scale, and growing the business day in and day out. We had an epiphany moment a few years ago that we were working too hard and we're running around doing everything.    We call it the, 'I'm a' mentality. I'm going to do this, I'm going to do that. I'm going to do everything. 'I'm a' could only go so far. So I'm ahead to bring some friends. So Jake and Gino, you know, brought some friends on and we started scaling up. And you know, we've got some really great people on the team and I think that's one of the things, I get so much of the enjoyment out of it. Cause I see these people coming on really with us and they just grow and they excel and then we've created a home for them.   Jake: And James, more importantly, that only started with a 25 unit property with $27,000 from Jake, myself and my brother, Mark. So that's the amazing thing. Talking about where to start. I'm too young, I'm too old, the market's too hot. I don't have enough money. Those are all myths that people want to tell themselves. What they're lacking is they're lacking innovation, they're lacking education, they're lacking creativity and they're lacking mastermind. Those are the things that I lacked when I used those excuses.    And if you want to use those excuses, that's fine. But we have so many Jake and Gino community members that are in their twenties and they're in their sixties and they've gone out and they're doing deals. So if you want to get into multifamily, you need to educate yourself first.   James: Yeah, very interesting. You guys are really, really vertically integrated. I mean, as you've mentioned, you guys own property management, asset management and also have a renovation team. And you also do some agency that representation right to the test lenders, I guess for the agency, which is really good. I mean I have the first three but not the last one. Question is, I mean, how did you guys do this 1000 units on your own? I can tell you there's not many people who have done like even like a what, 300 units on their own, right? Everybody syndicates, right? Including me; I syndicate, I used to own...I mean I still own some single-family, which I'm selling off right now, but all my deals are syndicated and a lot of people I talk to use syndication. But how did you guys go from that 25 units to 1000 units on your own?   Gino: We weren't that smart, first of all. We thought that's how you had to do it, to be completely honest with you. Because we said, Hey, we got to buy a deal. We'll buy the deal. We buy it, right? The three-step framework, if you see the wheelbarrow behind me, it's buy right, manage right and finance right. You need to do all three of those. We were buying them right and we're still buying the assets right.    It's truly important that you need to buy the asset right. So we buy these assets, we refinanced the assets and we wouldn't go and buy Ferrari's. We'd actually repurpose that money into the next deal. What really propelled us was we bought a 281 unit property. It was $11 million. It was owner finance. The owner basically said, here you go, here are the keys. We actually had about $120,000 come back to us at closing.   Now that doesn't happen every day, but that happens when you're ready and when you are integrated and you know the business model and you know, to take advantage of that. That really, really propelled us because we were able to refinance that property. So to date, we've refinanced over $9 million of our proceeds. We've rolled that right back into the business and we continued to grow that way. But James, to be honest with you, if we'd been syndicating through three years ago, we'd probably be at the 5,000 unit mark, which is maybe that's great, that's not great but that wasn't our path.    We started syndicating back in November because we saw we could create another multiple stream of revenue, create the asset management company, that syndication company, for syndication. And I had five or 600 investors on our platform because of the Jake and Gino brand. I just couldn't utilize them. We didn't have the space so we brought on another partner to start that business and that's been a fantastic business. We've done two syndications, we've got another deal in the contract right now and we're continuing to grow that. And James, as you know, they feed each other. It's just wonderful. You go to an event, you speak, you do podcasts, the education can sell education, sell books, and then you know what, you're positioning yourself as an authority leader. And on top of that, you're bringing investors on board and you're teaching people how to do it and you're getting the deal source. And it's just such a symbiotic, beautiful relationship.   James: Yeah, it's very interesting because I mean right now, like for example, I was told once, I mean you can do syndication, but your end goal is to own some of the units. But you guys are going the other way.   Jake: We started backward, James. I'm going to tell you something, and this is what I want your listeners to hear because it's the kind of thing where a lot of people are afraid of nonrecourse financing. And we'll tell you right now, non-recourse financing has made me rich and it's made Gino rich; fortune sides with him who dares. We took a chance on it. We couldn't even get into agency debt back when we first started. We were doing a lot of deals that would have been qualified for what is now known as Freddie Mac SBL. Okay. We took on the recourse debt. We had a lot of battles on the front end with the banks. I say a lot of times, it's just as hard negotiating the deal as negotiating the deal with the banks a lot of these times.    So we went in, we fought some good battles. As Gino said, we manage these assets, right? And then we were able to take the financing and sometimes we'd finance the deal once with a community bank and then sometimes you'll refinance it again and send it out to nonrecourse financing over time. So we just really did, we focused on buying these things, right. Adding a ton of value to them and then extracting the value, holding the assets longterm, not selling them, keeping the cost segregation going. And really my view of these is that we're going to buy them, we're going to manage them right. And the party is going to keep going because we're not going to sell them off if we're buying a deal in house. If we're buying a deal in house, we're gonna keep adding assets to it. Keep the cost SEG going and keep that party rolling.   James: But what's your end goal is syndication. I know syndication can grow very quickly in terms of unit counts, right? But your shared...   Jake: But it's not about just growing the unit counts for us, right? We want to have a tool in the toolbox that fits every deal. And we were talking before we got on the show today that we just bought a very hairy deal. It's 26 per unit. People were not being taken care of. It's 146 units. We have 40 vacancies right now. We didn't syndicate that. That was not a good deal necessarily for us to syndicate, but I know over time that deal's going to pay us back very handsomely. So was that a deal that we want to syndicate? Probably not. We're doing a deal right now. It's very clean. It's going to be a nice cash on cash return, right down the alley for syndication. We just want to, you know, any deal that comes our way, we want to, if it's going to cash flow, there's going to be an opportunity, we want to have a vehicle or tool to take that down. And syndication is just one of those tools. Find it in house is another one.   Gino: And I think the opportunity we have now, to piggyback off of that, as where we are in the market, in the market cycle right now, you just gotta be careful of what you're buying. You have to be buying assets in pretty good locations, with pretty good rent growth because when the economy slows down, you want to be able to continue to have your occupancy and run 94-95%. You don't want to see rents dropping. So you gotta be careful what you're buying. Would we've been buying these assets three and four years ago? No, the opportunity was more of those value-adds. Now there's less of an opportunity for our value adds because those prices are already built up. I mean, we went and bought an asset in November at 45 a door. Two years ago, it would have been 30 a door, but that's where we are in the market.    So with that value add, it's very difficult because you've got to put more loan to value. So you've got to put more money down on these deals and there's more risk, as going out 18 months or 24 months, if you're not able to make those preferred payments, you know, they're going to come knocking at you. And then the investor's going to say, well, why did we make the draw this and this quarter? Well, we were trying to reposition it for the long game. That's the thing with multifamily. Everybody out there, multifamily is a long game. It's number one, but debt and taxes, number two, it's about having a business. If you're not going to run the business, somebody has to run the business. And number three, it's a long game. You're not going to get paid today or tomorrow. You're going to be the farmer planting the seed, watering the seed, and waiting six months or 12 months for it to grow. That's why it's hard to get into multifamily because people love transactions. This is not so much transaction-based business unless you start getting into it and then a year, two years down the road, you can create some transactions by refing or by selling or by trading up. But when you start out, it's hard because it's that instant gratifying.   Jake: James, I want to say one thing that just piggyback on Gino here and what he's saying is many of you out there may be syndicating deals and we love syndicating. We love buying deals ourselves. Just keep in mind the syndicators that are the most successful are that they understand that the work starts after you bought the deal. Just because you're syndicating, you need to have that one on one connection, even if you're doing third party management. James, we were talking earlier that you know, he runs his own a property management group. That's when the real work starts folks. So you know, whether you're syndicating, whether you're buying in house, tee it up, make sure you're financing it right. Make sure you're buying it right. But then that managed piece, just because you know, you may not be running direct property management, you need to be having those weeklies with that property management, making sure you're nailing your KPIs.    James: Yeah. I also think that the managed portion makes the most money. Do you guys agree with that?   Gino: I totally agree with that 100% because that's where you're going to increase your NLI. You're either going to increase the income, decrease the expenses, create systems and be able to scale. But the problem that Jake and I had when we hit 650 units, we were still just telling somebody this the other day, we were still using rent posts and we fumbled upon that folio and that was the biggest aha moment. All of a sudden we said to ourselves, it doesn't matter how many units you add onto your portfolio, if you're not managing them efficiently and extracting as much value from them, that's going to be a big problem. So I think managing is the most important. It's ongoing.    Jake: There's more to it though, to James' point. Here's why. Once you buy the deal, there's no going back. You paid the money, you paid that price. That is fixed. That's why I always talk about the back leg of the wheelbarrow being fixed. If you finance the deal for 10 years, and I don't care if you have stepped down or you have your maintenance defeasance wherever you want to say, you're fixed, what are the levers do you have to pull? It's the management arm of it. That's the piece that you're going to be able to. Exactly. Right. That's a great point.   James: Yeah. Yeah, so that's why I always tell my friends and my followers in my Facebook group and all the people who come to me; the operations where you make the most money because before you buy the deal you are putting a proforma, right? You think it's going to be like that. You think it's going to be like that. You think it is going to be 3% operation. You think insurance is going to be this much. Right? So it's a lot of assumptions, but once you close on the deal, it's avail game, right? You are like, Hey, you know, now you have every tool in the box to really trap. That's where you really make the money and you, if you really work hard on the operation, you can make at least, you know,  2-3% more than if you give it to a third party management. Because third party management, they have a lot of other issues. It's not their baby.   Jake: You're not the only customer. Here, we're the only customer baby.   James: And they have a different profit center that they need to really make sure.   Jake: And we won't take on other clients. We only manage our stuff because it's ours and you're absolutely right. We're managing our baby, we're making sure our babies are doing well. There are little soldiers out there working for us. We want them to keep returning.   James: Yeah. Yeah. And also [13:28unclear] if you look at even your own operation, I can decide to, let's say my occupancy drop, I can reduce my staff today just by a phone call. Right. And reduce my expenses as well because my income is reduced. Right. So, but you can't do that on a third party. Right. You are like at the mercy of them. Right.   Gino: I agree with that. And you're also controlling; you're controlling. You can add on more employees. You can actually say to yourself, Hey listen, I want to implement this system. I want to raise my rents so you can have real-time. That's what's great about it.   Jake: Even think about the marketing piece. They may be using, you know, apartments or they may be using roof or whatever they're using and you tell them, well, I want you to stop using that. Well, that might be two or three emails or a week-long conversation to actually get that pulled out. And they may tell you, fly kite here, we just kill it.    James: Yeah, we just kill it. Yeah.    Jake: Move on. There's no question.     James: I have to give credit to my wife. She runs the property management side of it.    Jake: She must be a strong woman.    James: She's a very strong woman.   Jake: We should have her on the show.   James: She's at the property today. So I do the underwriting and investor relationship and acquisition and she does the construction and property management. And you need a lot of...   Jake: You're taking it easy, then man. Come on, you gotta get hurt...   James: My work is a lot on the front end. Right? But one it's closed, it's her work. And I do help out a lot too. Right? So, let's go back to a bit more details on syndication was owning, right? Because this is something that I've been thinking, right? Because Hey, you know, I was like you guys when in the beginning, I did a lot of short term loan, bridge loan and we make a lot of money for us. I syndicated, but my investor was so happy with it, he made so much money. But now with the market being at peak and there are not many deals out there, you know, we have to still get good cash flowing. We still do value-add deal, but no more deep value add deals. Right. So I presume that's what you guys are doing, right? Still, value-add deal but no more like a deep value add when you syndicate.   Jake: No, even the one we just did, we were talking about that; we did it in December, it was 26 a door and we're going in new decks, all new interiors and we have a ton of vacancies. I'm not afraid of it. The key is though, since we have our own management group, I don't want to take on five of these things at once because it's a resource issue at that point. We have resources to do one real heavy value add at the time so we're fine having one of those in the mix. But if you start stacking them, you know you really got to add team members and that's when it gets even more challenging. So for our size of scale right now, I'm very good with, you know, one at a time, getting it kind of rolled up. And we kind of we're just coming off the tail end of another one and then we ramped up into this one. So it's been working out for us.   Jake: So the problem with this deal, not the problem, the opportunity with this deal is we're using community financing. We've got an 85% LTV with loan to cost. So we've got 80% of the loan proceeds going into doing the cap-ex work. We're going to refi that property and bring it to the agency once it's all done. So there's the value there. And the only thing was when we bought it, we were able to have economies of scale. It's near a couple of our other assets are, we're able to use maintenance guys on that property. So that's another one of the reasons why we're able to do that cause just added to our portfolio. If this was something I was all by itself in, you know, down somewhere [16:30 unclear] assets, maybe you'd think twice. But there's always other reasons for doing the deal. And that was really one of the important factors that we saw.   James: And at what point did you start syndication? What was the timeframe? Was it like last year, two years ago?   Gino: So we started, we actually when we came off of our first event, I signed up like 30 people in our event back in November of 2017. I said to Jake, I've got all these investors floundering and that's the thing, when you're signing up investors, James, you have an important role. You need to reach out to those investors and you need to make substantive relationships. You need to start giving them value or else they're going to fall off. So I felt compelled to say to Jake, we need to start creating these relationships with these investors. We decided to hire somebody on and become a partner of that company. The beginning of 2018, February, March, April, we started ramping up, took us a few months to find our first deal. We find our first deal in August and that period timeframe for us, our first syndication, getting the PPM is soft commitments, emails.  It was pretty overwhelming and daunting but we did a small deal. It was only $6 million. It was 132 units. It was something where you can like consume and do your first deal for us. We raised $2.6 million in two days because we had all the framework, we were ready to go, we had the investors, they were prime, we had the podcast, we had the brand out there. But one thing with syndication that's a little different is things move really quickly, and it's a little nerve-wracking that you have to get everything in order. You have to get your emails out, you have to have your documents down, you have to have everything in order. You have to make sure that, you know, you get your webinars going and everything's spelled out clearly to your investors. And that's why it took us a little bit longer cause we had never taken money from the investors. So when it's your money and cash flows and come into the month, Jake says, Gino, septic fields scrapped out. We're not getting paid this month. I can deal with it.   Jake: Plus there was a demand thing we had people asking for it. And it was kind of like at some point where they're going to do, we flirted with the idea for so long as either we're going to do it or not. So we gave it a shot.   Gino:  And that's the thing we could have bought that deal without syndication. But I think it was just the ideal opportunity. It was a new market. It was small enough for us to say, you know what, we can handle this with the syndication. Let's try it. You just got to commit and then figure it out. And that's what we ended up doing. We committed to doing it. We worked with a great attorney, Kim Taylor. She walks through the process. We had great team members and then we just ended up pulling the trigger and we ended up closing in November of 2018 and we followed up with another purchase in April of 2019. About six weeks ago, we closed on a deal and at an additional 240 units in that market. So it's a great learning plus. Once you do one, you figure it out, you figure out the ramifications, the webinars, adding the investors on the documents. And then it's just 'rinse and repeat'.   James: Yeah. I think you guys are the example of why syndication exists, right? So syndication is not like a get rich scheme, right? Not everybody can do it. Not like somebody who was doing W2 can or can do, I'm not saying they must do syndication, right? So in my mind, syndication is like a mixture of an experienced operator, right? So you guys have proven that operator and there are some passive investors which want to place that money into this experienced operator, right? So if I'm getting some guy who was coming up from a boot camp or a  2-day course and trying to do syndication that he doesn't have the experience, I mean he might be coached by someone who's experienced, but I think that's where the syndication comes very powerful, right? When you marry people who really want to be passive with people who are really, really good at what they're doing that's where you get the beautiful marriage there. Right?   Gino: Also students who want to raise deals for others. So James, let's say you're coming short on a raise and you say, Hey, listen, I need to get some way, maybe you can get somebody to raise money for your deal. Obviously they have to be comfortable with you as the operator, as a sponsor. And Jake and Gina is a sponsor with a lot of students start that way by raising money for other people's deals, getting in the game, putting a little lower skin in the game and learning how the syndication process works. And then learning how much work there really is and saying, wow, this syndicator is not putting any money in this deal. But there's a lot of work and there's a reason why there's no money going on the GP side of the business. It's they're signing under debt and they're doing a lot of work for this and that's a great way for people to start getting in the business. Raise a little bit of money for another syndicator if they need that platform, then learn that process. And that's how you learn the process and then you can move on and succeed in getting your own deals.   James: Yeah, absolutely. What's the structure? Can you guys walk through the structure of your company, right? Because you have property management, asset management, you have renovation team, you do some kind of a mortgage brokering as well. On top of that you have an education platform, right? So how big is the whole team?   Jake: You know, probably and not including vendors and whatnot, it's probably just shy of 60 people,   James: 60 people. And how many people...I mean, property management would be the biggest, I guess.   Jake: Oh yeah. Property management is definitely the biggest. And you know, I'm really excited. You know, we do these weekly meetings. I'll meet with every property manager weekly. You know, we meet with the managers of the different divisions of our companies and we call them weekly L10s and we're just really looking forward to this year cause we're gonna really bring everyone together. I think one of the biggest things is when you start to scale and you start to grow, that culture piece is tremendous. Last year we did this big whitewater rafting trip. We brought everyone out. So we're looking for another event this year, but we're going to break down the barriers. We're going to get the core values going, get the tee shirts, bring everyone together for an event. And it's going to be interesting because what we're trying to do now is even get those synergies amongst the different companies jamming that much better together. Get everyone walking to the same beat and so I'm very excited about that.   James: And how many of the 60 people, like a property management. Do you have a number?   Jake: Well, we're going to be creeping up close to 46-47 on that soon. So, you know, we'll have a couple on the investment side of the business and then a handful on the continue education side.   James: Okay. Okay.   Jake: Okay. Property management and that's including our renovation team called the cap-ex crew. They are the elite Navy seal ninjas of property management and they go in when others can't, they get it done.   James: Yeah. So your renovation crew is supposed to be, I mean it's in house, but it's not really announced in terms of financial, right, because they're not supposed to be part of the P& L right? Is that correct?   Jake: Yeah. So that's basically going through the property management group.   James: Okay. Okay. Yeah. That's very interesting. And how did you guys...   Jake: He wants to see an income statement now, Gino.   James: Because...   Jake: I'm just messing with you man.    Gino: So James, I'll dive into the education a little bit more. We started the education about four years ago. October 2015 we launched the book with our profits behind me and it was just me basically quit my restaurant and said, Jake, I need to do something. I'm in New York. Let's start a podcast. And we didn't know why we started the podcast. We should have probably started it to get investors. But we just started because we wanted to learn. I mean, how many times can you speak to Ken McCroy or you know, Robert Kiyosaki for an hour, right? I mean, it's just amazing. So that's where we started. And then from that, we said, okay, how do we continue to build this? So we started selling, creating educational products. We wrote the book, we have trainings on Kajabi, we have mentorships, we have coaching.   And to grow and scale that business, I can't be doing one on one coaching all the time. So we hired a community director. We've got an operations manager in that business full time. We've got three part-time, we've got three full-time sales guys. We've got four coaches right now. We have two deal review coaches on top of our accountability coaches. So as you start growing, you commit, you figure it out, you start scaling up. But the real thing that you need to do is you need to get really qualified people. You need to get great people. Like Jake talks with the culture and our culture is basically a blue-collar work ethic. It's we don't want to hear 'it's not my job' because I'm still packing books. I'm still doing $5 an hour work when I have to. And Jake's doing the same thing. And I want that to convey those small startups with Jake and Gino and we're going to be able to expand this. We're gonna be doing weekend events to just start selling more products and we're going to start bringing on more sales guys. And as the community grows, I think that culture is going to be pervasive throughout all of the entire organization where it's like customers first, you know, students first. It's not me, it's we and whatever it takes gets done. I think that can permeate throughout all of the layers and all the multifaceted multifamily. And that's really important. So when we first thought about Jake and I, Jake will tell you, he thought culture was crap and it was working corporate because it didn't serve him. But I think as he sees it, it's everything right now. Because when they see Jake and I working hard and doing that, it just, you're the leader, you're supposed to be part. If you're going to put in a mission statement in words, and I got house rules over here, if you're not following your own house rules, how do you think your employees are going to follow the house rules.   Jake: James, nothing fires me up more than 'it's not my job'. You want to see the roof come off this house right now, smoke start coming out of my ears. That's the one thing that I can't handle.   James: My wife and I get upset when somebody said I do not know, I said, don't tell me 'I don't know'. Tell me, 'I'll figure it out'.   Jake: Or you know, let's ask and work on it. You know, it's like I can handle that a lot easier than 'it's not my job'. Cause that's like a moral and a work ethic issue and everyone else is working so hard and you're going to sit there and say something like that.   James: It's a clash between ownership mentality. I mean, especially with the property management, right, with the ownership mentality and employee mentality, right? Because a lot of times in property management, the people are working with employee mentality, but owners, we are more, we want to see the profit. We want to be really part of the profit center. Make sure everything runs as how we want for the investors. At the same time...   Jake: Gino knows about the blue-collar work ethic. We finished up a podcast with who was the guy that used to be in Bigger Pockets, who was the guy there? It was Brandon and Josh. And we got a video. We were out there one day. A tree fell across one of our assets that we just bought and was laying across the sidewalk. You know, we didn't have anybody at the time to do it. So Gino and I went down there, took out the chainsaw, chop that bad boy up, threw it in the back of the trailer and made a day of it. We got a video, I think it's still out there on YouTube, so it doesn't matter. I don't care what job it is, I'll do it all myself if we have to.   That's not how you scale, number one. That's 'I'mma' mentality. But if it comes down to it, if it needs to be done and there's no one else to do it, I'm going in and I'm going to do it. It's just period.    James: Awesome. Awesome. That's the work ethic, right? Sometimes you have to do it.    Jake: It's gotta get done. Somebody has got to do it. And the idea is to build a machine and put the systems in place to make sure it runs fluidly. You know, every day the best work that I can do is help working on the machine and building the machine. But it's not always going to be there. And sometimes, you know, a bolt falls off and if I gotta be the guy to screw it back on, I'm going to do it.   Gino: I think it's important to say that the machine isn't built from the very first day. From the very first day you're going to grow as a person. So four years ago, I wasn't doing the best work of what I had to do. I was just doing whatever work I needed to do. But now as you scale, and as you're able to do that, as you become financially free, you can start thinking about working on the business as apart as the working in the business. And the first three or four years, Jake and I were really working in the business. And we weren't able to create these multiple streams of revenue. We're just surviving and learning. And that's fine. That's what everyone's progression is. But once you get into it, when you start doing it, you can start transitioning out and start like what Jake said, start creating those systems. But if you don't start with a 25 unit property, you're never going to be able to do what you know, what actually transpires after.   James: Awesome. Let's go to some market selection questions. So how did you guys select this market?   Gino: Well, it's funny, Jake was going down in 2011 he moved down there and I had it on one of my other podcasts with my wife. He went to Knoxville, move there for six months without his wife, struggled. I mean, it's not an easy thing. He left New York, he abandoned New York and I'm up there at the restaurant. I had just met him and I'm like, Jake, these numbers work down here. Let's start looking at deals in Knoxville. His metrics for moving was; there were no state income tax, close to New York, decent weather, cost of living is great. So he moves to Knoxville. And ironically, enough, that's what makes it a pretty good market to invest in multifamily, right?    James: Population growth.    Gino: And we got lucky, we got lucky with that one. But we started investing, we started looking at deals. I think, you know, the Southeast is great. So like you said, we're vertically integrated within three hours of Knoxville. So that's what we're looking. I mean, throw a dart, there are so many great cities around there to invest in that market. We don't want to go up in the blue States, we want to stay. Texas is a little bit overbought. I mean, you know why. I mean, you have been an engine of economic growth there. People are flocking there because there are jobs there because there's infrastructure there and because people want to live there. So, that's what's happening. So I think, you know, as far as us, we just got lucky. We picked Knoxville and now we're able to go out into these other markets that mirror what Knoxville is.   Jake: And in addition to that too, we have a specific strategy that we're looking to be the best customer service property management company for C and B apartment complex. We own some A stuff but it's kind of because the deals worked and we bought it, but we see a discrepancy where C and B operators typically do not have that good of customer service. I love what Chick-fillet does with a $7 chicken sandwich. How are you doing today? It's a pleasure to serve you. How can I help you? It's that great customer service and I truly believe that is a blue ocean. That is our blue ocean strategy. It's going to separate ourselves and we rebrand all our properties, brand as our property management company so that when people pull up, they're going to know that these people care. We believe renting is personal and our residents are our number one priority. Okay, that's what we're about and that's the difference in how we run our properties and I think longterm it's not going to happen overnight. That's a longterm strategy is going to take years to fully implement, but that's the separator from us and the other guys.   James: So how do you guys standardize this? You know, the awesome operator experience for class B and C, how do you standardize it across the organization?   Gino: Yeah. Well, first thing you do is you start going on training platforms like Grace Hill, you start systematizing platforms and training. We're creating our own internal training right now for our maintenance techs. And then we're going to transitional to training our leasing techs. That's really important to have something standardized to train them. And I'm doing the same thing on education. So when we were onboard, as a coach, I created a training platform for our coaches to watch videos and show how to coach them. And it's the same way in anything. You want to be able to have something standardized where they're all playing from the same drum.   Jake:  So I'd like to elaborate on that a little bit as well because, so it starts with the basic stuff, like Gino mentioned Grace Hill. Now we also have a product called Kajabi where we've taken the Grace Hill training and we have, it's basically our elevated in house training that we're putting on the Kajabi platform where we're teaching our guys if they don't know how to do something, we're having level one, two, three and four for maintenance techs, for example. And then there's a YouTube page where they can go on and actually from their phone remotely check the video, Oh, this is how I need to change out this garbage disposal or thermostat, whatever the case may be. And so as we're going through, you're talking to us as we're in the middle of launching this entire customer service training program. In addition to that, it started with Grace Hill. We're moving to down to a Kajabi and we're working with Grace Hill on Kajabi at the same time. Once we're done with the maintenance end of it, and we should be done in the next couple of months with that end of it, it's then going to the full-service customer service piece. We have weekend trainings now. I don't want you to think that we're just starting this, but this is how we have the full-on slot of our strategy implementation. In addition to that, we've started working with Petra, they work with scaling up. I don't know if you're familiar with that.    James: No, not Petra.   Gino: Okay. It's Verne Harnish's book, Scaling Up.   Jake: And essentially, they look at people, strategy, execution, and cash. And you know, we've gone through top grading and making sure that we're getting players on the team. But the one piece of that is we fill our funnels up really full. We have all these ideas that we want to implement. So we have a good strategy, we have good people, we have good cash, but it's that execution piece that we need to get better at. So, you know, while we have an education company, we're open-minded and we know we can always grow and get better. So we're bringing in the best of the best. This is, you know, from everything I've seen, the best scale company in the country and they're working on our business as we work on our business to make us the best customer service property management group in the industry. So that's where we're going.    Gino: The cool thing about the whole education platform is we never would have done this training internally if we didn't have Jake and Gino. Because Kajabi is our online training platform for education. So it just bled over. And I've mentioned that, I said Jake, we need to do these videos to show the maintenance tech when he goes in, how to change a toilet, how to fix a hot water heater. This can all be documented by training videos. So if we didn't have the education platform, this never would have been even been a thought in our minds. And I think the other thing when you are going out as a business owner, keep your eyes open to what other businesses are doing.    My son had gotten a job down the street or at a restaurant and I was amazed at how many applications these people were taking in. They had an ADP platform and I said to Jake, this is another scaling up option where we can start onboarding our employees. And it's just a great tool. So, you know, a tip for everybody out there, if you're in multifamily real estate, see what other industries are doing because you can adapt and pull from other industries and use it to your advantage.   Jake: I want to talk about that a little bit though, Gino, because what we're basically getting with that is we've used ADP for years, but they have, I'm going to call ADP plus. It's their, whatever, you know, higher-end product. But they will give us for all our different brands, we will have a very corporate and professional landing page now. So we have something called the ran pride video. It's showcasing our folks, talking about our culture, which, you know, not have a history of the company video. All of these videos will go on these landing pages. So when potential employees want to look at us, Hey, that's what these guys are about. So we're selling ourselves; let's not kid ourselves, we are in the tightest job market in 60 years. So we need to be recruiting the best people in and we're not going to have a good organization.   So we're doing everything we can to make it a great work environment, get great people in the door and keep them. Because once they come in, we have a very low turnover. But you know, from ourselves, marketing ourselves to the outside world, we need to let them know what we're about. And then as they're coming through, they're putting their W2 information all into the ADP. It's all electronically saved in the cloud and that carries them through. It also has the HRS software so that our HR folks can manage that throughout the entire lifespan of their time with us. So we're really focusing, like I said, on scale culture and operations because, you know, the other things, the people, the strategy, the cash we've done very well with. So it's that execution and pulling it through I think is gonna propel us over the next 10 years.   Gino: And James, do you need it when you have 100 units? Maybe not, but if you're thinking of getting bigger, you're going to have to implement all these systems. Don't be overwhelmed with it now at 100 unit market, just think that you know, as you grow as a person, as you grow as a business person, you're going to be able to figure out those ideas and go...   Jake: Yeah, we're laying the framework to go from 50 to 500 employees.   James: Yeah, that's really good because I know Grace Hill, because I use it as well, we use ADP, but I've never heard about HRS and I mean I know about Kajabi, but I didn't know that you guys are using Kajabi as well.   Jake: So we blended the two together and then we're actually using a YouTube page for the videos so that they can get it right from the app on their phone. And it's coming together pretty nicely actually.    Gino: And there are so many app platforms out there. You can use Lightspeed, you can use Kajabi. We are one of the founders on there seven or eight years ago when they launched. So we've been using it for a while and we just got comfortable with it. There are so many different, you know, LMS systems that are out there.    Jake: The executives within our company, they love building this because they see the need for it. So they enjoy it and they're great. You know, there some of the ones out there filming, well not filming uncle Shawn's doing that, but actually, doing the tutorials on the maintenance or the customer service videos. So everyone's getting involved   Gino: And they're creating the assessments too, cause you want to actually have them watch a video and then do the assessments. So they're creating all that also, which is awesome.   James: So let's go into a deal, deal level detail or how do you, I mean, let's say today you get a deal today, right? From broker, off-market, right? So what are the things that you would look at, look at it quickly to either reject it up? Cause I presume a lot of deals, you guys don't even underwrite it, right?   Jake: We do a quick underwriting. So we're looking for cash flow from day one and the opportunity to force appreciation in the future. So what does that mean? You know, if it's a stabilized deal we want to be, I'd love a six and a half cap, you know, if we're a little bit lower than that and you know, six to six and a half cap, I think we can typically make it work if it's in a good location, if we're going to syndicate that deal and we're seeing, you know, 8% cash on cash, we like that. And you know that typically, we'll take it to the next level and start looking a little deeper.   James: Okay. Okay. Got it. Got it. And I presume deep value add, it really doesn't matter on the entry capital, on any of that.   Jake: Let's talk about that. So the deal we just bought, you know, if you're talking about actual is was a, you know, like probably like maybe like a...   James: 2%   Jake: And it was a beat to crap 1970s build. But you know, what are we talking about? Like do we really care what the cap rate is on that deal? No, because we know when it stabilizes the cap rates going to be more like a 12 so it's again keeping your mind open to each deal. What can I do and what's the opportunity with this deal? How do we want to take it down? Is it going to be an in house buy? Is it going to be, you know, a bridge financing, whatever the case may be as an agency? Or is it a syndicated deal? You know, all of these things weave together.  And that's the beauty of this game is that we have multiple things that we can do to extract value and create great things. And so, it gives us an opportunity to have fun with it.    Gino: And James, Jake's speaking up specifically, if we're in the 26,000 a unit, we need to add another four or 5,000. If you're into it for 31,000 a door, I know that that asset in right now is trading over 50 a dor. So I know that that right there is a whole month for us. So that's another way I like to look at the per-unit cost of what we're buying. And I like to look at the expenses. If I'm underwriting a deal, we know that the expense should be 4,200 and the operator is running it at 4,900, you know there's value in there. If there's other income that they're generating, that's only 2%, we know typically we can get 10 to 12% of other income. There's another income, there's another value add right there so we're looking for those.    And you know, you'll hear from brokers every day of the week that you can raise rents, you can raise rents. So I have to spend 10K a door to raise a $50 rent, or can I spend 3 K a door and get that same $70 rent bumps. So you have to really try to analyze the market. And I think the other thing you need to be careful is where you're buying. You know, marginal areas, you're not going to get as much elevation right now and it's a little bit riskier. So, you know, we're just buying an asset right now; if it's in a great location, we'd like it. And Jake likes to say he likes to be your Kroger's Wholefoods and Chick-fillet if you can buy in that location...   Jake: Starbucks, bring it on.   James: You guys do value add, right? So let's say your rehab budget got cut into half, right? 50% of what you have. First of all, let me ask you, what is the most...   Jake: Why did that happen and are we playing the what-if game.   James: You never know. Yeah, that's a good question because I want to, tune your mindset to the question that I want to ask. So what is the most valuable value add that you guys have seen? Jake: What is the most valuable value add? Like what is like did we get the most out of doing flooring? Did we get the most out of...?    James: Correct. Let's say you have a budget got cut. Now you have a small amount of budget.   Gino: That's a great question. It depends on what property you're looking at because some properties may, if you put a dog park and you fix up the clubhouse and you do a good job of the pool, you may not see incremental value on that. But all of a sudden you're keeping the tenants and in your act you have to compete with the property down the street. So on one of our properties, we put a dog park in, we've put a fitness center and we did a nice job in a clubhouse and we actually did a pool and the decking. That didn't translate...I'm thinking, it translate into increased value and increased rents, but it also made be able to compete with other people in the market space. I think landscaping, people don't understand; power washing, landscaping, and painting are three of the most important things.   On our property, when we took over November, we actually had rents at 525; they went to 675. And we saw them in the Google reviews. These tenants were saying, you know what, these people were raising rents, but they care; customer service. That's one of the biggest value adds, customer service. We put out exterior lighting so they feel safe at nighttime. We took care of the landscaping there. We put in a gazebo there. We stripped the parking lot and seal the parking lot. We put in a dog park there. Signage was really important. Not huge amounts of money, but anything to turn the look of the property, the feel of a property, you want to show your tenants and any of your customers that you're adding value and not just going there and raising the prices. At the end of the day, why are you raising the price on me if you're not giving me some type of value?   Jake: I'll dive into it a little bit more too. I mean, the basics that, you know, I feel like that you have to go with a lot of times are, I personally love sheet vinyl. I know a lot of people want to put in the plank and this thing. We have this amazing, it's called nature's trail. If anyone wants to go out and look at it, it's skinny, it's white. So it looks like the barn style flooring, it's beautiful, it's got great, great tones in it. Installed, we're $1.74 a square foot. I mean, that's phenomenal. And it goes in, it looks beautiful. It looks like there's hardware throughout. So if I had to really get down to bare bones and I'm turning a complex, I'm going in with my nature's trail, I'm going in with my proposed gray and I'm going white on the wood. So the woodworks, the trim, and the baseboard, I'm going a nice pure white Sherwin Williams and it gets like a 7004 or something like that.   Jake: And then, in addition to it, the property we did in December, we were like, okay, let's pull back a little bit because we're painting the cabinets. And we saw a little bit of a spike in our available units. So we went back in, we reassessed it, and we said, you know what? It looks too damn good not to, it's an extra 350 bucks. Let's just keep painting the cabinets and then we're back to zero available units. So it's always, I think, and this goes back to what you were saying earlier about being a hands-on operator; looking at these things, looking at your KPIs, saying, what the hell, why do we spike? Oh, it was my fault cause we're being cheap. So we went back in and now we're filling it back up like that.   Gino: At the same time, Jake also, you don't have to spend $170 on a ceiling fan. Maybe you see your supply spiking like they did a year and a half and saying, hold on, this unit doesn't need $170 ceiling fan.   Jake: It's a beautiful $75 ceiling fan. They're beautiful fan blades. You get the multicolor here. So yeah.   James: What do you guys think that, I don't know, this is my experience that I see. I mean a lot of times you can put in Capex and all that, but I think the management itself, just managing it correctly, people are just so happy paying you 50 to $75 more   Jake: But you're talking about customer service then.    James: Yeah, customer service. Yeah, correct. I'm not saying that's the most valuable value add, but I'm just saying in terms of...   Jake: I'll say it. Listen, if you come in and you say it's a pleasure to see you, it's a pleasure to serve you. How may I help you? What can we do to make your unit better? We have this unit today. We're gonna treat you like gold. I'll take that over the new paint.   Gino: Jake also, the other thing is when they call for a maintenance request, don't want to wait six days for hot water heater, you have to get to them.    Jake: You're not going back to the hot water heater on me again; are you? Comeon man.   Gino: I love the hot water heater in my house the other day. 44:20crosstalk] We took over the third property. I remember I was in the restaurant and Jake is sending emails, we're turning units. And we had a client come in and started crying cause we've fixed the stove. He didn't have his stove for how long Jake? It was just like the silliest thing in the world. I mean come on. So, I mean, the customer service is really, when you get a maintenance request, send out the maintenance tech and get it done. You know, that's simple.   James: Yeah. It's just amazing on you to just take care of the tenants or the residents and they are so happy to pay you so much money compared to, why didn't a new ceiling fan you? I mean that's all secondary for me. So it looks like we share the same concept as well. So, let's go back to a bit more personal stuff flow. Maybe, one by one, right? Why do you guys do what you're doing?   Jake: Yeah, I'll get into that. It literally is about control and freedom for me. I am responsible for myself and my family and I was not in a position of control or a position where my family's life was secure. It was in the hands of others and I did not feel good about that. I, ultimately at the end of the day, am responsible for everything that comes into my environment and I need to handle that. Multifamily gave me an opportunity to take control of my destiny. And you know, by adding value to others, I was able to in return receive value. And it's been a phenomenal thing for me because I don't want to be, you know, dependent on Wall Street. I don't want to be dependent on a CEOs decisions. I have a lot of faith and confidence in myself and Gino and I know if we do the right thing it'll come back to us. And again, it's something that I don't ever want to be in a position where my family is worried about, you know, where's their next meal gonna come from. Great thing about all this is we've created abundance in our lives.   And you know, we started something called Ran Carriers last year and we were able to actually feed 10,000 kids for Thanksgiving. And so, you know, we'll see if we can match that or do about 15 this year, Gino. And so it's when you bring abundance into your life, you can't help someone else if you don't have the means to do it. So by us driving the ship, we've been able to create abundance. We've been able to create good homes for folks and we've been able to give back. So it's been pretty special.   James: Awesome. What about you, Gino, why do you do what you do?    Gino: I wouldn't  know what to do if I didn't know what I wasdoing right now. I mean, honestly, I'm pretty much financially secure. If I didn't have Jake and Gino, I could just probably live off of the draws of the property. But that gets to be a little boring after a while. So I'm doing what I really like. I mean, the education, growing a business, I always wanted to grow a business from the ground up. I was wanting to help people out by buying properties and by coaching them in motivating and inspiring them. And if I can monetize on that, it's a home run for me. So I enjoy what I'm doing right now. I mean it took me a long time to figure out, and it's funny cause I feel sad for kids coming out of college. What do you want to do when you get older? If you're an adult and you figure it out by the time you're an adult, you're a little lucky. Most adults can't even figure that out.    So Jake talks about it, you know, don't follow your passion. I mean sometimes if you're passionate about opening a restaurant and that's what you want to do, but sometimes it turns into a job. So you just be careful. You know, if you're lucky enough to become financially free and then figure out what you want to do and do something that you love, I think that's like the most important thing in the world for me.   Jake: He's been humbled right now. The G dad is a giver. He likes helping people and you know, not for nothing. The education has allowed people to buy over 3000 apartment units. And I know that's what Gino gets excited about. You know, it's helping other people and, and it's that giving back piece because it's a tremendous community that we have. And the folks inside the community are all like-minded, hardworking individuals. And I think it's because of the, you know, the sort of persona that we give off and we tell people about the values and necessarily what we're about and people are connecting, they're converting and it's been amazing to watch. And they'll get inside the private Facebook group, Hey, we just knocked out a hundred units today and then everyone gets on and start congratulating, how'd you do it? Let's hear about the deal. And it's become great networking. We'd love to see the continued success.   Gino: The phone calls that you get and the 48:42unclear]  year-round. When a student says, I just left my job, or I'm leaving New York and I'm moving somewhere else. That's really worth a lot, man. Because when you get those emails saying, Hey, you know, you've changed my life. There's something that, you know, you can't replace that; that's something that you can't put a dollar amount on, cause you're helping others and you change somebody's life and you change someone's family's life. And that multiplies in effects of people that they know. So that's really cool. That's one of the cool things about education.   James: Yeah, that's one thing that you bring to your end days, right? So it's not about the money. I mean, you usually forget how much you've made, but the appreciation that people have shown you for you're helping them, it speaks. Second personal question. I mean, this is probably, each one of you can answer it. Maybe you can combine together. Is there a proud moment in your life that you think you will never forget, that that moment really impacted you then and you are really, really proud of that moment and you want to tell their stories to your grandkids?   Jake: Yeah, I got one. I got one coming up now. And it's not about myself. It has to do with Gino as well. We were at the event last year, we had a phenomenal event in Nashville, you know, and Gino calls them the 'do rules'. We had over 500 people there, whatever. And it was all about multifamily for two days and just great speakers. It's our annual event, multifamily mastery. And that it wasn't necessarily anything other than it created an opportunity for my daughter. And she went out there and Gino's kids were there and they were learning business and we had some fun shirts that said like Jake and Gino are multifamily masters or something. But my daughter at the time was three years old, she went out and started networking with people and she actually sold a shirt for like 15 or 20 bucks and then she came over and she was so proud. She hugged me and told me about it and I was able to announce it to the whole room and the whole room like erupted because it was just, you know, it's this little girl going out there and then she was making it happen. So I'll never forget that. And it just is, you know, because of the community that it created that moment for me. So that was very special to me.    Gino: So we'll leave it at that cause I've got so many stories, but that's one story.    James: Take one story.   Gino: I mean one of my proud moments March 1st, 2016 when I left the restaurant and it wasn't because I was leaving a bad situation. It was finally saying to myself that I achieved something that I had been working for forever. I finally was saying to myself, I don't have to do that anymore. I have been there doing it for 20 years, over 20 years, locked in the same job and if I can change after 20 years and having those limiting beliefs and being able to grow and do something different, I think I just wanted to inspire other people that do that. So that was really a proud moment in my life.   James: Awesome. Awesome. We're at the end of the show, why not you guys tell the audience and listeners about how to get in touch with you guys?   Gino: He's the sales guy, so I'll let him shoot.   Jake: Listen, if you can't find this, we're not doing our job very well, but it's really simple. Jakeandgino.com, ranpartnersllc.com if you're looking to invest or rancapllc.com if you're looking into the debt side of things   Gino: and please subscribe to the podcast. We have the number one multifamily podcast on iTunes called Wheelbarrow Profits. We have four shows now. I've actually launched the show with my wife called Multifamily Zone. We have the Movers and Shakers podcast, which highlights a student's success every week. And then we have the Rand Partners podcast on syndication. So we're doing shows, we like going out there as part of our fashion.   Jake: Hold on, Gino, there's more. We're going to give a teaser. So we had the best selling book, Wheelbarrow Profits on Amazon and we're phoning it up this year, right? We've got the honey bee coming out in October. We put a lot of work into this thing. It is a phenomenal book. And it tells a great story and this is not your traditional business book. Gino give a little bit more on that. What would you say about the honeybee?    Gino: It's a parable basically about a gentleman who's frustrated, is very similar to Jake's story. Going around, has a boss, hates his job, and then just stumbles upon an older man who's willing to mentor him and find out that, you know what, there's more to it. How do you have all this? The analogy of a river with little tributaries growing into a big Russian river and it's all about creating multiple streams of income, starting small and making the stakes, and then all of a sudden, five years later, you've created something really great. So we just wanted to translate our success and just have people open up to the idea of that you can start small but create those businesses and then from one little stream of revenue, you can end up having four and five like you do James. And like we do.    Jake: And I'll just leave with this because the one thing that I really picked up from Gino early on in our investing career was to get rid of limiting beliefs. I know it's like a big Tony Robbins thing as well, and people talk about this, but it's so impactful because you know, you'll sit there and say, Oh, I can't do that. Well, you're right, if that's the way you're going to think about it, you're right. I grew up in a super small town on a dirt road out in the middle of nowhere. And that's the truth. And you know, we've been able to grow this business to, you know, over a hundred million in assets and you know, created financial freedom and generational wealth for our families. So there was, you know, literally in the town that I grew up in, you could work at the school, there was a factory that made chairs and you know, my family was like, well, maybe you should be a cop... Gino:  Or a gym teacher.  Jake:  You know, I literally went to school to be a gym teacher because I played sports and that's all I knew. So don't limit yourself because look, multifamily is not rocket science. It really isn't. Get educated. I always say education times action equals results. It's possible for anyone out there to do it, especially a pizza guy and a job rep were able to do it.  James: Yeah, I always tell people, if you think there's no deal out there, you are right. If you think there are deals out there, you're absolutely right too.   Gino: I love that.  James: It's that mindset that you have to get away from. Jake: Listen, look at the deals for two or three weeks and then having them not pencil out, it can be very discouraging. Try two years. That's how long it took this guy and I to get into our first deal. So yeah, I always say, you know, the best thing we ever did, we were pesky. We hung in there. We kept driving.  James: Exactly. All right guys, thanks for joining this podcast. You guys added tons of value and we're happy to have you share.  Gino: Thanks James.  Jake: Thanks James. 

James: Hi audience and listeners, this is James Kandasamy from Achieve Wealth True Value-add Real Estate Investing Podcast. Last week, we had Scott Hendricks who is a wealth manager and he covered a whole slew of topics ranging from 1031, being a broker-dealer, how someone can be a broker-dealer to raise money legally. He also covered DSTs - Delaware Statutory Trust and some of the items of Opportunity Zone. So it was a very, very interesting topic where I learned a lot and I'm sure if you go back and listen to that, it's going to be very, very educational as well. Today I have Yonah Weiss from a medicine spec. Yonah is a business director and a medicine specs. She is focused on a lot of things but primarily Yonah focuses on cost segregation and bonus depreciation, which gives us a huge tax benefit for a lot of commercial asset class investors. Hey, Yonah, welcome to the show. Yonah: Thank you very much, James, for having me. It's a pleasure to be on your show. I love your show. It's one of the most, I'd say, one of the highest quality podcasts in the industry. James: Absolutely. Absolutely. I mean, I've been doing this for the past six to eight months and recently, I don't know it, it's a surprise to me as well that, you know, one of the I think radio public they selected this show as one of the top 24 shows for real estate investing in 2019 which is a very big surprise for me. So I'm happy that people are finding value in this podcast and I'm learning as well. So, Yonah, you have been in a lot of podcasts in many, many podcasts so I definitely want to cover cost segregation, bonus depreciation, but I want to go a lot deeper into a lot of other aspects of your personal growth and of the tax code itself. So hope you're ready for this. Yonah: Let's do it. James: Okay. Awesome. Awesome. So at a very high level, can you define depreciation? Yonah: Depreciation, in fact, usually means something going down in value. But for our intents and purposes, because we're talking real estate here, it's actually just a borrowed term. It's a tax deduction. It's a tax write off based on the fact, on the principle, that things go down in value as time goes on. So the IRS gives you, as a property owner, a tax write off of the entire value of your property over a certain number of years and that write off is called depreciation. James: Okay, got it. Got it. So it becomes much sweeter when the depreciation is just a paper loss, rather than actually losing the value of the building. Yonah: Exactly, exactly. So it's different from, an appraisal standpoint, you know, an appraiser might look at the property and be like, it actually has a lesser value because it is this many years old. So that's the difference when we're just talking kind of theoretical. James: Got it. So clarify me if I'm wrong. Only in the US, we get depreciation for a property that already been built and used for like 20-30 years. When someone buys it again, he gets a fresh depreciation start. Is that right? I mean, all other countries are like if you build new, they consider it getting old and it's depreciating. Is that true? Yonah: Right. Yeah. I mean, I can't say for sure because I'm not really well versed in every other country's tax laws. But yeah, the US tax code is based on, even if it's a used property, you can actually take the tax write off, which is actually interesting because a lot of people don't know this. You can actually use depreciation on properties in other countries if you're a US taxpayer. So if you own, let's say, a large property in India or wherever and you're paying us taxes, you can actually take the depreciation deductions from that property on foreign soil. It's a very little known fact, but it has to go on a different schedule. It's called the ADS, the Alternative Depreciation Schedule, which is a little longer instead of 27 years, it's 40 years. But yeah, that is something unique as well. James: Oh, I think that's probably a new fact for a lot of people because a lot of people have properties in other countries. So, do you know the details on how do you get the depreciation or you just have to work with a CPA and some tax consultant or how is that? Yonah: Yeah, I mean like all of your depreciation, it should go on your schedule with listing the property and then it just has to be filed on a different schedule. Meaning it's like I said, it's called the alternative depreciation schedule instead of the regular, which is called the modified adjusted, the regular schedule and the macro schedule, which we go on for most things like 27 and a half years for a residential, 39 for commercial. So it's important to just note that and work with the CPA, who knows how to do that because yeah, you can get extra tax deductions. James: And is this depreciation only for a brick and mortar assets? Is there any other assets? Like if I buy a goal, if I buy, I mean land, of course, there's no depreciation, right? There are only for buildings, which is a true brick and mortar. Is there any other investment vehicle that has depreciation other than real estate, which is the brick and mortar? Yonah: Well, there are other types of properties like equipment and things like that that maybe commercial owners might have, which have depreciation deductions. It's different than the regular depreciation, which we discussed in real estate. It's under a different code. The 179 deductions, which you know, will apply to a lot of commercial equipment and stuff like that that you can use that deduction to write off business equipment and things like that. Or even if you know large, you know, software, you know, any type of business, an asset that you're buying is not necessarily property that can be deducted and depreciated. James: Got it, got it. So, yeah, that's very interesting because depreciation is one of the most powerful word for real estate investing. I mean, compared to stocks and bonds and, you know, buying a goal. I mean real estate is something that, you know, this has been created by the tax code to say that....do you know why they do that? Is it because all the people in Congress invest in real estate that's why they kept depreciation as it is? Yonah: That's my theory. James: Thanks for being honest. Yonah: It hasn't been corroborated, I haven't done any independent studies or anything like that, but yeah. You know, it makes sense to me. It sounds like even a little corrupt just like speaking about it, but you know, somebody would like to say, cause it adds to the economy, like real estate, the businesses, you're going to be adding jobs and housing and et cetera, et cetera. But yeah, at the end of the day, you know, keeping the rich richer is something that the government has an interest in. James: So, yeah. I mean, this is one of the secrets that when I was working W2 and I didn't know about it and I didn't know how much, you know, it impacts your savings, your tax savings. Right? So it becomes a huge fact if you're able to depreciate to get some tax savings in and it's all on paper. There's no real stuff that's being depreciated. And real estate is a huge beneficiary of this depreciation, right? Yonah: Exactly. James: So what is the reason why land can't be depreciated? Yonah: So I guess because land never really goes away. And land is kind of a constant status. So, you know, you buy a property and the property...see, it's interesting, this schedule that the IRS set up, that all stuff and we're going to talk about cost segregation, breaking those things down into different categories and different schedules. You know, each type of asset has a different lifespan. And there are so many different categories, right? So you have stuff that fits into a 39-year category, stuff that fits into a 27 and a half your category, you have 20 years, 15 years, you know, 10 years, seven-year and all of these different things. And there are lists, you know, in each one of these categories, the land is the one thing that's constant that you know, it's always going to have value regardless. And when you buy a property, even the tax assessor, the county assessors are going to understand that you're buying land and you're buying the improvements on that land. And the improvements can include, buildings, it can include landscaping, it can include the personal property that we're going to break down further with a cost SEG. But yeah, land is just one of those constants that don't change. You can't write that off. James: Okay. Okay. I'm just thinking about whether... I mean maybe people don't like land. Maybe the people in Congress don't like land. That's why they say, okay, forget about land, let's go and do the building. Yonah: Maybe it's also because I mean if you think about it, the fact that we're paying property tax on our land is really an admission to the fact that the County really owns the land. Meaning we're really just renting the land in a way. Even though you own a property and you own that and you have the title to that property, but how can the County like tax you on it? Because you know, at the end of the day it's still part of that County, right? It's still part of that governance. And so maybe that's why you don't actually get the tax write off for something that, you know, in all intents and purposes is only being kind of lease from you. James: Got it. Makes sense. Usually, have, when I look at the County records and we land and implement improvements, the building is on top of the land, right? So usually - I don't know, I'm so well-well-versed with Texas, I'm not sure about other States - but usually, it's like 80 or 90% is the building and 10% to 20% is the land. Is that generic across all the States? Yonah: I'd say it's pretty average. Like meaning the national average. However, there are places where the land is going to be valued at a much higher level. For example, California is crazy. I mean the land values in California, I've seen up to 60% like literally, which is crazy. So obviously, the more the land value is, the less the improvements made, the less you can actually depreciate if you're basing that ratio. So yeah, so in certain cities like New York City also, like sometimes the land value is going to be higher, just because like that land is worth a lot more. James: Oh, it's worth a lot more and you can't depreciate, which is the absolute reason why everybody should invest in Texas and Florida at mid-city, not in the coastal side of it because the land is more expensive and they don't really give any depreciation schedule. That's a really good point. I never really thought about that. So yeah, that's another reason why, you know, people should be investing in places where the land is more expensive. I mean it's like 50% right off the hole. Okay. Interesting. So coming back to, you know, can you define how does depreciation gives a tax benefit for an investor in real estate? Yonah: So again, depreciation is a write off, right? Income tax, write off. Income tax write off means if you make $100,000, normally you're going to be taxed on that $100,000. If your tax rate is, you know, 39%, you've got to pay $39,000 to the government. Depreciation is the deduction so also, you know, if you have kids, there are all sorts of deductions that you can take. But depreciation is just a deduction right off the top. So let's say your depreciation deduction from your property is $50,000. So guess what? That's you just cut your income tax liability in half. So now you're only going to have to pay taxes on the 50,000 because 50,000 was your deduction. If you took that off your income tax liability, you're left with 50,000 to pay tax on, you're going to only have to pay 19 and a half instead of 39. James: Got it. So I mean, for the audience who's listening, I mean, in real estate you know, I mean in general, in investment real estate, there are two worlds; one is the investment world and the other one's the tax world. So whatever we are talking right now is what happens in the tax world, right? In the investment world, of course, you get the cash flow and you're going to spend it, right? It's like normal. You're not losing money, right? Whereas the tax world, the IRS tax code is meant to incentivize a lot of real estate investors. So they do this virtual depreciation, which is basically you're not really losing money, but they're saying you're losing money on paper and they say you are basically not paying taxes for that income. Yonah: Right, right. Which is crazy. In my opinion, this is probably one of the craziest rules in the tax code. To trump that - not to use any puns or anything like that - To trump that rule is the real estate professional status. Which is crazy. I mean, these rules are just, they're made for the wealthy. James: The ones who invest in real estate, I would say. Right. So let's go back to a lot more details into this depreciation, which is getting a write off on a yearly basis. And so, whatever cash flow we get, let's say your depreciation's more than cash flow, you're basically not paying taxes on it. Yonah: Exactly. Exactly. And that's really going to be the goal. And that's one of the things that cost segregation, right? And the bonus depreciation especially can help to accomplish that. Whatever cashflow that you have, whatever income that you're making, it's, hopefully, going to be tax-free income. James: So however, I mean on every year you're taking depreciation but when you sell, you're still doing a depreciation recapture. So can you explain to me how this whole, whatever you took in the past, let's say five years, you're recapturing it back on a sale? Was the whole benefit was just pushed to the sale or what happened? Yonah: All right, so a few things happen when you sell property. Number one thing happens, there's capital gains tax, which means if you made a profit on that sale, right? You bought it for a hundred, sold it for 200 you got a gain. You have to pay tax on that gain. There's also something called depreciation recapture tax. Okay. And again, this is tax, it's not recapturing and you're not paying back, you're just being taxed on the amount of depreciation that you took over the course of ownership. So there are different rates at which that depreciation recapture is taxed at. One rate is commonly capped at 25%. That's like at the capital gains rate, which is for real property, which is for the real estate. However, there is another rate which is going to be taxed at ordinary income rates, which is on a personal property, which is stuff that we're taking with the cost of depreciation but a lot of people don't think about and it's actually taxed at a higher rate and you're taking it more upfront. What ended up happening is, just to break it down very simply, we're taking huge deductions in their early years of ownership so that we're basically tax-free. Yes, that does mean that when it comes time to sell, we're going to get hit with tax on the backend. But in the interim, in that meantime, from the time you bought it until the time you sold it, hopefully, all of that money you're keeping cash-free and assume it's tax-free, that cash is now worth a lot more. This is called the time value of money. It's worth a lot more because you can now use it, you can reinvest it, you can make more compound interest on that money then having to pay it later on. Also, it's your money. So there's this kind of misconception - I'm just going to digress here for a second. I'll come back to the depreciation recapture tax. There's a misconception that you have to pay taxes. And I think this comes to us from being in the corporate world where we get our paycheck and taxes are automatically deducted as if it's not our money. So real estate is a way that we're making money, all that cash flow, but we're not taking off the top to give to Uncle Sam. We're keeping as much as we can because it's your money. It's not money you have to pay tax on. You only have to pay tax when you have that tax liability. When you have to pay. But if you have more deductions then it's your money to keep. Yes. So part of the real strategy, real estate is kind of differing, pushing off to a later date. And one of the reasons why that is is because there are other strategies down the road that can help to negate that taxes as well. So it's better to pay fewer taxes now and deal with it later because later on, you may have other strategies on sale that you wouldn't have had now upfront. And one of those things is a 1031 exchange, which you can now defer capital gains tax and you can differ the depreciation recapture tax also. There's another strategy that is less known but probably more powerful than a 1031 exchange. And this is called the partial asset disposition, which allows you to claim a lesser value on property that you dispose of because it has less value than it did when you bought it. Okay. Which means like this, if I bought a property for...and it comes in specifically with personal property. So your furniture; let's say you buy this table, this desk I'm sitting at, it costs $10,000. Now, I bought it for $10,000 in five years from now if I'm depreciating it, on a five-year schedule and with cost segregation, then really this has zero tax value. It's no longer, on paper, it's no longer worth anything, right, James? James: Yep, absolutely. Yonah: When I sell this table with this desk, I can actually write on a tax form that I am disposing of this personal property. It no longer has value to me. Maybe it has $100, something minimal, just nominal. Now I only pay the depreciation recapture tax on what's left on the remaining $100 value. So again, this only can happen when you're selling a property. This is only something or you're disposing of it. If you also renovate it, you can write that off also. But this only happens....understand that this is a strategy that we can only take later on. James: Oh, okay. So what you're saying is even though you have depreciated 100% on top of like taking like 25% of that 100% at sale, now instead of paying 25% recapture, maybe the recapture amount as much lower because some of the things you can say, Hey, this is completely useless right now. Yonah: Even though it's not. But from a tax perspective, it is because you've depreciated it. It's already been used now. So that means even on the depreciation recapture tax at a later date can actually be pushed off. I'll mention another great strategy, which is if you're a real estate professional and now you can use your depreciation or your losses to offset your active income as well. Once you've offset that active income, you can now use that to offset other taxes like capital gains tax or depreciation recapture tax. So for goodness sakes, if you have huge losses from this property and then you go and sell the property, guess what? You may actually be able to negate all of the tax that would have come from the losses themselves. James: Absolutely. I mean that's what we do, right? So as an elected professional, right. And that's what most of the people who are doing a large real estate transaction, including a lot of people in Congress, is doing. It's all meant to reduce their taxes or pay no taxes or defer it for later on time. But I want to understand one thing, I want to understand one thing. So at a sale, from what I know, you have to do a 25% recapture. But you say that 25% recapture that's also another part of the recapture, which is at a different rate level. Can you explain what is the 25% recapture and what is the other part and how do you split within these two? Yonah: Yeah, without getting too complicated, because there are actually different, there's like sliding scales and there are different rates involved. But generally speaking, there's what's called the unrealized gain, the depreciation recapture on the property itself, which you haven't appreciated and so that's on a 25%. And then you have personal property, which is on the ordinary income rate. James: Okay. And when you talk about personal property, can you give some examples of what does that personal property...like say for an apartment, in a multifamily building. Yonah: Right. So, again, if you're doing cost segregation, basically anything that you're segregating out you know, most of that stuff falls into the personal property category. So, you know, cabinets, carpeting, fixtures, appliances, all that stuff. James: Oh, got it. Got it. So, okay, we're going to go to cost segregation, then hopefully, it will be more clear. So all these times we only talk about depreciation, which is fundamental things in the whole tax incentive for real estate, right? So now, comes what you call the B grade, I guess. Right? And earlier we were like at a C grade, now we're at the B grade and we're going to go to the A-grade, which is bonus depreciation. Let's talk about B grade. What is cost segregation and how does it fall on top of depreciation? Yonah: Oh yeah. It's not really on top of, what it's doing is separating out the property into these different lives. So if we go back to our original example, the depreciation you're getting, you're able to write off the entire value of the building over a 27 and a half year span for apartments. For other commercials, it's on a 39-year schedule. That means you buy a property for $1 million, you can now write off, subtract some for land, 10%, 20% for land, and then the remaining $800-900,000, you can now write off as a tax, write off a paper loss a little bit every single year. Cost segregation allows, according to the tax code, you can have an engineer come to the property and actually allocate every tiny detail of that property into different categories which depreciate on faster scales, on faster rates. So you have stuff that depreciates on a five-year schedule, as I mentioned, all that personal property, furniture, fixtures, appliances, carpet and cabinets, all that stuff; if you put on a five year schedule, that means that you can literally take and write that entire value off, take as a tax deduction in those first five years instead of lumping it all together. With the entire million dollars, you're going to take 20%, let's say $200,000 and now, take that as a write off in the first five years. James: Got it. Got it. So just to give some education for the audience. So depreciation on real estate, especially on residential real estate is usually it goes across 27.5 years. And then what you're saying, cost segregation, they say, Oh, not everything in this building is 27.5 now we have windows, we have appliances, we have carpet, which we want to depreciate, for example, in five years. Then that's driveway where they say, Oh, it's seven-year depreciation. And then I can't remember what's the 15 years, can you give me some examples? Yonah: Right. 15 years is going to be anything that's considered land improvements. And land improvements includes landscaping, asphalt, parking lots, anything outside of the property that's not considered land, but like fencing, if you have a swimming pool, all that stuff, the concrete, all of that is on a 15-year schedule. James: Got it. So they split it into five, seven, 15 and they start depreciating. So very interesting. So does it matter whether you are doing this cost segregation on a major rehab project; with this project, there's no rehab? Yonah: You can definitely get more benefits when you're doing a rehab. Because when you are adding any money to the property, that money being added in the capital expenditures, it's going to be added to that basis. Meaning added to the books and now going to depreciate that amount of money as well because that's going into the property. So, again, if you bought this building for $1 million and then you went and added another $500,000 in renovations, that $500,000 now gets depreciated as well. So you can cost segregate that as well and break that up into the different components. James: Oh, interesting. I didn't know that. I mean we do a lot of rehab projects and I just never understood whether we should do more rehab will be better. But what do you think just increases the value and you get a bigger depreciation compared to... Yonah: And not only that, we're not going to get ahead of ourselves cause now we're not at the A level yet, we're going to come back to that. You can do the bonus depreciation on the rehab as well. James: Got it. Got it. So very interesting. So does it matter if I buy a small 50 units and depreciate versus buying 300 units and depreciate for any investors in these deals? Yonah: You know, what do you mean 'does it matter'? James: Well, I mean whether you get more benefit out of it or not. I mean, let's say, you invest 100,000 into this deal, does it matter if I invest 100,000 into small 50 units versus putting 100,000 and do 300 units? Yonah: It's going to be pretty much within the same scale because multifamily properties in general if they're the same type of style, the percentages are going to be pretty similar within a window. So anywhere between, I'd say, 20 to 35% is going to be your general cost segregation, the reallocation of the assets, the faster lives. So you know, there are going to be, each property is going to be different, but generally speaking, it's going to be pretty similar. James: Okay. So it's basically based on percentage and the scale. Yonah: Right. James: Okay. I never understood that. Yonah: So if it was a million-dollar property and you're putting $100,000, you have 10%. If it's a $10 million property, you put 100,000, your percentage of ownership is going to be a lot less. James: Correct. Correct. Yeah. Because I have some investors who say, I only invest in 300 plus unit and I never understand why. So, because sometimes, I mean, a lot of times on a smaller property makes a lot more money. And sometimes they just want to do the bigger one. So I always think that there must be some kind of tax benefit that they're doing it. But at the end of the day it's just a percentage of whatever equity that you are getting. Yonah: Correct. James: Got it. Got it. So is there any tips and tricks for multifamily investors or any value add investors when they're rehabbing their project? For example, I met someone the other day where they say you are able to write off the address plate of a unit. Like, say unit one or two. If that address plate is on a metal, they say that you can write it off as part of tax depreciation. Whereas if you go and you know, put a sticker or coughed out the number, you're not able to, that was a huge thing for me. Is that true? I mean, do you get some kind of benefit when you do that? Yonah: I mean that is true. Again, that's part of the five-year assets that engineers could come and recognize what that is. And there are tons of things like that. You know, whether it's going to be what type of flooring you're putting in. James: Okay, let's go into that flooring. What flooring will give you the biggest bonus? Yonah: Alright. So carpeting is five-year property. Vinyl flooring is a five-year property. But if you're going to do real tiles, for example, that's considered actually part of the structure so it's going to one of the 27 and a half year component. James: So doing carpet and vinyl would be beneficial than in tiles in cost segregation/depreciation (?) Yonah: Much more. Yeah. Cause that's actually one of the high-value components if you think about it in each unit. Like, think about how much you spend on flooring. James: Yeah, absolutely. Flooring is one of the biggest expenses, especially on a major rehab. So that's a really good benefit that I never really thought of because I do have properties with tiles and I would think about converting it. And, of course, we don't do it for the sake of getting depreciation but it's just a bonus, I guess. What else is there that comes out to you that you think, Hey, to get these small benefits of depreciation, you guys should look at that. What else is in a value-add rehab? Yonah: Mmm.. James: What about appliances? White versus black appliances, does it matter versus stainless steel? Yonah: Always go with the black. James: It looks better, depreciates more. No, I'm just joking. Yonah: Yeah. I would say just be studious. Be careful with what you're spending. Make sure that, you want to consult a tax advisor who is savvy in this area because you may be leaving a lot of money on the table. You may be leaving huge tax deductions that you may be able to get. And one of the great things about depreciation is that again, we're taking the right off of the entire value of the property, even if you didn't even spend that from your own pocket. Meaning you took that on a loan, you took leverage to buy that property. The bank's money you get the tax write off for, James: Oh, that's awesome. Yonah: You think about it, you buy a million dollar property, you put down, maybe 200-250 your own money, but you're getting a tax write off of $1 million, which is crazy. So too with the construction, with the renovations, you may get 100% financing for those construction costs and you can write the entire thing off as a tax write off. James: Got it. Got it. That's very interesting. So let me ask you one more thing though. If I have a choice, for example, a roof, it's part of the structure, right? So if I have a choice to ask the seller to replace the roof before we close on the deal or should I do it after we close on the deal? Does it make a difference in terms of who gets the depreciation? Yonah: I mean, obviously, not from a depreciation standpoint per se because either way, you're going to get the deduction because if you buy the property, you're buying the roof as well as part of the property. If you then go and spend your money, then it's money that you're spending from your own money or from the bank's money, whatever, and then you're going to depreciate that as well. So the roof happens to be part of a structural component, which is not gonna be eligible for bonus depreciation or you know, cost segregation, it's just going to be part of the main structure of the building, which depreciates at a later time. So it's not necessarily something that's going to get more more benefit per se. James: Unless the roof is increasing your price at closing. I guess, right? Yonah: Obviously, right. And if you have you deferred maintenance on that end that you can benefit from. James: Got it. Got it. Very interesting. A lot of strategies that we can do when we're doing a value-add project. Which I think is important to understand because some things can make a lot of difference in terms of your tax benefit. So I want to go a bit more detailed into the five, seven and 15 years, right? So because of this, let's say you're depreciating a lot of the five years, a depreciation on max later schedule, right? And let's say you keep this property for two years, right? After two years you decided, okay, I'm going to sell it off versus keeping it more than around five years, right? So what's the benefit? What's the threshold of benefits of that depreciation versus depreciation recapture that you are getting on how long you hold the property? Yonah: Again, the threshold when you're going to look at property to property on an individual basis you really have to kind of look at it in a bubble and it's difficult to do. I mean, you may want to do that because the investors are involved, et cetera, in that regard. But even before I answer that, I like to just kind of take a step back and realize that the real benefit of real estate is when you're going to be constantly buying more, right? Because whatever's going to happen to this property, the taxes in this one can potentially be deferred and be pushed off with the next property I buy. And so, that's a viable strategy. Again, we also have to take a step forward and look at each property on an individual level as if like, this is the only property I'm ever going to buy. And so if that being said, if it's the only property you're only gonna buy, so you have to see, is this going to benefit me? If I hold this for two years, I'm going to take this depreciation upfront and therefore I'm going to get the tax free cash flow in the first two years. And then when I sell, I'm going to have higher taxes to pay then. So again, that calculation is going to obviously going to come up at that point. I would say that you should really take that into consideration. You know, if you're going to have two years old versus a three-year-old, or a five-year-old again, the cash flow is the main key to this puzzle. And then, if you are refinancing, which is another possibility, then that money coming from the refinance is also tax-free. It's not a taxable event, which means that that money that's coming back to your investors, which you may decide to pay out proceeds from the refinance to the investors, will actually increase their returns as well. So it's all part of like a bigger calculation. James: Okay. Awesome. So let's go to number A, the king of depreciation now, which was because of the introduction of the tax act 2017. The introduced bonus depreciation for used property. So usually bonus depreciation is only built for new properties, right? So can you explain how that was born and what's the motivation behind it and how does it work to become A grade depreciation? Yonah: Yeah, so bonus depreciation, 100% bonus depreciation I should say, you know, came about on used property. That means that it used to be only if you built a new building. You did new construction, you were able to take a tax write off of the depreciation of anything that depreciates under a 20-year schedule. So again, that goes back to all this stuff. We're going to segregate, the cost segregation, the 15-year land improvements, the five-year assets, which are all personal property, et cetera. All of that stuff can now be eligible for bonus depreciation. Now, when you're doing a new build, it used to be only 50% of that. I mean, you could take a 50% in the first year, you could take a deduction of that depreciation. Then came the new tax code and said not only to 50, we're going to move it to 100%, which means you can take 100% of all of that depreciation and write it off in the first year. Okay. And used property, meaning even if it's an old property, you're buying it for the first time. So this is really going to take depreciation to a whole new level. It's going to take the first year, you know, instead of like on that million-dollar property, instead of a $30,000 tax write off for regular depreciation. And then you're gonna move it up with regular cost segregation, maybe to 60 or 70,000, comes bonus depreciation and potentially you're going to get like a $200-250,000 write off. James: Yeah, absolutely. Absolutely. And what's the motivation of the government passing this tax law? If you know. Yonah: I didn't come here to discuss politics. James: Okay. We have to get away from that. So there must be some reason. Yonah: I think it has to do with the stimulation of the economy, right? The more tax write-offs, the more money can go back into investing, creating jobs, create more housing, et cetera, et cetera. James: But it's limited until 2023 if I'm not mistaken. And after that from 100% becomes, I can't remember, 50%? Yonah: It goes to 80% and starts phasing out every year until it's gone. James: Awesome. Awesome. Yeah, I mean it's surprising for me because I did a lot of bonus depreciation for most of my properties. I think all of it is last year and everybody like almost like right off their capital. And when they looked at their K1 and everybody was surprised that, I mean a lot of people understood what it is, but there were a lot of new people who are asking me, what happened to my money? Did you disappear? Absolutely. Everybody was asking for it because a lot of them got like almost 90 to 100% write off. And I had to explain to them about the bonus depreciation and all that. So yeah, I'm going to be doing a webinar soon, I think, in the next few weeks. I'm not sure when is this episode going to be aired. Probably we'll pass the webinar, but if any of you are interested in getting that webinar link to register, cause I'm going to get a CPA to translate all this bonus depreciation into how passive investors will get the benefit out of it because there's a lot of ethicalities when it comes to tax codes. And I want to get a CPA who specializes in real estate professionals and how does this whole thing benefits everybody in investing in real estate, including passive investors who are not real estate professionals. Cause a lot of times real estate professionals, well understood, but people didn't want to know how does passive investors get the benefit out of real estate investing. All of that will be in the webinar, it's going to be a very interesting webinar. So can you tell our audience how to get all of you? Yonah: The best way to find me is actually LinkedIn. That's my home base. That's where I hang out and spend most of my time. But seriously, you can reach me, my email is a great way to contact me, YWeiss@madisonspecs.com. So SPECS is actually an acronym for specialized property engineering cost segregation. So that's our firm. And yeah, especially if you have a property you're looking at and you want to see what the potential benefits would be, we do an upfront analysis so you can just kind of see what those numbers, the potential tax benefits would be. Whether you're under a contract with a property that bought a property, owned property for years, you can see that. So yeah, happy to do that and please connect with me on LinkedIn. James: Yeah, absolutely. Absolutely. And before I let you go, when is the best time for someone to engage cost segregation firm? Is it before they go under contract? When they're looking at a deal after they close on the deal? Yonah: Usually you know, after they close is the best, I mean to engage, obviously you can reach out to me for that estimate. Even when you're under contract, it's probably the best time, but you know, you're wanting to get it done if you need it in the first year, which not everyone needs it in the first year. You may buy a property that's totally not profitable, you have no income. You don't need this. But yeah, if you want to get it done in the first year, the sooner the better. Because again, you need this for your tax filing and especially if you have investors, you can just send out K1, you need to get that out earlier on the year. The sooner the better, you can get it done. James: Oh, interesting. I usually start the first year itself, but what you're saying is when you need the depreciation, I guess. So, yeah, absolutely. Awesome. Yonah, very nice to have you on our show and I learned a lot and I'm sure our audience learned a lot. We go so much into the detail of, you know, one of the biggest benefit of investing real estate on top of the cash flow that you get. So the depreciation and the cost seg, and now the A-class depreciation of bonus depreciation. Absolutely. Thank you very much. Yonah: Thank you, James. It was my pleasure and we will see you soon. James: Absolutely. Thank you.

James:  Hi audience and listeners, this is James Kandasamy from Achieve Wealth True Value and Real Estate Investing Podcast. I'm excited to let you guys know that last week we had Mark Kenny from King Multifamily and we discussed a lot of interesting stuff about some of the different markets that he's been buying. They have been buying like in five different markets. Tennessee, Alabama, Georgia, Texas, and Florida. And it's very interesting to see, apart from Texas and Florida, which are, you know, more popular markets and how do they underwrite deals in Alabama and how they underwrite deals in Tennessee, you know. So it's a very interesting episode, I would encourage you guys to listen to that as well.    This week we have Scott Hendricks from Current Investment LLC. Scott is a wealth manager and we're going to be covering different topics such as a DST or Delaware Statutory Trust, which is another alternative for 1031 exchange. You're going to be talking some things about 1031 exchange. And we're also going to be talking about qualified opportunity zones investments and some of the broker-dealer licensing such as series seven licensing, which is really important for people who want to raise money using broker-dealer license. Hey Scott, welcome to the show.   Scott: Hi James. Thank you very much.   James: Awesome. Awesome. So did I miss out anything? Do you want to fill in the introduction with anything else that I missed out about yourself?   Scott: No, I, I appreciate that. I have been an Austin based wealth manager, financial advisor for about eight years now. I have a series seven, which is the general securities license and I have a series 66, which is called a combined uniform state license. I also am licensed with my clients in California and Arizona and Wyoming in addition to Texas. And I am affiliated with a broker-dealer firm known as Kelton and Associates. They're based in Tampa, Florida. But my business current investments are based right here in Austin.   James: Awesome. Awesome. Awesome. I really want to quickly get into the series seven being a broker-dealer because there's a lot of capital out there. There are very, very few deals nowadays. And what's happening is a lot of people trying to raise money, you know trying to be a money raiser, but there's a lot of advice that's coming from the SEC attorneys that, you know, you have to do it the right way. And there's a lot of discussion about why not I become a broker-dealer? So can you define what is a broker-dealer, which is basically a licensed person who's allowed to legally raise money? What is a broker-dealer?   Scott: Sure. So a broker-dealer in my case is basically the...I think of it as kind of my back office. The back office that supports registered representatives like me with performing my transactions for my clients, maintaining regulatory oversight and supervision of my activities, ensuring that I receive ongoing training. They handle the registrations with the government entities that oversee all securities business in this country. And you're correct, there are a wide range of licenses that govern various aspects of all of this activity. They are now regulated by an organization known by its acronym, FINRA, which is simply the financial industry, regulatory authority and finra.org is the website where anyone who would be interested in learning about these licenses or possibly even obtaining one of these licenses could go and look at the menu of the different licenses that FINRA overseas. Some of which are for broker-dealers, some of which are for general securities representatives like myself, some of which govern the transacting in your liquid securities and private placements, which are often the kinds of opportunities that I believe you're describing where it is necessary to raise funds.    I don't remember the specific numbers of all of those licenses. There are about two dozen types of licenses that FINRA supervises. And I would encourage your audience if they were interested to learn more about that to go to FINRA, finra.org.   James: Got it. So how difficult is it to get a series seven license? I mean how long does it take? How difficult is the exam? What do you need to be good at kind of thing? Can you explain?   Scott: Well, you know, interestingly I got my license eight years ago. I know some things have changed as far as the cost. The costs have gone up a little bit. They're still reasonable. Most of these licenses can be obtained for a few hundred dollars, a filing fee, purchasing the study materials, scheduling the exam. I would say the process takes anywhere from three to six months. There are no prerequisites so you do not have to have a finance degree from college, you don't have to work in the financial industry. You can simply if you purchase the application for the license, study the material, take the test and pass the test, you'll obtain one of these licenses.   James: So do you need to know a lot of financial terms? Is there a lot of math? Is that calculus involved?   Scott: I wouldn't have passed if there was very much calculus. No, there's no need to know a lot of math. It certainly helps to be familiar with, I would say intermediate financial concepts. Certainly, basic concepts like, you know, interest compounding, time of the value of money cost basis, rates of return; fundamental financial concepts that anyone who wishes to invest or is already an investor should be familiar with. But there's no set list of previous academic or experience requirements that one must have before taking one of these FINRA exams.   James: Got it. So basically the cost is less than a thousand dollars. You say $300 eight years ago.   Scott: Again, I'm a little out of date, but I would say yes, you can still apply for any of these federal licenses for less than I would even say, you know, three to $500.   James: Got it. Got it. And so you say three to six months you go to the exam, it's not that difficult, you need to know basic financial concepts, which I think is important. You're going to be advising people about their money and what's the rate of return.   Scott: It's a designed course of study to maintain the credibility of the industry, the level of professionalism and the basic knowledge base that the regulatory bodies in this country want professionals to maintain for the benefit of their clients.   James: So when you are taking a series seven and becoming a broker-dealer, why would one person want to be a broker-dealer?   Scott: If you want to oversee agents, if you want to essentially work with a group of agents, representatives, who will assist you in putting together investment opportunities and seeking investors, seeking clients, raising funds a broker deal or license, which I'm going to go out on a limb and say a broker-dealer license is probably more difficult to obtain, a little bit higher barrier because of that nature. That a broker-dealer is more of an office in charge of a number of representatives who then go into the field and work directly with clients.   James: So are you saying broker-dealer has someone under them who works with the clients?   Scott: They could. There's no reason why a broker-dealer could also not be an individual as well. But it is a different level of licensing required to have broker-dealer credentials than it is to have securities representative or securities agent credentials as I do.   James: Oh, got it. Got it. So series seven will get you into the securities agent level and there's another level where you're to become a broker-dealer, I guess.   Scott: That's reasonably accurate. Yes. So series seven, again, a series seven is called general securities license that enables me, authorizes me to transact in marketable securities for individual clients or businesses. So I am authorized to recommend and Franz deck that is initiate the buying and selling of stocks, bonds, mutual funds, exchange-traded funds, registered private placements and in that last case to accredited investors. So it opens up a range of investment transactions that I am authorized to both recommend to clients and then assist them in transacting in those assets. A broker-dealer could essentially be in a position to put together deals, to put together or review outside deals that then they would approve an authorized to their representatives to go out and seek investors, recommend them to investors   James: Got it. Great. I think the structure is similar to like in real estate agent versus broker, either the broker has somebody working for them.   Scott: I wish I thought of that. That's a great analogy. I think that's very comparable. Yes.   James: Got it. Got it. Very interesting. So I didn't even know that; I thought broker-dealer is a person, I mean, can be a person, but it's usually like a company where a lot of agents work for them and these agents get the series seven licensing. Okay. Got it. Got it. So I presume if you want to do fundraising for your lifetime, then you want to get a series seven licensing and be part of a broker-dealer.    Scott: You know, I would advise anyone interested in being licensed in the securities industry to get a series seven. The series seven is almost the gateway licensed to a range of other licenses. Some of these other licenses do require that the individual have a series seven as a prerequisite. And as I mentioned earlier, there are licenses that are specific to illiquid private placement types of investments. So if I was interested only in raising money for let's say for startups or for venture funds or for passive real estate portfolios or deals, I would encourage that person to go get the series seven but then also look for one of the more specific licenses that delve more deeply into the specialized knowledge required for those kinds of specialized  investments tailored to the accredited investor.    James: Oh, got it. So series seven is just basic and then there's a lot more specific to the niche, I guess.   Scott: Yes. Now, the series seven enables me to do both, but the accredited investor deals that I am able to recommend to clients must first be approved by my broker-dealer.    James: Okay, got it. Got it.    Scott: If I had one of these more specialized licenses, I might be able to go out and self approve or do my own independent due diligence and then recommend a particular investment to an accredited investor.    James: Got it.    Scott: As such, right now I need to go to my broker-dealer and say, Hey, here's a good deal. It looks like it would be right for one or several of my clients. And then asked my broker-dealer to scrub it, do their due diligence and then if they approve it, I would be authorized to go raise funds for it.    James: Got it. Got it. So if one of our audience who wants to raise money for commercial real estate, you know, as syndication or multifamily, so they can get a series seven license and go and work for a broker-dealer.  And in that while they work, they can propose to raise money on specific multifamily or any other commercials syndication, I guess to the broker-dealer and the broker-dealer needs to approve that, then he can go and raise money for that part of their syndication. Okay. Got it.    And I mean, if it's not confidential, do we know how do these agents get compensated in terms of percentage? What is that range if it's not confidential?    Scott: No, it's not really confidential. In my case, it's not confidential. In fact, it all has to be completely transparent and disclosed to the investor. So, for example, on a non traded REIT,  if I was to recommend a real estate investment trust to a client that had previously been approved by my broker-dealer, I would earn a commission. In most cases where the investment is illiquid, I'm not gonna put that into a fee-based account. It's a standalone transaction that might complement that particular investor's portfolio. If they agree, I would disclose my commission and my commission generally runs between about four to 6% on the deal. Again, it's very comparable to what a real estate agent might earn on the sale of a property. But I'll disclose my commission, if the investor wishes to proceed, then I'll help them invest and I'll earn a commission on that transaction.   James: So four to 6% of the money being invested, is that right?   Scott: Correct.   James: Got it. Got it.   Scott: You know, four to 6% of the investor's contribution I would earn as a commission, a percentage of that, I would share with my broker-dealer, my back office. The way we think about it with these securitized real estate deals is if you invest $100, you know, $94 of your investment goes into the ground.   James: Got it. Yeah, I understand.   Scott: You know, approximately a 6% sort of transactional cost. Speaker: Got it. And do you get paid in the beginning or do you get at the end or during the transaction or how does that..?   Scott: It really varies depending on how the deal is structured. It really varies. In many cases, my commission will be earned upfront, but there are certain deals where, where my commission may be considerably less upfront but I'll get an annual payout over the life of the time that the investor holds that deal. It really just depends from a deal to deal.   James: And it's a one time commission. Right? That's it. Right?      Scott: In most cases.    James: Yeah. So I think what some people are doing is basically they're getting a GP percentage, which can be a lifetime, I mean, of that investment. But this is slightly different. Did you get a commission flat fee of 4-6% in the beginning? I mean, not at the beginning, in most cases.    Scott: Right. Yeah. Most of my business James is fee-based portfolio management. So I may work with a client who has a portfolio of stocks and bonds and I'll earn a percentage of that account value over the time that I manage it on behalf of my client. It's in these cases of the one time a private placement transaction like a REIT or a Delaware statutory trust, where I'll simply earn a one-time commission. And then the investor will then own a passive property, a passive asset that will generate passive income for that client. But if they also have hired me so to speak or work with me to manage their other portfolio, that may be on more of a percentage-based or a fee-based relationship.   James: Got it. Got it. So is it public information on which agent or which broker-dealer is doing better than others like the stock market, in terms of performing for their clients or is it all private?   Scott: You know, that's one of those questions that can always only be answered with the words 'It depends.' It's really difficult when you come down to investing for individuals and let's say for business owner clients to compare performance. Because each and every investor has so many different goals and different risk tolerances and different timelines that it makes it very difficult. It really is apples and oranges to compare the performance of an entire book of business; either held by an advisor like me or overseen by a broker-dealer. It almost makes no sense to try to compare rates of return or performance simply because each and every investor has a unique objective.   James: Absolutely. Absolutely. I agree. I mean, that's a really good comment. I mean, returns are one thing, right? But risk profile off the investors and you know, how risky is the deal itself is another factor. And everybody has their own taste or flavor that they want to take on when they want to invest. So, awesome. Awesome. And why does an equity investor want to come to a broker-dealer versus going to a private syndication model and invest privately?   Scott: I think a lot of it has to do with the extra risk that you are mitigating by looking for investments that have already been registered with the securities and exchange commission and have been scrubbed; that is, have been researched thoroughly by a professional organization. And you know, there are certain things like just the credibility of the track record of successful deals that it has offered to clients that have exited; all the kinds of things you might look into with a private syndication deal. But for some investors that extra assurance of knowing that it has met the registration requirements of the securities and exchange commission and has been scrubbed and approved by a registered and licensed broker-dealer.   James: Got it. Got it.   Scott: That basically, that does that for a living. That does it, you know, hundreds of times a year looks at deal, memoranda and all of the documentation that goes into assuring investors that the deal is sound. And while you can never completely eliminate risk in any deal, I think that there's a certain risk premium that is reduced with registered and professionally researched opportunities.   James: Got it. Got it. Got it. Although I think I want to just clarify one thing. So usually the investor's equity is paid out of their equity, right? I mean the broker-dealer or the agent fees in this model are paid out of the equity. Whereas in the syndication model, a lot of times people who you know will become part of the GPS as one of the functions to raise money. They get the money from the GP, not from the passive investor. So that's one big distinction, right, because...   Scott: It is, that's correct. That's correct.   James: It makes a difference as well. So, in terms of the profile of customers who come and look for broker-dealers and agents who work with broker-dealers, I mean, is it like a lot of family offices, a lot of institutions, or is it a lot of private equity investors? How would you say in terms of percentage?   Scott: I think the answer is yes. And again, every wealth manager's business is different. In my case, I primarily work in the area of regulation D filed, liquid or a passive real estate and other types of deals. I generally am working with high net worth individuals.   James: Okay.   Scott: High net worth investors who are accredited and are simply looking to add or complement their existing portfolio with passive income through real estate, through business development companies. I also transact in oil and gas, master limited partnerships. So it's the investor in my case who is looking to diversify our portfolio and derive passive income at a rate that is more favorable than they would get in the bond market these days or certainly more favorable than they would get in something like a bank insurance CD or savings account. And perhaps doesn't have the inclination or the experienced to go in and evaluate real estate from private syndication that others might feel that they do have. So I'm able to offer for the less experienced real estate investor, the kinds of opportunities to derive passive income without the expertise that it might take to evaluate a syndication deal.     James: Yeah. Yeah. Okay. Makes sense. Yeah. The professionalism, of course, makes a lot of difference compared to someone you know, coming on from a weekend boot camp. So very interesting. So, yeah, I mean that's really good.   Scott: There are always different paths.    James: Yeah, absolutely. Absolutely. And so coming back to 1031 and DSTs - Delaware statutory trust. So 1031 is, you know, a lot of people know what 1031; where it's basically an exchange mechanism within real estate to a much larger real estate offer, same kind where someone has to identify like three deals within 45 days of closing of the current deal. And they can defer the capital gain and they can defer the depreciation recapture back to the new deal which they should close within six months. Am I right? Did I miss out some?   Scott: You know, that's pretty good. Everything you said is correct. I would simply add, and the way I like to describe it, a 1031 transaction is it's taking advantage of a section of the tax code and that's all 1031 is. It's simply a section of the internal revenue code that allows a real estate investor to sell a property or multiple properties and exchange the proceeds into other real estate, either a single property or multiple properties that can be either active or passively owned and differ all taxes that might be paid as a result of be the capital gains, depreciation recapture. There are a few other taxes that may come into play. For example, if you're in a state that has a state capital gains tax like California, that can also be deferred under the federal a tax code section 1031. But you're correct about the timelines there.   There are pretty strict timelines that must be met in a 1031. And I often tell groups of real estate agents and investors that 1031 is widely known. A lot of people know about it, but it still kind of has some stigma or some intimidation factor about it that prevents it from being widely used. And so part of what I try to do is help my clients and others understand the 1031 process. The primary thing they're going to gain is what they might have otherwise paid in taxes, they can keep inequity and reinvest into other real estates. You mentioned that in many cases an investor will trade up with the 1031, going into the larger holding in real estate. I also see a lot of clients who spread out their investment and diversify into other classes o rfeal estate or into other geographic areas that they may not have owned previously. So it really is a wonderful way, four real estate investors to both diversify, expand, and differ the tax liability in the process of building a portfolio of real estate.   James: Very interesting. But It's within the real estate asset class, right? Can they go from a real estate, you know, equity a 10 31 into something else other than real estate?   Scott: Not as of the end of 2017. And this is something that may be new to your audience. So with the last tax bill, I think it was called the tax cut and jobs act passed by the government in Washington back at the end of 2017, the rules of 1031 were limited. Whereas, previously investors were able to exchange property in maybe in a non-real estate asset. For example, if you owned a, I like to use the example, if you owned a classic car collection, you could sell your antique automobile and exchange the proceeds into real estate or into more cars or fine jewelry and still do it under section 1031. All of that went away at the end of 2017 and left only real estate tangible property is now the only asset class that can be exchanged under the tax deferral section of 1031.   James: Okay. So that's something new. I didn't even know that previously before 2017 you can exchange from other than real estate to other than real estate even though now you know, we all are real estate people so it's all within real estate, which is good.    Scott: And you also hear another common misconception about 1031. The 10 31 exchange is also sometimes commonly called the like-kind exchange. Like-kind is a phrase that is used in the actual language of the tax code. And a lot of investors, and frankly a lot of real estate agents confuse the phrase like-kind as meaning that if you sell multifamily, you must buy multifamily. Or if you sell a commercial property, you must buy a commercial property. That is not the case. Like-kind is very broadly defined by the IRS. Meaning, if you sell anything that has a physical address, a tangible property, you can buy any other category of tangible property. So if you sell a block of single-family homes that you've held as a rental property, you can go buy a warehouse or if you sell a self-storage property, you can go buy a ranch. So it's really any kind of property. It can be exchanged for any other kind of property,[31:24unclear] since 2017, as long as we're talking real estate.   James: Okay. So let me clarify that because we had some kind of sound issue there. So after 2017 we can go and exchange, even though it says like-kind, but you can go within a different asset class, like buying from single-family to a ranch or from multifamily to single-family. Okay. So if you still within real estate, you are good I guess. Right?    Scott: That's right.    James: Got it, got it. Got it. And I think one of the common strategies that a lot of you know, generational real estate investors use is basically to buy real estate and keep on exchanging until they die. And when they die, they gave it to their kids as a gift and where the cost basis starts all over again. And that's the generational wealth Passover, right? Is that true? I mean, did I say it correctly?   Scott: Yeah, it is. And really the 10 31 exchange is, I believe a terrific way to build a real estate legacy. If the investor has heirs or hopes one day to pass a legacy of real estate on to their heirs, 10 31 exchange is an excellent way to do that. Because as long as you continue to sell and then buy real estate under the rules of section 10 31, there's no limit to the number of times you can do it. And as long as you continue to do it, you have deferred your tax liability each time. If at any time you chose to cash out and simply sell your holdings and take the cash and walk away, you're going to owe the tax and in fact, you're going to owe the cumulative tax that you have been deferring. So there actually is with 10 31 a fairly strong incentive once you've begun the process to just keep doing it.   And if you keep doing it until your time is up and you have heirs waiting in the wings, you will upon the date of death of the original owner, that owner will leave to their heirs a legacy of real estate that upon the date of death is stepped up in cost-basis. That's the term that the auditors use such that the cost-basis will then become equal immediately to the market value as of that point in time. And as I like to say, the heirs, if they don't wish to hold on to the real estate, they conceivably could turn around the day after the funeral and go sell everything and pay virtually nothing in capital gains or depreciation taxes.   James: Got it. So that is an awesome tip there. You can use real estate to not pay tax and make tons of money and, of course, your kids are your heirs, they inherited that and they will make the money. But it's a big way to give your wealth that you have created to your heirs, right. And without paying any taxes   Scott: Right. And, again, it, it would then be up to that next generation whether they want to continue to own that real estate and continue to enjoy the benefits of passive income and all the other benefits of owning real estate in a portfolio. Or as I said earlier, if they chose to get out at that time because of the step-up in cost basis, it would potentially eliminate or virtually eliminate all of the capital gain tax liability.   James: Got it. And also the depreciation recapture, right?   Scott: The appreciation recapture as well. Now of course, if there's an estate tax, depending on the size of the portfolio that is inherited, an estate tax may still come into play. But that's an entirely different situation.   James: Estate tax. Okay. Got it. Got it. Got it. So let's come to DST - Delaware statutory trust. And I know some people say this is similar to 10 31. Can you explain what this and why we should use this compared to the normal 10 31?    Scott: Absolutely. So a Delaware statutory trust is not widely known. I've been familiar with these opportunities for about 4-5 years now and I've spoken to many real estate groups, investor groups, agents, attorneys, CPAs. The Delaware statutory trust, in short, is the only form of passive real estate that is eligible as replacement property in a 10 31 exchange. So let me expand on that. A Delaware trust is often compared to a REIT. It's very different from a REIT in many important ways, but it is a legal form of ownership set up around a property, around a physical property, and then offered to investors who may invest in a fractional percentage of the underlying property via the trust.  Because a Delaware trust must own physical property, the IRS recognizes it as another way an investor could engage in a 10 31 exchange. In other words, the 10 31 is just the process of selling and then swopping or buying other real estates. You could either as an investor buy an active property or properties, you're going to be the landlord and hold the deed and be responsible for the rents and the tenants and the repairs. Or you could own a fractional interest in a Delaware statutory trust. You would be a passive investor. The sponsor of the trust would have all management and landlord responsibilities, but as a fractional investor, you would derive your proportionate share of the income. And because there is underline real property in a Delaware trust, the IRS allows these types of trust as an eligible investment via section 10 31.   And so here's really how it works and this is kind of the main core, I think, of the benefits of the Delaware statutory trust, In section 10 31 exchanges, the investor sells a property that begins, as you alluded to earlier, that begins a 45 day calendar, a 45 day clock. That investor has 45 days to identify, in most cases, up to three properties that they intend to reinvest in. Now, they don't have to invest in all three. They could identify one primary property and two backups or two properties and one backup. But they've got to have those properties identified in the first 45 days.    A Delaware statutory trust makes an excellent backup property because it's passive, for one thing. It's open to investment. It's not going to fall out of escrow during the first 45 days as sometimes real properties do. In other words, it's not going to go off the market. If that were to happen with the investor's primary or secondary property and the deals weren't going to close there, if they have named a Delaware trust as a third or as any of their backup properties, their money could then roll back into that trust as an investment and that would effectively secure their 10 31 transactions from start to finish. So Delaware statutory trust makes great backup properties in that first 45 day identification period.   Secondly, in cases where an investor is selling a property and buying a property for less, or actually buying a less expensive property, maybe a value-add property that they want to improve and they're going to have some leftover cash from the deal that they sold, a Delaware statutory trust makes a great way to capture or invest that leftover cash and still secure 100% of the transaction, the 10 31 transaction, from tax. So as a simple example, if you're selling a million-dollar property and the property you want to buy is 850,000, you've got 150,000 leftover. It might be hard to find another real property for 150,000 in some markets. So a Delaware trust comes along as a great way to park or invest that residual leftover cash securing 100% of the 10 31 proceeds from taxation, at least deferring 100% of the tax liability and giving the investor now two different properties.   One is the primary property for 850 that they wanted to buy and fix up or be the landlord over. The other is the 150,000 fractional interest in a passive investment that they will have no work responsibilities to maintain, but they'll be receiving a passive income from that trust. And then the final way that I think Delaware trusts are powerful is if the investor is simply wishing to continue to own real estate but really wants to get out the landlord business entirely. And that would be someone who maybe has been an active landlord for a better part of their investment career, wishes to continue to hold real estate because it's a great asset. Why not? But doesn't want to be a landlord anymore. So they may sell all of their active real estate properties, declare their intent to do a 10 31 exchange and then pick two or three Delaware statutory trust to put 100% of the proceeds into. They now have switched from being an active to a 100% passive investor.    Someone else does the work of the landlord that is the sponsor of the trust. They began to receive the mailbox money or the passive income, still own real estate as part of their portfolio and they've effectively deferred all of what would have been their tax liability from selling their active holdings. And another wonderful thing about two more points about a Delaware trust. You can do a 10 31 exchange out of a Delaware trust. So when the underlying property in the trust sells, which signals the liquidation of the trust, the investor will be notified with plenty of time. They can then declare another 10 31 and take their proceeds out of the Delaware trust, which may have appreciated over that time and they can take those proceeds and swap them into some other property. They can either go into another trust or they can go back into the active real estate market if they choose to. Or of course they have the option to simply cash out, take the cash, and at that time they would incur the tax liability.    And then the other benefit of a Delaware trust is you do not have to do a 10 31 exchange to invest in a Delaware trust. Delaware statutory trusts are open to cash investors. So it's a good way for an accredited investor, which you must be. In order to invest in a Delaware trust, you must be an accredited investor, but you do not have to be bringing money into the trust via 10 31, you could be a cash investor. But once you're in a Delaware trust as fractional owner with either your cash investment or your 10 31 proceeds, you can then when the trust liquidates do a 10 31 exchange. So a Delaware trust provides a good way for a real estate investor who wishes to be passive, doesn't have a property to sell but wants to in the future be able to do a 10 31 exchange. As long as they've got cash and they are accredited, they can invest in a Delaware trust.    And then you know, three to five to sometimes seven years down the road when the trust liquidates, they'll be eligible to do a 10 31 exchange and defer any potential tax that they might have otherwise paid.   James: Wow. I didn't know so many things about DSTs. This is very eye-opening for me. It's like a syndication but it's a tax-protected syndication, right?   Scott: It's a way to take 10 31 money; money coming out of a 10 31 deal and put it into an investment open to up to 500 individual investors typically, which is far more than something like a tenant in common where you're limited to only 35 investors. Delaware trust, yes, you're a fractional owner of a real estate portfolio that is managed by a sponsor who acts as a trustee and you basically, your only job is to go to the mailbox and receive your checks.   James: Got it. Got it. Yeah, I was trying to bring that up. Tenants in commons is another way I thought Delaware strategize is similar to tenants in common. Because in tenants in common is where everybody puts their 10 31, everybody has their own LLCs, all different entities, but they work as one. But you brought up a good point. There's a limit on 35 tenants in common that can be done but DST is 500 people.   Scott: And an important distinction to make there is that with a much higher cap on the number of investors, you're able to fractionally own much larger institutional scale types of real estate. So you may be able to be a fractional investor in a downtown Dallas office tower that's in a Delaware trust, whereas 35 investors, it would be difficult to pull together the 35 investors who could afford to purchase a multimillion-dollar property. But with a Delaware trust, you often are a fractional investor in a property portfolio that could potentially be worth tens or even hundreds of millions of dollars. So access to a larger scale institutional type of property is one of the benefits of what the DST has versus a tenant in common.    And then the other one, now some will see this as a negative, some may see it as a positive. With a tenant in common, each one of the up to 35 investors has a vote. They have some control over the upkeep and the sale or the management of that property. And as you know, when the property is going to be sold, you've got to get the unanimous vote of all 45 investors. With the Delaware trust, the investor is 100% passive. They do not have any say, any control over the management of the property. That's entirely the responsibility [48:05unclear] of the sponsor. They also do not have any control or voice over when the property is going to be sold. So if that appeals to an investor, in other words, if they say, I don't want I have to vote or to have to go get the other 34 people to vote, I just want to be passive, a Delaware trust is a good option compared to [48:31unclear]    James: But what is the average return of Delaware statutory trust?   Scott: So again, that varies. It varies from you know, market conditions and from the difference of Delaware trusts that are available. Typically what I have been seeing lately are rates of return between about five and seven and a half to 8% and that's cash on cash. So cash on cash or nominal right of return is let's just say six to six and a half percent in the midpoint. So while that is not typically a strong rate of return compared to private syndication or even compared to a lot of tenant in common deals, you have to look at the other benefits.    One, again, access to larger institutional scale properties. The fact that the Delaware trust is going to be a registered program, sponsored and regulated by oversight bodies. And then three, although this is also the case with the other types of real estate investment, the sponsor of the Delaware trust in rules similar to REITs. If they are taking depreciation on the underlying property, that tax credit has to be distributed to their investors. So while the nominal rate of return might be 6%, that is the cash on cash return, in many cases, the investor is going to see some portion of that cash dividend be already after tax. In other words, it's going to receive the benefit of that depreciation tax credit that the sponsor is taking. So depending on the investor's tax bracket, their effective rate of return is going to be higher than their nominal rate of return, given that some portion of that distribution is after tax money.   James: Got it, got it, got it. But let's say for example 6% cash in cash, is it including the sale of the property or is there such thing called the sale because they are physical assets under this DST, right?    Scott: Yeah, no, you're right and I thank you. I should be clear. That is the cash flow. Let's say that, again, rates of return I'm typically seeing now average, I would just say average around 6% for this example. That is the cash flow. So that's the annualized cash flow that the investor is going to receive in monthly checks. Obviously one 12th of that amount in monthly check is the underlying property where they have their principal. If that underlying property appreciates over the life of the trust and is sold at a value greater than it was acquired for, the investor is also going to receive their prorated share of that appreciation. So the aggregate return is, I like to call it, or the total return is if the property appreciates is definitely going to be higher than the cash flow rate of return.   James: Okay. So do you have that kind of sample numbers on roughly what's a performer?   Scott: I can refer generically to some of the deals that I've seen. So let's say if an investor puts $100,000 as, let's say in this scenario where I described leftover cash; if they've sold a million-dollar property and they want to do a 10 31 and buy a $900,000 property and put that residual 100,000 into a Delaware trust, I'm just gonna use a number typically four to five, six or seven years. And again, during this time, the investment is illiquid. The investor cannot get their money back on their own schedule. They have to wait until the sponsor finds a buyer and sells the underlying property. But most real estate investors understand the concept of illiquidity.    So if they've put 100,000 into a Delaware trust and five years down the road, the sponsor finds a buyer for that property and sells it at 25% gain, 25% in an appreciation, the investor is going to get their 100,000 back, they're going to get 25,000 for their proportionate share of the 25% gain. And during the five years they've held it, they've collected, I'll use the 6% rate of return as an example, they've collected $6,000 a year in monthly distributions at a 6% rate of return. So they've in effect received in a very simple example, their $100,000 back. They've gotten $30,000 of cashflow over five years and they've received a $25,000 gain or appreciation on their original investment.   James: Got it. Got it. Got it. Interesting. So, yeah, I mean, it depends on the structure of syndication, right? Usually, you know, like for me, we allow people to buy and sell their shares. You know, within the investment period, but it looks like DST doesn't give that flexibility.   Scott: A DST and you know, again, it's important for me to also say that with DSTs, there are still risks involved. You can lose money as you can with any type of investment. The illiquidity of the investment is something that the investor has to be informed of and understand that if they are an investor in a DST, they're at the mercy of the sponsor for the holding period. Now, while the disclosures require that I tell investors it's a five to seven year hold time with no option to exit. Typically with the market right now being what it is, I have seen DSTs liquidate sooner then five to seven years. It's simply varies from yield to deal.   James: And what is the fee that the sponsor takes in DST?   Scott: That again, it varies from deal to deal. Typically there's a 1% a dealer or sponsor fee, at closing. And again, as I mentioned earlier, I do earn a commission on investment that goes into a DST, it can range from anywhere from four to 6%. And, again, it's in the same ballpark as if you were working with a real estate agent and buying the physical property or working with yield syndicator and buying into syndication.   James: Very interesting. I mean, I didn't know this vehicle exists and this is very powerful in terms of 10 31 money specifically. Why? Because you know, and I was thinking that you always have to go in 10 to 200 to go to larger properties, but it looks like you can buy smaller properties and take the remaining and put into DSTs I guess. Right?   Scott: Yeah. It's really a part of my message that using a DST is a great way for an investor to diversify if it is in their interest. First of all, the primary reason anyone would undertake a 10 31 is to defer the tax. But a DST allows that investor to diversify into different types of property, both in terms of asset class or asset and active and passive real estate. So they can begin to sort of put more chest pieces onto the chest board, I guess and look at passive investment, active investment, lodging, self-storage, multifamily, single-family industrial, commercial; build a real estate portfolio that is truly diverse in terms of geography, asset category and the active and passive of ownership status.   James: Got it. So let's quickly talk about qualified opportunities zone. I mean, there's so much of details into opportunity zone. I don't think we have time to go into a lot of details there. But at a high level, what is qualified opportunity zones investment, how is that different from a normal 10 31 and DST and you know, investing into opportunity zones?   Scott: So qualified opportunities zones were also part of this same tax act that passed at the end of 2017. They are a fairly new concept or fairly new opportunity for investors. And the case can be made that opportunity zones were written into law because investments that were not real estate were excluded from section 1031 eligibility. So an opportunity zone is a geographic region of the country and there are a thousand or more opportunities zones all over the country where the local authorities have designated a desire to have investment flow into those zones from investors. They may be, you know, below market regions of cities or communities where the thought being that if investment dollars float into these areas, we would have more healthy economic development.    Qualified opportunity zone investors may use gains from a sale of an investment other than real estate, whereas with 10 31, all you can exchange is real property. So, for example, if an investor has a stock portfolio and it's gone up in value, they want to sell their stock portfolio, but they'd rather not pay the capital gains tax that that's going to incur, they could invest the gain from that sale into a qualified opportunity zone, differ the tax liability, invest in a a property or real estate or real estate fund that's building projects in that zone and then they would enjoy a certain tax benefits due to the deferral of their original gain. If they maintain that investment in the opportunity zone for 10 years, they could then cash out and take their money and pay no tax. So one of the important differences between a 10 31 exchange and an investment in an opportunity zone is to put it simply, you don't have to die in order to cash out tax-free.   James: But do you get 100% tax being erased?   Scott: Not in the first case. You're correct. It really is complicated and we could probably have a whole separate episode on all of that opportunity zones. There are really two appreciation events that are subject to favorable tax treatment when it comes to talking about opportunity zone investments. The first one is the gain that the investor realized on the sale of their asset, whatever it may be that they want to put into an opportunity zone. So if they sold real estate that had gone up in value or sold stock, or I'll go back to my classic car example, and had an investment sale that would have been subject to capital gains tax, they can defer that tax up to seven years by putting that investment into an opportunity zone. Now, it is only a seven-year deferral. So after seven years, the investor will owe a portion of the tax they would have owed on the original sale of their investment.    It will only be, in the case of a seven-year deferral, it'll only be 85% of the tax they would have owed. So it is truly just a deferral. You do have to come up with tax payment, at least 85% of the tax you might have owed seven years ago. In year seven, that tax bill does come due to the IRS. But understand now we're talking about two different investments. The investment that was sold to make the original opportunity zone investment, the tax four, which is deferred seven years. So it might be a benefit to an investor's cash flow and then the investment within the opportunity zone itself. And if that investment turns out to have been a good one, and the real estate or the property or the project in the opportunity zone appreciates over 10 years -hold time- and the investor then cashes out of that opportunity zone investment that will be exempt from capital gains tax.    So it's that second investment in the opportunity zone that if it is a winner, if it appreciates over 10 years, the investor has the potential to cash out with their gain and owe zero capital gains tax.    James: Got it. Got it. Very interesting. So let me summarize. 10 31 DST and qualified opportunity zone. So 10 31 let's say I have a million-dollars, where I want to defer my tax and my depreciation recapture, I just buy another asset, right? A larger asset or multiple assets, but it should be a larger value than all of it get deferred. And to the next asset, if I don't want to pay tax, I have to, you know, keep on doing 1031 until I die and pass it to my heirs. That's the 10 31.  So DST is basically you asked it's the same as 10 31, but it's more of passive investment.    Scott: Let me, let me jump in there and clarify it. A 10 31 is just a transaction. It's a way to sell and then buy real estate and defer the tax, not pay tax during that transaction. A DST is an asset. It's a kind of an investment. It is a passive real estate investment that can be a part of the equation of the 10 31 transaction.   James: Got it. Okay. Yeah, that makes sense. And qualified opportunity zone is basically, it's the same as 10 31, but you're deferring your tax for seven years and on the seventh year, your bill is due to the IRS, but you get 15% forgiveness.    Scott: You basically get a discount based on discount on the tax that you would have owed in year one. You'll owe 85% of it by the time year seven comes around. And so again, that was the tax you would have owed on whatever it was you sold to make the opportunities zone investment.    James: Got it. Got it. So the original tax difference, you only pay 85% after year seven, right? So you get 15% forgiveness. But I think the bigger thing in an opportunity zone is whatever deal that you're investing in an opportunity zone that's completely free in terms of capital gain after 10 years.   Scott: Yeah. Right, right. If the investment you have made in the opportunities zone does well and it goes up in value and 10 years down the road you have the opportunity to exit, you'll owe no tax.   James: Okay. That's very interesting because that's another investment where you don't pay tax at all. And if you're doing most of the time you definitely make money, right. If you go through the construction phase and you're past that I guess. Right.   Scott: Well, I will say that opportunity zones are new. There are a lot of risks involved. We don't have time probably to go into them here, but yes, there are a lot more considerations to making a potentially successful opportunity zone investment, but in the basics, I think you've got it correct.   James: Yeah, yeah, yeah. I've heard about so much of details on opportunity zone that you're to be really careful whether it's a qualifies opportunity zone and, you know, there's so many things, right. So awesome.    Scott: And you know, James, this is a good opportunity for me just to mention as kind of a way of a disclaimer. I am not an attorney and I'm not a CPA. And one of the most important pieces of advice I give to my clients is if you're doing any of these complicated real estate transactions, check with your lawyer, check with your CPA to make sure that you've gotten all your questions answered before you write the check.   James: Yeah. I think the purpose of this podcast and talking about so many things of this is just educational and just letting people know there are options out there. Which is very important because I was not aware of DSTS and you know, there are so much of details of the, you know, opportunity zone. So it was very eyeopening for me, so thank you very much. I appreciate it. Why not you tell our audience how to get hold of you if they want to get hold of you?   Scott: You bet. Sure. again, I'm Scott Hendricks. My company is called Current Investments. My website is currentinvestments.net. That's all one word, current, like the flow of water and then investments plural.net. You'd be welcome to send me an email or give me a call. My email is Scott@currentinvestments.net. My phone number...Do you typically, do your guests share their phone number?   James: That's up to you.   Scott: Okay, well that's fine. I don't mind at all. My phone number in Austin is  512 563 2134    James: Awesome. All right, Scott, thanks for coming in. I learned a lot of things. I'm sure my audience and listeners learned a lot of things and that's it. Thank you.    Scott: It was fun. James. Thanks very much.

James: Hey, audience and listeners, this is James Kandasamy from Achieve Wealth True Value-add Real Estate Investing. I'm here today with Mark Kenny, who's the founder and I'm not sure, the president or what's the title?   Mark: Yeah, well my wife and I together so we might have different opinions but...   James: Okay. Both of you run the King multifamily. But before that, before we go into the hot topics that we're going to discuss with Mark, make sure that you guys look at last week's episode where we had KK Singh being interviewed. KK has moved from a business owner. He used to own gas stations and laundry mat and now he's become a multifamily investor, which is a very, very interesting concept. Because I think any business owner, anybody who wants to know how that business is run and why he's using multifamily, why did he go into multifamily? And he didn't even pay tax last year just because of the multifamily investment. So you guys want to check out the last episode.  But let's come back to this episode. Hey Mark, welcome to the show.   Mark: Thanks for having James. Great to see you again.   James: Awesome. Also, I'm happy to have you on the show. So, Mark, he's a GP, almost like 5,200 units, out of that 2000 units where he's basically the primary active asset manager and he's also GP on another 3,200 on top of the 2000 units. And he goes across multiple markets, which is very interesting for me. I want to go a bit deep dive into that. You know, he's in Texas, he's in Alabama, he's in Tennessee, he's in Florida and I believe that's what I covered. Right. Mark?   Mark:  Georgia, as well.   James: Georgia. Okay, got it. Got it. Atlanta. Right. So yeah. So Mark, did I miss out on something about yourself? Do you want to tell the audience about yourself?   Mark: No, I mean, yeah, real quick. So I grew up in Michigan. I'm in Dallas now, so not too far away from you, James. But I was a CPA for a while, did IT consulting, which you and I traded some stories about that before about the IT side and I started buying small multi-family when I was 22, I was a senior in college. About two to four units and then my brother and I...I didn't know what syndication was. Syndication is the fancy word for raising money from other people for the most part and pooling it together to buy properties. I didn't know what that was. So I started buying two to four units. And then my IT business was doing pretty well. That was, I really had no time. I always, I'd say 80, 85 hours a week and start really doing the math.   I was probably 90 to a hundred hours a week and a lot of weeks. And you know, frankly didn't have any time for my wife, caused some issues and so she basically said, you need to do something different than what you're doing. And I said, well, yeah, I will. But you know you have to deal with me and we both love real estate. So we started buying larger properties through syndication. I invested passively first in a syndication with a friend of mine, said it makes a lot of sense and you know, why don't I look at doing it myself and that's what we started doing back in 2013.   James: Got it. Got it. It's very interesting about your story when you're working on a W2 job, especially in the IT tech industry. I mean, it's a lot of work, we put in long hours, right? It's a constantly changing sector, right? The industry is consistently changing. We are always driven by schedule and I was just talking to, Shanti, who's my wife and all and how our life has changed when we used to be in W2 every day, like Fridays when we can really open up our time, open up because from Monday to Friday we are like so busy working like [03:55unclear]  focused and where I used to work, we used to work remote as well. So after five, six o'clock we used to work like, you know, we have lunch, we have dinner, and we continued working with the offsite team. So life never ends. And now with real estate, it's so much of a difference. Now you own your own time and you're out on what to do and we can, you know, my traveling time in Austin is like 11 to 2. That's it because it's a bit of traffic.   Mark: Yeah. It's interesting, right? I mean, I actually started my own IT business 2008 so I didn't even have a W2 job since 2008. But I got in a situation where, you know, any project that came up and any unrealistic timeframe that was out there, I would do it. I would make the dates. So that's what allowed me to get more and more projects. I had a number of Fortune 100 companies as customers, but so even though I have my own business back then, I still didn't have the luxury of time. You know, I was always going somewhere, always doing projects and yeah, I'd be up, I sleep three hours a night, like consistently, that's all I would sleep.   James: I mean, you don't have to go by numbers, but did you make like almost a similar amount of money compared to what you made in real estate? I mean, it's a time versus money investment, right?   Mark: It's a great question because when I first started looking at syndication, I said I'm not going to be able to replace my IT income. And I truly, it was a mindset. It really was. I really did not think I'd replaced my IT income. It was pretty, pretty high at the time. And after three projects that I did in multifamily I stopped doing IT. I had not replaced my IT income at that point in time, but it was enough to live and live, you know, decent. And then we've done, you know, we've done 37 projects, whatever now. But I didn't think I was gonna replace IT. But yeah, we've far surpassed it. I mean a lot frankly, and the time we have, and I don't have to ask anyone to go anywhere or you know, things like that, you can turn it on and off if you want to. Where in IT, if you're not working, not making any money, you don't have that passive income.   James: So you have a very interesting life cycle because you were working in IT, a W2  job and then you went to do your own business but still in IT. And now you are completely a full-time real estate investor. So, so in terms of time wise, I mean from what we're discussing, I mean, real estate investment gives you the best return of time, right? I mean, you get really good pay and at the same time, your time is like, really low.   Mark: There is no comparison. You know, you mentioned about talking to your wife a higher life is different. I mean, my life has, you know, 180 degrees different for the better than when it was before. I was on the verge of, you know, I'm not sure, you know, Tammy, my wife wasn't only happy because of my work schedule and now we got to work full time together. Just like you get to work with your wife, which is great. And the time, you know, if I want to go somewhere and you can get to the point with multifamily or any real estate investment, you get enough of it. If you choose to go sit on the beach, which I don't want to do, frankly I don't but if you choose to go and do that, you get in a position to do that for sure. With IT, I wouldn't be able to, I had to keep working projects in order to make money.   James: Yeah. But can we go back to your mindset when you are working, not as a business owner, when you are working in IT? Because I sometimes analyze my own mindset when I was working, because when I was working in IT, I did look at Robert Kiyosaki's book and I could not read like a few pages because it just doesn't make sense to me, we are so busy working. What is this guy talking about business. And after a few pages I put it down and I forgot about it until recently I started reading it and I was just surprised that that book changed a lot of people, real estate investors' life. But I don't know, I think when you are working you're really, really working, you really don't care about the business side of it and I mean, I think it's up to your circle, right? Who are you mixing with?   Mark: That's a great point. I know when I worked originally at KPMG Consulting and I worked for SAP you know, did some Salesforce consulting and things like that. And you're looking at other people that are older than you at the time I started out, it was, you know, early twenties when I started out. And look at other people that are partners, for example, and you have this image, you're like, that's my lifestyle. I'm going to be traveling all the time and I'm going to be working seven days a week, which is what I did. And you know, and then, you know, some point in time, not everyone gets to the point where I was, where my point was. And my wife was pretty much ready to leave me if I didn't do anything. And that was a big eye-opener for me. But you're right, you get trapped in that circle of influence, right? And everyone's doing the same thing. And at that time, I aspire to be a partner and I would've made partner, I mean, made a manager in two years and things like that. But I would have been miserable, frankly. I would have been.   James:  So compared to the job security, I mean, I don't know whether there's job security in any job or not because there is no job security, right? I mean, when I was a manager, I used to hire and fire people very quickly just because of non-performance, right? So there is no job security, right? I mean, I use to work on a semiconductor industry for like almost 20 years and we thought we were going to retire there but we realize you know, during different economic cycles, the company doesn't really, you know, honor your loyalty.  I mean, there's no such thing. They have to make a business decision, they'll let you go if they need to let you go. There's no such thing as a company is going to be keeping you forever.    Mark: Right, right. That's true.    James: Right. So yeah, coming back to real estate venture. So 2008 was when you got into IT and when did you start your real estate venture?   Mark: Syndication; 2013 is when I first started investing passively and invested in a few deals. And about that time I started looking at syndication, but it took me almost a year to get my first deal. And it was partly, I was looking at other things too; self-storage and building custom development, you know, homes and things like that, franchises. I looked at everything. I was looking for something to get me out of the bad situation I was in. But it still took us about a year to get our first deal.   James: So did you stop work and start into real estate? Was it a step function or was it like a...   Mark: It is gradual; for me, it took me three deals. So I'm thinking, let me see, 2014 is when I think I got my first deal, I don't remember exactly. But by '16 I had stopped doing IT.   James: Got it. Was that a painful transition from a business owner to a real estate investor?   Mark: No, it really wasn't for me anyway. You know, I've always had a big fear of money and you know, I wish I did, but I always did cause growing up and things like that. But we had enough money set aside to where, you know, I looked at it, if I had to go back and do IT, I had so many connections at a time, I could get a job pretty much, you know, right away. I didn't want to, but I was like, okay, well, I have a transition I'm making here, but if I fail, that was my mind, if I failed at doing this and after taking a year to find my first deal, I was pretty skeptical. And then we started getting the traction. So I was like, Hey if I need to go back, I can do that. I don't want to do it. But if I do, I can support the family. The transition wasn't hard for me. We were buying at that time only in Dallas, so I really wasn't having to travel outside Dallas. Yeah. So it was a pretty easy transition.   James:  Got it, got it. So as I was talking about that, you had like three different lifecycles, right? You're a W2 employee, you're a business owner and then you become a real estate investor and you are a CPA. So I'm going to ask you, similar to CPA question, how was your tax advantages comparing these three life cycles?   Mark:  Okay. So you know, even though I'm a CPA, I haven't practiced for 20...   James: But at a high level, was there any tax benefit between...   Mark:  Oh yeah. Without a doubt. When I had the IT business, you know, I was actually paying taxes quarterly. I was getting hit hard. I mean, I was making decent money. Now, in the last two years, we haven't paid any federal income tax like zero. And in fact, it's negative. So people were like, Oh, you didn't make any money. No, we make money. But from the tax benefit we received through depreciation and cost segregation and bonus appreciation, we pay zero federal income tax. So, I mean, think about people listening to this, if you didn't have to pay taxes, how much more money you'd have in your pocket and what you could do with that?   James: Absolutely.  Yeah. Yeah. I have a chart that shows how a $2 double for the next 20 years. And you know, at a 25% rate, that $2 becomes 72,000 after 20 years because you're taxed 25% every time you double, right? But if you don't have tax, that $2 becomes almost like $11 million, you know.   Mark: Oh, boy, Oh my goodness.    James: So the tax does impact your compounding savings. And if you don't look at it, you may not know. I mean, when I was working, I never really looked at tax because as I say, we are busy working. We just look at net pay coming to the thing. I mean taxes, like it's not nice for me. But when I look at that kind of chart, you know, it does make a lot of difference in terms of, Hey, you know, it does impact your overall savings. You know, if you compounded for not [13:53unclear]  you see a big difference, millions of dollars of difference.   Mark: Oh yeah. And like you mentioned, when you have a W2 job, it just comes out, you notice it, you don't like it. But when you have your own business, my own IT business, you have to write check every quarter you really notice it. And then you're like, I made that much money this quarter and where did it all go? And now I have to write a check for, you know, X number of dollars. And you know, you're just scratching your head and you're frustrated and stressed out. But with real estate, it's literally zero.   James: So did you have employees under you when you have a business?    Mark: All 1099.  James: Okay. So if you have an employee, then you're to pay tax for them too, I guess. So that's double taxation   Mark: That's exactly right.   James: Okay. So W2, I mean, I don't know. I have a chart that shows W2 people are paying almost 70% of the tax in this country. So this country is supported by people who are in W2. They are the ones who's paying taxes. They're the ones building the roads, the bridges, and all the infrastructure. Right? The 30% is from the other people who are earning less than 30,000 or people who are earning more than 500,000 and above.   Mark: Yeah.    James: Right? I mean, people who are earning more than 20,000 to pay a lot of taxes. But in general, if you look at it, the big bulk of it is paid by our W2 employees.   Mark: Right. Makes sense.    James: Just because you can't run away.    Mark: You can't. There are no savings, no tax shelters.   James: Absolutely. I'd say real estate investors, all kinds of you know incentive in the tax code to not paying taxes. So coming back to your real estate venture in multifamily, and you skipped over buying single-family and you went direct to multifamily.   Mark: We did. I mean, multifamily, two to four units when I was 22. Yeah. So it was smaller for sure. It made more sense to me, frankly. I don't remember, I actually didn't look at any homes. I don't know why I'd go back and think about that. Why I didn't start looking at any single-family homes. To me, we looked at two to four units at a time.   James: Well, I mean if you look at cashflow, two to 14 definitely make a lot more sense in terms of cash flow. Right? Maybe that's what it is. And how many two to four units did you own before you come to multifamily?   Mark: We had like 17 units total.   James: Okay. 17 in two to four units, I guess. Smaller multifamily. And do you think that helped you when you scale up?   Mark: It did. Because I know you manage, right? You and your wife manage. When we did the smaller properties, we self-managed and we took care of things and evicted people. So it definitely helped from that perspective. I didn't like the process, it's not something I want to do now, but it also, even though it's drastically different how you evaluate four units and below and in five units and below is drastically different, people can argue all day long steps are almost identical, right? You identify your criteria, you go drive by a property, contract, blah, blah, everything's the same. So it helped for sure. Plus just kind of, you know, getting comfortable with buying your first deal is the hardest. So once you start, you know, I bought like whatever it was, you know, five deals, six deals, I don't remember the number, exactly.  It gets you more comfortable. So when you go buy a larger property, it's bigger numbers. So it is concerning whatever I had already done, you know, like six transactions before that time, even though they're small, it helped.   James: Got it. Got it. I mean, in a way, it helps because I mean, you know at least how to read the lease and you probably know how real estate section happens, right?   Mark: Your first time signing for your first deal, usually you're most likely going to be pretty freaked out, right? You've done six smaller deals. It's still, then when you start doing bigger deal, then it's the money. Right? The only thing that concerned me, you know, I have to say only it really was the, you know, brain capital to the deals. I had no concerns about how to underwrite the deals that I knew how to do that or how to find deals or talk to brokers or loan. It was always about, you know, the capital. That was my biggest concern.   James: Okay. Okay. But do you think that's still an issue in this market cycle?   Mark: Yeah. I'm always concerned about capital. You know, we have like eight deals under contract right now. You know, so we've never not closed a deal, but you know, that's the one thing that's still stressing me out sometimes, frankly.   James: Yeah. Because you need to figure out whether you have big enough investor base too in all those eight deals.    Mark: That's right.    Mark: Okay. Got it. So coming back to this, no multiple markets that you have, I mean, do you want to explain on how did you get into this so many markets? I mean, I think some of it is you've partnered with some of your students, right?   Mark: Well, originally I was just buying pretty much with one other person off in Dallas. Dallas, and at least, in my opinion, was definitely getting more expensive and it's even more expensive now. I have a twin brother that moved to Atlanta so I used to visit him and Atlanta has a lot of similarities to Dallas. Dallas is yet, and it may never be, but it definitely has a lot of similarities. So I started traveling there. I looked at properties for about a year and a half before we got our first deal. And I just really like the market. That kind of was if my brother wasn't there, I don't know if I would be in Atlanta, frankly. I don't know if I would have thought about going there. When I'm going there, I see a lot of activity, new buildings, new development cranes, things like that. So it was an attractive market.    And then, so that's Texas and you know, kind of the Atlanta area. And then we started looking in the Southeast. This is a general statement. Some of the brokers cross different estates sometimes too. They might, if they have a license, they can actually sell in multiple States and they might say, Hey, now, we're in Tennessee, we have a project here, we have a project up in Arkansas now, which we don't own anything there yet. So these brokers started giving us deals and I started checking out different markets. And really, the way I got into the other markets as far as initially was I would have brokers in Dallas typically reached out to other brokers in other markets and make an introduction for me. And that kind of gives you instant credibility and they're going to typically give you the best of the best of brokers to work with in another market. And that's how we got involved in other markets.   James: Got it. So how did you choose this market? I mean, except for Atlanta where you said your brother was there, you initially went there because of Atlanta, but now you are like in five different markets. Tennessee, Alabama, Florida. I mean, now, how did you choose these markets and why these markets?   Mark:  Yeah. A friend of mine who I've done a lot of deals with, he had bought a smaller deal in Memphis and I never would have considered Memphis. And some people don't like Memphis. We own a lot there. We've done really well there. But Memphis also has, you know, even though [21:05 unclear] job growth population growth, things like that, it's okay, but not like Dallas, of course. But the rent growth has been going up. They're putting, you know, several billion dollars in investments of downtown. But that particular city also has something called a pilot program, which we've done multiple times. Where you can go in, you buy a multifamily property, you have to put a certain amount of capital into it. It's a lot. And then you'll get your property taxes cut in half and then they're frozen for 20 years. So I mean, as you know, property taxes is typically one of the largest, right?  [21:44unclear]  I can freeze them for 20 years. Cash flow is going to typically be pretty nice on it.    James: Hmm. So you're basically taking advantage of that particular program. What about the other States that..."   Mark: Yeah, Florida, I always looked, I like Florida just because of probably the weather initially and when we were in Atlanta we started looking in Florida as well. And Florida has, I mean, some areas like Miami that as you probably know are extremely expensive, just not going to buy there. But I also have a cousin, multiple cousins actually live in Florida and so I heard different things from talking to them. And then some of the brokers we were talking to like in Georgia and stuff like that, had some properties in Florida and a property came up and the first time we're looking at properties there. I liked the properties in Jacksonville and we have a few properties there now. And it was one of those markets, again, similar to Atlanta, job growth, population growth, rent growth. It doesn't have to be off the charts, frankly.    Some of the markets where it's so off the charts, it's just too expensive to buy in, the yields. You can't get the returns. And then with Alabama, it was a guy that had a deal and was looking to partner and I partnered with him on a few deals. He had deals there in Alabama. And then we have another one right now, a guy in our coaching group that has a deal in Alabama as well. He's closer over by there as far as that's where he'd been looking. So usually it's through some sort of relationship. Somebody either already lives there or someone is looking there and then it kind of gives me an opportunity to check the markets out.   James: Got it, got it. So basically if you have boots on the ground as part of your program, that's an advantage definitely. Right?    Mark: It is for sure.   James: But don't you find, you know, establishing broker relationship in that kind of market it's harder because you, I mean they did not know you, right?   Mark: It is, there's no question. I mean, you know, I think that's why it took us so long to get into Atlanta. We had a really hard time breaking in there. And then once we got in there, you know, it was just one brokerage firm in Atlanta that we closed 11 deals in like 18 months with. We've definitely had their attention. With that first deal., I went to Florida. I mean, I was banging my head against the wall because we couldn't get any traction with brokers there. I would say, you know, you just keep sticking with it, but there's no question, you know, if you're an outsider, don't live there and you've never bought a deal there, you're at a disadvantage. You can use things like, Hey, your track record and you can have brokers that I know.    So when we got a deal in Florida, our first deal, it was with a brokerage firm that I had bought a deal in Dallas with and the broker in Dallas had called me about it. So he, you know, if you want to say put a good word in for us. So a lot of these brokers talk as, you know, it's very small world. Yeah. And I don't think we would've gotten that deal in Florida if I had not bought a deal without a broker, you know, brokerage firm if you want to stay in Dallas, I think we would have probably not been selected for that deal.   James: Got it. So let's go a bit more detail into that step by step. So let's say today somebody, you know, in your circle or one of your students come, Hey, you know, I found a deal in Florida, right? Somewhere in Florida, right? So what are the things that you would do to underwrite the deal?   Mark: Yeah. You know, the underwriting different aspects of it, forget the reports and stuff for a second. But you know, even financing terms can be drastically different across the country. Some of the pre-review cities and stuff like that start at 65%. So you want to first understand, don't assume we're getting 80% leverage in three or five years IO in every single location because it's different. So understanding first, the insurance can be drastically different. You know, if you're on a coastal area, it can be a lot higher than all the other areas and understand kind of the fundamentals there.    Taxes, you know, do they get reassessed? And that can be through, we have a tax consultant we use, but also you can typically just call the County and the County will tell you kinda how the taxes will be reassessed and when. You know, in Memphis, that's every four years so that's important to know. They only reassess every four years. And then we'll get like a report, whether it's Yardi or CoStar. Those are paid reports. We'll also use things like some free...we have a number of links on our analyzer that take you to things like crime and the school districts things like that. Those are all links we have on that. But overall, nothing beats having someone on the ground, you know. So if you can talk to other people there and talking to lenders, you know, lenders have the biggest investment in a deal than anybody as a general statement where they have more money involved. So try to understand from lenders to kind of how some of the properties are performing there, it is important. In the report, as I said, it's only as good as the report. It is good data. A lot of it's based on, you know, actual transactions that have happened, but I'm trying to get someone like a broker or property management company. So if we have a property management company you know, David Shore is multi South in Memphis and he's in seven other, he's actually in seven other States.   Once we built that relationship, then we start asking him questions. He'll tell us, don't even look at that deal, it's not a good deal. This deal maybe you can look at, you know, 95% of deals he tells us not to look at there. So having some boots on the ground can't be replaced. It might take you a while to do that. It's typically going to be like a management company or maybe, you know, a broker, but you know, brokers in to sell, you know, they wouldn't, don't get paid unless they sell a property. So kind of all the different aspects. Reports talking to people, visiting the area, trying to understand what happened before in the past. Those areas are all good ways to kind of get more Intel on the property.   James: So you basically look at location, crimes, making sure how are you underwriting your tax records.    Mark: The tax is huge.   James:  Every state is different.   Mark: Yeah. Every state, county; city even sometimes. So we have like I say a tax consultant, but we have found really if you call the County and tell them the property what you're doing, they'll tell you how they reassess and they'll give you a good number. And we've only had like a couple of occasions where it hasn't really given us the information we want. Generally speaking, we always get the information we need from the County.   James: Got it. Got it. So who have told you the most knows? I mean like who say don't touch that deal most of the time? Is it a property management company or is it the tax consultant or insurance company?   Mark: Property management company. Without a doubt. It may be they don't want to manage it.   James: Well how do you know they just don't like that property. Maybe it's just because...   Mark: I know you self-manage. We have found in almost every submarket we ran with a management company, even if they don't manage a property today, they're like, we manage that property five years ago and you know like in that, you might have some Intel. We got a property here where a number of properties in Dallas I've looked at and our management company managed it. So I called the guy and said, Hey, what's up with that? And he'll say, you know, it had like $200,000 of plumbing issues or whatever it might be. But usually someone that's large in a submarket, they know the property or they at least know you know the area well enough to give you some really good Intel and it seems to amazed me where people are like, well, THE manageMENT company says we can push rents like $75, I think we can do it like by 125. it's like there's no basis for that. Like why do you think you can do that?    You can push your management company and ask them questions and things like that. You know, if I go try and do a comp for a property myself, I don't fit the demographics, I'm probably not going to get a good comp. Have a management company do it for you. They'll actually send people out there that fit the demographics. They'll actually get you comps and pictures and things like that. Go into some of these reports...I get called all the time from, I won't name them, but these providers of data call me all the time. I don't talk to them. And half time the information you get, you don't even know if it's right. It's coming through there. So, yeah.   James: So how do you know the management company that is calling is not the current management company?   Mark: Yeah, it's happened before. You know, you can ask the broker who managed it today. They'll tell you because it could be for sale and the property management company doesn't even know it. And if you call them and tell them, Hey, I'm looking at this property for sale, then they're going to be pretty upset.   James: Yeah. I've looked at out-of-state as well at one point. And I realized management company gives me the best quick data. They can tell me a lot of things about a state compared to anybody else, right. Because they know the pain of managing it. So yeah, I would say they are one of the best resources to call if you're looking at out of state investment. So after that, what do you do? I mean, you already looked at taxes, you already looked at the property, so it's all good. So what do you do next?   Mark: So then we'll underwrite it. Usually using, you know, we have a quick analyzer. We have a much more detailed analyzer. In the detailed analyzer, we're going to go through every expense category, like line by line, compare them to the, you know, T12. We'll try to get two independent property management budgets so we get that. And then our analyzer also has industry standards based on property, class, and size. We'll tell you what the standards are for every single category. Which is very helpful to see if something's out of whack. You know, I just had an example. Somebody not in a group, if someone's sent me something, it was two properties. It was over 300 doors together and they had payroll at $750 a door. I'm like, no, it's not going to happen. Or we're going to share the property manager on-site across the two properties and might not for 300 plus units, we're not going to, not very easily.  So I said, okay, so does the management company say they're okay with that? No. And if they did, what happened was that if you have to get rid of them and now you're going to bring in another management company, they're going to be at $1,200 a door. It just happened, another one today actually on something where they're getting charged two and a half percent on 80 doors. I said that's pretty low, two and a half percent. I'm not saying it's impossible, but you need to probably bump that up because just because one management company said they'll do it for that, if they're not your management company anymore, then you're going to be paying more.   James: Yeah. Yeah. You can't underwrite just because one person said it. I mean two and a half is really low compared to any industries. Whenever I see sponsors or syndicators showing me a deal, I mean, not many people should me their deals, but I do get to see some people still.  I mean, when they say they want to share management, that is an indication that you know that deal doesn't have that much upside. They have to do really, really creative weird stuff. They will share this, share that, we have to do. [33:15 unclear] covered parking. We have to do washer dryer and that's all that really small amount of upside. And that is not a good deal.    Mark: That's just the gravy. You're exactly right. I mean, you know it, right? You manage your properties and people are like, I'm going to share. I was like, you're not going to. I mean, if you think it was that easy, don't you think all the management companies would do it?    James: You're going to compromise a lot of things when you share management. And as I said, when you're going to that extent to really justify your upside in the deal, that means the deal is really not a good deal.   Mark: Well, James, I have people who'd be like, we're going to put in like wifi and charge this and they're trying to put that in an underwriting and I'm like, yeah. First of all, you might not be able to because of the cable contract. Right. You might not be allowed to, and second of all, let's just assume you're able to do that, is that needed in your analysis to make the deal work? I sure hope it doesn't. You know, it doesn't mean that.    James: Those who are learning this business, the biggest bulk of the deals that work is when you can bump up rent and you can reduce expenses if you can do these things is a big thing. So if you see any deals that you can, majority of your upside comes from here. You know, I don't look at adding more one or two washer and dryer, adding parking, adding wifi. That's what you said or sharing management. That's all right. Really the deal doesn't work at all. I think the sponsor's just trying to squeeze all kinds of juice and tell you that it's going to work, but in reality, it is really, really hard to make all that work. I mean that all that is just a bonus. If it works, it's good.   Mark: Yeah, that's exactly right. And your total expenses, you could go up because the property taxes, but you know some of your points of your own, you reduce the expenses. I mean there are huge savings in water lots of times for operators. You can go in there and do repair and maintenance. We see lots of times you do as well, I'm sure were people are putting capital items in repair maintenance and they're like $1,400 a door per year. I mean that's a really high, right? So they're just putting stuff up there. If you go in and get a loan you're able to put capital in there and maybe do roofings and a/c and things like that, you can most likely bring your repair maintenance down more to industry standard. So for looking for those things, but if you don't know what those standards are, you know, you don't have any gauge.   James: Sure, sure, sure. So we don't have to talk about your detail and analysis that you do, but on the sniff test that you have a quick analysis. So one of the few things that you would look at to, you know, kick out a project   Mark: Return wise, I'll look at, you know, we still shoot for like a 10% cash on cash return, which is getting harder   James:  10% with the IO on year one, I guess.   Mark: Yeah. Overall or if the product is a five-year project, 10% cash in cash, 15% plus IRR and 100%; 100% is getting harder on five years, frankly for a lot of properties, closer to six.  In some markets, it's more than that, but usually we try to stay in six and below to double the money. And then I'm looking at other things like, you know, what cap rate are they using? You know, on their exit, how they get the current cap rate, the broker. I mean, I had someone, no joke, in Florida called me and said- it wasn't Miami, by the way- they said, Oh, the broker told me the cap rate is 3 and a half. You know what I mean? So those types of things, right. So you can make any deal work. It's on a piece of paper,   James: Just change the exit cap rate.    Mark: Exactly right. I have an example, I do in our workshop where I'm like, you know this, and then you do the cap rate down to two, what does it do? And then, you know, other things are going to be more round, you know, total income growth over the first couple of years. What does it look like? You know, I'll see sometimes people think we're going to grow income 30%. I'm not saying it's impossible to do that, but I see a property as, you know, 92% occupied and you go up 30%, your total income in a year is pretty high so you need to have justification for that. So basically we look at a lot of different gauges, break-even occupancy, break-even reds and then the financing. You know, people don't understand financing well enough. Lots of times as far as what the hell they're going to do that.   James: It can make or break a deal. Right? So let's look at like the rent growth and the exit cap rate, right? So how do you differentiate these rent growth and exit cap rate on this like five different markets there?   Mark: Well the market cap rates, so we always start with the submarket cap rate, doesn't matter which property it is. And we have different ways to get that through reports and things like that. And then we put an escalator on it, an annual escalator, and it'll be different between ABC assets. And we have some ranges there. Some markets actually, you know, Dallas has gotten compressed so much on class C, you know, it was like eight and a half percent in '13. Now, it's like five cap for a lot of properties and you don't know if it's ever gonna go back. So we'll usually use you know, minimum 0.1 up and then up to a 0.2 for a year. So it could be, you know, full a hundred basis points on a five-year exit and a lot of it's depending on the property and location.    I mean some of them, some of the markets that the cap rates the banks compressed there but they haven't compressed as much as like Dallas. I mean they might've been..I'll just make an example, say Dallas eight and a half. Now it's five and the market there might have been seven and a half and now it's six. So it went down, you know, one and a half percent total. But we'll actually, we'll look at the property, the type of property that, you know, the age of it as a class and then the demographics and we'll add an escalator on an annual basis for it. So each year it escalates up.   James: But how do you decide that? So for example, I think in Texas a lot of people uses 3% rent growth, right? Even though some cities are different.   Mark: Well, no, for rent growth we usually use 2%. This is across the board, across all markets after year two. Your first two years as you know, you might have come in and you're increasing rents, rephase revenue in and things like that. After year two, the general statement is going to be 2%.    James: What about expenses?    Mark: Two.     James: Okay, so 2% income growth. 2% on year two onwards I guess. Which makes a lot of sense. I mean, you're not really counting for the first year for value add.   Mark: Right and it might be higher. I mean some people were like in Dallas, you know, seven and a half percent rent increase growth for a while. And people were like, I'm like, but that's like today, one point in time it's proved where, you know, Dallas rent increases have gone down considerably. It's still a great market, I like the market. I don't really buy here right now, but you can't count on today. Or someone will say, Hey, the economic vacancy is 6% and I'm like, yeah, but I mean, good for them. But you can't count on that.    James: You can't count on that. Yeah. Yeah. So yeah, I mean, yesterday there was a national multifamily trend report which shows I mean Dallas is below national average in terms of rent growth, right? So San Antonio and Austin, Austin has been always higher than national rent growth but San Antonio is higher than national rent growth. I never seen that San Antonio being higher than Dallas. I mean it's just cities change. You have to be really conservative in your underwriting.    Mark: I think people are like, enough is enough, right? When rents go up, you know, seven plus percent for a few years in a row, people are like, you know. And it doesn't mean it's a bad, bad market. I mean, there are 150,000 people a year here that moved to, [41:07unclear] you know, net. So there's great jobs and population growth. I've been arguing that for a while. It doesn't matter all those things happen. At some point in time, people will say enough is enough.    James: Yeah. People can't pay anymore.   Mark: In a 2% increase in their wage or whatever they get in 7% in rent, you know, four years in a row, it has a big impact on them.   James: Absolutely. Absolutely. But how do you like for example, in your experience, because you're working on multiple markets, right? I mean apart from Texas, which has seen a good rent growth, I mean, I think even Florida is seeing a good rent growth. I do not know what other markets house in Tennessee, Alabama and I think...   Mark: Georgia is good as a whole. I mean some markets and we bought in a place called Gainesville, Georgia, not Florida. The property has done phenomenal. But that's a secondary market for sure. It's about 45 minutes from Atlanta, but it's like, you know, a 7% rent growth right now. Same with Dalton, Northeast, you know, almost close to Chattanooga rent growths. Florida, like you said, is high; parts of Georgia is definitely high. Alabama and Tennessee, I would say are mediocre, frankly, they're just going to be average. Now, Memphis in general, the random amounts are lower, but the rent growth there is quite high right now from a percentage standpoint. But you know, the starting with rents, half of Dallas, wherever it is, right. So it's proportional, but the percent of rent growth in Memphis is actually quite high right now. The last I saw, it was in the top 10 in the country.   James: Oh really? Okay. Okay. And what about the exit cap rate? Right. So usually, I mean the usual underwriters, people use like one, to 0.2 more than what the market is. Do you use the same exit cap rates in the other markets?   Mark: We take the current and we'll add...so let's say the current was a six cap, we'll add 0.1 per year, 0.20 per year. And in some cases like to your point, and so like that's to the end of five years, you would've gone from a six to a seven. And in some markets, yeah, we'll be, you know, if we're going to be doing a 0.15 in a certain market and we're like, well, maybe this market isn't quite as attractive or in the past it hasn't performed quite as well, we might do the 0.20. At the end of the day, I mean, as you know, nobody knows what the cap rates going to do. We can all guess. And the important thing to consider is that you know, the cap rate has no impact on your cash flow per se. It's really more of a capital event like a refi or a sale, things like that. So if you can still cash flow and you know, get good returns, then you know, you wait to sell when it makes more sense to sell.   James: Correct. What about a loan wise? Have you guys been doing a longterm agency debt or you've been doing some short term loans as well?   Mark: We do about a third of the deals we do prior bridge, but not necessarily short term is still up to five years. So it's not short term really. And the rates are attractive and there's, you know, a lot of advantages too. Bridge and some disadvantages, but there are a lot of advantages. I like them, especially in the big value add deals from what you have to get them. And then we do Fannie, Freddie, and then a number of bridge frankly.   James: Got it. Got it, got it. So I mean, you work with a lot of you know, students who are trying to come up in this industry, right? So can you describe one characteristic of a student who made them really successful you know, sponsor on their own?   Mark: Okay.  Characteristic is, I mean, you know, if you want to say grit, not giving up, but as far as a whole, it's getting really good at something that really, you know, one skill set. You don't have to know everything about multifamily necessarily to get started. You have other people there to help you. But getting really good at something that's a value to somebody else. And it sounds like, okay, that's kind of obvious. Well, we've seen it work time and time again where someone, all they do is pretty much come in and just find deals. That's where the specialty is. They don't want to raise money or sign the loan or know things like that. But I think it's being patient, you know, when you have to wait a year, potentially. I waited a year to get my first deal. That's a long time, you know, to wait. And then you look back on it, it's like, that's not a long time to wait when you started buying more deals or you're like trying to do something new and you're spreading, you know, 12 months before you get a deal that can be frustrating. So just being patient.   James: Yeah. Especially when people are already committed, I'm going to do this.    Mark: Yeah, some people give something up to do it.   James: Yeah. I mean, I really just remember there's not much deals out there. So, you know, finding that one deal that makes sense takes time. Right. It's not easy, If it was easy, everybody would do it.   Mark: That's right. That's right. Okay.   James: So coming back to your personal side of it. I mean, is there any proud moment in your life that you think I would remember that moment? That one particular moment in your experience in your real estate venture?   Mark: Yeah.  That's a great question actually. I would say when I got that third deal and it closed because I had already decided if I close that deal, I was going to stop doing IT. So when I got that third deal and said, Hey...my son kept asking me cause I kept looking for deals when he's like, if you get that deal, can you stop doing IT? Cause he was seeing me work so much. And so when I got that that was huge for me, for my family.   James: Got it. That was a transition point of view, getting away from IT to real estate, I guess.    Mark: Right, right. And making the decision, like you said, to do it full time.     James: Yeah. It's a hard decision, especially if you're already used to a certain industry. And what has been, you know,  paying your bills, right.    Mark: Paying your bills, which is great. And you know, the other thing, unfortunately, when I was doing IT, that was kind of my self-worth. That's where I got my value. I wasn't really good at a lot of things, but for some reason, my mind just worked that way. And so I got my self-worth out of my job. So to give that up, you know, it is a big thing. And you don't know how successful you're going to be or not in your new adventure. So, but I mean, the best decision I ever made.   James: Yeah. I mean, you brought up a good point. Sometimes that whole industry, what you study for, define you 20, 30 years in your life and suddenly, you are changing your complete identity. I mean, it's a big thing, right? I mean, a lot of people do not want to do that. If they're known as engineer or a CPA or the IT guy, they don't want to know, what! Suddenly this guy's doing real estate.     Mark: Oh yeah. I mean, my CPA said, what are you doing? He did. Now he doesn't say it anymore. He did. He said, what are you doing? You're making a lot of money doing IT, why are you not doing it anymore? I mean, you know, he couldn't even comprehend it.   James: Yeah. And I have to mention this; when I was in IT, when I was an engineer, you know, I always think that people in IT, people who are engineers are really smart guys. So these are the smartest guys because that's what your circle is, right? Your circle of friends is there. You think this guy's smart solving problems. And I mean, I did my MBA, it was really eye-opening because I realized there are a lot smarter guys than me with a lot more money in the financial industry. So that was a big aha moment. And that's where I realized that you know, you have to go into business to make a lot more money. And there are a lot of other smarter guys in other smarter professions out there that make a lot more money. And so, I mean, before I forget what is the most valuable value add that you've seen in all your deals? What would you do in case your rehab budget got cut into half in a deal?   Mark: Oh, you mean from a CAPEX?    James: Capex wise, yes.   Mark: You know, one, people need to be...if the property looks like junk outside...I've been in properties that look good on the outside and they're not that great on the inside. But you need something outside to kind of attract you. And it could just be paint, you know, something so it's not dreary and dark, dark colors, you know, but using something a little bit more attractive color-wise for paint. Landscaping, simple stuff to do. It's basically thinking about what does a tenant see? When people say I'm going to do, you know, electrical work and you know, things like that. It's like the plumbing, stuff like that need to be done, but tenants don't see that. So first start with the outside and see what the tenants, you know, whether they go up to the office and it's kind of decked out.   Sometimes we'll spend a lot of money around the office to kind of put a lot of landscape in there and make it really nice, exterior wise. Interior, I mean, paint, it's pretty easy to do. Flooring is huge just from a maintenance standpoint. So if you can do it, but as you know, it's not that cheap to do floor and then we'll like resurface countertops. I wouldn't do cabinets and stuff like that if you don't have the budget for it. I wouldn't do appliances unless they need them. You're not going to get the bang for the buck for that. Again, people will see paint, they'll see flooring and they'll see like maybe surface countertops, paint the cabinets, things like that. But some people have really high aspirations. They want to do all these things, but at the end of the day, you're not living in the property so don't outdo the market. I won't be the first guy to prove something in a market, I let other people prove it first. But I would say for sure start with the outside. We start like with landscaping and paint, stuff like that. People can see that.   James: Got it, got it. Awesome. Mark. So we're at the end of the podcast. Do you want to tell our audience and listeners how to get hold of you?   Mark: Yes. An email address is Mark@thinkmultifamily.com and love the chat with anybody and I really, really appreciate you spending time with me today, James.   James: Sure, sure. Absolutely. Thanks for coming over. You had a lot of value. And I really like going across markets here because sometimes it's hard to find someone who has done deals in different markets, right. Because it's important. A lot of people want to do markets everywhere. I mean, there are deals everywhere so you just have to buy it right and you have to analyze it right. And, you know, just make sure the numbers work and the location works. Yeah. Awesome. Thank you, Mark.    Mark: All right, James. Appreciate your time.    James: Absolutely. Thank you. Bye.

James: Hi, audience and listeners, this is James Kandasamy from Achieve Wealth, True Value at Real Estate Investing podcast. Today I have KK Singh, KK Singh is a big figure in our social media circles, especially in the multifamily and multi-families syndication. KK used to be a Microsoft Certified System Engineer. I like to call it MCSE because it's a pretty well known designation for system engineers and the Microsoft world; and KK also owns multiple businesses including gas station convenience stores, a Laundromat, and also he started a real estate with a 40 single family residential in Indiana. And currently he's an investor in almost 3000 units as a LP, and in some of it is a GP across all States in the US. And he also has done agriculture, commercial and residential property in India. And also, business experience, almost 10 to 19 years in the US, and is also looking for expansion opportunity. Hey KK, welcome to the show. KK: Hello. Thank you very much James for having me on your show. James: Sure, absolutely. Absolutely. So, KK let's get started with our show. I mean I got to know you like almost two years now. So you have been doing very well in terms of multifamily investing and especially you started as a passive and now you're going more into the GPU, but I want to go before that. So you are on a later part of your cycle and you did a lot of different businesses, Laundromat and gas station convenience stores. And so I want to go into that business before we go into multifamily. And then after that I want to compare that business to multifamily. And why did you, at this stage of your life, why did you want to do multifamily? Because there's a lot of people who want to really learn these different businesses. Like I always wonder how gas stations work. I always wonder how convenience stores work. How does a Laundromat work? And do they really make more money than what I'm doing right now in multifamily? So you are the best person to really tell us and our audience what are the different aspects of this business. So let's start with, I mean, you own gas station convenience store and Laundromat. So tell us about these three businesses. I mean, how does the business work? How much do people make? Even in that business, what are the values that you always see that it's very awful? KK: Well, I came to United States, as you said, Microsoft Certified System Engineer and I lost my job after 9/11. And it was just about six months before I came. So I had a job for about six months and I lost my job and my friends were in the gas station business in Indianapolis and they offered me a partnership in the business and they asked me to come and join their business. And so I decided, since I had no options, I decided to join their business as a partner. It was a gas station in Indianapolis. So I started managing that, I automated there, put it up because everything they were doing on papers with pen and paper. So I was a computer professional, so I did everything into computers. And soon we lost the lease because the owner did not renew the lease on that property. So I had learned the business because I had it for about a year. So I bought a gas station here in Fort Wayne after about a year and a half since I came to United States.   James: So, before we go to the other business, how does a gas station make money?   KK: Well, the gas station owners make money mostly on the inside sales. They don't make money on the gas. James: Oh, you don't make money on the gas? KK: But you don't make money on the gas. And most of the money is made on the convenience store side. So, first I bought one gas station and soon I had other people join me buying gas stations. Here I was, the first Punjabi to buy a gas station here in Fort Wayne. And soon I brought some of my friends, my relatives to buy gas stations here. So we formed a group and we started buying in bulk. And that way we made more money, we got more rebates; we got more kickbacks since we were buying in bulk. James: So the rebate and discounts that you get that's on the fuel price? KK: No, on the inside sales, mostly on the... James: On the inside sale?    KK: Yeah.   James: So, why does every gas station have different pricing in terms of fuel? KK: Because you have the right to price your own gas, whatever you want to. Some people like to make 5 cents; some people like to make 3 cents. Some people like to lose money on gas. James: So, I mean we are always wondering, I mean I'm sure I thought every gas station owner was trying to make some profit because every gas station has different pricing. So do they try to take it back on making more money by increasing the gas price slightly? I'm sure there's elasticity in terms of customer demand versus the gas price. KK: Well the street price is who rules the gas prices, the street pricing. So some people like to bring the customers in by losing money on the gas.   James: Oh.   KK: Or making less profit on the gas and they want to bring the customers to their lot and then bring them inside to the convenience store where they can make 35% instead of pennies. James: Interesting. I thought there will be some money being made on the gas, but looks like what you're saying is it was so little money, you may not make money or you lose money... KK: I've lost more money because 90% people these days use credit cards. And then on top of that, you end up paying credit card fee as well. James: Oh, so you have to pay, but is the price inside of convenience store slightly higher than what you get from Walmart or Walgreens or CVS? KK: Yes. Yes. That's why they're called convenience stores because they are for convenience. But, yeah. So it's like they have to pay for the convenience. James: Yeah. Which makes sense, I mean, I'm giving you space and the gas for almost all on my costs. Right. And now you come and pay a bit more on the convenience of, probably people don't care because it's convenient for them. That's absolutely right. That makes a lot of sense now because I always wondered this. So, is the gas station business being impacted with some of the electric costs that's being popular nowadays? KK: Well, we never made money on the gas anyways, so I don't think it's going to affect the people still going to buy their food and drinks and chips and candy and the cigarettes. So they do still come. I own an electric car myself but still, I stop at gas stations to...   James: Buy things   KK: Buy coffee, buy candy, and buy something. James: I think the location of it is much more convenient. I think that's how like even Buc-ee's, I'm not sure whether you know Buc-ee's in Texas they're very big. They have a lot of gas stations, like hundred gas stations outside and it's a big convenience store. KK: Yup. Yup. James: Okay. Okay. That makes sense. Yeah. So it's like a big, slightly more expensive because it's very convenient.   KK: Correct.   James: Okay. So what about a Laundromat, how does that work? KK: Well, I had this lot sitting by my gas station for a long time. It was a vacant lot and I thought of buying it and utilizing it and this neighbourhood needed a Laundromat. There was a little lot like a block away from my gas station. There was a Laundromat, which were the old beaten up Laundromat, it had like 20 years old machines. So I thought that I can utilize this property and I did some creativity and bank that lot at a very low price. And I built a Laundromat from ground up with the best machines that they come, bigger machines. So immediately after I opened that Laundromat, the other one closed because it was all, nobody wanted to go there. So, and Laundromat is a good business too because you don't need the employees, so it's unattended. So I have a girl that comes in the evening and cleans up and somebody will go from the gas station and clean up or if there's any problems. So this is kind of a passive income. James: So you still have the Laundromat until now? KK: Yes, I do. And we are building another one. James: Oh, that's awesome. That's awesome. So is this the machine with a speed queen? KK: No, [10:00 unclear] machines. James: [10:02 unclear], okay. Okay. KK: We have bigger machines, like 90 pounders, 60 pounders, 50 pounders. Yeah. James: I mean, the reason I ask about speed queen, because in my properties, I'd probably own a Laundromat as well, but indirectly, right, in all our apartments, I think 90% of our apartments, we own our own machines. So, we like to buy new machines, but this is for residential. So it may not be... KK: [10:28 Inaudible] is good too.   James: Okay. Okay.   KK: But that store is good for Laundromat, commercial and it's very simple to operate, and it's a sturdy machine as well. James: Got it. And have you ever tried to sell these gas stations and the Laundromat? KK: No. James: Okay. So you're keeping it for passive income? KK: I have a system in place and they are an automatic, autopilot, I mean. So, because I have partners in all my gas stations, they run the gas stations and I stay home. James: Okay, good. That's true passive income right. KK: Yeah. James: Now, the reason I asked you whether you sold is because I want to know how this business is being valued. KK: No, I haven't never sold any gas station. I have always bought gas station, and I would still buy a gas station if I get a good deal. James: So if it's passive income, why not you buy nationwide? KK: No, it's not passive income, it's not. It's passive income for me because I have my friends and family as partners who run the businesses for me. It's not passive income and I don't, people call me all the time and ask me if they can buy a gas station and rent it out and make more money than single family or real estate, no, it's not like that. James: So it's not as a, what I'm trying to say I guess is...   KK: It's not at all passive. It's just autopilot for me because I've done this for so many years and I have brought in partners and some of them are even my employees that I have partnered with. James: So they are the one who is active and you are investing money and for you it's passive. So it's not really passive income, but because you are a silent partner, you get passive income, I guess.    KK: Right. Correct.   James: So after that, how did you buy 40 single family residential? KK: Well. the seller was from our community, he met me at the church and he said, I want to sell my property that he had for several years. And I told him that I know somebody in Indianapolis that I can refer to. And he said, no, I want to sell them to you. And I said, no, I have never done this and I'm not going to get into the rental business, toilet and all that kind of stuff. He said, I will give you a good deal and I will teach you for a year how to do it. So that attracted me and I came home and talked to my nephew and at that time I didn't even know about [13:10inaudible] it is. So, I talked to my nephew, we calculated, we didn't get any financials or anything from him and we were comparing, I went online to the city website and check the prices compared to what he was offering us. So I liked the pricing of everything. I said, yes, the very next day I said, yes, we will buy your houses. And we went ahead and bought, we never hired an attorney. We just wrote up purchase agreement on my computer and we bought those 40 single family houses and then he started helping me. But he had done this for about 40 years now. So, but he was all old school, everything was on pen and paper. I didn't like that idea. So I had a lot of other stuff going on. I said, no, I would do it myself. So I bought some books, I went online, did some research and started managing myself and I still manage those 40 single families myself. James: That's a very inspiring story, right? Because where you going from zero to nothing, I mean to learning about how to operate 40 single family residential. So how did you learn to make that business in single family residential from the guy who's selling you, he's old school? So now you are a Microsoft certified system engineer. You are going to think on how to put everything into computer. What was the first website or resource that you used to start managing this 40 single family residential?   KK: Well, first of all, I started researching about the property management software and I did some research on the property management softwares and I found [15:06unclear].com the best software for my purpose. And the pricing was good, the features were good. And I signed up for a demo, I took a demo and liked it and I moved all my properties to [15:21unclear] James: I used [15:23unclear] as well for my single family residential, even though I only own like two right now, but we went through a few iteration of property management software for single family and then settled on [15:33unclear], which is pretty good for the single family and [15:38inaudible] management. KK: Correct. Correct. James: So you are in Indiana? So have you ever thought about looking other places for real estate or you wanted to do that? KK: No, I do my multifamily almost, I have one in Indianapolis and all others are out of Indiana. James: Got it. Got it. KK: So, right now I'm doing the 10th view as a general partner and I did seven deals as a passive investor. So all of them but one is in Indiana and all of them are out of Indiana. James: Okay. So I want to go to that transition where you were doing Laundromat, gas station and 40 single family residential, so, how did you get introduced to multifamily apartments? KK: Well, when I bought these single family houses and I went online to, I started researching on bigger pockets and read some books and I realized that it's not scalable and especially there's no tax advantage. That's why we bought these properties. We thought, oh, we can save money on tax. Because we were paying a lot of tax, we had a lot of cash-flow from the gas stations, so we were paying a lot of tax. But with buying single family, we ended up paying more tax because we made more money. So, I thought, no, we were here to save on taxes, so this is not the way to do it. So I started researching and finally as I learned about the syndication process and cost segregation, how people save money on the tax. So we started and I actually started investing passively and never thought I'm going to be active investor at that time because I had so much going on and I have like 15 companies. So, I thought, okay, I will keep doing it. But I'll keep investing my passively and get K-one losses and wash off other passive incomes. That's was my original plan, but when I started learning about multifamily and I learned that I have so much passion about multi-families, so why not do it actively? James: Yeah, no. So I want to go through the thought process here. So, what year was it that you discovered multifamily? KK: 2015. James: 2015, which is like what? Four years ago. KK: Yeah. Four years ago. James: And you say syndication, right? So even when you introduced to multifamily, did you look at buying a multifamily without syndication? KK: Yes, we did. We did four times. James: So you did buy some multifamily without syndication? KK: No, we didn't buy any. James: Oh you didn’t... KK: Because we were thinking of buying the same way we bought these houses. James: Got it. KK: So we didn't even know how to do underwriting, how to calculate the profit and loss. So we thought, okay, we bought these houses for so much and these are like just two room, one bedroom apartments so this should be half the price of the houses. That's how we started and we offered four alloys. First we started with the 32 unit and we went all the way to 96 units to buy, but every time we were overbid by others and we didn't know that we have to do underwriting and all that stuff that I realized after giving four alloys that we, no, this is not the way to do it. We need to start underwriting and they are not priced as the houses are, they are priced based on the net operating income. Then I started learning all that in 2015, and as I was learning, I was investing passively as well.   James: Got it, got it.   KK: I still kept investing and a couple of my partners started investing along with me too. So, we invested all over the nation in first three years, 15, 16, 17, and in 18 I decided to go at it. James: Why you didn't from single family, you were thinking of buying the large multifamily, which is like 40, 50, no, 90 units, right? Why you didn't look at duplexes, triplexes and fourplexes. KK: Oh, I taught duplex, triplex is the same thing as single family because we had the money, we had the resources, we could get the loan, we had the network, so we thought we can buy 30, 40 units. We never thought of buying smaller properties. James: Okay, so you wanted to go big because you think you can do it. It's just that you didn't have the knowledge on how do people underwrite this commercial properties? KK: And that I learned, that I learned soon after being overburdened, four of those alloy's that we did present. So I decided to learn and then I learned a lot and I attended several boot camps and took some courses, read a lot of books, listened to a lot of podcasts. So actually I had a passion for it. So I was spending like five, six hours a day, maybe even more, maybe eight hours a day. Just learning about multifamily. For six months, I never slept before midnight for six months. James: For six months you didn't sleep before midnight because you were so wowed with this multifamily.   KK: Yes. That's when I was learning about it, listening to podcast, every night I would listen to podcasts, read something about it, so I spent a lot of time learning this process James: And you said multifamily was more interesting compared to buying more gas station, Laundromat and the single family because of the tax advantage. That's what you're saying. So you need something to offset your passive business, I mean, active business income, I guess. KK: Well, I had a lot of passive income as well. Because I was not active in all the gas stations. I was passive in some gas stations and we own real states of several gas stations, and those LLC owned properties. And so our operating companies were paying rent to the real estate company. So that was my passive income as well. James: Oh. That's an interesting strategy there. So why not buy like a strip mall or warehouse or industrial warehouse or South storage? KK: I don't like anything else but multifamily. James: Why? Did you look at that [22:30inaudible]? KK: Yes, I did look at it; it's on my criteria as well. The second think I would ever buy would be storing units or the mobile park, but I would never go to commercial or anything because I know people need at least a roof to live somewhere. James: Okay, got it. So you think there's a definite need for a residential? KK: Yeah, because of the technology, you never know. Did you see the strip malls, commercial buildings closing industries, moving to Mexico, China, India and all those countries? But they can't move apartments to China. James: That's right. That's right. KK: But they have to live here. So, that's the only, I get a lot of other offers, but I am very, very strictly multifamily person. James: Yeah. Yeah. So let me give you some education to the listeners. So, what KK was talking about is the tax advantage that you get in multifamily, especially with something called depreciation, which is a paper loss which offset, which shows your income. Even though you're making cash-flow from a positive cash-flow from your operation in apartments depreciation is going to be more, most of the time it's going to be more than your cash-flow, which means you are, it shows as you're losing money, which means you probably don't pay any tax on your cash-flow; and sometimes net cash flow minus depreciation do come out positive, but the amount will be low because now you have depreciation. And in single family residential houses, you still do have depreciation, but it's divided by 27.5. But in commercial, which is apartment, you've either been doing divide by 27.5, you can still do 27.5 but you can also do something called cost segregation, which means they segregate each part of the building and commercial into five years, seven years, 15 years and 27.5 years? They separate the windows to seven years. I don't know what exactly the schedule is, but example windows took seven years, the driveway took 15 years. Frauding took five years. And what they do is they save all this 15 years for all five years, everything is segregated. And all this depreciation is accelerated in the first five to seven years and 15 years. And even the first five years it's like 30% of total depreciation. So, the number of, the amount of depreciation you get in apartments is like, it can be huge because of this cost segregation. And now with the tax law that we have in 2017 from 2017-2023 you have something called bonus depreciation, which means you are going to take all the 15 years schedule of depreciation, you're going to depreciate it in the first year, which used to be only available for new development. Which makes sense, new developments; everything done you'd appreciate 15 years into it. But now the new tax law have given leverage for the properties that has already been built. But this advantage only available until 2023 and after that it starts reducing to 50% instead of a hundred percent depreciation become 50% and depreciates less, and in other commercial real estate, like strip centre and warehouses and all that, is not depreciated by 27.5, it's depreciated by 39 years. So you can... James: 39 and a half? KK: Come again. James: 39 and a half. KK: 39 and a half. Okay. Thanks for clarifying, I thought it's 39. So 39 and a half, and what happened is you get much lower depreciation, they can do also cost segregation, but you know, you're going to get less number. And it makes perfect sense for farmers because of the Maslow hierarchy of needs as well. Everybody needs a shelter to stay.  And especially because of those appliances they have, the kitchens, the counters, kitchens, fridge, the microwave and the stove, those things get depreciated in the very first five years. And you can get all that in the very first year. James: Yes, yes, correct. Correct. So that's an awesome tax strategy in apartment and that's what we call this multifamily apartment. So let's go ahead. So, you said you started learning how to value the apartment and at 2015 you learned the trick about how to trade. So, why not at that time you go and buy apartments, why did you go passive? KK: Well, at that time I was still managing the Laundromat and one gas station myself. And after about two years in 2017, my son-in-law, my daughter got married in 2015 and her husband came to United States in 2017. I asked him, he was a competitive engineer too, I asked him what he wants to do and he said I want to be in the business. He owned a gas station in Canada as well. So he migrated from Canada. So he started doing what I was doing. So, I was only managing these 40 single family houses and most of my stuff was on autopilot, so I had nothing else to do. I decided to go active. So that's when I started looking to do syndication myself. James: Okay. No, but my question was, like I mean after you learn all the tricks on how to underwrite multifamily, right, why did you still go with a passive investment KK: That's why, because I was busy managing my gas station, single family houses and Laundromat myself.   James: Oh. So, now your son-in-law is taking care of that, now you, okay. Got it. Got it. Got it. Now you have all the time to really be an active sponsor, I guess. KK: Correct. James: So, okay. Okay. How did you make that transition from being a passive to active? Because that's a day and night skills. KK: And you should know that too because you are sitting on this side right hand side and Jeff Green well he was sitting on my left hand side and San Diego mastermind. James: Oh, I must have influenced you. KK: Yeah. Something came, I pulled some of your power and Jeff offered me to be a general partner on his deal. James: That must be my [29:08inaudible] KK: Yeah. So I said, okay, I will be your general partner. I raised money for his deal to close. So that was my first transition and I was so much motivated by meeting all those people that like the mastermind in San Diego last March when I did the deal.   James: Yeah. That's very interesting. Sometimes this mastermind brings, the proximity is power. You have people who are doing it and you know that you can do it if you have the right support. And sometimes, certain words and certain discussions can motivate you to progress. So it's very, very powerful concept of mastermind. Sometimes people thinks that you go from mastermind, you are wasting time. You're talking but there are always influencers, especially in a small setting compared to going into like this large conferences where you go and just network, right. This is not so contagious, but in a small group setting, it can be contagious and that's good, so you are able to, yeah, I know when we were in the mastermind we were talking about, you are passive and I didn't know that was the time that you were transitioning. You decided to transition from GP. KK: That same day I did it and he emailed me all the information and when I was coming from San Diego, I was looking at the costar report, underwriting and everything on the plane from San Diego to Chicago all night. James: I have to give credit to myself too. KK: Yeah. The credit goes to you too. James: That's good. That's good. I hope so. I mean, I'm sure you would have some calling to or for you as well. But I've been, I'm happy to help out as well. So, KK, what was your discovery when you, from a passive investor, I mean, you were of before, let's assume that mastermind was a transition period. At that point before that you were a passive investor, your mindset is completely different. You just want to invest passively. You didn't want to do any active role, maybe its fun, it's interesting, but you just didn't want to do it. But once you step over into the GP side where you partner with another sponsor. So how do you think your mindset has changed from passive to become an active? KK: Well, my mindset changed back in 2017 because I had learned so much. I was thinking, why don't I put all this knowledge to work? Why I am just investing passively. But as I told you that when he took over, so I was completely free. And I stayed home and there was not much, and I have so much of my single family management on autopilot that I spend about nine hours a week. So I had nothing else to do, and I decided to move on to, and I started looking on deals before my mastermind, I did start looking deals and I did some [32:19inaudible] the properties and I did give some alloys as well, and I learned the business practically by doing it. And then it was, I think a miracle happened when you did something at the mastermind that I got a deal. And I also learned that it is teamwork. It's not something that I can do myself. It is teamwork. So I think that was a great opportunity for me when Jeff offered me that deal and they were in, they were very close to the closing. So, I raised the money in about three days and became a member of his asset management team where I learned a lot as well. And after that I did a one deal with Radcliff and Robert in Lexington, Kentucky in May, we closed that in May and now I'm a general partner on a deal with Viking Capital on a 92 unit, a B class asset in Marietta, Georgia, North of Atlanta. James: Got it. So let's assume KK, so now you have moved to become more on the active side, right? Part of the asset management team. So if I split you into two, your best friend is your older, KK Singh as the passive investor and now is the right one. The right side, KK is the active investor, what would you turn to your passive investor, best friend and say what are the advice that you want to give to your KK Singh a passive investor on how to invest smartly as a passive investor? Since now you know both sides. KK: Well, even when I was a passively investing, I was learning continuously because the very first deal I didn't know much about multifamily. So I just invested to see how it works. So I just wrote a check to Ivan Barrett for 50,000 and I invested in his deal in Dayton, Ohio, but after that I realized that I need to learn about the passive as well. And I like reading a lot, listening, and reading and so I started learning how to invest passively and I prepared a list of like 42 questions, which I was asking. And then I started investing with Joe [34:53inaudible] in his deals in Dallas and I didn't want to put all eggs in the same basket. So I tried some other syndicators other markets as well before I finally decided to go active. James: Got it. So, out of that 40 questions that you have in your passive investor checklist, and don't worry, I'm not going to ask you to do all the 40 questions, but is there any like five to 10 questions you think all passive investors should ask before investing in any deals? James: I think the most important thing is in this all the syndication process is the operator. So I always even tell my investors the same thing that I did myself. I always looked at the operator. Who is the operator? Who is their team? Do they have an office? Do they have a complete set up? And then do they have a track record? Have they gone through a full cycle? So I always look at that first, even as a passive investor, even as a general partner, I do the same thing; and the second thing is the market. What market is the property in? So does that property market have a rent growth, continuous rent growth? Does that market have a continuous population growth? Are the companies moving to that area? Is it a bigger like population over 200,000? I don't invest in smaller cities. So those are the second things, and then I move onto the property. Is it really a value added property? Every property sale, value add property, sometimes there's no value at all or there is no rent growth. I have seen like people wrote, right, 300 rent bump. Do you think the previous owner was dumb? So he was $300 below market. It doesn't happen all the time. So I prepared a list of questions. I learned how to do all the comps, sales comps, rent comps, and I do get my investor do the same thing as well. James: Got it. So what you're talking about is operators, the second is the market, third is the deal, which is absolutely the right priority. So let's say for a new passive investor, how do they find about, before we go there, can you define what's an operator is? KK: Well operator is the guy who finds a deal, brings it under contract, signs the loan or brings the team together, or if they already have the team, and then after the closing they operate, they make sure they are performing as for performer, the property management in place is working, doing a good job. And they are giving the reports quarterly or monthly, whatever information to the investors and also paying the investors as promised. James: So how can a passive investor know about the operator? I mean, without asking the operator directly because sometimes it's hard to know. I mean, as I say, a new passive investor comes, sometimes they are very shy to ask a lot of questions because they are worried that they will not get into the deal. But is there any other way that a new passive investor can find out about the operator without asking the operator directly? KK: Well, they shouldn't be shy. I even asked the operator if you die, I go that far, if you die.   James: Absolutely. KK: Yeah. I mean, I don't mind if somebody asks me if you die, where are we going to ask for our [38:57inaudible] or money? I mean, it's obvious if somebody could die in a second. Yeah. So there has to be some things in place that if somebody dies who's going to take care of. So I think that should be and I have uploaded those 42 questions on my Tenex Facebook group several times and Radcliff has those 42 questions on his website. I think passive investors should download there as well. But I can tell you how people find me. They follow me everywhere on social media. They check my profiles and they listen to my podcast and then they approach me, oh we know you for a year or two; I saw your video live or podcast. So they probably know everything before they come and contact me unless they are referred to me by someone who is already in my investor or my friend. So they trust me too. James: Yeah, I mean that's true. I mean once you are... KK: I'm very active on social media so people know what I do. James: Yes, yes, yes. Correct. Correct. Correct. So what about market? Can you tell the audience, especially passive investor, any specific resources they can go and see before investing in the market? I mean, I know you said you do not want smaller cities, you want big cities, but what else they should look for in a market before they even invest even passively? James: Well they should, first of all, we talked about the operator and then the market research is very important. They should look at there are so much free services available, ctdata is one of them. James: ctdata.net? KK: ctdata.com   James: dot com, okay.   KK: Dot com and they can go there at least or just write down population and there will be a population of so and so city. They'll get so much information and there's another world review website that it will automatically pop up under the CTdata and you can go there, research the market, sub-market and even the neighborhood.   James: So have you seen any deals that was presented to you as a, I mean when you are a passive investor, when you presented to you that you think are this guy, he didn't underwrite the deal as conservatively as he is claiming. I mean, everybody claims their underwriting yes. KK: All the time. Right. All the time. James: It's like a value add. Right. All deals are value add. Same thing, all lead sponsors, all our sponsors are saying all their deals are written conservatively, they fill up quickly. KK: Some people are very smart to write their OMs and they'll write it in such a way that a passive investor who's not very literate about the multifamily. And if they don't have time to do their own research, they can fall in that net very easily because they are written so smartly. So they don't understand. And they don't spend much time either. James: Yeah. But how do you, can you give us a few example where you were able to cut some, I would say... KK: The biggest one is the comps. James: It's the comps. Okay. KK: And the second thing is the rent growth. Sometimes they'll write 3% rent growth and they will say, oh, it's very conservatively written. And I have been managing these houses since 2014 I have never seen 3% going up every year. I mean there has to be some year when it's going to be down, it might go up to 3% again, but all five or seven years or 10 years, whatever the whole time is. They don't go up all the time. And another thing is the vacancy. A lot of times they will write the vacancy or we can, we're going to have it 95% occupied, but when you look at the four star report or others resources, the market occupancy is at 90%. So how can you do it 95% if the market is at 90%? So some of those assumptions they make are sometimes very aggressive. James: So you say rent comp, and use also talked about the comps? So you're talking about the rent comp that they are projecting? KK: Rent comps, rent comps, they are projecting this and sometimes I've seen on the OMs, they are not comparing apples to apples. They're comparing one bedroom to three bedrooms and then they'll say, oh, there is a threat, $315 rent bump. You're not comparing apples to apples.   James: Do you think they make a mistake or they just...? KK: They intentionally do it and nobody can challenge that either because they don't, they say nothing there that it is three bedroom compared to one bedroom. So that OM doesn't say that we are comparing one bedroom. It's just going to say that apartment has this rent and this apartment has this rent. And they'll show you that there is a $300 bump which is not true. So far, I never seen a bump more than $150. James: And even 150 is difficult to get, so yeah KK: No more than $150. I have seen up to $150 which is also, as you said, by renovating, adding like $500, $600 to the unit, you might be able to raise the rent by a hundred or $150 maximum. James: Very interesting. So was there any aha moment as a active sponsor, as active person, more on the GP side now that you think like in the past six to eight months that you think, oh, I've learned something new about multifamily. Can you share it with the audience? KK: I always learn every day, every day I get some new experiences. I learned new things from sometimes even from people who know nothing about multifamily, but sometimes they teach you with, and I am very motivational and I'm motivated myself. I try to motivate my members in my Tenex group as well. Like every day you learn, in this business, every day you learn some thing new. James: So, I mean, so you had been pretty successful in investing into multifamily and now you're going more into the GP, so what do you think is the most I would say secret sauce to your success? KK: First of all, and I would also suggest to your audience, which I didn't do, but I didn't have to pay the price, but somebody might end up paying the price. I would say invest in yourself, that means learn the process yourself before you invest in any real estate, it could be single family, multifamily, any kind of real estate, do your homework first and don't be scared to spend some money on yourself, your personal development and learning and boot camps. Those are really helpful and I will, when I started learning at bigger progress, bigger progress always said that you don't have to have a coach, you don't have to attend any boot camps and everything. But when I got out of that mindset, I said, no, I got to go checkout some boot camps. It doesn't matter if I have to spend some money. And I realized that I learned a lot, I got motivated a lot. And also when I was holding myself accountable to do something. So, it's before that it was flow free flow. So, whatever I could do, if I got a deal, I would go ahead and make an appointment. Go look at that deal and end up there. But I think these things help, these Facebook groups, these masterminds, these boot camps, there are all these real estate, multifamily events, all of them help.   James: Got it. So it helps in terms of giving you some guidance to move ahead or give you some motivation or how does, or give you some knowledge? KK: So, as long as you have knowledge, you feel very comfortable doing something. James: Got it. KK: If you get out of your comfort zone and have knowledge and once you have the knowledge, you feel very comfortable doing anything. If you don't have knowledge, you always in fear, you get scared, or what if I do this? What if I can't raise the money? What if I, so there's lot of questions. Once you have the knowledge, you know that you will be able to do this. If you have a good deal, the money will come. And I hear a lot of people saying they're on Facebook as well, that a lot of people say that if you have a deal, money will come. We have a deal, but we can't raise the money. So that means something is wrong with your deal. James: Especially on this market cycle, where there's a lot of capital chasing the small number of deals, the true deals, I mean there are a lot of deals, but most deals are 98% of the deals doesn't really underwrite well as what it used to be. KK: I was looking at underwriting yesterday, this property had since 2015, the occupancy is 60,000 and all of a sudden now it's on sale it's at 90%. I looked at the costar report. I said what? Within the last three months, it went up to from 60% to 90%. James: Hey, hold on, hold on, hold on. KK: Okay. I looked at this deal yesterday and since 2015 I looked at the CoStar report and since 2015 the occupancy was at 60% and then the last four months it went from 60% to 90% because now it's on sale. James: On sale. Yeah, correct. Correct. You have to be very, very careful about these kinds of deals. I mean, unless it's an experienced operator, you are ready to go and turn it around; otherwise it's just going to be difficult to once you take over.   KK: And I think they already offered a little bit more money, but now the broker wants them to raise their price. I said, don't even raise a penny. Whatever you have offered is already on the higher side, but a lot of times they want that kind of money and they can get, because somebody else will pay. And I told this guy that somebody else will pay more, but they're going to be in trouble. James: Correct. Correct. Right. I mean, market is saving a lot of people out there right now. Right. People have all paid in bills and made a lot of mistakes in the underwriting. But market has been saving a lot of them for the past nine years. I mean, a rising tide raises all ships, so it's okay to make mistakes now, but it may not be okay when the market turns. Because now you'll see who is in trouble once the tide comes down. So, you have to be very, very careful right now KK: The market is at such speed now, tending to slow down. So it, people should be very careful and they should do their sensitivity analysis as well. Do the stress testing on their deals to make sure that they will survive if the market sort turns a little bit. James: So KK, can you, is there any proud moment in your life, in your business life that you think you cannot forget? That's going to be that if you really think you know, the next 10 years, one proud moment that you think that you always really proud that you did something. KK: I think I have been always proud of what I did because I do my homework before I do anything. I've spent a lot of time researching when I built a Laundromat. I had spent about a year the same way and I am very proud that I spent that time and I'm making a lot of money on that Laundromat and it's a very successful business. James: So you do, I mean, you're proud that you're doing a lot of research before you entering into a new venture. So... KK: Correct, correct. James: And if you want to let our audience know how to find you KK: Oh, I am very easy to find. They can go to Facebook and I have a Facebook group, Tenex multifamily investment group, and we have a little over 3000 members in about six months. I think we started the group at the same time. James: Yeah. You started late but you are slightly ahead of our group right now. KK: Yeah. And that's where they can find me. They can ask me questions and every Tuesday I have a zoom calls where they can come and join us and learn something, network. And they can ask me questions as well face to face, every Tuesday, nine o'clock Eastern time. And the zoom link is always in the Tenex Facebook group and then they can reach me through our website as well growrichcapital.com, or they can call me on my cell phone, 260-341-1964. James: All right, sounds good. So KK thanks for coming for the show. You add a lot of value. I like to, I mean I think I really found a lot of nuggets because you moved from different, different businesses to multifamily. I think that was very helpful because a lot of listeners could be doing other businesses and always wonder why not that business, why not this business? Right. And then why multifamily? So you, I think you summarize it pretty well and I think you, I think I did get a golden nugget of a few golden nugget when you move from passive to active, right? And how that transition worked out and your thought process when you go to that whole process. So appreciate you coming on board. Thanks for coming and that's it. KK: Thank you very much for having me, James. James: Yeah, most welcome. Thanks KK. KK: Love to be back on your show again, sometimes when I'm a bigger syndicator James: You are already a big syndicated. Thanks KK. KK: Thank you. Thank you.      

Imagine being able to learn, hands-on, exactly how to operate a deep-sea submarine — without needing the submarine! That’s the kind of training opportunities VR training platforms like Immerse are able to offer with the technology at their disposal. James Watson and Justin Parry drop in to talk about all the other opportunities the tech presents businesses. Alan: You’re listening to the XR for Business Podcast with your host, Alan Smithson. Today, we have two amazing guests, James Watson and Justin Parry from Immerse. Justin is the co-founder and chief operating officer and leads product strategy for Immerse. As a founder, he designed and led product development of the Immerse platform from scratch. He now oversees the delivery of all technology and VR content across the organization. Justin has 20 years experience creating and growing B2C and B2B products from startups to global organizations. He’s developed and launched online platforms, websites, mobile products across the world, and joined Immerse from his role as global director of the Internet Yellow Pages for Yell Group. Immerse Virtual Enterprise Platform enables enterprises to create scale and measure virtual reality training content and programs. The platform enables enterprises to look at training and assessment in a completely different way, providing the tools to help maximize human performance, resulting in a more engaged, better equipped and safer workforce. If you want to learn more, you can visit immerse.io. Guys, welcome to the show. Justin: Hello. James: Thanks, Alan. Alan: [laughs] Hey. So you guys are in beautiful, sunny, warm UK. How’s it going over there? Justin: Well, it was very sunny until last week, actually, with the sort of slightly freakish weather that we’ve been having, but today is cold. James: It’s British grey. Justin: Yeah. Alan: British grey. Oh, well, we’ll just assume it’s beautiful and sunny. So let’s get digging in here. I’ve had a chance to try out the Immerse platform. It’s really amazing. You’re completely immersed, and the demo that you guys did for us: We were inside of a submarine. We not only go into it, but interact with all the bits of the submarine and start to learn parts of, “how do I make some things work?” And the great thing about it is you guys were there every step of the way. But one of you was in VR, and the other one was on a tablet or a computer. Talk to us, just to how did Immerse come to be? Justin: Well, we’ve been in the training space quite a long time. We weren’t initially in VR. We actually delivered our training applications via desktop, but they were always multi-user. So we would be tying together people from somewhere — maybe even Kazakhstan, some oil and gas training that we did — with trainers that may be in Iraq, or in the UK, or wherever that might be. And that was all done in a sort of virtual world. So it’s a little bit like the old Second Life, if people remember that. So it’s a powerful proposition, but it’s still a little bit difficult to sell. So with the advent of the headsets — or the latest generation of headsets, at least — we made the move into VR and a lot of services that we built there just kind of immediately made sense, and we got traction very quickly. We effectively then pivoted the whole company to be a full-on VR training platform. We rebuilt a lot of those services, especially for VR, because there was obviously some small itemization that we need to make. And so we find ourselves where we are today. And just in terms what you said there,

Imagine being able to learn, hands-on, exactly how to operate a deep-sea submarine — without needing the submarine! That’s the kind of training opportunities VR training platforms like Immerse are able to offer with the technology at their disposal. James Watson and Justin Parry drop in to talk about all the other opportunities the tech presents businesses. Alan: You’re listening to the XR for Business Podcast with your host, Alan Smithson. Today, we have two amazing guests, James Watson and Justin Parry from Immerse. Justin is the co-founder and chief operating officer and leads product strategy for Immerse. As a founder, he designed and led product development of the Immerse platform from scratch. He now oversees the delivery of all technology and VR content across the organization. Justin has 20 years experience creating and growing B2C and B2B products from startups to global organizations. He’s developed and launched online platforms, websites, mobile products across the world, and joined Immerse from his role as global director of the Internet Yellow Pages for Yell Group. Immerse Virtual Enterprise Platform enables enterprises to create scale and measure virtual reality training content and programs. The platform enables enterprises to look at training and assessment in a completely different way, providing the tools to help maximize human performance, resulting in a more engaged, better equipped and safer workforce. If you want to learn more, you can visit immerse.io. Guys, welcome to the show. Justin: Hello. James: Thanks, Alan. Alan: [laughs] Hey. So you guys are in beautiful, sunny, warm UK. How’s it going over there? Justin: Well, it was very sunny until last week, actually, with the sort of slightly freakish weather that we’ve been having, but today is cold. James: It’s British grey. Justin: Yeah. Alan: British grey. Oh, well, we’ll just assume it’s beautiful and sunny. So let’s get digging in here. I’ve had a chance to try out the Immerse platform. It’s really amazing. You’re completely immersed, and the demo that you guys did for us: We were inside of a submarine. We not only go into it, but interact with all the bits of the submarine and start to learn parts of, “how do I make some things work?” And the great thing about it is you guys were there every step of the way. But one of you was in VR, and the other one was on a tablet or a computer. Talk to us, just to how did Immerse come to be? Justin: Well, we’ve been in the training space quite a long time. We weren’t initially in VR. We actually delivered our training applications via desktop, but they were always multi-user. So we would be tying together people from somewhere — maybe even Kazakhstan, some oil and gas training that we did — with trainers that may be in Iraq, or in the UK, or wherever that might be. And that was all done in a sort of virtual world. So it’s a little bit like the old Second Life, if people remember that. So it’s a powerful proposition, but it’s still a little bit difficult to sell. So with the advent of the headsets — or the latest generation of headsets, at least — we made the move into VR and a lot of services that we built there just kind of immediately made sense, and we got traction very quickly. We effectively then pivoted the whole company to be a full-on VR training platform. We rebuilt a lot of those services, especially for VR, because there was obviously some small itemization that we need to make. And so we find ourselves where we are today. And just in terms what you said there,

James: Okay. So let's get started.  Hey audience, this is James Kandasamy from Achieve Wealth Podcast. Today, we have Tim Bratz from Legacy Wealth Holdings. Tim is a multi-family syndicator/sponsor who owns almost 3200 units almost valued at 250 million dollars in value. Hey Tim, welcome to the show. Tim: James, I appreciate you having me, buddy, thank you.  James: Absolutely. Happy to have you here. I've been trying to get you on the show for some time and we have been playing tag on the appointments. That's good. So, can you tell me which market are you focusing on right now?  Tim: I'm actually in six different markets, six different states. I'm pretty heavy in the Southeast. Majority of my property, about 70% of my properties are in South Carolina and Georgia, but I'm also in Ohio which is where I live. And then I'm also in Texas, Oklahoma and I got a couple of vacation rentals down in Florida as well. James: Okay. Without going too much into detail just quickly, how did you start? And then how did you scale to 3,200 units within how many years?  Tim: Yeah. Well, I mean, I was going through college when the last market cycle was going gangbusters. So 03 to 07, I'm going through college, everybody said if you wanna make money get involved in real estate. I ended up moving out to New York City because my brother was living out there. And I became a commercial real estate agent for businesses. You know, so I broker leases and I brokered a lease that was 400 square feet in Manhattan. It was $10,000 a month and so I was like the wrong side of the coin. I need to be owning real estate not brokering it. So I got into a lot of the residential stuff. I think a lot of investors get into real estate because of the lure of passive income and residual income, but then many of us get stuck doing this transactional stuff of flipping houses and wholesaling. And I went through that same phase, you know, I thought I had to stockpile my own cash. I didn't understand that you could syndicate, that you could raise private money and bring in equity partners and how your sponsors to then cosign on loans. I didn't know that that was possible.  So I went through the whole residential side of things and bought my first apartment building the end of 2012. So just like seven years ago. It was a little eighth unit building and I fixed it all up, put tenants in place and I was like man, I'm making better returns on this than I am flipping houses and it's way less headaches. And so I bought another eight-unit and kind of built up a portfolio about 150 units with some partners.           That partnership ended up going bad a few years later. In 2015, I ended up liquidating everything and then just going back out on my own. And so I started on my own and just kind of partnered up with a couple of people that they just started raising money for different projects and I partnered up with good operators and bring money to those projects and help sponsor those loans or I started buying my own properties here locally in Cleveland. And over the past four years, pretty much in August of 2015, I started buying my own stuff. So it's been right at four years now. I built up a little over 3200 units, 3207 units as of today, about 251 million dollars worth of property value and my model is based on the residential realm, actually. I buy properties and I got to be all in for 65% of the stabilized value because that's what the model was. I never read a book. I never went to a seminar before. I just kind of developed it myself and I started buying properties, apartment buildings, the exact same way.  So I have to be able to buy it, renovate it, be all in for 65% of that stabilized value. And so a lot of the buildings that I buy, you know, I'm into a building that's worth 10 million dollars for about six-six and a half million dollars. So on the 250 million dollars worth of property, I only owe to lenders and my equity investors, it's like right at 150 million dollars. So we have a lot of equity in our properties too.  James: Got it. Got it. So it's very interesting you bring up that 65% because that's the exact number that I had when I was doing my single-family for zero money down. So I counted if I get at 65% ARV, which is after repair value, you should be able to do a second load, which is I call it as a double closing of a loan. I have two loans; one loan is like you do like a short term loan and at 65%, you buy it, you take a rehab loan and then you flip it to the long term loan. Tim: Yes. That's my entire model. So I don't traditionally syndicate, I buy distressed assets. I'm bigger than some of the smaller investors but not quite a hedge fund or a Reit and I'm willing to get my hands dirty, I'm willing to actually do the work. So I take on a little bit more distressed type properties. I only buy in A and B Class areas, but the properties are typically C-Class type properties that need physical improvements, better management. Like really not just value-add but like a total repositioning a lot of times. We're remarketing, rebranding, all that. And so, we come in and we fix it all up and because we force appreciation because we can make it happen and really create the appreciation versus speculating on appreciation and hoping values go up over the next five years, we're able to create a lot of equity in that first 12 months and then we're able to turn around and refinance and cash out our investors.  So instead of selling, I just refinance at like a 70% loan to value that gives me enough money to then, pay off my bridge loan. Or that short-term construction loan is and it helps me pay off my investors and to me, it's more predictable. It's more predictable to know where interest rates and where the economy is going to be 12 months from now or 18 months from now than it is like maybe 5 or 7 years from now. Five or seven years from now, we could have a very different economy, very different political circumstances; could have three different presidents in the next five years, right? So we just don't know.  And for me, I like the predictability of buying at a wholesale price, creating an appreciation and then cashing out my investors. Now it's you know for lack of a better term house money in play, right? So now we can let the property ride and we can hit sit on it. It doesn't matter what happens to the economy for the next 10 years, I have a long-term, long amortization schedule fixed interest rate loan, non-recourse loan in place; where the market can go up it can go down, I still have tenants in place paying the debt service, paying the operating expenses, and putting cash in my pocket and I could ride this thing out because I don't owe any of my investors any more cash.  James: Got it. Got it. So yeah, that's exactly the deep value add, that's how I position it where you buy it at really good value; very, very low level.  You really put all your effort to push up the first appreciation and then you go and refi in 12 to 18 months, I guess right? Tim: And we built some new construction stuff too, down in the Southeast. We built some townhouses. Like we'll do new construction, it'll be like an A or B plus kind of an area but it's not luxury. We do only workforce type housing so we can build townhouses for about $85,000 per unit, 80 to 90,000 per unit and they'll rent for about 1,300 bucks a month for us. And so that allows us to get the values where we need it to then refinance and do the exact same thing just for new construction. So we do a little bit of that and more repositioning of existing assets though. James:  Yeah, very interesting. I really like the model. I was doing it like two-three years ago. I mean, for me, I got worried about the market and I start, not looking for deep value add and also deep value add is harder to find. Even though you find it, what happened the sellers are basically taking the value by pushing up the price on the deep value add and because of that, it's not a deep value add anymore. Tim: Right. I don't pay a seller for the value that I'm going to bring to the property, right? So there are some sellers that you know, they're like, oh, well, this could be worth this much. Yeah, but I have to create that value. You're not creating that value. So we find we're a lot of times direct to seller, off-market type property. You know, we're big enough now, especially in Georgia and South Carolina, we have the broker relationships where we're one of the top five buyers in town and you get those deals before they actually hit the market. But in a lot of other markets, I'm not, you know, the biggest buyer in town so I have to go off-market, direct to seller, kind of stuff. And we get a lot of our properties from Mom and Pops who have owned it for 20 30 years or inherited the property. They just didn't put any more money back into it. You know, the total debt on the property is very low if at all and they just don't want to put any more money into it. They don't want to do the work so we buy it from them. Or I buy a lot from smart entrepreneurs, really sharp people who make a lot of money in their traditional business and they just put their money in real estate and then they didn't have a joint venture partner. They never got educated. They don't know how to manage a management company or interview a management company and they just get abused in the business. So they're like I'm making too much money in my traditional business, this thing is going to sink me. Let me just fire sale this apartment building. So that's where we buy most of our properties from. And then again: we reposition it, we do the stuff that that hedge funds aren't willing to do, and we're qualified enough to take down a 200 unit building that needs a pretty heavy value-add. I do it that way. But like you said though, James, I'm starting to buy a little bit more stabilized assets, more like 85-90 percent occupied of just a little bit of tweaks in the common areas and amenities and then bumping up some rents. We're doing a little bit more of that right now just because of where we are in the market cycle.  James: Yeah, correct. But you gave a lot of details that I want to go a bit more detail into that. So you said you look for deals that are in class A and B, but more distress. And I mean you're basically shrinking your funnel as well because you're going for that... Tim:  Niche gets rich, right? James: Exactly. [11:02crosstalk] Tim: People say hey real estate's mine age. Now real estate's an industry, right? Apartments aren't even initial. You need to figure out what you are really, really good at. And one of the things that I'm really good at is 80 units to 100 units that are distress. It's bigger, it's too distressed for the small guys to get a loan on it because they don't have the background or the resume to go and take down that kind of stuff and the qualifications do that because they haven't done it before. It's a big project, big value add and at the same time, it's too distressed for the hedge funds because they just want to park money and let it sit, let it ride, and let it cash flow from day one. So this is my niche. It's A and B Class areas; good areas, desirable areas, just distressed kind of properties and we're able to get in there and we have all the financing, the relationships are all in place. We could raise the money pretty easily because we can cycle our money every 12 to 18 months. I don't have to wait five years to get my investors their money out; I can cycle at every 12 to 18 months. So as soon as I pay him back guess what they say, let's go do another one. And then they're involved in you know, three deals in five years versus one deal in five years and it makes my life easier because I don't have to go and raise money from new people all the time. James: Got it. Got it. That's a really good model. So that's the investors after you cash out when you pay them back, do they stay in the deal as well? Tim: Yep. So mine's a little bit different than traditional syndication. Usually me and my joint venture boots-on-the-ground partners, we keep 70 to 80% of the equity in the deal and then we pay a pref, a fixed pref to our investors regardless of the properties performance. So even if it's not cash flowing it's predictable because I know that if I'm borrowing 2 million bucks, I'm paying, let's say, 10% pref, I'm going to pay $200,000. That's just a cost of the deal. I got roofs, I got flooring, I got paint, I got cost of capital; it's an extra $200,000.  So I build that into my model and then I can make those payments to them. They feel more confident, more comfortable because now they have a predictable return on their investment. Then I refinance, they get all their money back off the table and then they still maintain 20-30% ownership without any money invested and we're able to do that again and again and again. And so, you know with traditional syndicators if I try raising money from somebody who's used to traditional syndication, they're like, why would I ever do that? Well, you get a predictable return and secondly, you get 30% ownership.  But if all your money is in three different deals, it's actually 90% ownership because 30% 30% 30%. And so overall, they're actually ahead of what they would do in traditional syndication where they might get 70 or 80% of the equity in one deal. So, it actually works out better for the investors, works out better for me but it's a lot of work on my part. We spend a lot of money.  Sometimes we spend a lot of money on advertising in new markets until we have those relationships built up and then, in order to find those off-market direct to seller deals and it's a lot of work. Like my business partner down in Georgia that I own a bunch of property with, he goes and sleeps at the properties for three nights a week. He spends four full days there, sleeps in a B-class apartment, you know, on a blow-up mattress, the guy is worth 25 million bucks. And then his brother who's our other partner is worth another 25 million and they're sleeping at the properties, doing the work, kicking the tables, making sure construction ends up on time, on budget and that's what you need to do man. I see a lot of people who are trying to be this puppet master and they're not willing to actually do the work of taking ownership over this thing. They just want to go and syndicate and then go back off to whatever they're doing. And to me, like there's something to be said about just having old school diligence and work mentality and what you can get done if you're willing to do that kind of stuff. James: Yeah, real estate is very, very powerful; especially commercial real estate where you can force appreciate. And especially if you are going to get the majority of the equity in the deal, why not I sleep, right?  In 12 months, 70 to 80% of this deal is going to be mine. Why not work hard, I'm with you. Tim: It's a season of your life. If you're putting your head down for a year or 18 months, but then you can generate millions of dollars of equity, why not do that? And so yeah, that's kind of the mentality that we take.  James: Correct. Yeah, it's very powerful to create wealth and I think the investors appreciate that as well because now you're able to give them back their money and all that. But your model is assuming that you are able to refi into a long term loan in the 12 to 18 months, right? So what happened if that model breaks? Tim: Yep, absolutely. So that's the inherent risk with our model is what happens if rates change, what happens? If banking tightens up, what does that all look like? So a couple of things. One, I don't think rates are going to change as much in 12 or 18 months as they would maybe in five or seven years. So to me, we underwrite the deal - like right now, I just closed on 500 units. I got 2 buildings, around 250 units each last month and I got a 3.83 and a 3.88 interest rate. Even right now, rates went up back; they're hovering around for four and a quarter right now for stabilized assets. We're underwriting the deals with 4.75 to five percent interest rate on the back end for a stabilized property. So we're taking on some of that, some of that, we're underwriting it for that. We also underwrite our rents very, very conservatively and we're at such a low basis in the property, usually around 60% of what that stabilized value is, we have options. So Fannie and Freddie are tightening up big time right now. That's okay because we're at such a low basis that we can still go over to CMBS - commercial mortgage-backed security - or a life insurance company and even though they offer a lower loan to value, I'm okay with that because I'm at a low enough basis. I can still cash out my investors.  So worst-case scenario, my investors still get their money back and we have a lower LTV loan. So maybe there's not some refi proceeds or anything like that that we can take off the table but at the end of the day, they're going to have more equity, you know, their equities gonna be worth more in the property and the cash flow is going to be more on a recurring basis for that. And the other thing is even when banks stopped lending to people in 2009-2010, guess what? They were still lending to somebody and it was the people with big balance sheets, with stabilized portfolios. And I have a big enough balance sheet and stable enough portfolio. I'll be able to get refinanced regardless of what happens in the next 12 to 18 months so I'm not that concerned about it. And again, because our basis is so low, we have such high cash flow on these properties. I have different options and have a good team of mortgage brokers. Who even if I had a slap another, you know three-year loan on there, even if it was at 6% interest rate or six and a half percent interest rate, I can still cash flow;  it's enough. It covers my operating expenses, it covers my debt service, still puts cash flow in the bank. You know, it's a crappy conversation that I have to have with my equity investors, but they keep on making ten percent on their money so they're happy.           You know, the worst-case scenario is they get their money back in 48 months; then, you know it is what it is. So I've taken a look at all the downside. I've talked to people with billion dollar portfolios and said, hey poke holes in my model. And that's the inherent risk is what if you can't refinance? So that's one of the things. The deals that I just closed last month, they were already in that 85-90 percent occupancy range. Like right at 90-91, I think is what they were. And so we got a Fannie Mae loan actually on it. That's a construction loan that we'll be able to put a supplemental debt on it. So, it's already a long term loan, 30-year amortization, couple years of interest only. And then, whenever we create the appreciation, 12 months 18 months from now, we'll be able to put supplemental debt, which is kind of like a second mortgage almost but through the same lender, so they're cool with it. And so the only real risk I'm taking is the interest rate on that portion of the debt. I owe 17 million dollar mortgage on it right now. And then the other will be about another 7 million dollars. So the only real rate risk is I'll get home at three point eight percent on 17 million dollars, even if the other 7 million goes a 5%, my blended cost of capital still four and a quarter or maybe a little less. So, you know, that's another way that we're reducing that ongoing risk.  James: It's very interesting. Now you're convincing me to do deep value add again. So because it's just so hard to mess up. Tim: I mean, the construction is where it all comes down to. I mean, if you stay on time and on budget, you're in good shape. But if you don't have a good construction partner like you can really get burn bad in the deep value add stuff. So you've got to understand what your team looks like, what your strengths are, what your weaknesses are. And for me, we're okay with it. We're pretty good at it and we have a really good construction team.  My partner in Georgia, man, I put him toe-to-toe against anybody in the country from a construction standpoint. He can build new construction, he can renovate existing units. And because he has the mentality of 'let me go and sleep at the property' three nights a week, away from his family, away from his five kids, you know, he's willing to take that on because it's again a season of his life. Like that's kind of partners that I like to partner up with. James: Yeah. Hustlers, they will go really far in life and that's what we need. It's very interesting. So I mean, is there any deal that you find that you didn't do? That you think you should have done and after you passed on it, you realized, ah, should have done that deal? Is there a deal that you look at...  Tim: That's a good question.  Let me think on this. We try to kill deals. I try to kill every deal that comes across my plate, especially right now. I try to look for every reason to walk away from every deal that comes across my desk. If I cannot kill the deal then I know it's a good deal. And so, you know, as soon as you're like, 'hey, well, I think I can scale back construction and make it work', wrong idea, wrong strategy. Because the last thing you want to scale back is the construction of the value-add process. Because then your rents aren't going to hit where you expect them to hit because you're not able to attract better tenants or higher quality tenants and they don't see the value that you're adding to the property. At the end of the day, like people like, 'oh, I think we can make this one work.' No. The only way you can make it work is if you go back to the seller and negotiate a lower purchase price because that's the only variable in this equation. You know, what rents are going to be is what rents are going to be; what the construction budget is, is what the construction budget is. The only variable here is the purchase price. And you know, you make your money on the buy side. So are there deals that I passed up on that I should have moved on? Maybe but for me, man, I don't have much of a risk tolerance. I only buy stuff that I know that is very predictable to me. That's why I don't play the stock market. I can't control if you know Volkswagen -  I can't control if Elon Musk smokes a joint on public television and the stock drops by 15%; you know, I can't control that. I like being able to control real estate and having very predictable returns for me and my investors. And sometimes it's a gut check, you know. Even if everything looks good on paper, but my gut doesn't feel good about it, I'll say no to a deal. It's just that I've seen enough deals go south. And as quickly as we can build our net worth, being in commercial real estate, one bad deal can take out your legs and wipe you out totally. So I'm just not willing to take on that risk, especially when it takes so much work in order to get to where we are.  James: Yeah. Yeah. I mean I want to touch on your gut check thing because I know numbers don't lie and we are numbers guys and when underwriting, we want to make sure things work on paper and all that. But I've walked out of a deal because everything works very well and the numbers look good, but there is something wrong in that deal that I didn't discover and I've walked out from that kind of deal as well. And that's very important. I mean, real estate is not only science where everybody says a numbers game and people that are good in numbers will do it but there's a lot of odd to it as well where it's just something wrong somewhere and it comes from experience. Tim:  That's the only way you get that, from experience and it's usually personnel kind of things that make me walk from a deal. I'm just not comfortable with that joint venture partner, with that management company or with whatever the seller is saying. You can kind of see through the lines once in a while, whatever that is. Yeah, I mean my model is I'm really good at raising money. I'm really good at sourcing deals. We're pretty good at creating - like we can handle a lot of the back office type stuff.  I'm back in Cleveland, Ohio now, is where I live, we can handle a lot of the management side of things; collecting of rents, work orders, telecommunication; all that kind of stuff, all the administrative side. From here in Cleveland, we just need a local boots-on-the-ground partner and some local property managers, maintenance personnel, and I always have a joint venture partner locally. And so if that joint venture partner isn't strong enough, then usually I'll walk away from the deal. Because man, I think it's important to have somebody with vested interest, with equitable interest in the deal; who's local to the property, who can go put their eyes on it a couple of times a month; to keep everybody honest, to keep the management company honest, to keep the local property manager, maintenance personnel, leasing agents and just come in and kick the tables once a month and just let people know that we're paying attention. Because if you don't pay attention, then they take advantage of you.  James: Yeah, it's hard work. I mean, I know exactly how you feel in terms of how much hustle and how much detail and how much you have to be on top of the property managers because it's not their baby, it's your baby. And there's so much of details that if you don't ask them, they're just going to slack off right?  Tim: Yes.   James: They are paid differently from what we have paid for and we are the owners and it's just completely different ownership level, right? So that's very interesting. Is there any deal that you think after you bought it didn't match from what you thought in the beginning. You thought this is how I'm going to execute it but once you buy, it's like, oh, it's completely different from what I thought and how did you overcome it? Tim: Yeah, I mean every deal is a learning experience and you to get punched in the gut enough times and eventually you learn. Fortunately, you know when I was growing my portfolio, I bought my first building in 2012 and I bought an eight-unit building for $30,000. So I'm in Cleveland, Ohio buying units for $4,000 a unit. I put another, I don't know, 50 grand into it. So I'm all in for $10,000 a unit. And it's hard to lose. And so in 2012 2013 2014 as I'm growing my portfolio, while I'm going through these learning curves, the market is getting better and that was able to absorb a lot of my screw-ups early on. So I still made money on every single deal that I did even though I was learning on a lot of these things. There's only one building, a 44 unit building, that I bought about 2-3 years ago maybe that I've lost money on. It was one of those things, hey, I saw the leases, I saw the rent roll. It was 80% occupied and I bought it from a guy that I know, somebody that I actually know. And so, I bought 44 units and he's like, "Yeah, man, 80% occupancy." "Great, man. I'm going to come in, I'm going to renovate the last whatever 9 units and turn those over. I got a local team." He was out of state.  "So like my team can come in clean it all up clean up the common areas. I think I can make $300,000 on this thing in the next 12 months pretty easily and it'll cash flow a little bit in the meantime." So I buy it and I find out it's only 25% economically occupied. So there are 35 tenants or something in place and only 11 of them are actually paying rent. And so I learned my lesson there, you know. It's not about occupancy, it's about collections.  And this is a buddy of mine. This is somebody I've known for many years and grabbed dinner with him, his wife, my wife and not a lot of times but a few times and close enough where I call him a buddy. And all of a sudden, he sells me a building, tells me it's 80% occupied, doesn't tell me it's only collecting 25%. And all of a sudden, I had to kick out 24 tenants and turn over 24 additional units.  So imagine what that cost does now to the $300,000 I thought I was going to make? And this was one of the only times I brought an investor in and he wanted 50/50 of the deal: "Let me bring the money, you do the deal."  "Okay, cool."  And I'm stroking a check for about 35 40 thousand dollars when it was all said and done. And I could have gone to that investor and said, "Hey, man, I need 20 grand from you. I'm putting up 20 grand of my money. We're selling this thing. It's a pain in the butt. We're gonna lose money on it. But, you know, we gotta get rid of it. And that's part of the deal."  Instead, I stroked the entire check, gave him 100% of his money back and because he didn't make a return, I gave him equity in another deal of mine, without him having to put up any money just to kind of soften that blow. And so I think when you do the right thing by your investors word spreads, you know, he says great things about me, he wants to invest in more deals with me and stuff now. It is, do the right thing knowing that there's always another deal. There's always another opportunity.  That one, we could have held on to the property long-term and let it cash flow. That's a cool thing about buying apartment buildings. You can really screw up and if you had to, you can hold on to it, manage it, let it cash flow for the next 10 years and eventually, you'll actually make money on these things even with that big of a screw-up. But for me and where my long-term vision is and my team and everything else, it was just more of a C-Class type property. It took up too much management and too many headaches. It wasn't big enough. We couldn't really scale it. So we made just a business decision to sell it and to eat that loss. But it's the only building I ever really ever lost money on. Now we've gone through pretty much everything and we've gotten kicked in the crotch enough times where we know what to look for across every building. Like it's very hard to pull the wool over our eyes unless it's like grossly fraudulent on the sellers part.  Another big thing that I didn't know early on that I wish I should have done that's always a consistent issue with every building we've ever bought is like the plumbing and the drain tiles leaving the building. It's always one of those unknowns. So now, we spend three to five thousand dollars to scope every single drain line, in every building that we put under contract to ensure that there's not going to be this massive plumbing bill, unexpected plumbing bill, once we buy the property. So that's one of the things that's been a big deal.           And then just verifying collections. Like those two things from a financial due diligence and a physical due diligence perspective like those two things that we've dialed in now and we always did everything else. We always inspected the rooms in every unit, the electrical panels. One of the other things that I didn't do early on that I do now, we've done for the many years now, is I used to only walk the vacant units and the common areas and the mechanical rooms. And then all of a sudden, you realize that they're not showing you all the vacant units. There are other vacant units that they're telling you that they're occupied, they just didn't want you to see them. And like I bought buildings where tenants were turning on and off their faucet with a wrench because there's no actual faucet. So you don't realize a lot of that stuff early on when you're a dumb kid. But I've been through all man. I've been everything. We walk every single unit on a 500 unit apartment building. We will walk every single unit and we'll put a report together on every single unit. It's a one-page, just kind of condition report. We'll take 30 pictures of every single unit. We put it all into like a Google Drive or Dropbox folder. In that way, we have all the information we could ever need on this property. We're not relying on our memory to look up all that stuff. It's all there. Our contractors can see it during the entire due diligence period, all that stuff. And so I think everything's a learning curve. I think you learn from everything. The thing in this business though is like if you can get past all those learning curves, if you can get past some of those losses and some of those getting punched in the stomach, eventually, you're process is so dialed in.  Like they can't pull the wool over your eyes that you cannot lose on deals. And that's why we walk away from a lot of deals that we do because they're waiting for somebody who's an idiot who doesn't know what they're doing to come in and buy their property and overpay for it or not do the due diligence that they're supposed to be doing and all these other things. But eventually, you know what you're doing enough, where your risk is so minimized because you've done all the due diligence on these things, it's a very predictable business at the end of the day. Like you said, it's all about numbers, right? James: Yeah, I mean, it's crazy nowadays, right? I mean with the market being as hot as it is right now, with so many people looking for deals and so many bidding war. So nowadays, the smarter thing that a lot of brokers and sellers are doing, they say day one hard money. Now, they lock you in. So you go into a bidding war, you pay this huge amount of hard money and sometimes they don't even give you early access., So now you're locked in. You can find a thousand and one things and yet we are locked in. Tim: No, I don't do that stuff. I don't play that game. You don't need to if your off-market direct to seller. If you're going through brokers, they're going to do that to you, you know. And there are some people who have crazy money and they're willing to risk that; I'm not willing to risk any of that stuff. A lot of people, they spend a lot of time on ROI - return on investment. I spend a lot of time on return on ROI - return of investment, you know, and making sure I get all my money back. I never ever want to risk principal.   I mean that deal, that's just too risky of a deal. If they want hard earnest money from day one and I haven't already walked the entire property, I'm not interested in doing it. I think once you get to a point where if you're partnered up with a great sponsor or you are a great sponsor yourself and you have the business acumen that like you have James or that I have like I'm able to posture up with these sellers now and kind of say, "Hey. Yeah, no problem. You can go steal somebody's earnest money. That's okay. You can go ahead and do that. But they're not gonna be able to close on this deal because you're lying about the condition of the property or the financials whatever. Or if you're willing to actually sell it to me, give me my opportunity to do my due diligence and shoot straight with me on everything, I promise you, I'm more capable of closing than any of the other people that you're getting bids from right now or you're getting offers from right now."  And so I've been able to kind of build up my credibility in that way where sellers are willing to take less money and offer me better terms than they would maybe with somebody else because they know that I can close on the property. They don't want to get dragged through the mud.  James: Correct. Yeah, this is very interesting, nowadays, the way the market is being played. They're putting all these handcuffs of hard money, day one. And there's another handcuffed where they said you must do lending with our own in-house lending. So that's another handcuff. There are two or three handcuffs that brokers are putting on sellers. And the third subtle handcuff that they do; nowadays, when they close, they send out an email saying that, oh, this buyer paid day one, you know huge amount of money $500,000. They're telling everybody else. Tim: They're trying to set that expectation.  James: If you want to come and buy deals nowadays, you better be ready. So many handcuffs are being put on buyers. But I think a lot of sellers, you know, if they want to work with a good buyer, people who want to really do business, they don't know want to just make the money on earnest money and waste a lot of time getting people to walk through all their units and getting their stuff all being nervous.  So just find a guy who's willing to do it and who is the true buyer. Who knows what he's doing and can close.  Tim: The good brokers with long-term visions and long-term goals, know how to find quality buyers and that's better than just anybody who raises their hand with earnest money, you know. In every hot market, there are people who are short-sighted, who got into real estate real quick just because they wanted to get rich quick, kind of a thing. And they'd rather just do it that way and then anybody who raises their hand, they're willing to go with and those aren't the brokers you want to work with. You want to work with the people who have been around the block a few times, who understand what a good buyer looks like, can build those ongoing relationships. Because as soon as the market shifts, if things cool off, it's going to clean out all the unqualified buyers and unqualified brokers as well. James: Correct. So, let's go to a bit more personal side of things. So what I like about you is you're very, very positive. So you like to look at life very positively and you know, it's hard to do because sometimes you always have something negative that comes in. So do you want to explain about in this business, yeah, you always want to say something negative that you always want to talk about but how do you maintain that positivity?  Tim: Yeah, I mean, you know, I told you the story when we met up a couple of weeks ago or a month ago. I mean, just less than 90 days ago, I was out golfing and I got rocketed to the face with a golf ball, 100 miles an hour from about 30 yards away. It shattered my upper maxilla bone. It knocked out four of my front teeth and shredded my gums. And my lip opened and I was bleeding like crazy. I look down. I'm like, oh, I feel my teeth dangling from my gums and I look down at the ground and I kind of took a knee to make sure I didn't pass out. I looked down at the grass, I'm like, "Man, this grass is really well-manicured; like beautiful grass here, on this golf course."  And I'm like, How the hell am I able to keep up such a positive attitude in this?" You know, I'm thinking about my thoughts. I'm very reflective in that regard. And I was like, "Well, here's why I can see it positive because I got hit my mouth and not in my eyeball or my temple. I could be blind or dead if this thing was an inch higher than where it was."           And so, man, I don't know if it's the law of attraction. You can call it God, you can call it, you know the universe and call it whatever but I think when you put the positivity out, it comes full circle. It's kind of like you reap what you sow kind of a thing and I sow seeds of positivity. And so, I jump in the golf cart and I get taken back to the clubhouse. You know, who's dining in the clubhouse? There are two dentists and an ER nurse having dinner in the clubhouse. They put me in there. They look at my teeth. They drop what they're doing. They take me to their dental office, 15 minutes down the road. They stitched me all up. They put my teeth back in and I'm able to save my teeth and 90 days later, you couldn't even tell that this whole thing happened. Like I'm still going through some cosmetic stuff, but overall like it was a terrible situation, but I think because I was positive it all just kind of came to fruition.  So, you know, one of the things I've always practiced is not saying I have to do something but saying I get to do something. When I go out to dinner with a bunch of my friends and I pick up the tab, they're like, "Dude, you don't have to do that." " No, I don't have to do it but I get to."  The reason that I do what I do is so that I can help people out and I can pay it forward. "Oh, hey, you don't have to cover that bill. You don't have to do this"  'No, but I get to."           I had to eat soup for about a month afterward, but I'm thinking you know, I'm eating a tomato bisque basil soup. I don't have to eat mud pies like people do on the other side of the earth. I don't have to walk two miles each way to go and get fresh water like people have to do on the other side of the earth and some people on this side of the earth. I get to eat soup, I get to eat something that's a bisque that has basil in it. Like are you kidding me? Like there are people who would kill to be able to eat that kind of stuff. I didn't have 14 teeth knocked out, I only had four teeth knocked out.  I think when you just compare it and you put it in that type of perspective of, man, it could have been way worse, you know, like the situation could have gone - and there are still people even with me with my teeth dangling from my mouth, being in that circumstance, I'm still in a better circumstance than a lot of other people who don't have any food, who don't have any shelter, who don't have any clothes, who don't have any support. They're being trafficked by like human trafficking like all that kind of crazy stuff.  Even when I have to go out and raise - I had to raise 7 million bucks for deals last month, and now I don't have to raise 7 million bucks. I get to raise 7 million bucks; that's a pretty awesome problem to have. And I think just putting it in that perspective of shifting your 'I-have-to' to 'I get to', will really make you more gratuitous or have more gratitude for life. James: Was it because of your parents or do you think because you just had some event in your life that you think now I have to change my time or it's just how you have been? Tim: That's a good question. My mom as always been very positive. My mom as always been, hey, you have something else to compare it to. Compare it to this, compare it to that. And I think that's probably what planted the seed of always looking at it from, "Yeah. You're right. I guess it could be way worse, right?" It could have been totally different circumstance. She always used to say, "Hey, if that's your biggest problem today, you've got a pretty good life, Tim." When I was growing up: "Ma, I don't know what I'm gonna do like my basketball just popped." "If that's your biggest problem today, it's a pretty good problem to have." You know, you're safe. You're secure, you're healthy, you have a family, you've got people who love you, you've got food with food on the table and clothes on your back and a roof over your head. Like all those kinds of things like you put in perspective. There's people dealing with a lot worse things. And yeah, I think my mom kind of rooted that into me maybe early on and it definitely stuck and man, I just show gratitude. Especially once you have kids, you know, and you realize man like all I want is their safety and their security and their healthiness and their happiness and as long as they're happy and I'm happy. That kind of a thing that's really amplified it over the past four years. I have a four-year-old and a two-year-old now. And so just putting things into in the perspective that way has been a big deal.  James: Awesome. Awesome. Is there one proud moment in your life that you think you will be remembering it for your entire life?  Tim: That's a good question, James. You've got some good questions there, buddy. James: I want you to think and answer.  Tim: Yeah, you know, I mean, is there one... James: One proud moment that at the end of your life, you're going to say that I'm really, really proud that I did that and it's going to be you know. Tim: Yeah, I don't know if it's one specific moment, but maybe just like kind of how I live my life. I try to do it on a daily basis and maybe it's not something profound. Maybe it's not something that's like one specific thing that was a catalyst. You know, I'm driving to the office today to come and talk to you and some dude cuts me off. Maybe he's got some priorities or something going on. I don't know what other people are going through, you know and for me to judge or get pissed off because somebody cut me off, why would I do that?   I'll tell you if there's a really proud moment, once my kids grow up to be decent human beings, you know, and making sure that I want to live my life as an example of what an exceptional life can look like. So I want people to be like, hey, if Tim Brax, some kid from a blue-collar family in a blue-collar town, outside of Cleveland, Ohio can build up a big portfolio and still maintain good health and still maintain positivity and still maintain great relationships with his wife and with his children, with his friends and still engage and and maybe not be balanced but have harmony in his life, like if this guy can do it, I know I could do it.  If I can inspire people, whether that be one moment in time by a Facebook post or an event that I host or being on a podcast, if I can inspire people to just be their best which is what I have on my wall here and that's not 'do' that's 'be' you know, that's like consumed that all together. It doesn't have to be the best. It would be your best. There's always gonna be somebody more capable, more resources, more whatever. You know, I don't think it's healthy to compare yourself to other people but to compare yourself to yourself and making sure that you're advancing on a daily, weekly, monthly and annual basis is a big deal. And so, I think I just try to make my kids proud, make my mom proud, make my wife proud, make my friends proud. Inspire other people and I try to do it more in the daily activity versus just do it one time and look at that one moment. I try to give back and try to - like I had suites to the Cavs games when LeBron was here in Cleveland. All right, and so when was that, two years year to go? Two years ago, I think. No, it was last year, I think. And so last year, I had a suite to the Cavs. I got the entire series for the first series. I figured who they're playing, but essentially when you buy a suite, you get it for the entire series, however many games they play at home and they played four games at home. And so, you know the first game I went to, I brought some business partners and was able to pay for the suite that way. And then, the second game I brought some family and the third game, I'm like, hey, I was excited to go but like I'm not as excited as I was maybe the first or second time and I'm like somebody else deserves this more than I do because I've already had this experience right? Like, how can I pay this forward?  And so I posted on social media, "I got a suite to the Cavs game. I have 18 tickets that I can give away, a couple of parking passes. It's stocked with food and drinks and whatever you guys want. Like does anybody know of a family or a few families that I can give these tickets to that maybe wouldn't have this experience on their own but really deserve because of how good of a people that they are?"  And man, like it got so much momentum and got so many shares and then the news picked it up and came and did a story on it. And I had about 5-600 applications that came through for people nominating other people to get tickets to this Cav suite. And so, it was actually really hard to break it down and essentially I found four or five families. I think five families that four tickets a piece that I gave the tickets to. And it was pretty easy to narrow it down to like 25 because I wanted somebody who had maybe faced adversity, overcame the diversity and then found a way to pay it forward; not just overcoming it but actually paying it forward and creating a difference.  So, you know, there was one girl whose sister died of an accidental overdose of drugs and now, this girl who's still alive, her younger sister goes around and speaks at different schools about opioid problems and drug problems and how to overcome that and different resources to plug into for that, you know. And so I'm like, wow, this girl, at the age of 16 years old is making an impact on the world; like she deserves some tickets. There was another gentleman who lost his daughter to a congenital heart defect. She was 3 years old, you know and loses his daughter to this congenital heart defect. And instead of like, I mean, I can only imagine how dark of a place he must have been in and he ends up opening up a nonprofit organization to help families with other kids with congenital heart defects to give them the support and help and the conversations and everything and making a massive impact up here in Cleveland, Ohio. This guy is such a good guy. I give him the tickets and he gives them to one of the people that are in his nonprofit, you know. And it's like, man, these people are just amazing individuals.           And so I found five awesome families like that, that we were able to give the tickets to and like doing stuff like that really makes me feel good. And what's even better is that there were 500 people who I was able to create a catalyst by doing this who now, 500 people are thinking in a positive way about people who make a positive impact on their life. And just that positive ripple effect that's created, I think is really, really powerful and it was really, really cool to see. James: Yeah. When I talk to you, I get very inspired because it's not about the portfolio of real estate or [49:17unintelligible]  rights, it's how you look at life and how you look at things. How you think positive and that's the most important when I look at a person. Tim: Yeah. And you do an awesome job with it, man. I mean, you realize that it's not the portfolio, it's not the money that's noble. It's what you can do with the money that's noble and utilizing it for good. I could afford a really expensive fancy exotic car and I drive a $20,000 Jeep just because I don't really care. I know that there's a bigger impact I can make by being a better steward of my Capital, putting it in more deals or paying it forward in ways like that. So I get more fulfillment from that than from maybe driving something fancy.  James: Yeah, even for me, I can't really imagine driving exotic car because, do I really need it?  Tim: At the end of the day, it'd be cool. I'd rather just go and rent one. I know I'd have buyer's remorse. I just know myself personally and I know that as soon as I bought it I'd be like, I don't really need this. And here's the thing. I like watches. I like clocks. I like taking nice vacations. I like traveling first class. I like that kind of stuff. I like making memories and traveling the world; I love all that. So that's where I get my drive from on making a lot of money. For other people, they like fancy cars, they like fancy houses; that's okay.  I got a good buddy, man, he drives a Rolls-Royce and has multiple hundred-thousand-dollar watches, you know. But I know he doesn't do it for flashed and to impress other people. He does it because when he looks down at his watch and when he gets in his car, he always sits back and he's like, "Man, I had to overcome some adversity, I had to go through some shit in order to get this watch. In order to be able to afford this car. And I've had to grow as an individual, as a person and make an impact on enough other people's lives, positively, that then the universe came back and gave me enough money to be able to afford this car and afford this watch." And so, I think it depends on perspective and that's how you look at it. Like I have nothing against people who have fancy nice things, material type things. Because I know he's one of the most giving people that I've ever met as well and so it's perspective.  James: Yeah, it's perspective. Yeah, awesome, Tim. So why don't you tell our audience how to get hold of you?  Tim: Yeah. I mean, I'm pretty active on social media; you can find me on Facebook Tim Bratz. I run my own Facebook account, you know, it's not somebody else running it. I do some education stuff on how to get involved in apartments and things but hit me up with a message there if you're looking for formal education. I give a lot of away a lot of free content, a lot of free insight and I try to provide a lot of value on social media and stuff so just connect with me on Facebook.  That's gonna be the best way and, yeah, man, James, I appreciate all the value that you give and all the value that you create and all the content that you put out there and, man, you're creating the ripple effect yourself on making a positive impact on people's lives. So appreciate you too, brother. James: Yeah, absolutely. Absolutely. Thanks for coming on the show. It was really a very inspiring show. I'm sure for me and for my listeners and everybody's going to be enjoying it.  Tim: Appreciate it, brother. Thank you so much. James: All right. Bye.

Episode 176: Theatre and Autism: How do you present a sensory friendly performance? How do Theatre and Autism fit together? Do you have students on the spectrum in your classrooms? Have you ever put on a sensory friendly performance? All of these questions and more are answered in this week's podcast with James Lekatz, program director of the CAST program (Creative, Accepting, Sensory-Friendly, Theatre) at the Stages Theatre Company in Hopkins, MN. Show Notes Stages Theatre Company - C.A.S.T Program National Autism Resources Autism Resources Autism Resource Kit School Community Toolkit Jacques Lecoq Drama Teacher Academy Episode Transcript UPDATE FALL 2018: James Lekatz is now the Artistic Associate at Interact Center for the Visual and Performing Arts. The mission of Interact is to create art that challenges the perception of disability. Welcome to the Drama Teacher Podcast brought to you by Theatrefolk – the Drama teacher resource company. I'm Lindsay Price. Hello! I hope you're well. Thanks for listening! This is Episode 176 and you can find any links to this episode in the show notes which are at Theatrefolk.com/episode176. Okay. Everyone, hands up. All of you, put your hands up – no, no, no. So, I have a question. How many of you have students on the autism spectrum in your classrooms? And, another, how do these students react to theatre? Do you believe it can impact them? Have you ever been to a sensory-friendly performance? Have you ever planned one? Okay, that was more than one question; that was a lot of questions and I'll bet that there is a lot more hands up to the answer to that first question than anybody thinks. And, yes, I can see you; I can see all of you. So, we're talking theatre and autism today. We are going to get some answers to those questions and more with today's guest. A very interesting conversation. I learned a lot. Let's get to it! LINDSAY: Hello everybody! I am speaking with James Lekatz. Hello, James! JAMES: Hello! LINDSAY: Awesome. Tell everybody where in the world you are. JAMES: Yes, I am coming to you today from Hopkins, Minnesota, which is kind of like a first-ranked suburb of Minneapolis. LINDSAY: Ah, perfect! Sometimes, I ask where people are and then they say and I'm like, “Well, I don't know where that is,” but this is good. Excellent! This is going to be such an interesting conversation on so many levels, I think. Let's start off, please, tell us what your job is. JAMES: Sure. I work for a theatre company called the Stages Theatre Company located in Hopkins, Minnesota. My job is twofold; one, I'm an education association, so I'm a theatre teacher and I work at many different schools in the west metro of the twin cities, and I also am in-charge of our access programming. And so, that is working with ASL interpreters, getting audio transcribers to come to our performances to do an open captioning, but also a major portion of what I do in the access is working with our sensory-friendly and autism programming. I run a program called CAST which is an acting program for students on the autism spectrum. And then, we have a ten-performance sensory-friendly season that we do throughout the entire year. LINDSAY: Talk about making sure that theatre is getting to everybody, right? JAMES: Right. LINDSAY: Also, I have seen it, time and time in the classroom, how those with autism, theatre really helps them. JAMES: It does, and it's kind of counterintuitive. You don't think it would because it's standing in front of people so it's nervous and a lot of people on the spectrum have anxiety. It's being able to use your voice where a lot of our students on the spectrum don't have that vocal flexibility. But, yet, they can do it. Seeing theatre works that way and doing theatre works that way. It's incredible! LINDSAY: Yeah, and this is one of the reasons I definitely wanted to talk to you and h...